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Profit and pain: How California's largest nursing home chain amassed millions as scrutiny mounted
This is how newspapers win Pulitzer Prizes.
Business
Profit and pain: How California’s largest nursing home chain amassed millions as scrutiny mounted
As advocacy groups call for transparency, documents help trace the flow of public money to a complex network of related companies
By Debbie Cenziper, Joel Jacobs, Alice Crites and Will Englund
Dec. 31, 2020 at 4:30 p.m. EST
The largest for-profit nursing home operator in California took control of his first home in 2006 in a Los Angeles suburb that calls itself “the city of opportunity.” Over the next decade, he built a sprawling network of facilities from San Diego to the state’s northern coast. ... The chain known as Brius Healthcare received more than $800 million from Medicare and Medicaid in 2018 to care for thousands of elderly residents in about 80 nursing homes. Instead of relying upon outside vendors, Brius pursued a business practice long used by a majority of for-profit nursing homes nationwide: paying related companies for goods, services and rent.
More than 70 percent of the country’s nursing home providers use operating funds to pay themselves through so-called related parties — companies they or their family members partially or wholly own. In 2018, Brius nursing homes paid related parties $13 million for supplies, $10 million for administrative services and financial consulting, and $16 million for workers’ compensation insurance, state records show. The homes also sent a total of $64 million in rent to dozens of related land companies.
The practice is legal and widely supported by the industry, which argues that related parties help control costs and limit financial liability. Watchdog groups counter that nursing home owners can reap excessive profits from public funds by overpaying their own companies. Related parties generally do not have to disclose profits, leaving regulators with little way to assess the financial gains of owners.
In recent weeks, consumer advocacy groups appealed to the Biden transition team, advancing a proposal that would require owners to submit tax returns and consolidated financial reports for all related parties, management, land companies, holding companies and parent companies. The proposal calls for the federal government to stop troubled owners from operating homes and to ensure that profits and administrative costs are reasonable since roughly 85 percent of nursing home revenue comes from Medicare and Medicaid.
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Debbie Cenziper
Debbie Cenziper is a Pulitzer Prize-winning contributing reporter on the Investigative team. For 25 years, Debbie has explored social issues, including affordable housing, education, voting rights and mental health care. At The Post, she has focused heavily on Washington, D.C., writing about development issues that affect poor neighborhoods. Follow https://twitter.com/debbiecenziper
Joel Jacobs
Joel Jacobs is a data reporter working with the corporate accountability team at The Washington Post. Follow https://twitter.com/jmdjacobs
Alice Crites
Alice Crites is a researcher and librarian who specializes in government and politics and has covered elections since 1994. She was a member of the team that won 2018 Pulitzer Prize for Investigative Reporting for the coverage of Roy Moore and the subsequent sting attempt on the Post. Follow https://twitter.com/alice_crites
Will Englund
Will Englund, a former Moscow correspondent, covers energy. A winner of the Pulitzer Prize, he is the author of “March 1917: On the Brink of War and Revolution.” Follow https://twitter.com/willenglund
Profit and pain: How California’s largest nursing home chain amassed millions as scrutiny mounted
As advocacy groups call for transparency, documents help trace the flow of public money to a complex network of related companies
By Debbie Cenziper, Joel Jacobs, Alice Crites and Will Englund
Dec. 31, 2020 at 4:30 p.m. EST
The largest for-profit nursing home operator in California took control of his first home in 2006 in a Los Angeles suburb that calls itself “the city of opportunity.” Over the next decade, he built a sprawling network of facilities from San Diego to the state’s northern coast. ... The chain known as Brius Healthcare received more than $800 million from Medicare and Medicaid in 2018 to care for thousands of elderly residents in about 80 nursing homes. Instead of relying upon outside vendors, Brius pursued a business practice long used by a majority of for-profit nursing homes nationwide: paying related companies for goods, services and rent.
More than 70 percent of the country’s nursing home providers use operating funds to pay themselves through so-called related parties — companies they or their family members partially or wholly own. In 2018, Brius nursing homes paid related parties $13 million for supplies, $10 million for administrative services and financial consulting, and $16 million for workers’ compensation insurance, state records show. The homes also sent a total of $64 million in rent to dozens of related land companies.
The practice is legal and widely supported by the industry, which argues that related parties help control costs and limit financial liability. Watchdog groups counter that nursing home owners can reap excessive profits from public funds by overpaying their own companies. Related parties generally do not have to disclose profits, leaving regulators with little way to assess the financial gains of owners.
In recent weeks, consumer advocacy groups appealed to the Biden transition team, advancing a proposal that would require owners to submit tax returns and consolidated financial reports for all related parties, management, land companies, holding companies and parent companies. The proposal calls for the federal government to stop troubled owners from operating homes and to ensure that profits and administrative costs are reasonable since roughly 85 percent of nursing home revenue comes from Medicare and Medicaid.
{snip}
{snip}
Debbie Cenziper
Debbie Cenziper is a Pulitzer Prize-winning contributing reporter on the Investigative team. For 25 years, Debbie has explored social issues, including affordable housing, education, voting rights and mental health care. At The Post, she has focused heavily on Washington, D.C., writing about development issues that affect poor neighborhoods. Follow https://twitter.com/debbiecenziper
Joel Jacobs
Joel Jacobs is a data reporter working with the corporate accountability team at The Washington Post. Follow https://twitter.com/jmdjacobs
Alice Crites
Alice Crites is a researcher and librarian who specializes in government and politics and has covered elections since 1994. She was a member of the team that won 2018 Pulitzer Prize for Investigative Reporting for the coverage of Roy Moore and the subsequent sting attempt on the Post. Follow https://twitter.com/alice_crites
Will Englund
Will Englund, a former Moscow correspondent, covers energy. A winner of the Pulitzer Prize, he is the author of “March 1917: On the Brink of War and Revolution.” Follow https://twitter.com/willenglund
