NEW YORK — The fear started when a few patients saw their nurses and dietitians posting job searches on LinkedIn.
Word spread to Facebook groups, and patients started calling Coram CVS, a major U.S. supplier of the compounded IV nutrients on which they rely for survival. To their dismay, CVS Health confirmed the rumors on June 1: It was closing 36 of the 71 branches of its Coram home infusion business and laying off about 2,000 nurses, dietitians, pharmacists, and other employees.
Many of the patients left in the lurch have life-threatening digestive disorders that render them unable to eat or drink. They depend on parenteral nutrition, or PN — in which amino acids, sugars, fats, vitamins, and electrolytes are pumped, in most cases, through a specialized catheter directly into a large vein near the heart.
The day after CVS' move, another big supplier, Optum Rx, announced its own consolidation. Suddenly, thousands would be without their highly complex, shortage-plagued, essential drugs and nutrients.
"With this kind of disruption, patients can't get through on the phones. They panic," said Cynthia Reddick, a senior nutritionist who was let go in the CVS restructuring.
"It was very difficult. Many emails, many phone calls, acting as a liaison between my doctor and the company," said Elizabeth Fisher Smith, a 32-year-old public health instructor in New York City, whose Coram branch closed. A rare medical disorder has forced her to rely on PN for survival since 2017. "In the end, I got my supplies, but it added to my mental burden. And I'm someone who has worked in healthcare nearly my entire adult life."
CVS had abandoned most of its less lucrative market in home parenteral nutrition, or HPN, and "acute care" drugs like IV antibiotics. Instead, it would focus on high-dollar, specialty intravenous medications like Remicade, which is used for arthritis and other autoimmune conditions.
Home and outpatient infusions are a growing business in the United States, as new drugs for chronic illness enable patients, healthcare providers, and insurers to bypass in-person treatment. Even the wellness industry is cashing in, with spa storefronts and home hydration services.
But while reimbursement for expensive new drugs has drawn the interest of big corporations and private equity, the industry is strained by a lack of nurses and pharmacists. And the less profitable parts of the business — as well as the vulnerable patients they serve — are at serious risk.
This includes the 30,000-plus Americans who rely for survival on parenteral nutrition, which has 72 ingredients. Among those patients are premature infants and post-surgery patients with digestive problems, and people with short or damaged bowels, often the result of genetic defects.
While some specialty infusion drugs are billed through pharmacy benefit managers that typically pay suppliers in a few weeks, medical plans that cover HPN, IV antibiotics, and some other infusion drugs can take 90 days to pay, said Dan Manchise, president of Mann Medical Consultants, a home care consulting company.
In the 2010s, CVS bought Coram, and Optum bought up smaller home infusion companies, both with the hope that consolidation and scale would offer more negotiating power with insurers and manufacturers, leading to a more stable market. But the level of patient care required was too high for them to make money, industry officials said.
"With the margins seen in the industry," Manchise said, "if you've taken on expensive patients and you don't get paid, you're dead."
In September, CVS announced its purchase of Signify Health, a high-tech company that sends out home health workers to evaluate billing rates for "high-priority" Medicare Advantage patients, according to an analyst's report. In other words, as CVS shed one group of patients whose care yields low margins, it was spending $8 billion to seek more profitable ones.
CVS "pivots when necessary," spokesperson Mike DeAngelis told KHN. "We decided to focus more resources on patients who receive infusion services for specialty medications" that "continue to see sustained growth." Optum declined to discuss its move, but a spokesperson said the company was "steadfastly committed to serving the needs" of more than 2,000 HPN patients.
DeAngelis said CVS worked with its HPN patients to "seamlessly transition their care" to new companies.
However, several Coram patients interviewed about the transition indicated it was hardly smooth. Other HPN businesses were strained by the new demand for services, and frightening disruptions occurred.
Smith had to convince her new supplier that she still needed two IV pumps — one for HPN, the other for hydration. Without two, she'd rely partly on "gravity" infusion, in which the IV bag hangs from a pole that must move with the patient, making it impossible for her to keep her job.
"They just blatantly told her they weren't giving her a pump because it was more expensive, she didn't need it, and that's why Coram went out of business," Smith said.
Many patients who were hospitalized at the time of the switch — several inpatient stays a year are not unusual for HPN patients — had to remain in the hospital until they could find new suppliers. Such hospitalizations typically cost at least $3,000 a day.
"The biggest problem was getting people out of the hospital until other companies had ramped up," said Dr. David Seres, a professor of medicine at the Institute of Human Nutrition at Columbia University Medical Center. Even over a few days, he said, "there was a lot of emotional hardship and fear over losing long-term relationships."
To address HPN patients' nutritional needs, a team of physicians, nurses, and dietitians must work with their supplier, Seres said. The companies conduct weekly bloodwork and adjust the contents of the HPN bags, all under sterile conditions because these patients are at risk of blood infections, which can be grave.
As for Coram, "it's pretty obvious they had to trim down business that was not making money," Reddick said, adding that it was noteworthy both Coram and Optum Rx "pivoted the same way to focus on higher-dollar, higher-reimbursement, high-margin populations."
"I get it, from the business perspective," Smith said. "At the same time, they left a lot of patients in a not great situation."
Smith shares a postage-stamp Queens apartment with her husband, Matt; his enormous flight simulator (he's an amateur pilot); cabinets and fridges full of medical supplies; and two large, friendly dogs, Caspian and Gretl. On a recent morning, she went about her routine: detaching the bag of milky IV fluid that had pumped all night through a central line implanted in her chest, flushing the line with saline, injecting medications into another saline bag, and then hooking it through a paperback-sized pump into her central line.
Smith has a connective tissue disorder called Ehlers-Danlos syndrome, which can cause many health problems. As a child, Smith had frequent issues such as a torn Achilles tendon and shoulder dislocations. In her 20s, while working as an EMT, she developed severe gut blockages and became progressively less able to digest food. In 2017, she went on HPN and takes nothing by mouth except for an occasional sip of liquid or bite of soft food, in hopes of preventing the total atrophy of her intestines. HPN enabled her to commute to George Washington University in Washington, D.C., where in 2020 she completed a master's in public health.
On days when she teaches at LaGuardia Community College — she had 35 students this semester — Smith is up at 6 a.m. to tend to her medical care, leaves the house at 9:15 for class, comes home in the afternoon for a bag of IV hydration, then returns for a late afternoon or evening class. In the evening she gets more hydration, then hooks up the HPN bag for the night. On rare occasions she skips the HPN, "but then I regret it," she said. The next day she'll have headaches and feel dizzy, sometimes losing her train of thought in class.
Smith describes a "love-hate relationship" with HPN. She hates being dependent on it, the sour smell of the stuff when it spills, and the mountains of unrecyclable garbage from the 120 pounds of supplies couriered to her apartment weekly. She worries about blood clots and infections. She finds the smell of food disconcerting; Matt tries not to cook when she's home. Other HPN patients speak of sudden cravings for pasta or Frosted Mini-Wheats.
Yet HPN "has given me my life back," Smith said.
She is a zealous self-caretaker, but some dangers are beyond her control. IV feeding over time is associated with liver damage. The assemblage of HPN bags by compounding pharmacists is risky. If the ingredients aren't mixed in the right order, they can crystallize and kill a patient, said Seres, Smith's doctor.
He and other doctors would like to transition patients to food, but this isn't always possible. Some eventually seek drastic treatments such as bowel lengthening or even transplants of the entire digestive tract.
"When they run out of options, they could die," said Dr. Ryan Hurt, a Mayo Clinic physician and president of the American Society for Parenteral and Enteral Nutrition.
And then there are the shortages.
In 2017, Hurricane Maria crippled dozens of labs and factories making IV components in Puerto Rico; next came the COVID-19 emergency, which shifted vital supplies to gravely ill hospital patients.
Prices for vital HPN ingredients can fluctuate unpredictably as companies making them come and go. For example, in recent years the cost of the sodium acetate used as an electrolyte in a bag of HPN ballooned from $2 to $25, then briefly to $300, said Michael Rigas, a co-founder of the home infusion pharmacy KabaFusion.
"There may be 50 different companies involved in producing everything in an HPN bag," Rigas said. "They're all doing their own thing — expanding, contracting, looking for ways to make money." This leaves patients struggling to deal with various shortages from saline and IV bags to special tubing and vitamins.
