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Governor seeks more accountability for nursing homes
State officials plan to dock pay to California's nursing homes that fail to meet staffing standards set by the state.
The move is one in a series of changes meant to make nursing homes more accountable for the taxpayer money they receive. The reforms are part of a larger spending plan for nursing homes contained in Gov. Arnold Schwarzenegger's revised budget released last week.
"We're doing this to drive the system to what we all want, which is better quality and accountability," said Toby Douglas, deputy director of the Department of Health Care Services.
Officials say they still expect to sketch out final details of the plan with nursing home leaders and patient advocates before budget negotiations with the Legislature. The plan would need approval by the Assembly and Senate.
Five years ago, California enacted a new nursing home funding system that sent nearly $1 billion in additional funding to nursing homes with the expectation that care would improve through better wages and increased staffing levels. But the bill included few safeguards to ensure the money was spent as intended.
California Watch reported last month that about 230 nursing homes saw funding increases but either cut wages, reduced staff or fell below the minimum staffing levels set by the state.
The governor's budget plan for nursing homes also includes a new fund that will take money from all nursing homes and return it to those that meet quality standards.
The state would perform audits of staffing levels for each of California's roughly 1,000 nursing homes. The audits would be completed in the next two years.
The group that represents nursing home owners plans to evaluate the changes in coming weeks, according to spokeswoman Deborah Pacyna.
"We certainly support quality care and accountability," Pacyna said.
Deborah Doctor, a lobbyist for Disability Rights, said she is concerned that the nursing home plan might get lost in larger budget deliberations. She would rather see the plan discussed in its own legislative hearings than as one small part of the overall budget. The plan involves about $4 billion in annual state and federal spending.
Still, she said the changes are a "baby step" in the right direction.
"Until we see the details of how it will play out, it's hard to know what the affect would be on the budget and quality of care in nursing homes," Doctor said.
The California Watch investigation also found that nursing homes have been appealing more state-issued citations since the state began paying legal fees for those challenges.
Douglas said his agency will tighten rules on which legal fees the state will reimburse. It will also cap the amount the state will pay nursing homes for liability insurance that covers patient-care lawsuits, Douglas said.
Douglas said the proposed changes will be a starting point for ongoing discussions with nursing home industry leaders and patient advocates.
The changes come as the nursing homes industry plans to boost rates 3.9 percent this year and 2.4 percent next year. The increases will not come from the state general fund. Instead, it will come by increasing the fee that nursing homes pay to draw federal matching funds, Douglas said.
A portion of that rate increase will go into the special fund meant to reward good nursing homes, Douglas said.
The special fund will also include half of each facility's labor-based bonus payment, which is an additional payment equal to about eight percent of each facility's spending on staffing.
The state will also put into the fund money it saves by capping liability insurance. A third source of funds will be the bonus payments docked from homes that fall under the state staffing standard.
The reserved money will go back to nursing homes that meet specific benchmarks that have yet to be determined, Douglas said.
The state also plans to oversee a satisfaction survey of patients, their families and nursing home staff. The results will also factor into the incentive payments.
Michael Connors, an advocate with the California Advocates for Nursing Home Reform, favors the proposal to set aside money to reward improved care.
But he said the state could go further.
"Paying a lower bonus to a facility that's understaffed?" he said. "That's not much of a sanction. We shouldn't be paying them a bonus in the first place."
The California Watch investigation was published or broadcast in April by several news outlets across the state, including the San Jose Mercury News, Orange County Register, Riverside Press Enterprise, Long Beach Press Telegram, Contra Costa Times, Oakland Tribune, Sacramento Bee, Santa Rosa Press Democrat and KQED Public Radio.