this be will come to order today we have a hearing titled in the hands of strangers or nursing home safeguards working each member will be recognized for an opening statement i will begin this is national nursing home week which makes today's hearing quite timely surprisingly this subcommittee has not held an oversight hearing on nursing home care since one thousand nine hundred seventy seven the make up of the nursing home in this tree and its clientele has radically changed over the past thirty one years the last significant change in home regulations came twenty one years ago in the nursing home reform act which was passed as part of the budget reconciliation act of one nine hundred eighty seven  or eighty seven and that congress establish standards for quality of care and quality of life that nursing homes must meet in order to receive payment from medicare and medicaid now twenty one years later we are examining whether the standards continue to provide an appropriate level of patient care and protect the residents of nursing homes some of our most frail elderly disabled citizens living in their homes either for a short time for rehabilitation or for long periods when it becomes their final resting home many many are completely dependent on others for everything from eating to bathing turning them over in bed and pain management government regulations require that a base level of care  provided to a nursing home residents not only because this vulnerable population cannot speak for themselves but also because taxpayer funded programs like medicaid and medicare pay for the vast majority of the care provided at nursing homes the centers for medicare and medicaid services c m s enforces these minimum standards by country by contracting with each state to conduct annual inspections or surveys of nursing home state surveyors identify a problem called a deficiency they can recommend various sanctions to c m s ranging from civil monetary penalties to the rarely used ultimate sanction of terminations from part to from participation in a medicare and medicaid programs yes and state server state surveyors strive hard to look beyond a nursing homes walls to see whether the fragile nursing home residents are receiving all the care they need however surveys often fail to identify serious problems that threaten residents moreover when the surveyors do identify problems the penalties imposed by c m s can be so weak that they fail to bring about sustainable improvement in the practices of the facilities that they did a real responsibility for the difficult task of care in their home falls on dedicated and hard working nurse's aide skilled nurse professionals in the street owners and operators we entrust our loved ones often only as a last resort to the hands of the strangers to care for our grandparents and parents in most cases these strangers become a second family for for us and our loved one and they care for our family member with the same love and attention as if he or she were part of their own family that ikeda devoted caregivers in many of the companies that employ and manage them these are our profound thanks for their commitment and leadership in the daunting task of caring for an increasingly fragile and medically complex patient population in the past few years a wave of new owners and investors have begun purchasing nursing home chains both small small and large successful and unsuccessful chains these firms are private unregulated and new to the nursing home market many worry that the top priority for these new owners will be profits rather than providing for staff and resources necessary to ensure top quality care for loved ones frequently they use complex corporate structures separating a nursing home real estate from the operating companies and putting multiple layers of limit liability partnerships between themselves and the day to day operations of the nursing home the impact of these two new owners on the quality of care and safety of nursing home residents is still unclear some companies  profits into the facilities and focus on quality of patient care others unfortunately skim off the profits to line the pockets of investors or plough the money into separate ventures that have nothing to do with nursing home care what is certain however is that c m s and the states lack the tools to keep up with the rapid change in the industry to know who actually owns the country's nursing homes and who should be held accountable for residence in their care when congress passed over eighty seven safeguards the typical nursing home was owned by a sole proprietor or family and not part of a chain over fifty percent of nursing homes are part of a chain and many of those are in the hands of private equity investors chain ownership has the potential to improve quality of care by allowing the sharing the sharing of resources and expertise across their facilities at the same time chains have the potential to hide common problems and obscure responsibility for inadequate quick care centers for medicare and medicaid services c m s needs to weigh these concerns to a greater degree in its and forstmann today's hearing will examine the challenges posed for the federal state and local government individual families resident advocates and family members and the industry as the face of nursing home ownership rapidly changes we will hear from witnesses reflecting a variety of perspectives including government leaders academics academic experts industry leaders in organized labor representing nursing home workers and the centers for medicare and medicaid services we will also hear an example of the trouble nursing home chain in new england whose homes have been fined more than forty five times in the last three years for patient care problems that have tragic results such as organ failure amputation of limbs paralysis and death the chain is now in bankruptcy and on the brink of sale to a private equity firm clearly this example is the exception rather than the rule when it comes to nursing home care our goal here today is to be sure that these such examples become more and more rare or disappear altogether i look forward to hearing from our witnesses today we all this hearing to the industry  home staff and the nursing home residents to ensure that congress is doing all we can to see that federal nursing home regulations are adequate i'd now like to turn to my colleague mr shimkus for his opening statement before i do so we should take no fact that mr shimkus retired last night after thirty two years of service in the military in the army as a ranger and i want to thank him for his service to our country and i really do enjoy having him as my ranking member and a friend but thank you for your service to our country john and i look forward to your opening statement mr chairman thank you for coming last night and the flashback was one nine hundred seventy seven i was a freshman to west point thirty one years ago is the last time we had a hearing on on this industry and that's too long and so it's appropriate that we do this today's hearing will expose the issues in practice surrounding the critical federal safeguards for sure and quality of at nursing homes across the country this bipartisan oversight examination is necessary to ensure the safeguards are up to date and effective today's hearing topic is an intensely personal one for many people many americans already or will have entrust a mother or father or spouse for me grandparents at certain times of their life at the most vulnerable to the care of a nursing home in fact my grandmother was dementia patient and was in ten years before she passed away and i remember that well when entrusting our most vulnerable citizens our loved ones to the care of strangers there is a fundamental need to know that they are in good hands the nursing home industry is a complex and diverse industry extending to some sixteen thousand individual facilities serving three million people per year this industry has been rapidly changing over two decades and the question is how are these changes affected the quality of care from the available evidence improvements in nursing home quality have improved in some ways over the past two decades but more should be done to assure quality of care quality of life and the safety in nursing homes we know there are chronic bad actors a report last year and we just have a new report that we need to go over just released which we have not i have not saw my really comments are directed to the previous one until staff freeze it real quick the new one  despite positive efforts by the centers for medicare and medicaid services industry to improve quality of care roughly twenty percent of nursing homes nationwide each year cited for serious deficiencies and a portion of these homes are chronically deficient the  also reported shortcomings in the survey and standards enforcement system used to identify problem homes government and academic witness witnesses will testify today about the uneven quality of nursing home inspections and what that means for consumers and regulators witnesses will also testify