"In the last five years I've seen more things out of stock or on shortage than the previous 35 years combined," said Rigas.
The sudden retrenchment of CVS and Optum Rx made things worse. Another, infuriating source of worry: the steady rise of IV spas and concierge services, staffed by moonlighting or burned-out hospital nurses, offering IV vitamins and hydration to well-off people who enjoy the rush of infusions to relieve symptoms of a cold, morning sickness, a hangover, or just a case of the blahs.
In January, infusion professionals urged FDA Commissioner Robert Califf to examine spa and concierge services' use of IV products as an "emerging contributing factor" to shortages.
Bracha Banayan's concierge service, called IVDRIPS, started in 2017 in New York City and now employs 90 people, including 60 registered nurses, in four states, she said. They visit about 5,000 patrons each year, providing IV hydration and vitamins in sessions of an hour or two for up to $600 a visit. The goal is "to hydrate and be healthy" with a "boost that makes us feel better," Banayan said.
Although experts don't recommend IV hydration outside of medical settings, the market has exploded, Banayan said: "Every med spa is like, ‘We want to bring in IV services.' Every single paramedic I know is opening an IV center."
Matt Smith, Elizabeth's husband, isn't surprised. Educated as a lawyer, he is a paramedic who trains others at Columbia University Irving Medical Center. "You give someone a choice of go up to some rich person's apartment and start an IV on them, or carry a 500-pound person living in squalor down from their apartment," he said. "There's one that's going to be very hard on your body and one very easy on your body."
The very existence of IV spa companies can feel like an insult.
"These people are using resources that are literally a matter of life or death to us," Elizabeth Smith said.
For five months last year, Rylee Cornwell, 18 and living in Spokane, Washington, could rarely procure lipids for her HPN treatment. She grew dizzy or fainted when she tried to stand, so she mostly slept. Eventually she moved to Phoenix, where the Mayo Clinic has many Ehlers-Danlos patients and supplies are easier to access.
Mike Sherels was a University of Minnesota Gophers football coach when an allergic reaction caused him to lose most of his intestines. At times he's had to rely on an ethanol solution that damages the ports on his central line, a potentially deadly problem "since you can only have so many central access sites put into your body during your life," he said.
When Faith Johnson, a 22-year-old Las Vegas student, was unable to get IV multivitamins, she tried crushing vitamin pills and swallowing the powder, but couldn't keep the substance down and became malnourished. She has been hospitalized five times this past year.
Dread stalks Matt Smith, who daily fears that Elizabeth will call to say she has a headache, which could mean a minor allergic or viral issue — or a bloodstream infection that will land her in the hospital.
Even more worrying, he said: "What happens if all these companies stop doing it? What is the alternative? I don't know what the economics of HPN are. All I know is the stuff either comes or it doesn't."
After more than five decades of trying, the drug industry is on the verge of providing effective immunizations against the respiratory syncytial virus, which has put an estimated 90,000 U.S. infants and small children in the hospital since the start of October.
But only one of the shots is designed to be given to babies, and a glitch in congressional language may make it difficult to allow children from low-income families to get it as readily as the well-insured.
Since 1994, routine vaccination has been a childhood entitlement under the Vaccines for Children program, through which the federal government buys millions of vaccines and provides them free through pediatricians and clinics to children who are uninsured, underinsured, or on Medicaid — more than half of all American kids.
The 1993 law creating the program didn't specifically include antibody shots, which were used only as rare emergency therapy at the time the bill was written.
But the first medication of its kind likely to be available to babies, called nirsevimab (it was approved in Europe in December, and FDA approval is expected this summer), is not a vaccine but rather a monoclonal antibody that neutralizes RSV in the bloodstream.
The Centers for Disease Control and Prevention's Advisory Committee on Immunization Practices is certain to recommend giving the antibody to infants, said Dr. Kelly Moore, president of the advocacy group Immunize.org. The CDC is currently assessing whether nirsevimab would be eligible for the Vaccines for Children program, agency spokesperson Kristen Nordlund told KHN.
Failing to do so would "consign thousands upon thousands of infants to hospitalization and serious illness for semantic reasons despite existence of an immunization that functionally performs just like a seasonal vaccine," Moore said.
Officials from Sanofi, which is producing the nirsevimab injection along with AstraZeneca, declined to state a price but said the range would be similar to that of a pediatric vaccine course. The CDC pays about $650 for the most expensive routine vaccine, the four shots against pneumococcal infection. In other words, FDA approval would make nirsevimab a blockbuster drug worth billions annually if it's given to a large share of the 3.7 million or so children born in the U.S. each year.
Pfizer and GSK are making traditional vaccines against RSV and expect FDA approval later this year. Pfizer's shot initially would be given to pregnant women — to shield their babies from the disease — while GSK's would be given to the elderly.
Vaccines designed for infants are in the pipeline, but some experts are still nervous about them. A 1966 RSV vaccine trial failed spectacularly, killing two toddlers, and immunologists aren't totally in agreement over the cause, said Dr. Barney Graham, the retired National Institutes of Health scientist whose studies of the episode contributed to successful COVID-19 and RSV vaccines.
After two years of COVID lockdowns and masking slowed its transmission, RSV exploded across the United States this year, swamping pediatric intensive care units.
Sanofi and AstraZeneca hope to have nirsevimab approved by the FDA, recommended by the CDC, and deployed nationwide by fall to prevent future RSV epidemics.
Their product is designed to be provided before a baby's first winter RSV season. In clinical trials, the antibodies provided up to five months of protection. Most children wouldn't need a second dose because the virus is not a mortal danger to healthy kids over a year old, said Jon Heinrichs, a senior member of Sanofi's vaccines division.
If the antibody treatment is not accepted for the Vaccines for Children program, that will limit access to the shot for the uninsured and those on Medicaid, the majority of whom represent racial or ethnic minorities, Moore said. The drugmakers would have to negotiate with each state's Medicaid program to get it on their formularies.
Excluding the shot from Vaccines for Children "would only worsen existing health disparities," said Dr. Sean O'Leary, a professor of pediatrics at the University of Colorado and chair of the infectious diseases committee of the American Academy of Pediatrics.
RSV affects babies of all social classes but tends to hit poor, crowded households hardest, said Graham. "Family history of asthma or allergy makes it worse," he said, and premature babies are also at higher risk.
While 2% to 3% of U.S. infants are hospitalized with RSV each year, only a few hundred don't survive. But as many as 10,000 people 65 and older perish because of an infection every year, and a little-discussed legal change will make RSV and other vaccines more available to this group.
A section of the 2022 Inflation Reduction Act that went into effect Jan. 1 ends out-of-pocket payments for all vaccines by Medicare patients — including RSV vaccines, if they are licensed for this group.
Before, "if you hadn't met your deductible, it could be very expensive," said Dr. Leonard Friedland, vice president for scientific affairs and public health in GSK's vaccines division, which also makes shingles and combination tetanus-diphtheria-whooping cough boosters covered by the new law. "It's a tremendously important advance."
Of course, high levels of vaccine hesitancy are likely to blunt uptake of the shots regardless of who pays, said Jennifer Reich, a University of Colorado sociologist who studies vaccination attitudes.
New types of shots, like the Sanofi-AstraZeneca antibodies, often alarm parents, and Pfizer's shot for pregnant women is likely to push fear buttons as well, she said.
Public health officials "don't seem very savvy about how to get ahead" of claims that vaccines undermine fertility or otherwise harm people, said Reich.
On the other hand, this winter's RSV epidemic will be persuasive to many parents, said Heidi Larson, leader of the Vaccine Confidence Project and a professor of anthropology at the London School of Hygiene and Tropical Medicine.
"It's a scary thing to have your kid hospitalized with RSV," she said.
While unfortunate, "the high number of children who died or were admitted to the ICU in the past season with RSV — in some ways that's helpful," said Dr. Laura Riley, chair of obstetrics and gynecology at Weill Cornell Medicine in New York City.
Specialists in her field haven't really started talking about how to communicate with women about the vaccine, said Riley, who chairs the immunization group at the American College of Obstetricians and Gynecologists.
"Everyone's been waiting to see if it gets approved," she said. "The education has to start soon, but it's hard to roll out education before you roll out the shot."
