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Digging into nursing home data found correlation between spending, quality Date: 05/22/17

Kay Lazar

By Kay Lazar

I have written about nursing homes, off and on, for years. Two of the most common sentiments I hear: nursing home operators lament a lack of money and families complain about crummy care.

In Massachusetts, about $1 billion a year in Medicaid money is spent on nursing home care. Nursing home owners are required to file annual reports detailing how they spend that money. Seems simple enough.

As it turns out, state regulators hadn't reviewed those reports in years. None of the regulators I interviewed seemed to have a handle on where the money was going. I stumbled on that fact while reporting another story, and promptly filed a public records request for the latest report from each of the state's roughly 400 nursing homes.

The resulting package, “A pattern of profit and subpar care at Mass. nursing homes,” aimed to answer for our readers how this money is spent and whether there is a correlation with quality of care. Precise numbers sometimes were hard to pinpoint, because nursing home owners often failed to report executives’ salaries (as required) or other important data. There still was plenty of information, and we were able to find a clear link between profits and quality of care.

If you want to investigate nursing homes in your area, here are some tips:

Tip #1:

When requesting from your state's Medicaid office nursing home annual financial reports (typically called cost reports), make sure to request ALL THE REPORTS required from each facility. Nursing home owners often create a web of related companies – such as one real estate company that “owns” the building and a separate management company that manages the facility – and many states require an annual report from each entity. It is important to get all the reports because nursing home companies often hide profits (and shield their legal liability) by shifting money to these related companies and then report a “loss” for the nursing home itself.

I was fortunate at the time to have a terrific data guru on staff who was able to write a code that electronically scraped from each report the key data we needed. That included: total nurse staffing hours (RN, LPN, CNA), total resident census, total food spending, operating revenue, gross and net income, management fees, rental fees, etc.

We then imported data from the Nursing Home Compare website of the Centers for Medicare and Medicaid Services (CMS). These data sets include all known health and safety violations (known as deficiencies) reported for each nursing home. We used data sets that were closest in dates to the period covered by the annual financial reports.

Tip #2:

Make sure to record the time periods of the CMS data sets you use, because CMS is regularly updating these files. If you need to go back in to get additional data, you need to know which set you used.

We combined data from the nursing home financial reports, and from the CMS site, into a giant database. That allowed us to compare spending with outcomes (i.e., quality of care as measured through health and safety inspections.) We found strong links between the two.

Tip #3:

Lawyers who specialize in elder care, and who sue nursing homes for abuse and neglect, can be terrific sources for this type of reporting. They – or the forensic accountants they hire – frequently dig into nursing home cost reports to follow the money, and they can help you find your way through the morass.

Results

This project was painstaking but rewarding – and got results from legislators. It helped convince Massachusetts legislators to mandate that additional Medicaid money approved in the state budget for nursing homes be used only for raises and benefits for nursing staff and other low-paid nursing home workers. (Translation: The extra cash is not supposed to be used to boost the six- and seven-figure salaries of executives.)

Kay Lazar is a Boston Globe health reporter who focuses on aging, sports medicine, and public health. Her body of work on nursing homes was awarded third place in the 2016 AHCJ Excellence in Journalism Awards for Beat Reporting.