May 06, 2024

Warren, Lawmakers Call out Hypocrisy of Nation’s Largest Public, For-Profit Nursing Homes for Opposing New Biden Admin Staffing Rule While Spending Millions Enriching Executives and Shareholders

Since 2018, the nursing home industry has paid nearly $650 million in buyouts, dividends, and salaries to executives and shareholders. 

“We are grievously disappointed by the nursing home industry’s opposition to the Administration’s efforts to ensure these residents receive high-quality care, and seek an explanation for why… for-profit nursing home companies claim they cannot afford to meet CMS’ new minimum staffing standards. ”  

Letter Text to Brookdale Senior Living (PDF) | Letter Text to Ensign Group (PDF) | Letter Text to National HealthCare Corporation (PDF)

Washington, D.C. — U.S. Senators Elizabeth Warren (D-Mass.), Richard Blumenthal (D-Conn.), and Bernie Sanders (I-Vt.), along with U.S. Representatives Lloyd Doggett (D-Texas) and Jan Schakowsky (D-Ill.) sent letters to three of the largest public, for-profit nursing homes in the country — Brookdale Senior Living, Ensign Group, and National HealthCare Corporation — highlighting the discrepancy between their opposition to a Centers for Medicare and Medicaid Services (CMS) proposal to set minimum staffing levels for nursing homes, and the industry’s massive payouts in buyouts, dividends, and salaries to executives and shareholders, totaling almost $650 million dollars since 2018. The letters follow a November 2023 report from Senators Warren, Sanders, and Blumenthal, which found that the CMS proposal would result in higher quality care, fewer deficiencies in care, and lower levels of patient abuse.

“(We) seek an explanation for the discrepancy between (your organization’s) massive payouts in executive salaries, stock buybacks and dividends, and the nursing home industry’s simultaneous opposition — based on claims that they are too expensive — to new rules to increase staffing and protect nursing home residents. These two competing claims do not add up,” wrote the lawmakers. “(The) nursing home industry diverts hundreds of millions of dollars in cash away from nursing home staff and patient care, and into the pockets of company executives and shareholders.”

On April 22, 2024, CMS finalized a new rule to set a floor for minimum staffing requirements in nursing homes. The new standards also required that all nursing homes have at least one registered nurse on site 24 hours per day, 7 days a week. Since announcing the rule, the nation’s largest public, for-profit nursing homes have vehemently opposed this measure, arguing the rule would be too costly to enforce and force closures. 

However, the letters reveal that, since 2018, three members of the American Health Care Association (AHCA) – the largest association representing long-term and post-acute care providers in the U.S. – which are also among the largest public, for-profit nursing homes in the United States, have paid out nearly $650 million in stock buybacks, dividend payments, and rich rewards to top executives, including nearly $118 for Brookdale Senior Living, $300 million for the Ensign Group, and over $226 million for National HealthCare Corporation.

“There are approximately 1.2 million nursing home residents in the United States. We are grievously disappointed by the nursing home industry’s opposition to the Administration’s efforts to ensure these residents receive high quality care, and seek an explanation for why … for-profit nursing home companies — which handed out nearly $650 million in buybacks and dividends and have richly rewarded their top executives — claim they cannot afford to meet CMS’ new minimum staffing standards,” the lawmakers concluded. 

Senator Warren has led the fight for stricter oversight of nursing homes and increased transparency: 

  • In April 2024, at a hearing of the Senate Special Committee on Aging, Senator Warren highlighted the impact of low staffing levels on quality of care in nursing homes. As of the time of the hearing, CMS was finalizing the rule that would require every nursing home to have a sufficient number of staff on hand to protect and care for residents.  
  • In November 2023, Senators Warren, Blumenthal, and Sanders released a new report: Residents at Risk: Quality of Care Problems in Understaffed Nursing Homes and the Need for a New Federal Nursing Home Staffing Standard. The report revealed that, across a broad range of health outcomes, nursing homes with higher staffing levels that meet the requirements in the CMS proposed rule provide higher quality care than homes with lower staffing levels.
  • In May 2023, at a hearing of the Senate Special Committee on Aging, Senator Warren called out corporate owners of nursing homes, including private equity firms and Real Estate Investment Trusts (REITs), for their failures to protect patient safety and use of complex legal arrangements to avoid regulatory scrutiny.
  • In May 2023, Senators Warren, Chuck Grassley (R-Iowa), and Bob Casey (D-Pa.) and Representatives Lloyd Doggett (D-Texas) and Katie Porter (D-Calif.) sent a bipartisan letter to Health and Human Services (HHS) Secretary Xavier Becerra and CMS Administrator Chiquita Brooks-LaSure, calling on CMS to strengthen and finalize its proposed rule to make nursing home ownership more transparent.
  • In December 2022, a Government Accountability Office (GAO) report requested by Senators Warren and Ed Markey (D-Mass.) found increases in both the number and the severity of care deficiencies cited at State Veterans Homes (SVHs) across the nation, citing an increase “from 424 in 2019 to 766 in 2021.”
  • In May 2022, Senator Warren and lawmakers sent a letter to private equity giant KKR for the grossly substandard care and unsafe living conditions in group homes it owned for people with intellectual and developmental disabilities. 
  • In February 2022, testifying before the Senate Budget Committee, Senator Warren called out private equity firms’ predatory practices of buying up distressed companies; stripping workers of benefits, fair pay, and safe working conditions, and reaping billions in profits. She noted that research shows that private equity ownership of nursing homes led to a 10% jump in short-term mortality rates.
  • In August 2021, Senator Warren and lawmakers launched an investigation into private equity ownership of for-profit hospice companies and subsequent reductions in the quality of care.
  • In March 2021, Senator Warren released Genesis’s response to her January 2021 letter and sent a letter to the company, revealing new information that the company CEO - who left the company in near bankruptcy in January 2021 - has been awarded $8 million in salary and bonuses since the start of the pandemic. Senator Warren raised new questions about why the company lavishly rewarded its CEO after more than 2,800 of its residents died of COVID-19 and despite the fact that he left the company in dire financial conditions. 
  • In November 2019, Senators Warren and Sherrod Brown (D-Ohio), and Representative Mark Pocan (D-Wisc.) wrote to four private equity firms that invested in companies providing nursing home care and other long-term care services, citing reports that show private equity investment has played a role in the declining quality of care in nursing homes and requesting information about each firms' management of this sector.

###