States face steep challenges: making sure they don't disenroll people who are still entitled to Medicaid and connecting the rest to other sources of coverage.
The upheaval, which begins in April, will put millions of low-income Americans at risk of losing health coverage, threatening their access to care and potentially exposing them to large medical bills.
It will also put pressure on the finances of hospitals, doctors, and others relying on payments from Medicaid, a state-federal program that covers lower-income people and people with disabilities.
Almost three years ago, as COVID sent the economy into free fall, the federal government agreed to send billions of dollars in extra Medicaid funding to states on the condition that they stop dropping people from their rolls.
But legislation enacted in December will be phasing out that money over the next year and calls for states to resume cutting off from Medicaid people who no longer qualify.
Now, states face steep challenges: making sure they don't disenroll people who are still entitled to Medicaid and connecting the rest to other sources of coverage.
Even before the pandemic, states struggled to stay in contact with Medicaid recipients, who in some cases lack a stable address or internet service, do not speak English, or don't prioritize health insurance over more pressing needs.
"We have no illusion that this will be beautiful or graceful, but we will be doing everything we can not to lose anyone in the process," Dana Hittle, Oregon's interim Medicaid director, said of the so-called Medicaid unwinding.
With the rate of uninsured Americans at an all-time low, 8%, the course reversal will be painful.
The Biden administration has predicted that 15 million people — 17% of enrollees — will lose coverage through Medicaid or CHIP, the closely related Children's Health Insurance Program, as the programs return to normal operations. While many of the 15 million will fall off because they no longer qualify, nearly half will be dropped for procedural reasons, such as failing to respond to requests for updated personal information, a federal report said.
Certain states may be hit particularly hard: Nevada's enrollment in Medicaid and CHIP has risen 47% since February 2020. Many signed up toward the start of the pandemic, when the state's unemployment rate spiked to nearly 30%.
Ordinarily, people move in and out of Medicaid all the time. States, which have significant flexibility in how they run their Medicaid programs, typically experience significant "churn" as people's incomes change and they gain or lose eligibility.
The unwinding will play out over more than a year.
People who lose Medicaid coverage — in the more than 30 states covered by the federal marketplace — will have until July 31, 2024, to sign up for ACA coverage, CMS announced on Jan. 27. It's unclear whether the state-based marketplaces will offer the same extended open-enrollment period.
Even states that are taking far-reaching action to make sure people don't end up uninsured worry the transition will be rough.
In California alone, the state government forecasts that at least 2 million people out of 15 million in the program today will lose Medicaid coverage because of loss of eligibility or failure to reenroll.
"We acknowledge that this is going to be a bumpy road," California Health and Human Services Secretary Mark Ghaly said. "We're doing all we can to be prepared."
In an all-hands-on-deck effort, states are enlisting Medicaid health plans, doctors, hospitals, state insurance marketplaces, and an assortment of nonprofit groups, including schools and churches, to reach out to people at risk of losing coverage.
States will also use social media, television, radio, and billboards, as well as websites and mobile phone apps, to connect with enrollees. That's in addition to letters and emails.
Nevada has developed a mobile app to communicate with members, but only 15,000 of its 900,000 Medicaid enrollees have signed up so far.
"[T]he transient nature of Nevada's population means that maintaining proper contact information has been difficult," a state report said in November. At least 1 in 4 letters sent to enrollees were returned on account of a wrong address.
The law that allows states to begin disenrolling ineligible Medicaid recipients on April 1 bars states from disenrolling anyone because mail was returned as undeliverable until the state has made a "good faith effort" to contact the person at least one other way, such as by phone or email.
To further reduce disruption, the law requires states to cover children in Medicaid and CHIP for 12 months regardless of changes in circumstances, but that provision doesn't take effect for almost a year.
States will give Medicaid recipients at least 60 days to respond to requests for information before dropping them, said Jack Rollins, director of federal policy at the National Association of Medicaid Directors.
States will use government databases such as those from the IRS and Social Security Administration to check enrollees' income eligibility so they can renew some people's coverage automatically without having to contact them. But some states aren't taking full advantage of the databases.
States have until February to submit their unwinding plans to the federal Centers for Medicare & Medicaid Services, which will monitor the process.
But it is already clear that some states are doing much more than others to keep people insured.
Oregon plans to allow children to stay on Medicaid until age 6 and allow everyone else up to two years of eligibility regardless of changes in income and without having to reapply. No other state provides more than one year of guaranteed eligibility.
Oregon is also creating a subsidized health plan that would cover anyone who no longer qualifies for Medicaid but has an annual income below 200% of the federal poverty level, which amounts to about $29,000 for an individual, state officials said. The program will have benefits similar to Medicaid's at little or no cost to enrollees.
Rhode Island will automatically move people who are no longer eligible for Medicaid — and with annual incomes below 200% of the poverty rate — into an Affordable Care Act plan and pay their first two months of premiums. State officials hope the shift will be seamless for many enrollees because they'll be moving between health plans run by the same company.
California will move some people to a subsidized private plan on the state's marketplace, Covered California. Enrollees will have to agree and pay a premium if they don't qualify for a free plan. However, the premium could be as low as $10 a month, said Jessica Altman, executive director of Covered California. (Altman's father, Drew Altman, is president and CEO of KFF. KHN is an editorially independent program of KFF.)
"We want to make it easier to say yes to coverage," Altman said.
But experts worry about what will become of Florida Medicaid enrollees.
Florida doesn't have its own ACA marketplace. As in most states, its residents use the federal exchange to shop for ACA plans. As a result, the handoff of people from Medicaid to marketplace may not be as efficient as it would be if it involved two state agencies that regularly work together, said Jodi Ray, director of Florida Covering Kids and Families, a nonprofit that helps people find coverage.
Another concern for advocates is that Florida makes less use of government databases than other states to check enrollees' incomes. "We make everyone jump through hoops to get reenrolled instead of utilizing all the acceptable data," Ray said.
Florida typically takes weeks to process Medicaid applications, while some states do it in a day, she said.
Florida's unwinding plan illustrates the difficulty of reaching enrollees. The plan said that, since 2020, the state has identified 850,000 cases in which Medicaid recipients did not respond to requests for information.
Florida Medicaid officials did not return calls for comment.
While state officials struggle to manage the unwinding, healthcare providers are bracing for the fallout.
Dennis Sulser, chief executive of Billings, Montana-based Youth Dynamics, which provides mental health services to many children on Medicaid, expects some will lose coverage because they get lost in the process.
That could leave patients unable to pay and the nonprofit financially stretching to try to avoid children facing an interruption in treatment.
"If we had to discharge a child who is in our group home care, and they're only halfway through it and don't have all of the fundamentals of the care support needed, that could be tragic," Sulser said.
KHN correspondents Daniel Chang in Hollywood, Florida; Angela Hart in Sacramento, California; Katheryn Houghton in Missoula, Montana; Bram Sable-Smith in St. Louis; and Sam Whitehead in Atlanta contributed to this report.
Some nursing home owners moved money from their facilities through corporate arrangements that are widespread, and legal, in every state.
This article was published on Wednesday, February 1, 2023 in Kaiser Health News.
By Jordan Rau
After the nursing home where Leann Sample worked was bought by private investors, it started falling apart. Literally.
Part of a ceiling collapsed on a nurse, the air conditioning conked out regularly, and a toilet once burst on Sample while she was helping a resident in the bathroom, she recalled in a court deposition.
"It's a disgusting place," Sample, a nurse aide, testified in 2021.
The decrepit conditions Sample described weren't due to a lack of money. Over seven years, The Villages of Orleans Health & Rehabilitation Center, located in western New York near Lake Ontario, paid nearly $16 million in rent to its landlord — a company that was owned by the same investors who owned the nursing home, court records show. From those coffers, the owners paid themselves and family members nearly $10 million, while residents injured themselves falling, developed bedsores, missed medications, and stewed in their urine and feces because of a shortage of aides, New York authorities allege.
At the height of the pandemic, lavish payments flowed into real estate, management, and staffing companies financially linked to nursing home owners throughout New York, which requires facilities to file the nation's most detailed financial reports. Nearly half the state's 600-plus nursing homes hired companies run or controlled by their owners, frequently paying them well above the cost of services, a KHN analysis found, while the federal government was giving the facilities hundreds of millions in fiscal relief.
