Where Do the Billions of Dollars Go? A Closer Look into Nursing Home Spending

Nursing homes receive billions of Medicare and Medicaid dollars annually, yet facilities are often understaffed, resulting in residents not receiving adequate nursing care. This could be because instead of putting taxpayer dollars towards nursing home resident care, they funnel billions into “related party” transactions to make a profit. Despite this continually happening, there appears to be little oversight by the federal government to examine how this inconspicuous, unaccounted-for money is spent. 

What are Related Parties?

An article published in the Journal of Health Law in 2003 suggested that nursing homes avoid civil liability by creating separate, single-purpose corporations so owners and operators could protect assets that would otherwise be subject to civil judgment. This would separate the operational side from the real estate side. This was later referred to as “related party” transactions. This resulted in 75% of nursing homes utilizing related party transactions, and $11 billion funneled into related party transactions by 2015.

Lack of Transparency in Related Party Transactions

The Centers for Medicare and Medicaid Services (CMS) requires nursing homes to identify related parties and disclose all payments made to them on the facility’s Medicare cost report. However, CMS fails to closely examine how the money is spent. Instead of a breakdown of what services were provided, CMS only requires nursing homes to report payment amounts in broad categories such as “rent,” “maintenance,” or “insurance.” This lack of information and transparency is problematic and even potentially harmful.

Nursing homes continue to spend billions on related parties, with payment amounts exceeding reported costs by 1,200%, with no explanation. As nursing home staffing and quality ratings steadily decline, corporations profit from related party transactions. Now is the time to hold nursing homes accountable for mishandling taxpayer money and protect the residents they promise to care for.

Nursing Home Neglect and Abuse Lawyers Who Demand Answers

When you move a loved one into a nursing home, you trust the facility to give them the attention and care they need and deserve. But, when they don’t follow through, the results can be devastating. Unfortunately, nursing home neglect and abuse cases impact families nationwide, with many flying under the radar. Our nursing home abuse and neglect lawyers fight to hold nursing homes accountable and defend families’ rights.

Contact us today by submitting a form online or calling our office at 919-781-1107 for a free legal consultation.

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Rocky Mount, NC 27804
P (252) 443-2111
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