Nursing homes pump millions into campaigns while benefiting from favorable state policies

 

WVUE's Lee Zurik looks at nursing home campaign dollarsIn today Louisiana Purchased episode, WVUE's Lee Zurik looks at nursing homes and the money they contribute to state politicians.

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By NOLA.com | The Times-Picayune 
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on November 07, 2013 at 10:13 PM, updated November 11, 2013 at 8:46 PM

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The traditional image of Louisiana politics is of oil and gas lobbyists roaming the Capitol halls with briefcases full of cash to wine, dine and offer contributions to willing lawmakers. Or maybe the more recent, and very real, scene of a legislator handing out checks from riverboat casinos to colleagues on the Senate floor.

The energy industry, gambling and utilities are, in fact, major sources of campaign dollars for Louisiana politicians. But there is another business interest that has quietly risen near the top of the contributor charts while benefiting from favorable public policies.

The nursing home industry, with its mostly for-profit owners, is now among the largest political givers in the state, shelling out nearly $2.8 million in campaign contributions between 2009 and 2012, according to a joint examination of state campaign records by NOLA.com | The Times-Picayune and WVUE Fox 8 News.

The largest beneficiaries of this political largesse, records show, were the campaigns of Gov. Bobby Jindal and state legislators, who have enormous influence over how much the nursing home industry gets in public dollars every year.

Story by

Manuel Torres
NOLA.com |
The Times-Picayune

Lee Zurik
Fox 8 News/
Fox8live.com

During the four years analyzed, the Jindal administration and lawmakers kept Medicaid payments stable to the nursing homes, while slashing spending for other health care sectors -- including doctors, hospitals, pharmacies and the competing home health care industry.

Jindal, who proposes the state's annual Medicaid budget, and the Legislature, which approves it, has kept nursing home payments up by cutting deeply into a trust fund that was designed to help pay for elderly care for years to come, state officials said.

The state's payments to nursing homes - $796 million last year - remained roughly level even as shrinking public demand has left thousands of nursing home beds empty across the state, according to data collected by Medicare.

For nursing home owners, however, empty beds are not a complete loss. The formula the state uses to calculate nursing home rates includes overhead expenses that result in taxpayers paying for empty bed costs. Department of Health and Hospitals officials would not say how much the state is paying this year for empty beds, but it was more than $23 million as recently as 2010 - and observers said nursing home rates have gone up since then, not down.

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"Most other health care providers during this financial downturn have had to deal with a loss of state funding, and the nursing homes have been protected from that loss," said Jan Moller, director of the Louisiana Budget Project, a left-leaning Baton Rouge think tank that has studied the issue. "Their rates have gone up and up every single year, even though the population in nursing homes has actually been declining for most of the last few years."

Jindal did not grant requests for an interview. Kyle Plotkin, his communications director, said in a statement that Jindal has more than 42,000 donors and that "people who contributed to the governor's campaign are supporting his agenda for moving the state forward."

Nursing homes have a special relationship with the government. The federal Medicaid program requires participating states to provide nursing home care while giving the states leeway in deciding how and how much the homes are reimbursed. The states also are responsible for regulating and overseeing nursing homes, which provide care to some of the nation's most vulnerable citizens.

The industry says it has stepped up to fill a vital role in providing that service. Joe Donchess, executive director of the Louisiana Nursing Home Association, said the state encouraged nursing home owners to build facilities and approved new beds in the 1980s and 1990s. The recent drop in demand, he said, is not the industry's fault.

"We build them based on a need," Donchess said of nursing homes. "Now that we have a mortgage of 6, 8, 10 million dollars, does that mean you're going to cut us off at the knees and say we're not going to pay you for that anymore? It's a fairness issue."