In 2020, these affiliated corporations collectively amassed profits of $269 million, yielding average margins of 27%, while the nursing homes that hired them were strained by staff shortages, harrowing injuries, and mounting COVID deaths, state records reveal.
"Even during the worst year of New York's pandemic, when homes were desperately short of staffing and their residents were dying by the thousands, some owners managed to come out millions of dollars ahead," said Bill Hammond, a senior fellow at the Empire Center for Public Policy, a think tank in Albany, New York.
Some nursing home owners moved money from their facilities through corporate arrangements that are widespread, and legal, in every state. Nationally, nearly 9,000 for-profit nursing homes — the majority — outsource crucial services such as nursing staff, management, and medical supplies to affiliated corporations, known as "related parties," that their owners own, invest in, or control, federal records show. Many homes don't even own their buildings but rent them from a related company. Homes pay related parties more than $12 billion a year, but federal regulators do not make them reveal how much they charge above the cost of services, and how much money ends up in owners' bank accounts.
In some instances, draining nursing home coffers through related parties may amount to fraud: Along with The Villages' investors, a handful of other New York owners are facing lawsuits from Attorney General Letitia James that claim they pocketed millions from their enterprises that the authorities say should have been used for patient care.
Deciphering these financial practices is timely because the Centers for Medicare & Medicaid Services is weighing what kind of stringent staffing levels it may mandate, potentially the biggest change to the industry in decades. A proposal due this spring is sure to spark debate about what homes can additionally afford to spend versus what changes would require greater government support. Federal Medicaid experts warned in January that related-party transactions "may artificially inflate" the true cost of nursing home care in reports that facilities file to the government. And the U.S. Department of Health and Human Services' inspector general is investigating whether homes properly report related-party costs.
'A Dog Would Get Better Care'
Beth Martino, a spokesperson for the American healthcare Association, said there is no evidence that related companies charge more than independent contractors do for the same services. "The real story is that nursing homes are struggling right now — to recruit and retain caregivers and to keep their doors open," Martino said.
Lawyers for The Villages and its investors have asked the judge in the case for a delay until April to respond to the allegations of fraud and resident neglect in the lawsuit that the attorney general filed last November. One of the lawyers, Cornelius Murray, said in court papers that many allegations of short-staffing occurred during the pandemic when workers were out sick and the facility was required to accept any patient with COVID-19. Lawyers declined to discuss the case with KHN.
In a deposition for that case, Ephram "Mordy" Lahasky, one of Fulton's owners, disputed that he and fellow investors improperly depleted The Villages' resources to the detriment of residents.
"I can assure you there was a lot of money left in the facility to make sure that it was not running on a shoestring budget," he testified. The Villages, Lahasky said, was a "beautiful facility" with "beautiful gardens" where "residents look great" and employee morale was strong.
That wasn't the opinion of Margarette Volkmar. She said in an affidavit filed with the state lawsuit that her husband was left in his bed with only a diaper on, was bruised by a fall, choked by another resident, given the wrong medication doses, dressed in other residents' clothes, and covered in unexplainable bruises. After she moved him to another home, he gained back the 60 pounds he had lost and never fell at the new facility, she testified.
"I wouldn't put a dog in Villages," she said. "A dog would get better care than he did."
Owners Invested in Hundreds of Homes
Both The Villages and its related real estate corporation, Telegraph Realty, were controlled by the same trio of investors, although they arranged for the nursing home to be listed in regulatory filings as solely owned by a silent partner and did not disclose their co-ownership of The Villages, court records show. One co-owner, David Gast, disclosed his net worth was $22 million and revealed that he had shares in more than 100 nursing homes, according to a loan application included in court records. Lahasky, whose disclosed net worth was nearly $73 million, said in a deposition he was the biggest nursing home proprietor in Pennsylvania and owned one of New York's largest ambulance companies.
A third co-owner, Sam Halper, who reported a net worth of about $23 million, is under federal criminal indictment in Pennsylvania on charges of submitting false reports to the government about staffing and patient health at two nursing homes. He has pleaded not guilty. Added together, all the investors in corporations tied to The Villages have stakes or official roles in 275 other facilities across 28 states, federal records show.
The lease that The Villages had with Telegraph Realty required the home to pay up to $1 million in profits on top of the costs of debts and $50,000 a month for rent, according to a copy filed with the lawsuit. The attorney general alleged that, over seven years, the owners gave themselves and other investors more than $18 million from outsized rent profits, management fees, and proceeds from refinancing the property, an act that saddled The Villages with higher debt.
Lindsay Heckler, a supervising attorney at Center for Elder Law & Justice in Buffalo, which provides free legal help to older, disabled, and low-income adults, said she is concerned other nursing home owners in the state fail to provide quality care after purchasing facilities.
"When you see quality of care decline after an ownership change, the question needs to be asked: What's going on with the finances?" she said.
Inflated Rents and a Plea to Die
Separating a nursing home operation and its building into two corporations is a common practice around the country. In New York, for-profit nursing homes with related-party realty companies spent 19% more of their operating revenue toward rent in 2020 than did for-profits that leased from unaffiliated firms, KHN found.
Fulton Commons Care Center, a nursing home on Long Island, spent nearly a third of its 2020 revenue on rent, a higher portion than all but three other facilities in New York, financial records show. In a lawsuit filed in December, the attorney general charged that the rent paid to Fulton Commons Realty, the company that owned its East Meadow, New York, building, was grossly inflated. Both the home and real estate company were owned by Moshe Kalter and his extended family, according to documents filed with the lawsuit.
In 2020, the nursing home paid nearly $10 million in rent to Fulton Realty, but an auditor for the attorney general calculated the property expenses that year were less than $6 million. The owners of Fulton and their families gave themselves nearly $16 million over four years from inflated rent, substantial management fees, and "no-show" jobs for Kalter's eight children, the attorney general alleged.
"Rather than honor their legal duty to ensure the highest possible quality of life for the residents in their care, the Fulton Commons owners allegedly maintained insufficient staffing so they could take more money for their own personal gain," James said in a statement.
Raul Tabora Jr. and David Yaffe, lawyers for Kalter, called the lawsuit's charges "one-sided" in a written statement to KHN. They said that the payments to the children were not for jobs but because they were shareholders, and that Fulton kept an average balance of $3 million on hand to cover any pressing needs. "The evidence will demonstrate that any time resources are needed, they are provided by Mr. Kalter," the lawyers wrote.
Residents' families told investigators that staff shortages existed well before the pandemic. In an affidavit filed with the lawsuit, Frank Hoerauf Jr. said workers left his father sitting in adult diapers without pants and let his hair grow so long it covered his eyes. Another time, they left him screaming in pain from a urinary tract infection, he said.
"Fulton Commons seems like it was operated to be a cash machine for the owners where the care and the quality of life for residents there was very poor," Hoerauf said.
Another resident, Elena Milack, who had lost one foot to diabetes, complained about poor care for years, including having to ring the call bell for an hour to get help to get to the bathroom, according to an affidavit filed by her daughter-in-law and health proxy. "GET ME OUT OF HERE OR TELL ME WHAT I CAN TAKE TO KILL MYSELF," she texted her son in summer 2019. In 2020, she contracted an infection that turned her remaining foot black.
"Toes are all infected now," Milack, a retired law school secretary, texted. "[M]y upper foot is dying and will soon fall off. I am hoping the good Lord will take me before that happens." She died in November 2020.
Kalter said in a deposition he had never stepped inside his nursing home and did not supervise the quality of the care. He testified he granted full authority over the facility to its administrator and relied on his nephew, who was the controller of the home, to interact with the home's leadership, according to court records.
In his deposition, Kalter said: "I have no personal knowledge of anything that's going on in the nursing home."
According to an affidavit from an auditor for the attorney general's office, over the course of four years, Kalter deposited nearly $12 million from Fulton into his joint bank account with his wife, Frady.
KHN data editor Holly K. Hacker contributed to this report.
Payers have long feared CMS would demand repayment of billions of dollars in overcharges.
This article was published on Monday, January 30, 2023 in Kaiser Health News.
By Fred Schulte
Medicare Advantage plans for seniors dodged a major financial bullet Monday as government officials gave them a reprieve for returning hundreds of millions of dollars or more in government overpayments — some dating back a decade or more.
