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'It's going to take time': HHC takes steps to boost nursing home staffing, but challenges remain

Indianapolis Star - 12/20/2021

One year after an IndyStar investigation, Indiana's largest nursing home owner has taken new steps to boost staffing and quality at its facilities statewide.

Paul Babcock, who took over as leader of the Health & Hospital Corp. of Marion County last year, said the public health agency plans to nearly double the amount of money it spends on its system of 78 nursing homes across the state.

HHC has also added two new provisions to its contract with the private company that operates the homes.

The first introduces performance incentives intended to improve quality at the nursing homes. The second requires the company, American Senior Communities, to hire a compliance officer to respond to allegations of illegal or unethical behavior.

Still, those changes stop short of the recommendations from an audit the agency commissioned last year in the wake of IndyStar's investigation and mounting coronavirus deaths at its facilities.

"Obviously, it's going to take time," Babcock told IndyStar. "This isn't something that gets done overnight."

What IndyStar's investigation found

An IndyStar investigation last year, titled "Careless," exposed how dismal staffing levels left the state's roughly 530 nursing homes woefully unprepared for the coronavirus pandemic, despite Indiana's status as the nation's largest recipient of extra Medicaid funds for nursing homes.

Indiana qualifies for those extra funds because of an arcane program that provides enhanced Medicaid funds for nursing homes owned by local government agencies.

Careless: Nursing home residents suffer as county hospitals rake in millions

County hospitals across the state have acquired more than 90% of Indiana's nursing homes — at least on paper — to access the extra money. But IndyStar found state and federal officials have allowed those hospitals to divert much of the money to other purposes such as hospital construction.

More than 20 public hospitals across the state — including HHC, which operates the Sidney & Lois Eskenazi Hospital in Indianapolis — participate in the program. Together, they divert hundreds of millions of dollars every year.

The practice has raised concerns because even before the pandemic, Indiana ranked 48th in the nation for total nurse staffing hours. That includes highly trained nurses as well as nursing assistants who provide much of the hands-on labor in nursing homes. Staffing is widely considered a top indicator of quality.

Poor staffing, missed reforms: How Indiana failed nursing home residents

The human toll was detailed in inspection reports and malpractice claims involving injuries or deaths that may have been prevented with adequate staffing: bed sores allowed to fester until limbs had to be amputated, repeated falls that left residents with broken bones or fatal head injuries, and violent attacks among unsupervised residents.

And that was before the pandemic. As the virus swept through the nation, it killed Indiana nursing home residents at higher rates than in most other states, IndyStar's investigation found.

The system also allowed rampant fraud. IndyStar's investigation exposed a secret report that detailed previously unknown accusations of fraud involving former executives at American Senior Communities and their associates.

Careless: 5 were prosecuted in American Senior Communities fraud. A secret report accuses 20 more.

The report, compiled by American Senior Communities in 2016, claimed 25 people in nearly two dozen schemes defrauded HHC's nursing home system of at least $35 million. Only five of those people were prosecuted and $15.5 million recovered on behalf of taxpayers.

Investigation prompts review

IndyStar's investigation and the mounting COVID-19 death toll led HHC's board to order an outside review of its nursing homes in May of 2020. The agency's longtime leader, Matthew Gutwein, also resigned in September under pressure from the board.

HHC paid $865,000 to Atlanta-based law firm Constangy, Brooks, Smith and Prophete LLP to perform the nursing home review. It was completed in April, but HHC didn't provide a copy of the review's findings to IndyStar until October, despite repeated requests.

Auditors found HHC had not fully developed or implemented policies and procedures to enforce its contract with American Senior Communities.

"Consistent adherence to all contractual provisions is critically important when considering that 78 nursing facilities represent a sizable and multifaceted business operation within a complex, heavily regulated industry," the 27-page report says.

The report also found that pre-pandemic staffing levels at HHC's nursing homes were below state and national averages.

"This created operational challenges during the sudden onset of the pandemic, both in terms of access to available employees and the significant financial obligation of immediately adjusting staffing patterns because of COVID-19," the report says.

The staffing challenges were not unique to HHC, the report notes, "as the entire healthcare industry nationwide was plunged into crisis management."

The report recommends that HHC set regulatory compliance and staffing ratio expectations for American Senior Communities and require the company to notify HHC when those staffing goals are not met.

The report also suggests HHC should consider spending more of its nursing home Medicaid funds to improve staffing.

'An incalculable loss'

Babcock, who replaced Gutwein in September last year, said he is aware of the stakes.

His office at HHC's headquarters at 38th and Rural streets is relatively unadorned with one exception: A framed copy of the front page of the New York Times from May 24, 2020.

"U.S. Deaths Near 100,000, an incalculable loss," the headline says.

It's a reminder of the importance of HHC's public health mission, Babcock said.

Today, more than 800,000 people have died from COVID-19 in the United States. More than 1,100 of those were residents of HHC's nursing homes.

Babcock said he can relate the devastation felt by those families. He lost his own grandmother to COVID-19 last year. She was a dementia unit resident at a facility that is not owned by HHC.

"The mission, personally, means a lot," he said.

"I think what this report just shows is that there's always more that can be done to improve it," he said. "And that's what we're working on. That's our goal. That's our mission. And, you know, patient care is for me, and for the team, paramount."

More money for nursing homes

But when Babcock took over at HHC last year, the agency was spending less, not more, on nursing home care.

As the coronavirus ravaged nursing homes across the country in 2020, HHC actually reduced the amount of money it spent on its nursing homes, according to spending information IndyStar obtained through a public records request.

Although HHC's nursing homes generated about $186 million in extra Medicaid funds, the agency spent only $47 million, or about 25%, on its nursing homes in 2020. The other $139 million went to the hospital.

That was a significant decrease from the year before HHC spent about $65 million on its nursing homes in 2019. It was also a much smaller amount than what the agency had told Indianapolis City-County Council it would spend on the nursing homes in 2020.

Babcock said he couldn't comment on what HHC's previous administration had told the City-County Council. He attributed the reduced spending on the nursing homes to an influx of CARES Act funding from the federal government.

But he said HHC planned to spend far more on its nursing homes this year and in 2020, with a goal of attracting and retaining more staff.

"In 2022, we're projecting to put about $80 million to try to ensure that we have the adequate levels in this difficult marketplace," he said.

Staffing remains a challenge

Boosting staffing levels will be an uphill battle. Employers across industries are having difficulty filling opened positions. That's especially true in health care settings. And it's an even bigger problem at nursing homes in particular, Babcock said.

Average wages for registered nurses and nursing assistants have risen about 30% at HHC facilities over the past two years, according to information the agency provided.

Still, staffing numbers have continued to decline. HHC didn't provide comparable systemwide numbers, but for the agency's 14 nursing homes in Marion County, the number of nursing home employees has fallen from 2,138 in 2019 to 1,674 currently.

American Senior Communities is trying to augment those numbers with employees from contract agencies, according to HHC.

Babcock is hoping the continued investment pays off.

"We're looking at increasing wages to try to retain staff, potential incentive programs — we're doing everything we possibly can to maintain high levels of staffing," he said. "But it's just a challenge in the industry across the board."

There remains one key recommendation from the audit that HHC hasn't yet tried: Setting required staffing ratios for American Senior Communities.

"Unfortunately," Babcock said, "because of how challenging it is just to get staffing, we're not in a position to be able to do that."

IndyStar reporters Emily Hopkins and Tim Evans contributed to this story.

Contact IndyStar reporter Tony Cook at 317-444-6081 or tony.cook@indystar.com. Follow him on Twitter: @IndyStarTony.

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