[Congressional Record Volume 144, Number 58 (Monday, May 11, 1998)]
[Senate]
[Pages S4630-S4632]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. GRAHAM (for himself, Mr. Chafee, Mr. Johnson, Mr. Harkin, 
        and Mr. Grassley):
  S. 2061. A bill to amend title XIX of the Social Security Act to 
prohibit transfers or discharges of residents of nursing facilities; to 
the Committee on Finance.


                  NURSING HOME PATIENT PROTECTION ACT

  Mr. GRAHAM. Mr. President, along with Senators Chafee, Johnson, 
Grassley, and Harkin, I will be introducing today the Nursing Home 
Patient Protection Act. This is legislation to protect our Nation's 
seniors from indiscriminate patient dumping from nursing homes.
  Approximately one month ago, it looked like 93-year-old Adela 
Mongiovi might have to spend her 61st Mother's Day away from the 
assisted living facility that she had called home for the last four 
years.
  At least that's what her son Nelson and daughter-in-law Gina feared 
when officials at the Rehabilitation and Health Care Center of Tampa 
told them that their Alzheimer's disease-afflicted mother would have to 
be relocated so that the nursing home could complete ``renovations.''
  As the Mongiovis told me when I met with them and visited their 
mother in Tampa last month, the real story far exceeded their worst 
fears. The supposedly temporary relocation was actually a permanent 
eviction--a permanent eviction of all 52 residents whose housing and 
care were paid for by the Medicaid program.
  The nursing home chain that owns the Tampa facility, and several 
others across the United States, wanted to purge its nursing homes of 
Medicaid residents, ostensibly to take more private insurance payers 
and Medicare beneficiaries, which pay more per resident.
  While this may have been a good financial decision in the short run, 
its effects on our Nation's senior citizens, if practiced on a 
widespread basis, would be nothing short of disastrous.
  In an April 7, 1998, Wall Street Journal article, several nursing 
home executives argued that State governments and Congress are to blame 
for these evictions because they have set Medicaid reimbursement rates 
too low.
  While Medicaid reimbursements to nursing homes may need to be 
revisited, playing Russian roulette with elderly patients' lives is 
hardly the way to send that message to Congress or to state 
legislatures. While I am willing to engage in a discussion as to the 
equity of nursing home reimbursement rates, I and my colleagues are not 
willing to allow nursing homes to dump patients indiscriminately.
  The fact that some nursing home companies are willing to sacrifice 
elderly Americans for the sake of their own economic bottom line is bad 
enough. What is even worse is their attempt to evade blame for Medicaid 
evictions.
  The starkest evidence of this shirking of responsibility is found in 
the shell game many companies play to justify evictions. Current law 
allows nursing homes to discharge patients for--among other reasons--
inability to pay.
  If a facility decreases its number of Medicaid beds, the State and 
Federal governments are no longer authorized to pay the affected 
residents' nursing home bills. The nursing home can then conveniently, 
and unceremoniously, dump its former Medicaid patients for--you guessed 
it--their inability to pay.
  Evictions of nursing home residents have a devastating effect on the 
health and well-being of some of society's most vulnerable members.
  A recent University of Southern California study indicated that those 
who are uprooted from their homes undergo a phenomenon known as 
``transfer trauma.'' For these seniors, the consequences of transfer 
trauma are stark. The death rate among seniors is 2 to 3 times higher 
than for individuals who receive continuous care.
  Those of us who believe that our mothers, fathers, and grandparents 
are safe because Medicaid affects only low-income Americans, we need to 
think again.
  A three-year stay in a nursing home can cost upwards of $125,000. As 
a result of this extreme cost, nearly half of all nursing home 
residents who enter as private-paying patients exhaust their personal 
savings, lose their health insurance coverage during their stay, and 
become Medicaid beneficiaries. Medicaid is, for most retirees, the last 
refuge of financial support.
  On April 10, the Florida Medicaid Bureau responded to evidence of 
Medicaid

