The head of the state’s community health agency on Thursday pulled from consideration a special reimbursement increase for select nursing homes that would have rewarded some of Georgia’s biggest campaign donors.
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.
The Department of Community Health board was scheduled to consider 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 after board members raised concerns.
Reese said DCH will study whether to shorten the lag time between owners spending money to upgrade homes and getting higher rates. Instead of the 45 or so nursing homes that would have benefited from the rate hike DCH was considering, hundreds might be eligible. Reese acknowledged that could greatly increase the cost to taxpayers beyond the $26 million price tag listed for the proposal pulled Thursday.
“We believe there is merit in recognizing the expenditures that a new owner of a nursing facility may incur,” Reese said.
Jon S. Howell, president and CEO of the Georgia Health Care Association, the industry’s lobby, said his organization was glad to hear Reese acknowledge “that the length of time from when skilled nursing care centers incur costs and when those costs are recognized in the reimbursement methodology are too lengthy.”
“Georgia’s providers look forward to working with the department on a long-term, global solution while embracing the language and legislative intent of the appropriations act this fiscal year,” he said.
Rates for homes this year are based in part on the costs nursing homes incurred in 2012, Reese said. Other areas of state government, including the University System of Georgia, also are funded using past years’ data, such as enrollment.
Language calling for the special nursing home rate hike was slipped into this year’s budget late in the 2014 General Assembly session by the state Senate. Several top senators told the AJC they didn’t remember who proposed it, but the rate hike language made it into the final version of the budget signed by Gov. Nathan Deal.
The stakes are huge for both the nursing home industry and the politicians they support.
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. The industry’s lobby has for decades been a prominent player working to increase nursing home funding during the final days of General Assembly sessions.
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.
Lt. Gov. Casey 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.
The rate issue could resurface during the upcoming General Assembly session, when lawmakers may consider funding new rates for nursing homes. The Pruitt’s company and the nursing home lobby donated more than $100,000 to lawmakers and state political parties during the first half of 2014, including more than $60,000 during the first three months after the legislative session.
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