knowledgeably about what more might be done to improve the information supplied to regulators to a survey process and related industry oversight activities some developments to prove the quality of information looking courage ing new inspection approaches appear to take a more systematic look at nursing home quality look forward to learning how rapidly these can be implemented and how these measures can improve consumer ability to identify quality homes and information is and knowledge is power and i think when people are given a choice if they have more information the better the problem isn't in rural america is not a lot of choices  chairman stupak knows that from his area and i definitely know that in mine i also look forward to discussing what federal officials believe is necessary to strengthen federal oversight in light of industry trends there are a hundred thousand fewer beds today than ten years ago and nearly two thousand fewer facilities before bankruptcies malpractise litigation pressures and new models of caregiving transform the industry according to an h h s study and i'm vald pretty much that continual care debate about residential living then assisted living and then long term skilled nursing facility and all combined in to one which is i think a positive movement in the direction by the industry today half a nursing homes are part of a chain a rate that has declined from ten years ago over this period there has been corporate restructuring and more focus on regional chains with some new corporate ownership arrangements and we'll hear this morning it may be difficult to identify how those all to milly accountable for quality of care decisions are affecting care more sunlight connecticut's experience with this chain that means to note too that this is a say to no who doesn't suffer while in care of one of the change homes will tell us her story this morning please accept mine  in my colleague's sympathies and thank you for testifying your testimony is very important for us i am pleased to learn of the vigorous enforcement h h s inspector general's office and the department of justice have pursued in recent years a positive story in two thousand se use office help to work five hundred thirty four cases and the d o j has already netted sixteen point six million in restitution and settlements and false claim act cases that mostly involve nursing homes w ensure we are getting rid of bad actors and encouraging quality improve but as we discussed enforcement we should also focus on what more can be done to identify address problems before they result in quality care deficiencies this brings the dentistry role and quality safeguards on that subject the buck stops with the industry and so i am eager to learn what steps the industry is taking to set standards to self police to improve quality and improve quality not just at the margins among minimum standards but at all levels of performance we need competition for quality we can drive consumer decisions and improve care for all i want over time mr chairman thank you very much and now you're back i think the gentleman  this committee the subcommittee over many years today we focus on the quality of nursing homes and how new types of ownership may affect this vital industry as an original sponsor of the one thousand nine hundred seven nursing home reform act which originated in this committee as a result of hearings held in this subcommittee i want this critical law to effectively support and protect those who must live in nursing homes and again mr chairman i commend you for holding th hearing today there is much that needs to be done here with regard to this industry and with the laws affecting it because it has undergone radical changes since the one nine hundred eighty seven law was enacted and there's real need to go into these matters nursing homes are an industry with which new investors and new financing structures unknown to us are beginning to impact significantly on how the healthcare is afforded to our senior citizens and others who are not able to any longer protech themselves without the assistance of this kind of help this new dynamic raises serious questions about whether profits are being placed before the needs of nursing home residents and if so what needs to be done by this committee and by the congress since the law's not been reviewed for a number of years i look forward to the testimony of acting administrator reams  of the centers for medicare and medicaid services and about what c m s needs in order to better oversee and improve the quality of nursing homes i will note parenthetically that i'm not very well satisfied with the behavior of that agency and with the judgments that they've been making about health care in this country i'm hopeful that this hearing will evoke greater cooperation from that agency and perhaps a manifestation of a better philosophy of government inside that agency in some ways the quality of care in our nation's nursing homes has improved over twenty years but it must be observed there's still a way to go more than twenty years ago congress ought to stablish minimum standards for care quality of life for every nursing home resident is disturbing that a subset of today's nursing homes appears to be unable to avoid harm to its residents that's a curious repetition of events of twenty thirty and forty years ago when fires substandard housing conditions poor treatment of patients in nursing homes dangers to their and to their health because of improper care and inadequate staffing were causing significant problems this hearing is going to receive testimony from federal state municipal authorities about the failure of some nursing homes to meet the basic basic standards and why they cannot be held accountable clear there's much to be said on both sides of this there is things to be said on the side of the nursing homes that they're not being adequately and properly paid and properly treated by the government is also to be said that the government is not engaged in proper supervision or very frankly proper reporting to the congress about the situation that exists in this particular industry and i want express my thanks to connecticut attorney general richard blumenthal for being here general thank you for being with blumenthal will testify about a new england nursing home chain with a troubled history of understaffing poor care and unpaid debts i'm sure that is replicated in other places also testifying today will be the inspector general for h h s who will identify ways c m s can more effectively protect nursing home residents this will be a matter of considerable concern and interest to the committee the day to day care for the frail elderly and disabled is a difficult and quite frankly often thankless job is complicated by the inadequacy of payment by the federal government on these matters it takes a special person to care for those who cannot care for themselves no one knows this better than the five hundred thousand dedicated nursing home workers of the service employees international union and you and the nation owes them a great debt for their efforts and i thank them myself and for leading the fight for ensuring quality health care for every american they owe they are the thanks of all of us i also applaud those industry leaders who have advocated higher standards i particularly want to recognize my friend bruce yarwood president of the american healthcare association h c a is one of those leaders who has set the buyer high through the advancing excellence campaign and finally i welcome mrs ossie to know who share the story about her husband experience and facility that she action this committee and this congress should take with regard to protecting not only the public interest but the image of the nursing homes it also will help us to understand what changes in the laws are needed and i commend you for your leadership in this th benchmark for that year of my own my first child was born in one thousand nine hundred seventy seven and on monday she gave birth to my first grandchild so i hope that we have good nursing home care for people like me but i do thank you for holding the hearing and for taking the time to review long term quality care in our nation's nursing facilities and whenever i talk about health care with my constituents my top concern is preserving an act enhancing access to quality care and doing it in an affordable manner that's what our constituents want and as our nation's population ages more americans are looking at options for elder care and since my days in the tennessee state senate i've had a record of supporting long term care options for seniors whether it's found in nursing homes long term care hospitals or additional options that they want to have to meet their needs i'd also like to say my district is home to advocate a provider of long term care services for patients in nursing homes in eight states primarily in the south east and i know this is a highly regulated industry an advocate is and many of their competitors have shown a commitment to transparency and we appreciate that because we've learned a few