Nursing homes spent big bucks on Ohio politics. You could be looking forward to a big Medicaid boost

COLUMBUS — Ohio lawmakers are considering legislation that could pour hundreds of millions of additional funds into Ohio’s nursing home industry — a political powerhouse who says its facilities are under water.

Republican leaders in the House of Representatives have not shared details about the size or shape of the package. Industry officials say the money is badly needed to ensure quality of care as care homes grapple with rising labor costs, pandemic-related increases in care costs, snarls in the supply chain and staffing shortages.

The money would flow into an industry heavily dependent on state and federal dollars backed by a powerful political machine. Sixteen lobbyists are registered in Ohio on behalf of three industry organizations, not to mention a few large chains that employ their own lobbyists.

Meanwhile, industry PACs and individual plant operators have contributed more than $1.4 million to state races in the 2021-2022 campaign cycle alone, almost entirely to Republicans supporting Ohio with trifecta control of state government and supermajorities in both houses of the rule the General Assembly. A political nonprofit operated by one of the organizations spent $1.7 million in 2019-2020, the latest data available.

The COVID-19 pandemic has hit the nursing home industry hard. It sparked deadly outbreaks, increased costs, drew unflattering media attention, and accelerated a shift toward home care for older Americans. The virus itself spread quickly through community facilities such as nursing homes, posing a serious threat to the elderly and frail population.

While most households have struggled with outbreaks, government inspections show more than three dozen Ohio facilities have reportedly posed “imminent threats” to the well-being of their residents during the pandemic. Inspectors claimed poor standards of care and infection control preceded more than 80 deaths of residents across the state from COVID-19.

According to Miami University, the Medicaid program spends around $7.6 billion annually on nursing homes in Ohio. Last year, state lawmakers gave facilities an additional $300 million in coronavirus relief funds to help them deal with rising labor costs, with the proviso that the money goes to caregivers like nurses, not owners and operators.

GOP House Speaker Bob Cupp said Wednesday the House is now “seriously” considering passing legislation to allocate more funding to inflation-adjustment facilities. House Majority Leader Bill Seitz said the funds would focus only on direct care costs, but didn’t name a price tag.

On a longer-term basis, the three professional associations have jointly proposed a range of measures that would increase their funding while incentivizing certain quality care interventions and private rooms for residents.

Incentives for quality of care under current law are weak, said Roger King, a lobbyist for the Academy of Senior Health Sciences, which represents about 150 institutions. But he said the homes have been underfunded for 15 years, resulting in substandard care. Adequate funding and new, “more meaningful” incentives, he said, would produce better quality care homes. They may not fill all of the gaps uncovered during the pandemic, but they are a step in the right direction.

“More money is appropriate,” he said. “There’s no doubt about that. The question is: how can we fund more and try to get better outcomes and better care for people in institutions?”

According to Pete Van Runkle, a lobbyist and director of the Ohio Health Care Association, which represents about 1,200 long-term care providers, costs, particularly labor costs, have skyrocketed since 2019, the base year for calculating reimbursements. He said facilities need sustained, not just one-off, funding.

“We haven’t seen an inflationary environment like this in 40 years, so we need interest rates to respond to cost changes. Our members are seriously upside down,” he said.

Some of the ideas and justifications sound good, but there’s not enough serious follow-up to ensure that new money translates into better patient outcomes and actually gets to workers, according to Loren Anthes, a fellow at the think tanks Center for Community Solutions with a specialization in medicine Medicaid Policy.

“We’ve long had a system in Ohio where we’ve put the needs and interests of the industry ahead of the needs and interests of the customers,” Anthes said. “And what are we doing to address these rather alarming incident reports?”

An AARP spokesman said the organization supports any legislation that increases funding for nursing homes, which often precedes better quality. But Erin Pettegrew, a deputy at the state long-term care ombudsman’s office, said complaints from residents are still frequent and she would have more information about the financial status of the facilities before committing to more funds.

