Lawmakers scrapped a bill Wednesday that would have forced county hospitals to disclose how much they pay their executives and how much money they divert from their nursing homes. The measure — Senate Bill 405 — had been scheduled for a hearing before the Senate Health & Provider Services Committee, but the committee's chairman, Sen. Ed Charbonneau, RValparaiso, yanked the bill at the last minute. The move effectively kills the legislation. The deadline to pass bills out of committee is this week. Charbonneau offered no explanation for the decision. IndyStar asked him after the meeting why he did not hear the bill. He only said that he didn’t think the timing was right.
The announcement surprised advocates who showed up to testify in favor of the bill. Even the lawmaker who filed it, Sen. Fady Qaddoura, D-Indianapolis, said he found out only moments before the meeting. "I'm disappointed that it was pulled from the calendar because this is a critical issue," Qaddoura told IndyStar after the meeting. "In my view, if it's public dollars, then we should mandate public disclosure."
SB 405 would have shed light for the first time on exactly how much federal money county hospitals divert from their nursing homes — and to what extent hospital leaders have benefited personally. It also would have required the Indiana Department of Health to establish new quality metrics for nursing homes and it would have prohibited retaliation against whistleblowers who expose wrongdoing at health facilities. The effort to require more transparency follows an IndyStar investigation that found at least $1 billion in federal money generated by Indiana nursing homes has been used for other purposes, such as county hospital construction projects. Millions more has been lost to fraud. The money is part of a Medicaid program that provides extra payments to nursing homes owned by local government agencies, including county hospitals. About 20 county hospitals across the state have acquired more than 90% of Indiana's roughly 530 nursing homes, at least on paper, to access the extra Medicaid funds. The money — more than $825 million last year — is intended to improve care for nursing home residents. But IndyStar found that county hospitals exploit loose state and federal rules that allowed them to use much of the money to pad the bottom lines of their hospitals instead. The true amount of money that has failed to reach nursing home residents as a result is not known because many county hospitals won't disclose the information. IndyStar also found that compensation for some public hospital executives grew dramatically as they acquired nursing homes. The CEO of one small county hospital received $8 million in a single year. But as with the nursing home spending, many county hospitals won't disclose how much they pay their executives. They don't have to because of a state law passed in 2016 that makes them the only government agency in Indiana that doesn't have to publicly share employee salaries. The spending — and the secrecy that surrounds it — has raised concerns because Indiana's nursing homes are some of the most poorly staffed in America. Even before the pandemic, Indiana ranked 48th in the nation for total nursing staff when adjusted for the needs of residents. The poor staffing left Hoosier nursing home residents particularly vulnerable to COVID-19.
Qaddoura said after the meeting that he doesn't understand why the General Assembly is unwilling to demand more information about how public hospitals are spending such large sums of taxpayer dollars. "We've lost over 7,000 senior citizens at nursing homes, (Indiana's) nursing home industry is one of the top five most funded in the nation, yet we're among the lowest five as it relates to some quality metrics, including staffing ratios," he said. "So to me, it's a commonsense, nonpartisan solution to bring more financial transparency." But the state's powerful nursing home industry has long opposed reform efforts such as required staffing ratios. And they spend a lot of money to influence state policy. The industry's trade group, the Indiana Health Care Association, is among the top 5 spenders on lobbying at the General Assembly. Nursing home interests have also poured millions of dollars into Indiana political campaigns. Public hospitals also have significant influence as major employers in their home counties. They have come to rely heavily on the nursing home funds to subsidize operations and pay off debt on new construction projects. Steve Long, president and CEO of Hancock Regional Hospital, told lawmakers during an unrelated hearing last week that the supplemental nursing home Medicaid program has been "mischaracterized." "The program operates exactly as its intended to," he said. "In fact, the program was established by the state almost two decades ago, approved by the federal government, and is serving the exact purpose for what it was intended. And it is improving access for Medicaid recipients both in the nursing facilities and the county hospitals." Charbonneau echoed that sentiment after scrapping the transparency bill on Wednesday. "What they're doing is perfectly legal," he told IndyStar. That might be true, but it doesn't excuse low staffing or poor care at Indiana's nursing homes, Qaddoura said. And it doesn't mean it should be shrouded in secrecy.