things and i think one of those mr chairman is that it's important that reported quality related data be meaningful and useful not only to consumers but to us law makers and to care providers i'm looking forward to testimony from today's witnesses regarding opportunities to revise and improve quality of care quality of life and staffing data collection when treating the elderly instead of placing additional regulation on the industry it is prudent to improve the quality and nature of the information currently reported to the government and i think also mr chairman for us to establish a matrix whereby evaluated data provides insight into the outcomes that are provided for care bad actors are found in every single industry this there is and i caution against holding the good actors responsible for poor performers in addition i'm concerned about the public perception is some of the hearings that we have and how they can create public fear i do appreciate an open and honest debate and warn against opening the doors to trial lawyers who may want to police the long term care industry as a baby boomer as i said earlier and now a grand mama i recognize that the nation's health care sector is evolving to meet the needs of an aging population everyone wants assurance that the elder care industry works to improve the quality of long term care for the benefit of every can retiree today and in the years and decades ahead i yell back holding it like a lot of members i'm also on the health subcommittee and i'm going to go up there in a few minutes but i want to thank our witnesses for beer and thank you for calling this hearing my colleague from tennessee for many years i was a state legislator in texas and nursing home regulation was something we dealt with every session but since one nine hundred eighty seven more aggressive effort it's interesting i always thought it was regulate on the state level but since most of the medicaid money is from the federal government sixty percent typically it was  it was often difficult because i know in texas our medicaid program is not as rich as some other states but it is such a big part of our medicaid dollar in texas the decision to take a loved one to a nursing home is a difficult decision and i know anyone who would rather have their family member remain independent with at home with them and not make that decision fact i want to welcome this side to know because just a number of years ago my wife and i had to make that ultimately she passed away in a nursing home hospice care because it used to be hospice was separate but now they're also part of a nursing home facility christmas of two thousand and six and a lot of people think elected officials we don't experience the same things every everybody does but we do our family went through this for ten years and i know members of congress who are on our full committee who's going to write now with their family so it's it's a difficult decision i'm glad you're willing to come and testify i have to admit we had problems in texas louisiana with eric kane three years ago and my mother in law was in under hospice care and when radio was coming in to we thought houston but it in a going to beaumont just to the east and we had a terrible experience in louisiana with their c home patients not having evacuation procedures but in our office actually checked every one of ours and i went to the one wire everybody was stuck on the freeway leaving houston i went to the one where my mother in law was at and was really proud that they had cops on the floor for the staff they brought in staff to make sure they would be there we only live two miles from them so we were going to go over there and be there anyway but  t in that case and it was a chain nursing home was very well prepared to deal with the patients at that facility and again she was part of the hospice facility on that when we do have to make those decisions as families  you know people turn to nursing home to give their loved ones the type of care they cannot provide they entrust those nursing homes with their family members and again it's the squeaky wheel gets the oil whether you're in government or in the private sector if you're there all the time  keep on it you actually see because oftentimes the understaffing i know the requirements by statute regulation but oftentimes it's difficult so families have to stay involved but in the past nursing homes are mainly mom and pop institutions and we have those in my district too but times have changed and now we have larger chain are seeing homes in multiple states and this corporate structure of nursing home has come sometimes tangled web of finances at a  time requires a forensic accountant figure out who actually owns a nervous and nursing home and instances where complaints have been made against the home or tragedies that resulted from abuse or mistreatment dolphin for c m s to deal with this new system nursing homes and levy morning mr burgess were an opening statement thank mr chairman and i too appreciate you holding this hearing the chairman of the full committee said he was looking forward to hearing the testimony  of administrate kerry weems i am as well unfortunately we'll have to wait until the end of this hearing to hear that testimony and once again we're in the awkward position of tying up the head of a large federal agency for the better part of a day wouldn't we know they have other important things on their plate you know this is an issue that bothers me and i do wish the committee would approach this with a little more sensitivity represented blackburn talked about long term care insurance and i know that's not the purpose of this hearing today but i do also want to mention just a little bit about long term care insurance i was at the alzheimer's association fundraiser last night the banquet that they have and it really is apparent to me that we are not as a body talking about long term care insurance and the availability of long term care insurance nearly enough that the american people are that that even pops up on their radar screen when i turn fifty years old which was unfortunately some time ago my mother one of the fact one of the last pieces of advice my mother gave to me was to consider buying long term care insurance because she told me if you don't buy it when you're fifty you won't be able to afford it when you're seventy five or eighty and truly that was good advice and i do want us to use our opportunities with the ability to inform the american people that the availability and the cost of long term care insurance in midlife is a an affordable option people ought to consider yes the medicaid program will pick up the cost of your nursing home expense but at least in the home state of texas they are only obligated to place he within five hundred miles of your home that means for someone living in lewisville texas as i do they might be placed in a nursing home in paris texas and if you think well represented blackbird is gone because i think it's hard to get your grandkids to visit when you only live a few miles away try living five hundred miles away so it is something that's important i do want this committee to focus on that there's so many issues involved in the topic at hand today i am glad to see we're focusing on this issue i do hope that the panel before us today will focus specifically on some issues related to transparency and the type of transparency that is needed in the industry perhaps the best information we can give consumers  is information about not just cost of the of the stay in the nursing home and i would prefer that we call them residents of nursing homes with an inmate's but cost as well as things like infection rates things like the availability of occupational physical therapy the problem is i'm afraid this hearing is going to get bogged down in trying to figure out who owns what and who's done what to whom i've always been a strong advocate of transparency in the medical and nursing community and recently introduced a bill to about greater transparency in health information technology in the health industry h r fifty eight eighty five for anyone keeping score at home would allow hospitals and physicians offices to integrate information technology in a much more se less manner than they are able to do currently and this issue seems on point for this hearing today because it appears that a major problem of monitoring enforcement and regulation of nursing homes is the lack of integrated information being supplied to people like administrator williams at the center for medicare and medicaid services i still wonder if the larger prayer problem lies not with the general lack of transparency but with the lack of consistent and uniform enforcement so often we are seeing good nursing homes found and given fines because of the regulator who was sent to their facility perhaps in a somewhat overzealous manner meanwhile nursing homes that have a poor indicator of quality are given a seal of approval because a regulator sent to check up on them employed a much more laid back approach i am interested in learning about the effectiveness of