And nursing homes are just one option for the elderly. Beth Kowalczyk is the Political Director of O4A, which represents county agencies statewide that help older Ohioans find home and community-based care in lieu of nursing homes. She said low wages, fueled by low Medicaid reimbursement rates, have pushed providers out of the market.

Nursing homes may need more money, but so do home and community-based care providers — an industry that could dry up without more funding.

“We’ll be left out, and people won’t have those options,” she said. “They will either be forced to choose a nursing home because there is no other option, or they will be left at home without assistance and potentially end up in a hospital.”

Robert Applebaum, a gerontologist at Miami University in Ohio, broadly agreed. More funding is sensible, he said, but should be strategically focused on what facilities and beds the state still needs amid falling demand for care services. And home care should not be left behind.

The money

GOP lobbyist and ruler Neil Clark represented the OHCA for years. In his posthumous 2021 memoir, he compared Ohio’s nursing home industry to 500 ATMs across the state: politicians can go at will, punch in a number, and withdraw cash.

A review of campaign posts from the 2021-2022 cycle at Plain Dealer shows little has changed.

Brian Colleran, the founder of Foundations Health Solutions, operates a chain of 53 nursing homes statewide. He and his wife collectively donated more than $360,000 to Republican candidates and state committees during the cycle. Colleran is currently at the end of a corporate integrity deal with the federal government after he and his business partner agreed to settle with the U.S. Department of Justice and pay $19.5 million over alleged anti-kickback law violations. The settlement was not a guilty verdict.

In a statement through their attorney, the Collerans said they support children’s education, wildlife, land conservation, music and arts, and health initiatives focused on seniors and people with disabilities. They said they were “blessed” to be able to support causes and individuals who share these values.

Ronald Wilheim and his family donated nearly $340,000 to Republican candidates and committees. He is the President of the Long-Term Care Division of Communicare Health Services, a multi-state corporation. In a statement, Wilheim said he supports candidates fighting for jobs, reducing inflation and “taking constructive initiatives to solve the nursing crisis in our industry.”

Wilheim sits on the OHCA board alongside other major contributors such as Gerald Schroer, who runs the parent company of several nursing homes and providers ($76,000), or Linda Black-Kurek, who oversees a chain of three facilities ($42,000).

Each of Ohio’s three professional nursing home associations has its own PAC. The Academy has spent more this cycle ($215,000), followed by the OHCA ($141,000) and LeadingAge ($26,000), representing non-profit organizations.

OHCA also runs a non-profit “welfare” organization that can raise and spend nearly unlimited amounts of money on races. Over the past five years, she has spent $2.9 million, usually on advertising and grants to other political nonprofits, tax records show. That includes $515,000 over four years to another non-profit organization now at the center of the Justice Department’s investigation into former House Speaker Larry Householder.

“You get what you appeal to”

Of all the candidates running for Ohio office, none received more money from the nursing home industry this cycle than GOP Rep. Jay Edwards of Athens County. He was followed by candidates with a more national profile, including GOP Gov. Mike DeWine and Senate President Matt Huffman, a Republican from Lima.

During the cycle, Edwards’ campaign received approximately $55,000 from the Collerans and $27,000 from her business partner. Not to mention $82,000 from a handful of other operators.

In an interview, he said the operators who have joined him are like-minded in that they want to see serious incentives for quality of care. He said that instead of focusing on a dollar amount or the mechanism of awarding funds, he was adamant he wanted quality incentives that compel nursing homes to make improvements.

“I think we have a duty to make sure that Medicaid money is paid to nursing homes based on quality, not just shared equally,” he said.

He, too, acknowledged that the new quality stimulus measures on the table may not address all the pitfalls that have emerged during the pandemic. But he said they were a step in the right direction and away from a system “played” by care homes to get more money than they make.

Although he doesn’t want to do too much too quickly as he risks putting facilities out of business, he said it should be a slow and steady process.

“You get what you inspire,” he said. “You have to start turning the ship around.”

The Ohio Department of Medicaid declined to comment on pending legislation.

Jake Zuckerman reports on state politics and politics. Read more of his work here.