"I think the General Assembly needs to act on this issue to restore trust," he said. "I don't know how we can be fiscally responsible with over a billion dollars diverted since 2003 and be silent on this matter."
Contact IndyStar reporter Tony Cook at 317-444-6081 or tony.cook@indystar.com.
The announcement surprised advocates who showed up to testify in favor of the bill. Even the lawmaker who filed it, Sen. Fady Qaddoura, D-Indianapolis, said he found out only moments before the meeting. "I'm disappointed that it was pulled from the calendar because this is a critical issue," Qaddoura told IndyStar after the meeting. "In my view, if it's public dollars, then we should mandate public disclosure."
SB 405 would have shed light for the first time on exactly how much federal money county hospitals divert from their nursing homes — and to what extent hospital leaders have benefited personally. It also would have required the Indiana Department of Health to establish new quality metrics for nursing homes and it would have prohibited retaliation against whistleblowers who expose wrongdoing at health facilities. The effort to require more transparency follows an IndyStar investigation that found at least $1 billion in federal money generated by Indiana nursing homes has been used for other purposes, such as county hospital construction projects. Millions more has been lost to fraud. The money is part of a Medicaid program that provides extra payments to nursing homes owned by local government agencies, including county hospitals. About 20 county hospitals across the state have acquired more than 90% of Indiana's roughly 530 nursing homes, at least on paper, to access the extra Medicaid funds. The money — more than $825 million last year — is intended to improve care for nursing home residents. But IndyStar found that county hospitals exploit loose state and federal rules that allowed them to use much of the money to pad the bottom lines of their hospitals instead. The true amount of money that has failed to reach nursing home residents as a result is not known because many county hospitals won't disclose the information. IndyStar also found that compensation for some public hospital executives grew dramatically as they acquired nursing homes. The CEO of one small county hospital received $8 million in a single year. But as with the nursing home spending, many county hospitals won't disclose how much they pay their executives. They don't have to because of a state law passed in 2016 that makes them the only government agency in Indiana that doesn't have to publicly share employee salaries. The spending — and the secrecy that surrounds it — has raised concerns because Indiana's nursing homes are some of the most poorly staffed in America. Even before the pandemic, Indiana ranked 48th in the nation for total nursing staff when adjusted for the needs of residents. The poor staffing left Hoosier nursing home residents particularly vulnerable to COVID-19.
Qaddoura said after the meeting that he doesn't understand why the General Assembly is unwilling to demand more information about how public hospitals are spending such large sums of taxpayer dollars. "We've lost over 7,000 senior citizens at nursing homes, (Indiana's) nursing home industry is one of the top five most funded in the nation, yet we're among the lowest five as it relates to some quality metrics, including staffing ratios," he said. "So to me, it's a commonsense, nonpartisan solution to bring more financial transparency." But the state's powerful nursing home industry has long opposed reform efforts such as required staffing ratios. And they spend a lot of money to influence state policy. The industry's trade group, the Indiana Health Care Association, is among the top 5 spenders on lobbying at the General Assembly. Nursing home interests have also poured millions of dollars into Indiana political campaigns. Public hospitals also have significant influence as major employers in their home counties. They have come to rely heavily on the nursing home funds to subsidize operations and pay off debt on new construction projects. Steve Long, president and CEO of Hancock Regional Hospital, told lawmakers during an unrelated hearing last week that the supplemental nursing home Medicaid program has been "mischaracterized." "The program operates exactly as its intended to," he said. "In fact, the program was established by the state almost two decades ago, approved by the federal government, and is serving the exact purpose for what it was intended. And it is improving access for Medicaid recipients both in the nursing facilities and the county hospitals." Charbonneau echoed that sentiment after scrapping the transparency bill on Wednesday. "What they're doing is perfectly legal," he told IndyStar. That might be true, but it doesn't excuse low staffing or poor care at Indiana's nursing homes, Qaddoura said. And it doesn't mean it should be shrouded in secrecy.
"I think the General Assembly needs to act on this issue to restore trust," he said. "I don't know how we can be fiscally responsible with over a billion dollars diverted since 2003 and be silent on this matter."
Contact IndyStar reporter Tony Cook at 317-444-6081 or tony.cook@indystar.com.