the quality indicator survey pilot program and how it can effectively work on a nationwide scale and finally i can't help but notice the recent new york times article focused on this topic and noted the frustration of our friends in the trial bar who are having a personal injury lawyers who are having a hard time figuring out whom to sue and while i feel their pain one of the problems that we're facing today here were critical of large changes that have acquired a larger larger ownership share of nursing homes but we've sued in regulated and underfunded the smaller owner of the nursing home just completely out of existence in the past ten years and while some of that fall perhaps lies  the state level a good deal of that blame lies here on the doorstep of the united states house of representatives so i do hope we will rather than just simply focusing on whom to blame in this discussion today we might be able to focus of a few solutions because after all that's what the american people sent us here for how you'll back the balance of my time mr chairman i thank the gentleman i want to compliment and mr weems for being here and sitting through this we was given he was given the option if he so chose to have a staff sit and take notes and come down when his panel appeared to his credit he stayed and i appreciate him being here especially it's been thirty one years since congress has looked at this issue i think there's things we can all learn from this hear ing today so i welcome his participation and his willingness to to be with us at this hearing next i'd turn to mr barton for an opening statements or mr chairman i'll put  statement formally in the record i do want to say that i think this is a very good hearing we haven't done over side on the nursing home industry in a number of years and so i think you're to be commended in mr dingell for doing this and we will work with you in a bipartisan basis to uncover the facts and if actions are necessary after we uncover the facts to implement those actions so we appreciate the hearing thank you mr burton he was here but you missed the step probably ran upstairs because i know she's on the health committee also so let's conclude the opening statements by members and let's turn to our first panel of witnesses on our first panel we have mr lewis morse chief counsel to the inspector general for the u s department of health and human services of baltimore and the susanna to know the wife of the kind of man who broke his back was paralyzed at the nursing home so we welcome all of our when the system thank you for being here it is the policy of this subcommittee to take all testimony under oath rise raise your right hand and to take  chief counsel in the office of inspector general at the department of health and human services as a result of congressional action and efforts by c m s and the nursing home industry important steps have been taken to improve residents help and quality of life unfortunately not all nursing homes consistently provide the level and amount of care that the residents require in two thousand and six almost one in five nursing homes was cited for deficiencies that caused actual harm or place residents in immediate jeopardy so i g affirmatively addresses nursing home vulnerabilities in three ways oversight enforcement and guidance first in our oversight role i j has conducted approximately ninety evaluations of the nursing home program since major nursing home reforms of two decades ago one of our role commendations was the development of a national abuse registry for long term care employees we have found that without accurate inaccessible background information nursing homes may hire individuals who could place residence at considerable risk in our enforcement role ideas investigate cases of agree to slee substandard care in nursing homes and pursue criminal civil and administrative remedies against those who harm our beneficiaries we have collaborated extensively with the department of justice and state medicaid fraud control your own is to successfully prosecute nursing homes and caregivers for failing to provide basic levels of care including cases of residents suffering from preventable pressure sores untreated broken bones drug overdoses and death already has excluded from participation in federal healthcare programs caregivers who have abused or neglected residents as well as nursing home administrators and operators for systemic failures in these cases we may not exclude the facilities providing bad care if we believe it's in the best interest of the residents as an alternative we negotiate corporate integrity agreements which establish comprehensive compliance programmes and require appointment of independent quality monitor the monitor has extensive access to all aspects of the organisation and makes recommendations to address underlying deficiencies these compliance programs have been instrumental in improving the quality of care as a third initiative we promote compliance with our program requirements and greater awareness of quality of care issues for example we recently published a draft supplemental guidance that discusses the fraud and abuse risks the nursing home should address when implementing a compliance program i do also is working to increase awareness by stakeholders of the importance of delivering quality of care for example we recently coauthored a health care board of directors resource guide last year we met with nursing home representatives from across the country to explore how to better inform their boards about the quality of care provided in their facilities consumers should also have a reliable user friendly data on nursing home quality to make informed choices for family members already makes three recommendations we believe will contribute to proving to the quality of care th residents receive in nursing homes first create a nationwide centralized database to improve screening of nursing home staff the database could merge the o i g s exclusion database state nurse aid registries and disciplinary actions by licensure boards we believe such a database would reduce the risk that potentially abusive caregivers will be employed to care for this vulnerable population second direct c m s to create demonstration for objects to establish mandatory compliance programs for nursing homes effective compliance programs can help reduce fraud and abuse enhanced operational functions and improve the quality of health care services and third enhanced the quality of data made available to nursing home industry and to the public c m s is nursing home compare website offers consumers and the nursing home industry a good base of information on the quality of nursing homes however the website can be improved by adding data that provides a clearer and more comprehensive picture of the specifics the syllabi as well as the performance of the nursing home chain thank you for the opportunity to testify today and that concludes my remarks i look forward to your questions  attorney general mr blumenthal would you your opening statement please sir thank you mr chairman and i want to join in thanking you for holding this hearing and members of the committee for devoting their time and effort and i want to also make the point although it probably need not be made that we're talking about a small number of nursing homes still a minority in this industry which is composed of many hard working honest caring owners and others and i want to make the point particularly as to those others the staff and caregivers who work in these nursing homes they have been not only an extraordinary and profoundly important source of care for individuals in connecticut who are in these homes but they also provided my investigation with exceptionally important information they are very very important to our investigation whether it's the nurses or the food preparers or the maintenance workers they have given us first hand knowledge about the problems at haven health care and similar kinds of problems throughout our nursing home industry in connecticut connecticut's very frustrating and frightening experience with haven health care and it's been mentioned already is symptomatic of a crisis that is really spreading across the nation provides a clear clarion call for reform our presen system of scrutiny is ineffective and inconsistent it fails on two principle counts information and enforcement mr morris has just made some very pertinent and significant recommendations as to how to improve the information availability and flow and my testimony is about that area of concern but also about enforcement because my job as attorney general is to enforce the laws and that's really how we became involved in the haven healthcare problem what it showed me very dramatically is that our current regulatory system is mired in a past era when nursing homes were owned by small local companies or even individuals and that regulatory system is simply inadequate impotent to address the larger problems and challenges posed by mammoth multi state companies not because they are big but because they employ an interlocking