[[Page S4631]]

dumping in Tampa by levying a steep $260,000 fine against the Tampa 
nursing home. That was strong and appropriate action, but it was only a 
partial solution. Medicaid funding is a shared responsibility--shared 
between the States and the Federal Government.
  While the most egregious incident occurred in Florida, Medicaid 
dumping is not the problem of a single State. While nursing homes were 
once locally run and family-owned, they are increasingly administered 
by multi-State, multi-facility corporations that have the power to 
affect seniors across the United States.
  Mr. President, let me also point out that the large majority of 
nursing homes in America treat their residents well, and they are 
responsible community citizens. Our bill is designed solely to prevent 
potential future abuses by the bad actors.
  This bill is simple and fair. It would prohibit current Medicaid 
beneficiaries, or those who ``spend down'' to Medicaid from being 
evicted from their homes. That is a crucial point, Mr. President.
  Adela Mongiovi is not just a ``beneficiary''; she is a mother and she 
is a grandmother. And to Adela Mongiovi, the Rehabilitation and Health 
Care Center of Tampa is not an ``assisted living facility.'' To Adela 
Mongiovi, it is home.
  This is the place where she wants, and deserves--like all seniors--to 
live the rest of her life with the security of knowing that she will 
not be evicted. Through the passage of this bill, we can provide that 
security to Adela Mongiovi and to all of our Nation's seniors.
  Mr. President, I ask unanimous consent that the article to which I 
referred from the April 7, 1998, Wall Street Journal be printed in the 
Record.
  There being no objection, the article was ordered to be printed in 
the Record, as follows:

              [From the Wall Street Journal, Apr. 7, 1998]

                For Medicaid Patients, Doors Slam Closed

                   (By Michael Moss and Chris Adams)

