Ga. nursing-home scheme may cost taxpayers $76 million

A federal investigation said the owner of a Georgia nursing home chain improperly used a legal loophole to score $300 million in bonus payments for his chain. That could cost Georgia taxpayers $76 million, Max Blau reports for Georgia Health News, in partnership with ProPublica's Local Reporting Network. 

Twenty years ago, Ronnie Rollins, who owned a for-profit chain of nursing homes, thought of an unorthodox way to qualify for bonus Medicaid payments meant to go to non-profit nursing homes. By having non-profit partners apply for bonus payments, Rollins believed he could convince federal officials that the non-profits owned the agencies, Blau reports.

Because the idea pushed the limits of the law, Rollins asked the Georgia Department of Community Health for approval. The department agreed, as long Rollins gave the department a portion of the bonus payments; officials "hoped to use the money to help stabilize Medicaid reimbursement rates for providers across the state," Blau reports.

Over the next 20 years, Rollins built one of the state's largest non-profit health-care networks, today called Community Health Services of Georgia, and brought in about $300 million in bonus payments. In the 2017 fiscal year, CHSGa brought in over $650 million in total revenue, Blau reports.

Federal officials say Rollins' workaround threatens the state's ability to collect Medicaid funds. In 2014, the Centers for Medicare and Medicaid Services ruled that some of Rollins' bonus payments were inappropriate; payments under the program have halted, and CMS is seeking $76 million in repayment from the state. The state has appealed, but if it fails, taxpayers will be on the hook for repaying the money.

Since Medicare and Medicaid reimbursements to the chain halted six years ago, the nursing homes have reported below-average staffing levels, more than twice the average deficiencies as the average nursing home in Georgia, and the chain has been fined more than $1.2 million for violating patient-safety standards, according to the GHN and ProPublica investigation. The chain's 55 nursing homes also have a 4.9% covid-19 death rate, compared with the statewide average death rate of 3.3% for nursing homes.