constellation of ownership a maze of different corporate entities in different states that can be shielded from accountability and so i have actually attached to my testimony the corporate organization chart of just one of these chains haven health care which when it filed for bankruptcy filed individual actions for every one of the forty four entities can you put that up on the screen so others can  see it it's attached to my testimony so anyone who wants it would be happy make your sales your haven health care is really a poster child for the perils of concentrated ownership and power because that consolidation of financial control enables the kind of self dealing and self aggrandizement for purposes unrelated to the care of patients that occurred at haven health care to put it very simply what we found was that the ownership and management of haven health care was using its resources either directly or as collateral for loans to completely unrelated commercial enterprises almost nine million dollars invested invested in a record company in nashville the purchase of a building there for two point one million dollars the purchase of a lakefront home in connecticut in the town of middlefield for close to half a million dollars all at a time when haven health care oh did its vendors close to thirteen million dollars when we talk about vendors we're talking about companies and individuals who are essential to the quality of care at these facilities fifteen nursing homes in connecticut ten in other new england states vendors such as pharmaceutical drug companies equipment suppliers even utilities that went unpaid so that in one of them when heating oil ran out the individuals in the home suffered from literally freezing cold at another where electricity almost was cut off by the power company so the impact of fiscal mismanagement is very direct and real on patient care and in fact the haven health care situation i think is symptomatic of exactly that phenomenon and the reason why i recommended very specific fiscal management oversight and scrutiny methods of imposing it to our state legislature which now are the basis of what i'm recommending that the federal government ought to require of all states i'm not going to go through in detail what they are because they are in my testimony and i know in the interest of time summaries are far better than full explanation but i just want to make the point that patient and resident quality of care are profoundly at risk but we're also talking about literally billions of taxpayer dollars in the case of haven health care one hundred thirty million dollars in medicare medicaid payments annually in connecticut we're talking about one point three billion dollars spent in taxpayer dollars on nursing home obviously billions nationwide so we owe it to taxpayers even if they have no direct family say as many of the congressmen who talked about their personal experience obviously do as we at this table than me as many in the audience do as citizens countless of them across the country have a direct stake in the quality of care through family members but fiscal controls are a matter of governor no responsibility and how we spend these dollars let me just say finally that i strongly support the kind of information database that has been suggested by mr morris and in addition i have proposed a strike force composed of federal and state representatives that could not only monitor but take swift strong action as well as conditions to be imposed on the states that would require state systems for monitoring fiscal mismanagement and integrity and as well prevent corporate bleeding of nursing home finances require regulation of nursing home owners and management companies establish minimum insurance requirements a number of other conditions that by the end of this decade i think the federal government should impose on all states as a condition for governmental a where we are now and with haven health care is that some that we have restored stability we have assured patient care the entire interlocking corporate structure is in bankruptcy court under the jurisdiction of the judge we have a restructuring officer and a patient care officer who have in effect taken over operation and it will be shortly sold after an option to a new owner it has been a long and hard struggle but haven health care has been very far from a haven it has been in effect a house of horrors for many of the families who entrusted their lump loved ones to its care it has certainly been a fiscal nightmare and a quality of care conundrum for all of us who have sought to pick up the pieces and restore civility and integrity and i wan our state agency the department of social social services which has been integral to this effort as well as federal authorities the office of inspector general has been a strong partner as has been the united states attorney thank you thank you you thank you for having me it's actually quite an honor to be here my i'm a long term care on boston for baltimore city there's four of us in our office and we advocate for the rights of residents in thirty one nursing homes and over three hundred assisted living facilities i was asked to come here and testified before you and give you some examples of how we face difficulties when coming against nursing homes who are not very transparent in their ownership and baltimore city i have experienced firsthand firsthand the the difficulty in helping not only the residents but also the nursing home and solving problems which affect the care of the residents when i am asked whether i prefer the corporate nursing home or the privately owned nursing home i can only answer with a question and that is what would you rather where would you rather go have a nice dinner a chain restaurant or a restaurant where the chef is the owner we encountered problems such as malice and frustrations have actually been meeting with residents in a room where a mouse has climbed up my leg i have seen nursing homes where there is a total of four floors in the nursing home and three of them have no working showers for the residents i have seen nursing homes just like the attorney general mentioned where the boiler had been broken for months to in winter and the nursing home administrator had to go and buy space heaters for the residence rooms which are completely against komarr regulations here in maryland the difficulty that we face is that from my experience there is a lack of human touch in the corporate nursing homes for the most part when i go to a nursing home that is privately owned and i go up to the administrator who is my go to person and i say we have a situation can we fix it more often than not the problem has either been addressed or solved before i leave the doors of that nursing and the less transparent ownership of nursing homes the nursing home administrators takes the role of foam was like a buffer it seems to me like there's a shield where either he's either hiding problems from whoever he answers to or there's a reluctancy to do a larger effort to make a larger effort to solve the problems  i have witnessed than one nursing home for nursing assistants smoking marijuana what appear to be marijuana and the smoke was coming in to one of the residents rooms where i was standing and when i approached the administrator at first he seemed very r responsive and proactive about it and after taking a minute to think he said when you call me tomorrow we'll follow up the next day it was completely shut down from any further information  this nursing home in particular is owned by one of those large companies based out of louisiana i believe and those so those are the challenges that we face  the lack of human touch that i do sometimes wonder if the owners have actually seen the nursing home before and i think that's a pretty it's a shame it's a shame because they're dealing with people and these people need help and they're not there on vacation they live there and i just i hope it would be better thank you thank you  control hospital is helpful to regulators at all levels in the government information about ownership is critical to both promoting compliance and aren't foresman efforts our experience has been that when we are looking into substandard care provided by nursing homes one of the enormous challenges we face is navigating through the corporate structure that is put up to deflect responsibility from those who have made resource decisions i would offer though that while transparency is a critical part of improving care and supporting our in forstmann efforts it's a means to an end the end is improving quality and so we would submit a compliance program which gets critical information up to decision makers up to shareholders and those who actually are controlling the resources of the chain is essential knowing who they are is critically important getting them that information so they can be held accountable if they don't act goals we have not recently looked at pecos as part of our evaluative effort i believe one of the concerns that we have with pecos is how many layers of accountability it captures and as