       Indianapolis--On Monday, Jan. 26, right after lunch, Betty 
     Nelson and dozens of other residents of Wildwood Health Care 
     Center were brought into the activity room and told they were 
     being evicted.
       Rumors about an impending change had circulated at the 
     nursing home for weeks, but the news delivered on this wintry 
     day stunned the elderly patients as they stood at their 
     walkers or sat in their wheelchairs. The facility was ending 
     its relationship with Medicaid, the state-run health subsidy 
     for the poor. Nearly 60 of its 150 residents would have to 
     find new places to live.
       Most had worked all of their lives, and many had started 
     out paying their own way at Wildwood, which charged them 
     $3,000 or more a month. But eventually they had run through 
     their savings and had turned to Medicaid to help pay their 
     bills.
       There among the crowd were 88-year-old Della Arthur, a 
     glove maker who later served nearly two decades as a Red 
     Cross volunteer; 73-year-old Art Biech, a former postal 
     carrier who handed out Wildwood's mail; and Gregory Dale, a 
     retired pipe fitter with Ford Motor Co. who would turn 90 in 
     two weeks. Some of the residents wept. Others, suffering from 
     dementia, couldn't comprehend what was being said. Mrs. 
     Nelson, who is 72, understood; as the news sank in, she cried 
     out from her wheelchair, ``You're kicking us out because we 
     don't have enough money.''
       Wildwood is among the many nursing homes nationwide that 
     Vencor Inc. is emptying of Medicaid recipients. A publicly 
     traded company based in Louisville, Ky., Vencor ran hospitals 
     before buying a 310-facility nursing-home chain three years 
     ago, to become the nation's fourth largest nursing-home 
     chain. It says it now wants to attract wealthier patients who 
     can afford the higher levels of medical care it plans to 
     provide.
       Vencor also says it fears that a growing number of 
     successful lawsuits against nursing-home owners will hold the 
     company to ever-higher standards of care that it can't 
     sustain under Medicaid rates. In Florida, where the state 
     attorney general has retained outside counsel to build a 
     sweeping Medicaid fraud and abuse case against the entire 
     industry, Vencor says it might withdraw all 21 of its homes 
     from Medicaid as a defensive move.
       Overall, the company, which hasn't previously detailed its 
     plans publicly, says it has withdrawn or begun withdrawing 13 
     homes in nine states from Medicaid. It says another 25 homes 
     are candidates to be withdrawn because they are in cities 
     where Vencor wants to link long-term hospitals it already 
     owns with specialized nursing homes aimed at higher-paying 
     patients. Vencor may eventually open 90 non-Medicaid, 
     specialized nursing homes, many of them built from scratch, 
     the rest transformed from existing Medicaid facilities.
       In addition, the company says it is doing all it can to 
     maximize the number of non-Medicaid patients coming through 
     its doors--something it regularly trumpets to Wall Street. In 
     nearly all circumstances, a Vencor nursing home with an empty 
     bed will turn a Medicaid resident away in the hopes that a 
     private patient will soon come along and take the space.
       ``We'll go out of Medicaid in all 300 buildings if we don't 
     start to see a little change in the Medicaid program,'' says 
     Michael Barr, Vencor's chief operating officer. He says 
     Vencor is losing money on its Medicaid patients--a standard 
     complaint by nursing-home owners. States say they cover all 
     ``reasonable'' costs and contend that homes can make a profit 
     from Medicaid.
       Relinquishing the reliable income of Medicaid--which at 
     least ensures that few beds remain empty--is a gamble. But 
     with big public companies racing into the nursing-home 
     industry and pursuing more aggressive pricing strategies, 
     many other companies also are targeting the higher end of the 
     market. And industry analysts predict that some may follow 
     Vencor's lead in jettisoning Medicaid recipients.
       Only a few states, including California and Tennessee, 
     currently bar mass evictions. These states instead require 
     companies seeking to withdraw from Medicaid to wait until 
     patients die or choose to leave. Nearly all other states 
     leave the matter entirely up to the nursing-home owner's 
     discretion.
       Economics aside, evicting old people can create hard 
     feelings in the community, as Vencor learned at Wildwood. 
     There, little assistance or planning preceded the eviction 
     notice to the residents. Many families were informed only 
     after the residents were told. Management also kept the news 
     secret from most staff members, many of whom were distraught 
     as weeping residents wheeled or walked from the room after 
     the brief eviction meeting. ``It just broke my heart,'' says 
     Valerie Lynch, a former activities assistant who says she was 
     prompted by the evictions to find a new job.
       Panic spread in the next few days as waiting lists sprang 
     up at other homes in the Indianapolis area. Even those who 
     found comparable surroundings say they suffered 
     disorientation and the pain of losing their closest friends. 
     Many blamed themselves, including the pipe fitter, Mr. Dale, 
     whose family waited until two days after his 90th birthday on 
     Feb. 11 to move him out. ``Dad felt he had done something 
     wrong,'' says his daughter, Jackie Vukovits. ``The day we 
     took him, he kept saying, `Why do I have to leave here. They 
     were good to me.' ''
       Mr. Dale had just made the Wildwood newsletter, his name 
     ringed in stars. the write-up ended: ``Greg, we are very 
     happy you chose to live at Wildwood. Congratulations on being 
     chosen Resident of the Month.
       Vencor officials stand by their decision to evict 
     Wildwood's Medicaid residents but say they have come to 
     realize that mistakes were made. ``We really are doing this 
     for what I consider to be the right reasons. Our goal is to 
     turn this into the best medical nursing facility in that 
     market,'' says Mr. Barr. ``In hindsight, we probably could 
     have done a better job of notifying residents and families.'' 
     Mr. Barr says he decided last week to send company vice 
     presidents to oversee all forthcoming evictions.
       After meeting yesterday with Mr. Barr, local advocates for 
     the elderly and some former residents said they would seek to 
     ``increase the pressure'' on Vencor, possibly through 
     picketing and by seeking legislation to prohibit evictions. 
     ``If Vencor is allowed to get away with this, it opens the 
     floodgates not only for Vencor but other nursing-home chains 
     in this country,'' says Michelle Niemier, deputy director of 
     United Senior Action, a statewide senior advocacy 
     organization.
       The changes were particularly wrenching, residents and 
     staff say, because Wildwood--founded by a local concern in 
     1988--had a reputation as one of the city's best homes and 
     had remained nearly full in a state with below-average 
     nursing-home occupancies. The residents were a close-knit 
     group, having decided this was where they would live the rest 
     of their lives. One year, residents sold crafts to pay for a 
     gazebo.
       Last summer, two years after it purchased the facility, 
     Vencor hired Edward Hastings to run it. A 16-year veteran of 
     nursing-home administration, Mr. Hastings had been a regional 
     administrator for a nursing-home chain and then worked as a 
     consultant for the state of Indiana, monitoring nursing homes 
     that failed their health-care inspections.
       In November, only weeks before the eviction announcement, 
     Wildwood residents were cheered by a makeover of the 
     facility: fresh paint, new floor tiles, sleek name plates for 
     residents' doors. Then gossip spread that this fresh look was 
     not meant to benefit everyone. It was left to Mr. Hastings to 
     break the news.
       While a handful of nursing homes in some states have always 
     made do without Medicaid residents, the vast majority of 
     nursing homes nationwide have come to rely on the government 
     program for a good chunk of their revenue. Medicaid 
     recipients play a big role in keeping a facility's census up. 
     Even if the reimbursement is much lower than the private 
     rate, it is usually perceived by owners as superior to empty 
     beds.
       ``It's highly unusual to pull out of Medicaid,'' says Lori 
     Owen Smetanka, an attorney for the National Citizens' 
     Coalition for Nursing Home Reform, an advocacy group in 
     Washington, D.C. Even in Kentucky, Vencor's home state, state 
     Cabinet for Health Services spokeswomen Barbara Hadley Smith 
     says nursing homes ``are fighting

