Two DCH board members replaced after nursing home hike stalls

A state Department of Community Health board member who opposed an obscure rate hike for the politically powerful nursing home industry is being replaced by Gov. Nathan Deal, The Atlanta Journal-Constitution has learned.

Another board member who publicly raised questions about the increase is being replaced as well.

They were given the news the day the rate hike stalled.

Jamie Pennington, who said last month that the rate hike “doesn’t make sense,” and William Wallace, who voted against the increase at a previous meeting, were told Thursday they wouldn’t be reappointed. Their terms on the board were up.

Two board members who supported initial adoption of the rate increase last month were reappointed Friday.

The DCH board was scheduled to consider final approval of the rate hike Thursday for nursing home owners who bought facilities between Jan. 1, 2012 and June 30.

DCH Commissioner Clyde Reese pulled the rate increase from consideration in part because of concerns raised by board members. Reese said the agency would study changes to speed up compensating nursing home owners when they make improvements to their facilities.

The move came after The Atlanta Journal-Constitution reported this week that the rate increase for select nursing homes — which was backed by the General Assembly — would cost $26 million a year and hike payments to some big-money contributors who owned nursing homes.

About 40 nursing homes could see rate increases under the change, including several owned by top political donors to Deal, Lt. Gov. Casey Cagle and leading lawmakers, according to a DCH report.

Nursing homes care for about 52,000 Georgians and received about $1.2 billion last year in funding from the state-federal programs run by DCH.

Owners have also been among the biggest political donors to state leaders and parties from both parties, heavily backing Democrats when they were in charge, then switching to Republicans when the GOP took over the Capitol.

The industry has contributed about $900,000 to Deal’s campaigns and political action committee. Real PAC, the political action committee created to support Deal, received about 40 percent of its contributions from the nursing home industry. The nursing home lobby also hired Deal’s son-in-law just after the governor was elected in 2010.

The Pruitt family, among Deal’s top donors, had at least eight nursing homes on the DCH’s list of possible beneficiaries of the special rate change. All eight were listed as changing ownership this year, including five during the 2014 session. The now-stalled change could have increased annual payments to homes owned by the family by about $4 million.

Cagle has received more than $100,000 in contributions from the industry since 2006, when he was elected lieutenant governor and Senate president. The group’s lobbying arm and top companies have given more than $1 million to legislative candidates, political parties and partisan political action committees in recent years.