we have seen in our investigations and some of the investigative journalism reports there are so many layers between the individual facility with which c m s has its provider agreement and those who are really calling the shots pecos does not capture that number of different indirect donors so it is it's part of the solution but it is not a comprehensive solution let me ask you this question how do compliance programs work in conjunction with the voluntary industry standard  nursing home have been doing a campaign for advancing excellence campaign how do you look at that with your clients as a regular to complement each other can help explain that l certainly they certainly can complement each other the nursing home industry should be applauded for the steps it has taken to promote voluntary efforts to improve care in our experience a compliance program has  closure stone integrity financial integrity and integrity over clinical care what makes a compliance program such a powerful tool and i would suggest the next step towards advancing care is that you mandate certain components of a compliance program you empower a compliance officer to if you will speak truth to power you build incent turmel's systems to get to root cause analysis and to come back to the transparency point you empower the compliance officer to bring that information to those who actually make resource decisions so while we applaud what the nursing home industry has done we think much more can be done to promote quality through compliance programs  demonstration project mandating compliance programs would be a good start let me ask you because you testified that the continue in its oversight of the use of anti psychotic drugs and nursing homes has your investigation with your  use less use what have you found and it's ongoing i take it that that work is still ongoing so it would be premature for me to report its results we would be pleased to come back to you once that work is completed mr attorney general you recommend that the creation of a national clearinghouse of nursing home information why isn't the current information at c m s which c m s maintains a nursing homes adequate chairman i think it is inadequate because as a number of facts first of all because it is incomplete in many respects it fails to encompass or capture the real owners of nursing homes the kind of labyrinthian maze of corporate structure that many of the chains now have prevents that database from being fully current or accurate but equally important there are issues about its availability to the states the access that state regulators may have to it for example our department of public health order our department of social services may not have full current information about citations investigations licensed or niall's disciplinary proceedings simply because  it fails to capture all that data or make it available in a timely way to the state so i think the state should be a partner in that kind of national clearinghouse rather than just a and  bystander in the case of haven health care for example numerous violations occurred repeated in some of the nursing homes forty five in the course of three years involving very severe issues of patient care i am doubtful that any of those kinds of citations or incidents appeared in the in the database that exist now even though haven health care was operating ten nursing homes in other new england states so i think that again coming back to the present perils of concentrated ownership and power we need a different paradigm to deal with them in terms of information gathering and enforcement when you're the top law enforcement agent in the state of connecticut and you've been there longer than new haven has had ownership of these when was there no central base for you to go to as the chief law enforcement officer of connecticut to look to the as you began your investigation in new haven this a g s we've got a problem problems that haven health care certainly the financial problems and some of the health care issues and one of the recommendations that i have made is that fiscal problems and gross mismanagement be sufficient reason in effect to intervene and establish a receiver under state court proceeding present laws simply fail to give law enforcement the power it needs to prevent the recurrence of these problems fines and penalties are all too often simply regarded as the cost of doing business and very often as happen haven health care and ms access to nose case the nursing home operator will make the case to regulators that a financial penalty will actually diminish the quality of health care because it diminishes the resources available for health care and so my pitch to the committee basically is we need stronger means of preventing gross mismanagement or self dealing and bleeding of resources before or it occurs because as happened with haven health care we were aware of its problems back in two thousand and six we urged the department social services to seek a receiver it had reasons for declining our recommendation but we would have been probably better off with earlier intervention a better standard a better means of imposing control such as a receiver or federal joint federal state action and haven health care's the exception not the rule of nursing homes i think you said your testimony is that the case well it is an exception you know we've intervened and we've done in our state criminal prosecutions of fraud we have also done receivers for other nursing homes we just as a matter of fact established a receiver for nursing home chain called marathon which has a number of homes both in connecticut and massachusetts which then went to bankruptcy court and very often the bankruptcy court structure itself can impose a delay and confusion on the process it took us literally months of a team of our lawyers three or four of our lawyers going to repeated bankruptcy court proceedings working with creditors secured creditors a very complicated process but i think what we'll find is that more and more these these nursing homes will seek the refuge of bankruptcy court as they're legally entitled to do in order to avoid more effective state intervention for sharing your story you said you had shopped around for a nursing home for your husband in that searching did was there any signs that more we're trying to get more information there's a website i think there's going to a question about how much information is available what successful for the consumers what might be accessible in addition to for local law enforcement or in the inspector general's of our a g s have various states miss morse can you talk about the website and information and maybe information that's available that's not available to everybody i'd be glad to and i would also note that dr david zimmerman will be appearing in the next panel who has a great depth of expertise around the quality indicators and how they can be used effectively the suggestions coming from the inspector general are aimed at putting the information that is available in context so that a consumer  or an enforcement agency and equally important the industry itself can look at the information see how a facility is doing relative to its peers so there's a context so consumers can read the information and understand what the deficiencies mean in the context of overall care and equally important provide consumers and the industry with trending information so you know how this facility and the chain it is a part of has done over time one of the things we have  seen is that many facilities are what are called yoyo passivity as they come in and out of compliance so if you happen to take a snapshot while they're in compliance it may not tell you everything you need to know and i think we've experienced a quite  expection regime based upon a pop inspection versus one that somehow they know is coming and they're scum preparatory actions and we did that in the military when we knew i was coming only had to pay a dollar what based upon your experience what should have happened in that nursing home was your happening yeah i mean if they were fined six hundred fifteen dollars i think that i guess the question then you kind of race it with the chairman would with all these signals being raised is what could you all done more is there more that you could do just in the state which was state rules and state laws with even with existing state laws to be very blunt we could have sought a receiver that is a state takeover through a state court action earlier than we did and it's now a matter of public record that my office recommended a state  takeover earlier than was done and our state department of social service which has the ultimate authority through its approval process to undertake that action declined to adopt the recommendation but the hartford current article has certainly performed an enormously important service in raising public awareness about these problems and i wan and i appreciate that you know we're not here we're trying to just as you know just follow the facts to help us in the public policy arena and raise education even