Medicaid Paying Some Nursing Home Legal Fees

By Erin Jordan, Reporter

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By Aaron Hepker

CEDAR RAPIDS, Iowa — Iowa’s nursing homes and assisted-living centers serve more than 40,000 Iowans. When one of those nursing homes hires a lawyer to fight allegations of abuse or neglect, did you know your tax dollars often end up footing the bill? An investigation shows that Eastern Iowa nursing homes sought Medicaid reimbursement for more than $2.2 million in legal and accounting fees and professional services in 2010. Medicaid pays for legal fees even if a nursing home loses a citation appeal or lawsuit — a fact that bothers one Cedar Rapids woman.

From a young age, Marlys Ingles acted as the eyes for her mother and father. Both were blind. “I always felt very protective of my parents. I think you have a different relationship with your parents when they have disabilities.” When Ingles’ mother, Darlene Hart, died on Dec. 30, 2005, at Crestview Acres Nursing Home in Marion, Ingles wanted to find out what happened. State inspectors learned that Hart suffered a heart attack and staff failed to perform CPR as instructed by Hart and her doctor. Ingles decided to sue the nursing home.

“If I would have had to take a second mortgage on my home or something, I probably would have considered it.” What she didn’t know is that nursing homes can get their legal fees reimbursed by Medicaid. “It just seems ridiculous that taxpayers’ money would be spent to defend the citations, especially when the citations are founded.”

Legal fees are an allowable cost under Medicaid and are included in a nursing home’s per-bed, per-day reimbursement.

Roger Munns, Department of Human Services spokesman, sent KCRG-TV9 this statement: “Nursing homes and other providers are entitled under federal law to appeal adverse actions taken by government regulators — in short, due process. The cost of defending themselves is considered an allowable cost whether they win or lose.”

Steve Ackerson’s trade group represents more than 300 Iowa nursing homes. He says Medicaid officials view legal costs as a small, but necessary, part of a nursing home’s expenses. “They understand the need to have representation. They know it is part of doing business with Medicaid and Medicare to have, you know, representation from a legal counsel, so it’s just routine costs.”

Medicaid also reimburses nursing homes for association dues, which means taxes could be paying part of Ackerson’s salary, which was more than $270,000 in 2009.

Marlys Ingles settled with Crestview Acres in 2008. The confidential settlement has helped bring some closure for the family. “I do feel like maybe justice was served in that I stood up for my mom and her memory ... if that makes sense at all.”

The Department of Human Service drafted a proposal in late 2009 or early 2010 that would have revised the Iowa code section dealing with reimbursement of legal fees by nursing homes. The rules change would have forbidden reimbursement for legal fees when a nursing home loses a criminal or state civil action or when the state succeeds in suspending or revoking a nursing home’s license.

It’s hard to say whether DHS is still considering these changes. New drafts have not been made public and DHS has not set a timeline for presenting proposed changes.

Inspector's Report Darlene Hart

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