Nursing Homes' Focus on Profit Leads to Poor Patient Care, Neglect

Updated on: 11/15/2019

According to data published by federal health care inspectors, nursing homes in the United States have a history of significantly over-billing Medicare each year for treatments that are either never performed or are unnecessary and even put patients’ lives at risk.

The report adds credence to the already troubling issue of the over-billing of Medicare by facilities with elderly patients in the U.S.

For-Profit Facilities Worse than Non-Profits

Bloomberg News obtained data from the U.S. Department of Health and Human Services through a Freedom of Information Act request in December showing that nursing homes in the United States over-bill Medicare by a total of $1.5 billion per year.

The data also showed that there was a much stronger connection between for-profit nursing homes and over-billing than there was for non-profit nursing homes. According to the data, 30 percent of reimbursement claims to Medicare from for-profit facilities were deemed inaccurate in comparison to only 12 percent from non-profits.

For-profit nursing homes – in particular, their booming growth in the U.S. over the last decade or so – have been a hot topic for some time now, and numerous in-depth studies suggest that profit is an evil motivator for the $2.8 trillion U.S. healthcare industry.

“Research shows for-profits are more likely to pursue money in all kinds of ways than non-profits are, even by pushing the legal envelope,” says Jill Horowitz, a professor at UCLA’s School of Law.

Legal Action against Nursing Homes

Between the years 2008 and 2012, U.S. federal prosecutors carried out 120 civil and criminal cases – all of which have been resolved at this point – against nursing homes and associated parties in relation to Medicare fraud. What’s particularly disturbing is that was twice the number of cases that were brought over the previous five years combined.

These unnecessary procedures are not all "no-harm, no-foul," either. Although many of the overbilling stems from procedures that were either never performed or unnecessary, some actually caused significant injuries to nursing home patients.

In one case, a 92-year-old man with lung cancer received more than two hours of physical, occupational and speech therapy the same day he spat up blood and two days before he died. In another example, a woman who was “near death” was allegedly braced upright for multiple hours of physical therapy.

Other Safety Issues at For-Profit Centers

Bed sores, injuries from slip and fall accidents, malnutrition, pneumonia and infections are among the other common injuries and illnesses suffered by many of today’s patients being treated at U.S. nursing homes. These types of injuries are often easily preventable, and therefore are associated with neglectful staff members and procedures.

At least a bulk of the procedures and treatment being administered to nursing home patients appear to be part of an overall strategy of reducing labor costs and increasing profits. This creates an obvious conflict, as nursing home facilities should be focused on providing their residents with quality healthcare, rather than cutting costs and increasing profits.

This, combined with the fact that overbilling is significantly more rampant in for-profit facilities than in non-profits, supplements the argument that profitability does not belong in the healthcare system, at least not in the sense that it belongs in other industries. It's no wonder that we're seeing more and more instances of neglect and abuse in nursing homes throughout the country, many of which get away relatively unscathed.