The health insurance industry had long feared the Centers for Medicare & Medicaid Services would demand repayment of billions of dollars in overcharges the popular health plans received as far back as 2011.
But in a surprise action, CMS announced it would require next to nothing from insurers for any excess payments they received from 2011 through 2017. CMS will not impose major penalties until audits for payment years 2018 and beyond are conducted, which have yet to be started.
While the decision could cost Medicare plans billions of dollars in the future, it will take years before any penalty comes due. And health plans will be allowed to pocket hundreds of millions of dollars in overcharges and possibly much more for audits before 2018. Exactly how much is not clear because audits as far back as 2011 have yet to be completed.
In late 2018, CMS officials said the agency would collect an estimated $650 million in overpayments from 90 Medicare Advantage audits conducted for 2011 through 2013, the most recent ones available. Some analysts calculated overpayments to plans of at least twice that much for the three-year period. CMS is now conducting audits for 2014 and 2015.
The estimate for the 2011-13 audits was based on an extrapolation of overpayments found in a sampling of patients at each health plan. In these reviews, auditors examine medical records to confirm whether patients had the diseases for which the government reimbursed health plans to treat.
Through the years, those audits — and others conducted by government watchdogs — have found that health plans often cannot document that they deserved extra payments for patients they said were sicker than average.
The decision to take earlier audit findings off the table means that CMS has spent tens of millions of dollars conducting audits as far back as 2011 — much more than the government will be able to recoup.
In 2018, CMS said it pays $54 million annually to conduct 30 of the audits. Without extrapolation for years 2011-17, CMS won't come near to recouping that much.
CMS Deputy Administrator Dara Corrigan called the final rule a "commonsense approach to oversight." Corrigan said she did not know how much money would go uncollected from years prior to 2018.
Health and Human Services Secretary Xavier Becerra said the rule takes "long overdue steps to move in the direction of accountability."
"Going forward, this is good news. We should all be happy that they are doing that [extrapolation]," said former CMS official Ted Doolittle. But he added: "I do wish they were pushing back further [and extrapolating earlier years]. That would seem to be fair game," he said.
David Lipschutz, an attorney with the Center for Medicare Advocacy, said he was still evaluating the rule, but noted: "It is our hope that CMS would use everything within their discretion to recoup overpayments made to Medicare Advantage plans." He said that "it is unclear if they are using all of their authority."
Mark Miller, who is the executive vice president of healthcare policy for Arnold Ventures and formerly worked at the Medicare Payment Advisory Commission, a congressional advisory board, said extrapolating errors found in medical coding have always been a part of government auditing. "It strikes me as ridiculous to run a sample and find an error rate and then only collect the sample error rate as opposed to what it presents to the entire population or pool of claims," he said. (KHN receives funding support from Arnold Ventures.)
Last week, KHN released details of the 90 audits from 2011-2013, which were obtained through a Freedom of Information Act lawsuit. The audits found about $12 million in net overpayments for the care of 18,090 patients sampled for the three-year period.
In all, 71 of the 90 audits uncovered net overpayments, which topped $1,000 per patient on average in 23 audits. CMS paid the remaining plans too little on average, anywhere from $8 to $773 per patient, the records showed.
Since 2010, the federal Centers for Medicare & Medicaid services has threatened to crack down on billing abuses in the popular health plans, which now cover more than 30 million Americans. Medicare Advantage, a fast-growing alternative to original Medicare, is run primarily by major insurance companies including Humana, UnitedHealthcare, Centene, and CVS/Aetna.
But the industry has succeeded in opposing extrapolation of overpayments, even though the audit tool is widely used to recover overcharges in other parts of the Medicare program.
That has happened despite dozens of audits, investigations, and whistleblower lawsuits alleging that Medicare Advantage overcharges cost taxpayers billions of dollars a year.
Corrigan said Monday that CMS expected to collect $479 million from overpayments in 2018, the first year of extrapolation. Over the next decade, it could recoup $4.7 billion, she said.
Medicare Advantage plans also face potentially hundreds of millions of dollars in clawbacks from a set of unrelated audits conducted by the Health and Human Services inspector general.
The audits include an April 2021 review alleging that a Humana Medicare Advantage plan in Florida had overcharged the government by nearly $200 million in 2015.
Carolyn Kapustij, the Office of the Inspector General's senior adviser for managed care, said the agency has conducted 17 such audits that found widespread payment errors — on average 69% for some medical diagnoses. In these cases, the health plans "did not have the necessary support [for these conditions] in the medical records, which has caused overpayments."
"Although the MA organizations usually disagreed with us, they almost always had little disagreement with our finding that their diagnoses were not supported," she said.
While CMS has taken years to conduct the Medicare Advantage audits, it also has faced criticism for permitting lengthy appeals that can drag on for years. These delays have drawn sharp criticism from the Government Accountability Office, the watchdog arm of Congress.
Leslie Gordon, an acting director of the GAO health team, said that until CMS speeds up the process, it "will fail to recover improper payments of hundreds of millions of dollars annually."
KHN senior correspondent Phil Galewitz contributed to this report.
The $1.7 trillion spending package Congress passed in December included a two-year extension for telehealth, but also signaled reluctance to make the changes permanent.
This article was published on Tuesday, January 31, 2023 in Kaiser Health News.
When the COVID-19 pandemic hit, Dr. Corey Siegel was more prepared than most of his peers.
Half of Siegel's patients — many with private insurance and Medicaid — were already using telehealth, logging onto appointments through phones or computers. "You get to meet their family members; you get to meet their pets," Siegel said. "You see more into their lives than you do when they come to you."
Siegel's Medicare patients weren't covered for telehealth visits until the pandemic drove Congress and regulators to temporarily pay for remote medical treatment just as they would in-person care.
Siegel, section chief for gastroenterology and hepatology at Dartmouth-Hitchcock Medical Center, is licensed in three states and many of his Medicare patients were frequently driving two to three hours round trip for appointments, "which isn't a small feat," he said.
The $1.7 trillion spending package Congress passed in December included a two-year extension of key telehealth provisions, such as coverage for Medicare beneficiaries to have phone or video medical appointments at home. But it also signaled political reluctance to make the payment changes permanent, requiring federal regulators to study how Medicare enrollees use telehealth.
The federal extension "basically just kicked the can down the road for two years," said Julia Harris, associate director for the health program at the D.C.-based Bipartisan Policy Center think tank. At issue are questions about the value and cost of telehealth, who will benefit from its use, and whether audio and video appointments should continue to be reimbursed at the same rate as face-to-face care.
Before the pandemic, Medicare paid for only narrow uses of remote medicine, such as emergency stroke care provided at hospitals. Medicare also covered telehealth for patients in rural areas but not in their homes — patients were required to travel to a designated site such as a hospital or doctor's office.
But the pandemic brought a "seismic change in perception" and telehealth "became a household term," said Kyle Zebley, senior vice president of public policy at the American Telemedicine Association.
The omnibus bill's provisions include: paying for audio-only and home care; allowing for a variety of doctors and others, such as occupational therapists, to use telehealth; delaying in-person requirements for mental health patients; and continuing existing telehealth services for federally qualified health clinics and rural health clinics.
Telehealth use among Medicare beneficiaries grew from less than 1% before the pandemic to more than 32% in April 2020. By July 2021, the use of remote appointments retreated somewhat, settling at 13% to 17% of claims submitted, according to a fee-for-service claims analysis by McKinsey & Co.
Fears over potential fraud and the cost of expanding telehealth have made politicians hesitant, said Josh LaRosa, vice president at the Wynne Health Group, which focuses on payment and care delivery reform. The report required in the omnibus package "is really going to help to provide more clarity," LaRosa said.
In a 2021 report, the Government Accountability Office warned that using telehealth could increase spending in Medicare and Medicaid, and historically the Congressional Budget Office has said telehealth could make it easier for people to use more healthcare, which would lead to more spending.
Advocates like Zebley counter that remote care doesn't necessarily cost more. "If the priority is preventative care and expanding access, that should be taken into account when considering costs," Zebley said, explaining that increased use of preventative care could drive down more expensive spending.
Siegel and his colleagues at Dartmouth see remote care as a tool for helping chronically ill patients receive ongoing care and preventing expensive emergency episodes. It "allows patients to not be burdened by their illnesses," he said. "It's critical that we keep this going."