among called policy people in the executive branch so they do the job and this is obviously one that you know could have could have been done better by a lot of people let me just let me just raise because there's a concern in illinois right now and  state other states their share is different and i have a big beef about that to begin with but but being a fifty fifty state there's two problems isn't one and a lot of  e care and this is so is our medicaid recipients if we do not fund based upon a percentage then what i only has to do is we have to find the loopholes to game the system that probably bring more money in and then so i don't know what connecticut is that's first question the second question is we have a particular problem in illinois because of the state is the payer they pay they get the money back they're get their their portion back off but if they delay payment in some cases right now in a state of annoyed for five six months that really kills financially some of these facilities because then they're trying to fifty fifty match you know there are some states that have seventy thirty right and i think that that observation and i think it's very pertinent to your party emphasizes the importance of our working together and recognizing the complexities of these issues i have recommended for example in my testimony that a ten percent change in beneficial ownership trigger additional monitoring or review if that process had been in effect when greater meaning who came to be the owner took over it would have been found that he had no experience in this in the industry other than repairing the roof on some of the facilities it would have prompted stronger oversight and monitoring which i believe is necessary and you're absolutely right that suspending or withholding money may be problematic for some of these institutions which is how long it how well again i only know my state we're probably four months behind i i feel a little bit insecure answering and that's fine i'm not trying to put jobs but i'm just i believe it is a problem in this experience in illinois is but let me just make a very important point to you that very often these institutions in financial trouble are exams money not suspended but a dance money and i would wager that happens in a lot of other states as well and the critical decision that our agencies have to make is whether to advance more money in other words throw good money after bad or good money being for the care patients but possibly for exploitation as well i thank the gentleman mr kofi for more questions a year old me to be made part of record i noted earlier here in your bones and back and forth nose testimony which is very very moving mr morris isn't it the case that c m s currently has no centralized database from which state officials can easily find information about nursing home companies moving into their states i couldn't speak to that directly i believe acting administrator wins will be testifying later there is data available through pecos which adana pfizer immediate owners  facilities as we were discussing a couple moments ago the difficulty is being able to follow that ownership upstream through multiple well let me ask you this and i think we're going to hear later from sam asset they only have information about seventy percent of nursing home providers and in the country and they're going to tell us that they that it focuses on the quality of care nursing home residents receive with regard to ownership what difference does it make whether c m s has complete information about corporate ownership of nursing home chain i think it makes a difference because the government should know who is doing business with and if the benefit of the bargain the money we've paid for services is not being met we should be able to go to those who received our money through ownership interests and you know hidden shells and be able to have a conversation with them and hold them accountable if they don't improve the care of the residents for whom we are charged with looking after so i think it makes a huge amount of difference so would everyone on the panel agree that that information should be part of the searchable database ok but i want to comment now ok let me ask mr blumenthal the owner of haven health care way too borrowed against the equity value of the real estate and his nursing home to finance their lakes traficant ventures such as the purchase of a recording studio in nashville tennessee why do owners such as mr  attempt to separate the ownership and operations of a nursing home what is the economic rationale for permitting them to have ownership or for his doing what he and is doing what he did really well you're you're asking the wrong person for the defense here well let me ask you this is a problem for an owner to use right or sing homes equity to finance non health care related ventures in your view and i and i apologize i didn't mean to be facetious it's a very honest and serious question and for us a very real one and in fact we are continuing our investigation there has been public mention i can't comment on it that federal authorities may be involved as well but the use of that money for unrelated purposes raises very serious and significant legal exposure for him and in my view there is simply no rationale for there is no excusable reason for resources to be taken from a nursing home enterprise as we alleged he did for recording company or private home or other unrelated ventures whether extravagant or not and risking the the nursing home and then to claim that six hundred fifty one dollars or whatever it was is just too much for for him to pay and sending and i think that's a pretty insulting sign to begin with but to send a dollar is absolutely despicable in my view and your question goes exactly i think it's a very good illustration of the practical consequences of the separation of these different entities into different corporate structures so that they can be insulated from accountability and i know that ms ascertain knows attorneys are here today they're seeking recovery and by the way others have sought recovery through malpractise actions and one of my recommendations is that there be minimum insurance requirements so that people who are in this situation can hold accountable these there are no minimum insurance transparent it's easier for the ombudsman and i really appreciate the work of ombudsman we have some in our community to prompt improvement in a nursing home how often do you find that parents see is a problem in the you encounter a nontransparent home what steps does your office take to determine who the owner is from our office or selves we do all the research we can do from calling the administrator to trying to decipher who owns the place in some cases the administrator we're actually look at you and say i'm not quite sure i think there are a company out of chicago but we also have a c e o who may be able to help you and it's it's quite frustrating and i understand that they are running a business for better or worse and i know that my role is in the trenches and i understand that there's bigger agencies  involved and i hope that somebody knows well mr chairman mask a couple more questions yes few more thank you i mean if you're dealing with a nursing home that had a record of poor performance in another state would you have any way of finding out and how would you do it now i mean unless there was a warning i would and i wouldn't know you would know and is there any way you could find out i'm not terribly sure ok what is your experience been with nursing homes that are purchased by companies that are based out of your state is there any difference in the quality of care that you've  the quality of care i guess that's a question that the residents here answer ok i am not one to say that quality of care is better than this one i guess it depends on what the president expects is quality of  difference between those are that are part of an outside of your state chain yes what kind of steps do you think that federal regulators could take to most assist your work in dealing with nontransparent nursing homes is my last question to know who to go to allowing us to know who the owners are so that if we have to go far and beyond the administrator who saw a contact person we know where to go we know who to call we know who to approach to solve the problem like not having showers in the nursing home can let me just ask mr blumenthal the answer that as as you've just heard the information sharing is completely inadequate and what i would like to see is that the federal government established a clearinghouse a database that is freely accessible to regulators and perhaps even proactively warned state regulators about owners operators managers who have encountered problems where you know we're not talking about rocket science to use an over use term it is a very simple concept that this information be freely available and that there be joint state federal enforcement and that the federal government require absolutely require as a precondition for providing all those billions of dollars