[[Page S4632]]

     to get into Medicaid.'' Vencor has one Kentucky home, 
     Hermitage Nursing and Rehabilitation Center in Owensboro, 
     that is now in the process of moving its Medicaid residents 
     out.
       A review of U.S. Health Care Financing Administration 
     records shows that 127 homes officially pulled out of the 
     Medicaid program in the past two years--nearly all because 
     they closed their doors entirely, merged with other homes or 
     were threatened with termination because of low quality. Only 
     one home indicated to federal officials that it pulled out of 
     Medicaid because of ``dissatisfaction with reimbursement.''
       But it is likely to happen more. In addition to Vencor, 
     other nursing home operators, both large and small, are 
     weighing whether to opt out of their state's Medicaid 
     programs. Dick Richardson, chief executive officer of 
     Renaissance Healthcare Corp., says his nursing home in 
     Holyoke, Mass., dropped out of Medicaid last year due to low 
     reimbursement.
       Mr. Richardson says the relatively small home would lose 
     money if it filled all 61 beds with Medicaid residents. So he 
     evicted his Medicaid residents, dropping the census to five 
     non-Medicaid people. He now has 20 private-pay and Medicare 
     patients and says the home will break even at about 32 
     private patients. ``I know there are going to be other homes 
     up here that do the same,'' he says. ``It's unfortunate for 
     Medicaid patients, but for business it might be good.''
       Vencor, too, contends that it loses money on Medicaid, 
     which, at Wildwood, pays it $82 a day for providing the same 
     intermediate level of care for which private patients are 
     charged $125. But Vencor's average daily take from Medicaid 
     has increased 16% at Wildwood since 1995. And two months ago, 
     the state, sued by Indiana's nursing-home trade group, said 
     it would build a new rate system allowing for more generous 
     payments for sicker patients.
       Even with the current Medicaid plan, Wildwood as a whole 
     had an operating profit of $797,410 on revenue of $7.5 
     million in its most recent fiscal year, its filing to the 
     state shows. That 10.7% margin is higher than the average for 
     nursing homes in Indiana and nationwide. According to H-CIA 
     Inc., a Baltimore health-information concern, the national 
     average margin for nursing homes was less than 5% in 1995, 
     the most recent year for which figures are available.
       From its base as an operator of specialty long-term 
     hospitals, Vencor rapidly expanded from 1985 to 1995. Its 
     stock, after an initial public offering in 1989, shot up 
     severalfold in a little more than two years. But regulatory 
     changes and competitive pressures have hurt. Three years ago, 
     Vencor's stock stood at $37; yesterday, it closed at $29.50 a 
     share, up 18.75 cents in composite trading on the New York 
     Stock Exchange.
       Now it is hoping that higher fees from private patients 
     will help it make a comeback. Wildwood now charges $168 a day 
     for top-level care. And Vencor has ambitions of higher prices 
     still at Wildwood and its other homes.
       New federal rules will help: Changes expected May 1 will 
     allow Medicare rates to go as high as $600 a day for the most 
     intensive level of care, industry analysts say.
       What complicates the process of phasing out Medicaid 
     patients is the fact that many start out as paying residents 
     and only later switch to Medicaid. Thus, a nursing-home 
     company that bars Medicaid patients at the door could end up 
     dealing with Medicaid eventually.
       At Wildwood, Mr. Dale's story offers an example. After 
     breaking his neck in a fall in 1992, he paid a caretaker $7 
     an hour to watch over him at home. When he entered 
     Wildwood in 1994, Mr. Dale paid his bills with savings, 
     Social Security and a pension. His daughter, Mrs. 
     Vukovits, says the facility led them to believe that it 
     would gladly allow him to shift over to Medicaid when 
     necessary, and he did so, eventually to supplement his 
     dwindling funds. Even so, she says, he continued to cover 
     a large portion of his $80-a-day bill at Wildwood by 
     turning over his Social Security and pension income.
       Vencor says it never really considered letting people like 
     Mr. Dale stay on. ``My philosophy is that if you have to do 
     something you're better off to face up to it and do it,'' 
     Vencor's Mr. Barr says. ``This is like having to go through 
     an amputation. If you have to cut your hand off, do you cut 
     it off a finger at a time or just cut your hand off and go 
     on?''
       Families of Wildwood residents say they worried most about 
     the difficulties involved in relocation. Three months 
     earlier, Mr. Dale had been moved from Room 400 to Room 303 to 
     accommodate the renovations. ``It doesn't seem like a big 
     move, but it really is,'' says Mrs. Vukovits. ``He went 
     downhill. He fell going to the bathroom. It was a longer 
     distance to the dining room, so he had to start using a 
