Congress May Eliminate Taxpayer-Funded Bonuses to Problem Nursing Homes

Congress is considering legislation that would eliminate taxpayer-funded bonuses to nursing homes. The legislation is an amendment to the budget bill that has been debated by Congress. The amendment was accepted by unanimous consent of the Senate on Thursday, but the bill itself has yet to be approved.

The Des Moines Register reported last November that nursing homes throughout the country are earning hundreds of millions of dollars in taxpayer-funded bonuses despite violations of basic health-and-safety standards. Iowa's nursing home bonus program, now seven years old, was one of the first in the nation.

Nationally, the total cost of the bonuses is unknown. The Centers for Medicare and Medicaid Services, which approves and helps fund each of the bonus programs, does not track the payments. Currently, there are 81 bonus-payment programs in 36 states.

The Register examined eight programs in the seven states where recent regulatory violations don't disqualify a nursing home from receiving a bonus that is touted as being directly related to quality care. Those eight programs cost taxpayers $312 million per year.

Some of the largest bonuses to poor-performing homes have been in Oklahoma, the home of Republican Sen. Tom Coburn, a medical doctor. Coburn authored Thursday's amendment, telling his Senate colleagues that taxpayers shouldn't be billed for bonuses paid to inferior care facilities.

"We paid out in excess of $300 million in bonuses to nursing homes that had significant problems in terms of giving the care and meeting Medicare standards," he said. "Why? Why wouldn't we fix that?"

Coburn's amendment would prohibit federally funded bonuses to nursing homes and any other government contractors that "fail to meet basic performance requirements." Coburn has likened the bonuses to those paid to executives at American International Group, or AIG, the insurer that has received $182 billion in federal bailout money.

In Iowa, the Register found that 16 of 23 homes hit with major fines in 2007 qualified for 2008 bonuses. Two homes that earned bonuses were on a federal list of the worst nursing homes in the nation, and a third faced the threat of having its license pulled because of substandard care. For more, read the story.

Robert W. Carter, Jr. is a Virginia attorney whose law practice is dedicated to protecting the rights of the victims of nursing home and assisted living neglect and abuse in Richmond, Roanoke, Norfolk, Lynchburg, Danville, Charlottesville, and across Virginia.