that you do at the state do an adequate job of monitoring that require people adequate numbers of inspectors and the kind of enforcers who will protect against the haven health care kind of situation thank you the man  york times coverage today of this hearing and it says that there is widespread understatement of deficiencies in this in the nursing home business and then you quoted also as saying we found nursing home residents who are grossly dehydrated or malnourished we've found maggot infestations in wounds and dead flesh and so forth and i was just wondering yes number one in conducting this report this report how many states did you go in and look at nursing homes in those states and from your perspective  what portion of nursing homes do you feel are not meeting minimum standards in our country today let me try to answer the question this way i believe the times article you're referring to today's article was actually talking about a report issued by the g a o today so we were not part of that value would have effort however as part of our audit and evaluations we look at facilities throughout the country all fifty states  and use those to base our findings and recommendations in the particular matters that you're addressing we work very closely with state and federal law enforcement officials in every state we work with the state medicaid fraud control units that are really on the front line of these enforcement efforts so we bring all of that in forstmann information as well as our value would have work to the question of you know how many facilities how many chains are providing substandard care we would note that  suggests about one in five is providing care that puts residents in harm's way subs putting them in jeopardy or providing actual harm and we would also note that many of these facilities yoyo in and out of compliance with program requirements so the magnitude of the problem when looked over a multi year period is probably more dramatic than that so you're saying that twenty percent of the nursing homes in the country are endangering patients today in the care that they providing bait based on the survey information coming out of both the state and federal surveyors yes now and when we talk about federal standards meeting federal standards what does that term actually name and can you delineate some of the different types of standards that we're referring to well the centers for medicare and medicaid services have conditions of participation which specify both patient care as well as life safety requirements that nursing homes are required to meet in order to participate in our program and those are the standards from which when the federal government and then our partners in the state use to evaluate whether a particular facility is in compliance there is a state survey process by which each facility is subject to on average about fifteen months survey reviews and then the federal surveyors go back and review some portion of that work to see whether the quality of those surveys is adequate and consistent ok now i want to get back to this owners issue for just a minute if a nursing home was a meeting the requirements are it's not it's either providing care at a certain standard or it's not so why is the ownership aspect of it so important the ownership aspect is important because care is delivered through a range of different mediums and the quality of care varies throughout the week and year when we see systemic failures of care i mean something's wrong with how that nursing home is delivering care not to just one individual but across the board when we in the enforcement community and the compliance improvement community want to have a conversation about how to improve care we need to find who's got control of the resources our experience has been that when a facility is under the control of a large corporation which has put multiple layers of accountability between decision makers and the facility resources are drained away from care so we need to be able to have transparency and accountability with those who actually make the resource decisions and as was alluded to in this panel many times when we speak to the head of the facility they don't know who's in charge they don't know how to respond to an ombudsman's concern or a state surveyors concern it's always passed  uphill they may not know actually who's got control over those resources and as i said i think if we are point billions of dollars into this industry we ought to know who we're giving that money to and one other question the attorney general blumenthal as attorney general of connecticut do you have the authority yourself to close down there saying home of it's providing substandard care i do not alone i can act only when the experts i'm not a health care expert i'm not a doc i'm not a trained medical person nor is anyone on my staff i depend on the department of social services to go through a proceeding and that happened in this instance eventually and we did go to court but i cannot unilaterally do so but i want to come back i think you've asked the next one question why do we care about ownership well if you take the case that you just heard about oscar ask her to know suffered huge harm and that's a sillett a should have been held accountable and it was not because it said we don't have resources so they sent a dollar if they'd known who the owner was and been able to go after him and hold him accountable he would not have been using those resources to buy a record company in tennessee or a house on the front of a lake now that is an extreme example the resources were there but the chain of command and control was so complex that it couldn't be held accountable chairman let me just briefly follow up on that if i mean if they want to jump and go doing a few months we're going to break for a vote even though you may know who the owner is and it may be out of state and you can follow the money that still doesn't require or make certain at the nursing homes going to that money is going into a nursing home they have a right after they pay whatever they do where money left or to use how they want it doesn't necessarily guarantee an improvement for those residents so other than your surety bond or your insurance proposal minimum surance liability proposal do you get them to do the right thing in this case because we pay seventy eight billion a year in direct costs that all the other parts of medicare which are doled out to nursing homes for third drugs and other things so well that that question which is an extreme one goes to some of the other suggestions i've made information sharing would presumably alert a regulator in in illinois or michigan or for modern new hampshire about an individual in connecticut is betraying the public trust and it is a trust people are entrusted to the care of this institution and if there were the kind of pattern of violations citations findings in connecticut established there it could be made available to others and eventually even in connecticut action could be taken against him so the minimal insurance policy the more about lation to have should you tie bart to that  your insurance liability then go up it could and should be raised and if it apply uniformly across the country as a condition of federal medicare medicaid it would be even more effective  but you know some of the some of the proposals i've made have to do with greater cooperation among the states which i think has to hatch or mr morse to do and say some quickly i'm going to go to mr shimkus for a question just to elaborate that not only information sharing among states but actually information sharing with those in command and control if we can establish that those who control the resources know of the substandard care being provided at the facility level it increases accountability they draw their attention to fixing those problems so as are the reserve first line of defense in the way the ombudsman but also going upstream in the corporations so you don't get the defense of i had no idea what was going on you can hold me his testimony nursing homes are required to submit updates to their existing provider and roman when they have a change in information such as ownership which then populates the picos database using pico c m s has the of has the ability to better track ownership and changes in ownership mr morris you want to respond to that as i believe you said earlier the challenge is getting to multiple tiers of ownership my understanding is pico is actually only addresses direct s have the authority the question is legislation to do there you have the authority to force us i don't know the answer to that we need to find out the answer mr chairman good things were to excuse this panel we may follow it up with other written questions because i know i want a couple  more questions about times not going to and we have five votes and we're to recess until twelve thirty and i don't want to keep it here till twelve thirty for a few more quick questions so will dismiss this panel will recess we'll be back at twelve thirty for our second panel thank you all for being