     wheelchair. He stopped going to activities.''
       ``He was just getting over that,'' she says, when the 
     evictions were announced.
       Mr. Hastings says the evictions were scheduled to occur 
     hallway by hallway over five months. ``We didn't want to 
     shock everybody,'' he says. But when news about waiting lists 
     got around, he says. ``People panicked a little bit and 
     left.''
       Joining in the exodus were some residents who still paid 
     the higher private rates but who realized that they, too, 
     might eventually need Medicaid, and Wildwood's occupancy 
     plunged from 150 to 78. Mr. Hastings says it has rebounded 
     into the 90s.
       Most who left found homes through their own searching. Many 
     sought help from Kay Mercer, a 62-year-old stroke victim who 
     had been resident council president. ``They followed me 
     here,'' she says at her new home, the Oaks Rehabilitation and 
     Health Care Center, where several Wildwood residents 
     including Mrs. Nelson and Mr. Biech moved. Mr. Dale moved to 
     another home, where he has adjusted to the new view from his 
     window. ``I don't think I bother anybody. I hope,'' he say 
     one warm spring day, eating lunch.
       Others didn't fare so well. Two days after Wildwood 
     resident Jane Van Duyn moved into another nursing home, the 
     57-year-old woman with severe multiple sclerosis slipped into 
     a coma. She died within the week. Her husband, Ed Van Duyn, 
     says he can't blame her death on the move, since she was 
     already quite weak, but he notes that the disease leaves its 
     victims vulnerable to stress and even slight temperature 
     changes. ``Every trauma they get sets them back.'' . . .
       Asked about the death, Mr. Barr said, ``We're dealing with 
     old people who are fragile, who already have been moved out 
     of their own home, and are in a different home, and there 
     certainly is absolutely no easy way to deal with displacing 
     them again.''
       Residents and families say that a final insult was that 
     they had to pay expenses connected with the eviction, 
     including the $45 telephone reconnection charges. Mr. Van 
     Duyn says Vencor refused even to pay the $200 ambulance fee 
     for moving his wife. Mr. Barr says Vencor would reconsider 
     this decision.
       Residents and their families say they were too overwhelmed 
     at first to fight back. But Lou Ann Newman, Mrs. Nelson's 
     daughter, wrote to Vencor and state agencies on Feb. 6 asking 
     for an investigation. ``This matter was handled in a most 
     cold, calloused and unprofessional way,'' she wrote. She says 
     she didn't get a response.
       Mr. Hastings, the administrator, who was familiar with Mrs. 
     Newman's letter, says, ``If I was in her position, I'm sure 
     some people thought it was cold and callous because we were 
     throwing them out.''
       Vencor's Mr. Barr says a regional official overseeing 
     Wildwood was reprimanded for not responding to the letter. 
     Last week, that official resigned. Mr. Barr adds: ``I don't 
     want to be defensive of a comedy of errors here because it 
     appears that there were some bad judgments made here. And I'm 
     in a situation right now where I'd like to go up and choke 
     the administrator [Mr. Hastings] and pound his head on the 
     floor a couple of times and tell him not to do it again. I 
     don't want him to use the kind of bad manners that it looks 
     like we used here by not thinking through the whole process 
     with these patients.''
       On a recent tour of Wildwood, the upbeat Mr. Hastings 
     pointed to the renovations and said, ``What you're seeing is 
     only going to get better.'' Among his ideas, which the 
     company says are preliminary: a day-care center for the 
     elderly, a hospice for patients expected to die within six 
     months and the novel idea of overnight stays for patients who 
     usually live elsewhere. ``With the midnight care, you could 
     drop off your father at dinner and pick him up in the 
     morning,'' Mr. Hastings said. ``We're looking for a niche we 
     could fill.''
       In Room 006, Ms. Arthur was waiting to move. Weeks ago, she 
     packed her belongings into six boxes and stacked them in the 
     bathroom. But she has no immediate family, and she says her 
     guardian had been out of town. The adjoining rooms--formerly 
     occupied by her friends, Mrs. Mercer, Mrs. Nelson, Mr. Dale, 
     Mr. Biech--were vacant.
       Holding her big white purse, Ms. Arthur sat in a corner 
     beneath the bare walls, and said she didn't know why she had 
     to leave. ``Everyone I've talked to, they've had tears in 
     their eyes. Many here had to go and I miss them so. They were 
     wonderful,'' she says. ``If there was anything I could do to 
     turn it different, I would. I like it here very, very much. 
     It's good. Oh me, why? All these fine buildings and fine 
     furniture. Whatever the cause, I can't figure.''

  Mr. GRAHAM. Mr. President, I submit the bill and ask for its 
immediate referral.
  The PRESIDING OFFICER. The bill will be received and appropriately 
referred.

                          ____________________