Some of Seigel's work is funded by The Leona M. and Harry B. Helmsley Charitable Trust. (The Helmsley Charitable Trust also contributes to KHN.)
For the past nine months, Dartmouth Health's telehealth visits plateaued at more than 500 per day. That's 10% to 15% of all outpatient visits, said Katelyn Darling, director of operations for Dartmouth's virtual care center.
"Patients like it and they want to continue doing it," Darling said, adding that doctors — especially psychologists — like telehealth too. If Congress decides not to continue funding for remote at-home visits after 2024, Darling said, she fears patients will have to drive again for appointments that could have been handled remotely.
The same fears are worrying leaders at Sanford Health, which provides services across the Upper Midwest.
"We absolutely need those provisions to become permanent," said Brad Schipper, president of virtual care at Sanford, which has health plan members, hospitals, clinics, and other facilities in the Dakotas, Iowa, and Minnesota. In addition to the provisions, Sanford is closely watching whether physicians will continue to get paid for providing care across state lines.
During the pandemic, licensing requirements in states were often relaxed to enable doctors to practice in other states and many of those requirements are set to expire at the end of the public health emergency.
Licensing requirements were not addressed in the omnibus, and to ensure telehealth access, states need to allow physicians to treat patients across state lines, said Dr. Jeremy Cauwels, Sanford Health's chief physician. This has been particularly important in providing mental healthcare, he said; virtual visits now account for about 20% of Sanford's appointments.
Sanford is based in Sioux Falls, South Dakota, and Cauwels recalled one case in which a patient lived four hours from the closest child-adolescent psychiatrist and was "on the wrong side of the border." Because of the current licensing waivers, Cauwels said, the patient's wait for an appointment was cut from several weeks to six days.
"We were able to get that kid seen without Mom taking a day off to drive back and forth, without a six-week delay, and we were able to do all the things virtually for that family," Cauwels said.
Psychiatrist Dr. Sara Gibson has used telehealth for decades in rural Apache County, Arizona. "There are some people who have no access to care without telehealth," she said. "That has to be added into the equation."
Gibson, who is also medical director for Little Colorado Behavioral Health Centers in Arizona, said one key question for policymakers as they look ahead is not whether telehealth is better than face-to-face. It's "telehealth vs. no care," she said.
This story was produced by KHN (Kaiser Health News), a national newsroom that produces in-depth journalism about health issues. Together with Policy Analysis and Polling, KHN is one of the three major operating programs at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit organization providing information on health issues to the nation.
Panel disagrees with FDA proposal that everyone get at least one shot a year, saying more information is needed.
This article was published on Friday, January 27, 2023 in Kaiser Health News.
By Arthur Allen, Kaiser Health News
At a meeting to simplify the nation's COVID vaccination policy, the FDA's panel of experts could agree on only one thing: Information is woefully lacking about how often different groups of Americans need to be vaccinated. That data gap has contributed to widespread skepticism, undervaccination, and ultimately unnecessary deaths from COVID-19.
The committee voted unanimously Thursday to support the FDA's proposal for all vaccine-makers to adopt the same strain of the virus when making changes in their vaccines, and suggested they might meet in May or June to select a strain for the vaccines that would be rolled out this fall.
However, the panel members disagreed with the FDA's proposal that everyone get at least one shot a year, saying more information was needed to make such a declaration. Several panelists noted that in recent studies, only about a third of people hospitalized with a positive COVID test actually were there because of COVID illness. That's because everyone entering a hospital is tested for COVID, so deaths of patients with incidental infections are counted as COVID deaths even when it isn't the cause.
The experts questioned the rationale for annual shots for everyone, given that current vaccines do not seem to protect against infection for more than a few months. Yet even a single booster seems to prevent death and hospitalization in most people, except for the very old and people with certain medical conditions.
"We need the CDC to tell us exactly who is getting hospitalized and dying of this virus — the ages, vulnerability, the type of immune compromise, and whether they were treated with antivirals. And we need immunological data to indicate who's at risk," said Dr. Paul Offit, director of the Vaccine Education Center and a pediatrician at Children's Hospital of Philadelphia. "Only then can we decide who gets vaccinated with what and when."
Offit and others have expressed frustration over the lack of clear government messaging on what the public can expect from COVID vaccines. While regular boosters might be important for keeping the elderly and medically frail out of the hospital, he said, the annual boosters suggested by the FDA and the drug companies may not be necessary for everyone.
"The goal is to keep people out of the hospital," he said. "For the vulnerable, it would be important for vaccines to keep up with circulating strains. But for the general population, we already have a vaccine that prevents hospitalization."
Other panelists said the government needs to push research harder to get better vaccines. Pamela McGinnis, a retired official of the National Institutes of Health, said she had trouble explaining to her two young-adult sons why they promptly got sick after venturing out to bars one night only weeks after getting their bivalent booster.
"'Think how sick you would have gotten if you weren't fully vaccinated' is not a great message," she said. "I'm not sure ‘You would have landed in the hospital' resonates with recipients of the disease."
Members of the FDA's advisory committee have been irked in recent months, saying the agency didn't present them with all the data it had on the bivalent vaccine before it was released in September. And some critics have said the FDA should have instructed drug companies to include only the newer strains of the virus in the shot.
Asked about that Thursday, Jerry Weir, a senior FDA vaccine officer, said his "gut feeling" was that a vaccine matched to a single omicron strain would have performed better than the bivalent shot, which also contains the original COVID strain. "But the real question is where we're headed," he said, "and I don't know the answer."
Perhaps the most important presentation Thursday was from Heather Scobie, who keeps tabs on COVID at the Centers for Disease Control and Prevention. She reported that fewer than half of Americans 65 and older had gotten the latest booster, and that only two-thirds of that age group had gotten even a single booster.
Yet evidence continues to mount that it's mostly the elderly who are at serious risk from COVID. Death rates from the disease have declined in every age group except those over 75 since April, despite the uptick in new strains. Except for the very old, the death rate has hovered around 1 in 100,000 since April. Earlier in 2022, babies 6 months old and younger were hospitalized and died at relatively high rates. Vaccination levels in the 4-and-under group hover at about 10%.
While acknowledging the FDA's desire to regularize its COVID vaccine policy, panel members said it's still too early to know for sure whether COVID will surge only in the winter, like flu, respiratory syncytial virus, and other respiratory infections.
"For the next few years we may not know how often we need to make a strain change in the vaccine," said Dr. Steven Pergam, medical director of infection prevention at the Seattle Cancer Care Alliance. Or even if people who are not in poor health or elderly need additional boosters.
One vaccine-maker represented at the meeting, Novavax, said it would need to know by the end of March which strain to include in its vaccine for fall. Companies with mRNA vaccines like Pfizer and Moderna can change their formulas faster, but their products aren't clearly better than Novavax's.
All three of those vaccine-makers revealed at the meeting that they are developing single-dose vials or prefilled syringes. Up to now, they've delivered their vaccines in multidose vials, but since the government has run out of money to buy vaccines, individual pediatricians may order them in the future. Since the vaccine must be used quickly once a vial is open, doctors are leery of wasting vaccine and losing money.
The lack of open nursing home beds is marooning some patients in hospitals for weeks while social workers seek placements.
WAUKON, Iowa — Marjorie Kruger was stunned to learn last fall that she would have to leave the nursing home where she'd lived comfortably for six years.
The Good Samaritan Society facility in Postville, Iowa, would close, administrators told Kruger and 38 other residents in September. The facility joined a growing list of nursing homes being shuttered nationwide, especially in rural areas.
"The rug was taken out from under me," said Kruger, 98. "I thought I was going to stay there the rest of my life."
Her son found a room for her in another Good Samaritan center in Waukon, a small town 18 miles north of Postville. Kruger said the new facility is a pleasant place, but she misses her friends and longtime staffers from the old one. "We were as close as a nice family," she said.
The Postville facility's former residents are scattered across northeastern Iowa. Some were forced to move twice, after the first nursing home they transferred to also went out of business.
Owners say the closures largely stem from a shortage of workers, including nurses, nursing assistants, and kitchen employees.
The problem could deepen as pandemic-era government assistance dries up and care facilities struggle to compete with rising wages offered by other employers, industry leaders and analysts predict. Many care centers that have managed to remain open are keeping some beds vacant because they don't have enough workers to responsibly care for more residents.
