Nursing homes, governor at odds on Ohio budget
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COLUMBUS, Ohio (AP) - New numbers from the state show some 200 Ohio nursing homes are paying six-figure administrator salaries and the industry is spending millions of Medicaid dollars to employ owners' family members and to hire related side businesses.
An Associated Press review of data compiled by the Office of Health Transformation for release Thursday comes as Gov. John Kasich's administration is in an emotionally charged faceoff with the nursing home industry over its spending.
The governor's $55.6 billion state budget proposal cuts nursing homes' Medicaid funding by $222 million over the two years beginning July 1. The financial impact on the industry is estimated at $427 million, however, because costs and demand are expected to continue to rise. Medicaid is the state program for those who can't afford medical care.
Kasich seeks to expand access to home care programs, such as PASSPORT, and increase quality incentives to nursing homes as part of a health care system overhaul led by the transformation office.
For-profit nursing home operators cried foul in a recent television commercial, which urged Ohioans to lobby state senators to restore some of the funding. "Call now, before it's too late," the ad said, as a plug was pulled from the wall and a heart monitor flat-lined. Kasich, AARP and an association representing nonprofit homes decried the ad, and the group behind it pulled it off the air.
Amid their fight against the cuts, data from 2009 cost reports filed by more than 900 nursing facilities statewide showed 216 paid their administrator more than $100,000. On average, administrators make about $80,000 - slightly below the national average. The reports are the latest available.
Jo-Lin Health Center Inc. in Ironton topped the list, reporting paying its administrator $301,663. The median salary in Lawrence County, where the center is located, is $34,596, according to state data.
A message was left with the facility seeking comment.
Sanford Gerber, the administrator at Belle Manor Nursing Home in New Carlisle, laughed when told he appeared to be among the highest paid administrators in the state, with reported wage of $206,003.
"If you're thinking that they're paying administrators here $200,000 a year to run a 60-bed nursing home, boy, I'd love to have one of those jobs," Gerber said. He declined to disclose a different salary than what is listed on the facility's state form.
Gerber said exorbitant salaries would mean "there'd be nothing left for food or rent or supplies."
The $201,452 salary reported by Broadview Multi-Care Center in Parma includes salary and benefits for administrator Isaac Lifschutz, as well as continuing education and other expenses he incurs, said chief financial officer Barry Stump.
"On the surface it may sound a little bit high, but keep in mind you are dealing with one of the larger facilities in the state. We've got 218 beds," he said.
The system Ohio began moving to in 2005 reimburses nursing homes at rates representing the prices it has determined services should cost. In the past, nursing homes were reimbursed for actual costs - with caps set on wages, family member employment, and side businesses. Kasich's plan would complete the transition to a so-called price-based system, with adjustments to the earlier formula.
"If that line would have had one dollar on it or a million dollars, it wouldn't have changed, not by one penny, the reimbursement that Broadview gets from Medicaid. Not by one penny," Stump said.
State data show Broadview is also among facilities paying the highest compensation to family members of the owner. It paid $370,569 in 2009, coming in third behind Crestview Rehabilitation and Skilled Nursing Services in Lancaster that reported paying $873,305 and Jo-Lin, which reported paying $474,223.
About 1,100 family members of owners are employed around the state, according to reports.
Lifschutz said these are family businesses that do their best to serve the community.
"This is a family business that puts a lot of money back into the facility, into continuing to improve resident care, improve the building and grounds, improve quality of life," he said. "Our single biggest cost is nursing."
Spokesman Eric Poklar said the health transformation office is working to compile extensive data on state health programs that can be easily accessed by the public.
"We're not trying to interpret the numbers," he said. "This is something we would really avoid reaching conclusions on and leave that to the policymakers."
Overall, nursing facilities reported spending $44.1 million on businesses in which owners have an interest. Green's Nursing and Rehabilitation Center in Lyndhurst spent the most: almost $2.2 million. Newark Health Care Centre in Licking County spent the second highest: $1.2 million.
Erin Kennedy, executive director of the Newark home, told The Advocate newspaper that expenses reported in the data go to a contractor that provides physical, occupational and speech-language therapy services "to help our patients and residents regain their lives and return home as quickly as possible."
The AP on Thursday obtained results of a poll conducted by the Ohio Health Care Association, representing for-profit facilities, after it aired the flat-line ad. The survey of 708 Ohio voters found 74 percent of those surveyed somewhat disapproved or strongly disapproved of Kasich's proposed cuts. The poll had a margin of error of plus or minus 4 percent.
Pete Van Runkle, association executive director, said businesses in which owners have some business interest might provide groundskeeping, medical supplies or food.
"It's going for services for patients and those services are composed of a number of components," he said. "You have to have groundskeeping of the facility at some level in order to have a decent place to live."
Cathy Levine, executive director of the Universal Health Care Action Network of Ohio, an advocacy group, said nursing home expenses deserve review.
"We have terrifying unmet needs for basic human services like food and medical care that people are going without that need to be addressed through our government," she said. "So we need our lawmakers to scrutinize how every dollar is being spent on administration and overhead to make sure those resources are going to deliver care to the frail elderly and older adults."
Office of Health Transformation: www.healthtransformation.ohio.gov