The pandemic brought billions of extra federal dollars to the long-term care industry, which was inundated with COVID-19 infections and more than 160,000 resident deaths. Many facilities saw business decline amid lockdowns and reports of outbreaks. Staff members faced extra danger and stress.
From February 2020 to November 2021, the number of workers in nursing homes and other care facilities dropped by 410,000 nationally, according to the federal Bureau of Labor Statistics. Staffing has rebounded only by about 103,000 since then.
In Iowa, 13 of the 15 nursing homes that closed in 2022 were in rural areas, according to the Iowa healthcare Association. "In more sparsely populated areas, it's harder and harder to staff those facilities," said Brent Willett, the association's president. He noted that many rural areas have dwindling numbers of working-age adults.
The lack of open nursing home beds is marooning some patients in hospitals for weeks while social workers seek placements. More people are winding up in care facilities far from their hometowns, especially if they have dementia, obesity, or other conditions that require extra attention.
Colorado's executive director of healthcare policy and financing, Kim Bimestefer, told a conference in November that the state recognizes it needs to help shore up care facilities, especially in rural areas. "We've had more nursing homes go bankrupt in the last year than in the last 10 years combined," she said.
In Montana, at least 11 nursing homes — 16% of the state's facilities — closed in 2022, the Billings Gazette reported.
Nationally, the Centers for Medicare & Medicaid Services reported recently that 129 nursing homes had closed in 2022. Mark Parkinson, president of the American healthcare Association, said the actual count was significantly higher but the federal reports tend to lag behind what's happening on the ground.
For example, a recent KHN review showed the federal agency had tallied just one of the 11 Montana nursing home closures reported by news outlets in that state during 2022, and just eight of the 15 reported in Iowa.
Demand for long-term care is expected to climb over the next decade as the baby boom generation ages. Willett said his industry supports changing immigration laws to allow more workers from other countries. "That's got to be part of the solution," he said.
The nursing home in Postville, Iowa, was one of 10 care centers shuttered in the past year by the Good Samaritan Society, a large chain based in South Dakota.
"It's an absolute last resort for us, being a nonprofit organization that would in many cases have been in these communities 50 to 75 years or more," said Nate Schema, the company's CEO.
The Evangelical Lutheran Good Samaritan Society, the full name of the company, is affiliated with the giant Sanford Health network and serves 12,500 clients, including residents of care facilities and people receiving services in their homes. About 70% of them live in rural areas, mainly in the Plains states and Midwest, Schema said.
Schema said many front-line workers in nursing homes found less stressful jobs after working through the worst days of the COVID pandemic, when they had to wear extra protective gear and routinely get screened for infection in the face of ongoing risk.
Lori Porter, chief executive officer of the National Association of healthcare Assistants, said nursing home staffing issues have been building for years. "No one that's been in this business is in shock over the way things are," she said. "The pandemic put a spotlight on it."
Porter, who has worked as a certified nursing assistant and as a nursing home administrator, said the industry should highlight how rewarding the work can be and how working as an aide can lead to a higher-paying job, including as a registered nurse.
Care industry leaders say that they have increased wages for front-line workers but that they can't always keep up with other industries. They say that's largely because they rely on payments from Medicaid, the government program for low-income Americans that covers the bills for more than 60% of people living in nursing homes.
In recent years, most states have increased how much their Medicaid programs pay to nursing homes, but those rates are still less than what the facilities receive from other insurers or from residents paying their own way. In Iowa, Medicaid pays nursing homes about $215 per day per resident, according to the Iowa healthcare Association. That compares with about $253 per day for people paying their own way. When nursing homes provide short-term rehabilitation for Medicare patients, they receive about $450 per day. That federal program does not cover long-term care, however.
The Evangelical Lutheran Good Samaritan Society nursing home in Postville, Iowa, closed in November 2022. It was the only nursing home in the town of 2,500, and one of at least 15 care centers to close in Iowa last year. (Tony Leys / KHN)
Willett said a recent survey found that 72% of Iowa's remaining nursing homes were freezing or limiting admissions below their capacity.
The Prairie View nursing home in Sanborn is one of them. The facility, owned by a local nonprofit, is licensed for up to 73 beds. Lately, it has been able to handle only about 48 residents, said administrator Wendy Nelson.
"We could take more patients, but we couldn't give them the care they deserve," she said.
Prairie View's painful choices have included closing a 16-bed dementia care unit last year.
Nelson has worked in the industry for 22 years, including 17 at Prairie View. It never has been easy to keep nursing facilities fully staffed, she said. But the pandemic added stress, danger, and hassles.
"It drained the crud out of some people. They just said, ‘I'm done with it,'" she said.
Prairie View has repeatedly boosted pay, with certified nursing assistants now starting at $21 per hour and registered nurses at $40 per hour, Nelson said. But she's still seeking more workers.
She realizes other rural employers also are stretched.
"I know we're all struggling," Nelson said. "Dairy Queen's struggling too, but Dairy Queen can change their hours. We can't."
David Grabowski, a professor of healthcare policy at Harvard Medical School, said some of the shuttered care facilities had poor safety records. Those closures might not seem like a tragedy, especially in metro areas with plenty of other choices, he said.
"We might say, ‘Maybe that's the market working, the way a bad restaurant or a bad hotel is closing,'" he said. But in rural areas, the closure of even a low-quality care facility can leave a hole that's hard to fill.
For many families, the preferred alternative would be in-home care, but there's also a shortage of workers to provide those services, he said.
The result can be prolonged hospital stays for patients who could be served instead in a care facility or by home health aides, if those services were available.
Rachel Olson, a social worker at Pocahontas Community Hospital in northwestern Iowa, said some patients wait a month or more in her hospital while she tries to find a spot for them in a nursing home once they're stable enough to be transferred.
She said it's particularly hard to place certain types of patients, such as those who need extra attention because they have dementia or need intravenous antibiotics.
Olson starts calling nursing homes close to the patient's home, then tries ones farther away. She has had to place some people up to 60 miles away from their hometowns. She said families would prefer she find something closer. "But when I can't, I can't, you know? My hands are tied."
Seek treatment with antiviral therapy, which remains effective against new COVID variants.
This article was published on Wednesday, January 18, 2023 in Kaiser Health News.
By Judith Graham
A new coronavirus variant is circulating, the most transmissible one yet. Hospitalizations of infected patients are rising. And older adults represent nearly 90% of U.S. deaths from COVID-19 in recent months, the largest portion since the start of the pandemic.
What does that mean for people 65 and older catching COVID for the first time or those experiencing a repeat infection?
The message from infectious disease experts and geriatricians is clear: Seek treatment with antiviral therapy, which remains effective against new COVID variants.
The therapy of first choice, experts said, is Paxlovid, an antiviral treatment for people with mild to moderate COVID at high risk of becoming seriously ill from the virus. All adults 65 and up fall in that category. If people can't tolerate the medication — potential complications with other drugs need to be carefully evaluated by a medical provider — two alternatives are available.
"There's lots of evidence that Paxlovid can reduce the risk of catastrophic events that can follow infection with COVID in older individuals," said Dr. Harlan Krumholz, a professor of medicine at Yale University.
Meanwhile, develop a plan for what you'll do if you get COVID. Where will you seek care? What if you can't get in quickly to see your doctor, a common problem? You need to act fast since Paxlovid must be started no later than five days after the onset of symptoms. Will you need to adjust your medication regimen to guard against potentially dangerous drug interactions?
"The time to be figuring all this out is before you get COVID," said Dr. Allison Weinmann, an infectious-disease expert at Henry Ford Hospital in Detroit.
Being prepared proved essential when I caught COVID in mid-December and went to urgent care for a prescription. Because I'm 67, with blood cancer and autoimmune illness, I'm at elevated risk of getting severely ill from the virus. But I take a blood thinner that can have life-threatening interactions with Paxlovid.
Fortunately, the urgent care center could see my electronic medical record, and a physician's note there said it was safe for me to stop the blood thinner and get the treatment. (I'd consulted with my oncologist in advance.) So, I walked away with a Paxlovid prescription, and within a day my headaches and chills had disappeared.
Just before getting COVID, I'd read an important study of nearly 45,000 patients 50 and older treated for COVID between January and July 2022 at Mass General Brigham, a large Massachusetts health system. Twenty-eight percent of the patients were prescribed Paxlovid, which had received an emergency use authorization for mild to moderate COVID from the FDA in December 2021; 72% were not. All were outpatients.
Unlike in other studies, most of the patients in this one had been vaccinated. Still, Paxlovid conferred a notable advantage: Those who took it were 44% less likely to be hospitalized with severe COVID-related illnesses or die. Among those who'd gotten fewer than three vaccine doses, those risks were reduced by 81%.
A few months earlier, a study out of Israel had confirmed the efficacy of Paxlovid — the brand name for a combination of nirmatrelvir and ritonavir — in seniors infected with COVID's omicron strain, which arose in late 2021. (The original study establishing Paxlovid's effectiveness had been conducted while the delta strain was prevalent and included only unvaccinated patients.) In patients 65 and older, most of whom had been vaccinated or previously had COVID, hospitalizations were reduced by 73% and deaths by 79%.
Still, several factors have obstructed Paxlovid's use among older adults, including doctors' concerns about drug interactions and patients' concerns about possible "rebound" infections and side effects.
Dr. Christina Mangurian, vice dean for faculty and academic affairs at the University of California-San Francisco School of Medicine, encountered several of these issues when both her parents caught COVID in July, an episode she chronicled in a recent JAMA article.
First, her father, 84, was told in a virtual medical appointment by a doctor he didn't know that he couldn't take Paxlovid because he's on a blood thinner — a decision later reversed by his primary care physician. Then, her mother, 78, was told, in a separate virtual appointment, to take an antibiotic, steroids, and over-the-counter medications instead of Paxlovid. Once again, her primary care doctor intervened and offered a prescription.
In both cases, Mangurian said, the doctors her parents first saw appeared to misunderstand who should get Paxlovid, and under what conditions. "This points to a major deficit in terms of how information about this therapy is being disseminated to front-line medical providers," she told me in a phone conversation.
Michael Osterholm, director of the Center for Infectious Disease Research and Policy at the University of Minnesota, agrees. "Every day, I hear from people who are misinformed by their physicians or call-in nurse lines. Generally, they're being told you can't get Paxlovid until you're seriously ill — which is just the opposite of what's recommended. Why are we not doing more to educate the medical community?"
The potential for drug interactions with Paxlovid is a significant concern, especially in older patients with multiple medical conditions. More than 120 medications have been flagged for interactions, and each case needs to be evaluated, taking into account an individual's conditions, as well as kidney and liver function.
The good news, experts say, is that most potential interactions can be managed, either by temporarily stopping a medication while taking Paxlovid or reducing the dose.
"It takes a little extra work, but there are resources and systems in place that can help practitioners figure out what they should do," said Brian Isetts, a professor at the University of Minnesota College of Pharmacy.
In nursing homes, patients and families should ask to speak to consultant pharmacists if they're told antiviral therapy isn't recommended, Isetts suggested.
About 10% of patients can't take Paxlovid because of potential drug interactions, according to Dr. Scott Dryden-Peterson, medical director of COVID outpatient therapy for Mass General Brigham. For them, Veklury (remdesivir), an antiviral infusion therapy delivered on three consecutive days, is a good option, although sometimes difficult to arrange. Also, Lagevrio (molnupiravir), another antiviral pill, can help shorten the duration of symptoms.
Many older adults fear that after taking Paxlovid they'll get a rebound infection — a sudden resurgence of symptoms after the virus seems to have run its course. But in the vast majority of cases "rebound is very mild and symptoms — usually runny nose, nasal congestion, and sore throat — go away in a few days," said Dr. Rajesh Gandhi, an infectious-disease physician and professor of medicine at Harvard Medical School.
Gandhi and other physicians I spoke with said the risk of not treating COVID in older adults is far greater than the risk of rebound illness.
Side effects from Paxlovid include a metallic taste in the mouth, diarrhea, nausea, and muscle aches, among others, but serious complications are uncommon. "Consistently, people are tolerating the drug really well," said Dr. Caroline Harada, associate professor of geriatrics at the University of Alabama-Birmingham Heersink School of Medicine, "and feeling better very quickly."
We're eager to hear from readers about questions you'd like answered, problems you've been having with your care, and advice you need in dealing with the healthcare system. Visit khn.org/columnists to submit your requests or tips.
Observers offer 'an unequivocal yes,' to the question of whether Biden has met his campaign promise.
This article was published on Wednesday, January 18 in Kaiser Health News.
By Julie Appleby
In a speech on Nov. 2, 2020, then-presidential candidate Joe Biden promised, "I'll not only restore Obamacare; I'll build on it."
Two years and counting since then, how is he doing in meeting that promise?
KHN has teamed up with our partners at PolitiFact to monitor 100 key promises — including this one — made by Biden during the 2020 presidential campaign. The pledges touch on issues related to improving the economy, responding to calls for racial justice, and combating climate change. On healthcare, they range from getting COVID-19 under control and improving veterans' healthcare to codifying Roe v. Wade. KHN has recently done progress checks on the administration's pledges to lower the costs of prescription drugs and to reduce the nation's maternal mortality rate.
Eight days into his tenure as president, Biden signed an executive order aimed at strengthening Medicaid and the Affordable Care Act, or Obamacare. A couple of months later, he signed his first major piece of legislation, the American Rescue Plan, which included provisions expanding eligibility for subsidies and increasing premium tax credits available to help low- and moderate-income Americans purchase ACA coverage.
That legislation also offered financial incentives to encourage the 12 states that had declined to expand Medicaid eligibility to do so.
The consumer subsidies were originally set to expire this year but were extended by the Inflation Reduction Act, which Biden signed into law Aug. 16, after much debate and without any Republican votes. The expanded eligibility for subsidies was also continued by this measure.
In October, the Biden administration addressed another issue in the ACA, the so-called family glitch, which prevented some people with job-based insurance from qualifying for subsidies.
Those items alone prompt "an unequivocal yes," to the question of whether Biden has met his campaign promise, said Sabrina Corlette, co-director of the Center on Health Insurance Reforms at Georgetown University.
Joe Antos, a senior fellow at the American Enterprise Institute think tank, offered a different perspective — that the actions taken on the glitch can't count toward Biden's promise to "restore" the ACA. Antos said that's because it wasn't a glitch at all, but rather an intentional element of the original ACA put there to save the government money, and help win its passage in Congress.
"Biden was vice president when the bill was signed into law, and he supposedly supported it," Antos said.
Corlette touted other Biden administration changes, including increased funding for consumer assistance programs that help people sign up for ACA coverage and streamlined some of the paperwork required for enrollment.
The White House issued an official recap of other actions taken as a result of the executive order, including extending the annual open enrollment period to bring in more policyholders, and allowing low-income Americans to sign up anytime.
Last year, a record 14.5 million Americans selected an ACA plan. This year's sign-up period ended Jan. 15 in most states and, based on preliminary numbers, enrollment in 2023 will continue the upward trend.
The boost in enrollment is due, in part, to the enhanced subsidies, which lowered premiums to $10 or less a month for some low-income consumers, and eliminated a cutoff threshold, allowing some higher-income families to qualify for at least some subsidy, said Corlette.
Antos agreed that the administration has made changes that "clearly built on Obamacare and expanded spending and probably did cover more people."
What happened with the financial incentives meant to get states to expand their Medicaid programs to include more low-income adults, particularly those at or below the poverty level who have no children? Those incentives are still there for the taking, but, so far, no states have done so.
South Dakota expanded after the rescue plan's passage, but that was because voters approved a ballot measure, not because of the financial incentives.
"That was part of Biden's goal, to close the coverage gap," said Joan Alker, executive director of the Center for Children and Families at Georgetown. "We still have 11 states resisting Medicaid expansion, and that leaves a big, gaping hole in coverage in those states. But that's not for lack of trying by the Biden administration."
Because enrollment is up, subsidies are more available, more people are helping consumers enroll, and there are additional enticements to get states to expand Medicaid, we rate this as a Promise Kept.
Our sources:
Telephone interview with Sabrina Corlette, co-director of the Center on Health Insurance Reforms at Georgetown University, Dec. 20, 2022
Telephone interview with Joseph Antos, senior fellow at the American Enterprise Institute, Jan. 5, 2023
Telephone interview with Joan Alker, executive director of the Center for Children and Families at Georgetown University, Jan. 10, 2023