Industry lobbyists push back on Minnesota elder care reforms

Two of the state's most powerful nursing home lobbyists flanked Sen. Karin Housley, R-St. Mary's Point, last week at a Senate committee hearing as she made her case for a package of reforms intended to protect Minnesota seniors from abuse.

Every few minutes, one of the pair stepped to the microphone and launched into a monologue on the strain that each proposal might inflict on nursing homes. And as the hours wore on, the focus of the hearing gradually shifted from preventing elder abuse to the way that new regulation could cripple hundreds of senior care facilities across the state.

The scene exemplified the pervasive influence that Minnesota's nursing home industry exerts at the Legislature, where deep pockets and an army of lobbyists have given it a long-standing reputation for getting what it wants.

Yet that influence could face a pivotal test this year: Public alarm over a surge in maltreatment allegations and a scathing report by the state's Legislative Auditor have prompted wide-ranging proposals to expand government oversight of nearly 2,000 senior care facilities.

By last week, industry leaders had embraced much of a bill by Housley, who is chairwoman of the Senate Aging Committee, but they were pushing back against wider reforms, and their voice was being heard.

The senior care industry's two largest trade groups — Care Providers of Minnesota and LeadingAge Minnesota — spent nearly $1 million on lobbying in 2016 and 2017, an increase of 56 percent from the previous two years and the largest outlay by the groups on record, according to new data from the state Campaign Finance and Public Disclosure Board.

The groups, which together have nearly two dozen registered lobbyists, have also increased their presence at the Capitol, blitzing lawmakers with information as debate intensifies over how to fix the state's deeply flawed system for protecting seniors from maltreatment.

Industry leaders take a different view. Costly new regulations could hurt, not help, dozens of nursing homes that already struggle to recruit enough workers and pay them adequately, they argue.

"Right now, this is still an industry that is in distress," said Patti Cullen, president and chief executive of Care Providers, which represents nearly 900 senior care organizations across the state.

The 2018 Legislature is shaping up to be a pivotal session for the industry.

A five-part series published by the Star Tribune last November documented that hundreds of incidents of serious abuse — including beatings, sexual assaults and thefts — were going uninvestigated each year by the agency charged with protecting the elderly in senior homes. The findings were affirmed by the state Legislative Auditor, which concluded in a report released this month that the Health Department had failed to fulfill its responsibilities to protect vulnerable seniors.

As a result, Gov. Mark Dayton and several prominent lawmakers have proposed measures that would increase oversight of the lightly regulated assisted-living industry, toughen up penalties for abusers, and establish stronger protections for the roughly 82,000 residents of senior care homes across the state.

Industry representatives argue that a bevy of new rules and regulations could force some struggling nursing homes out of business, and might have a "chilling effect" on recruitment of new staff amid a statewide shortage of caregivers.

They point to this month's bankruptcy filing of the nation's second-largest nursing home operator, HCR ManorCare Inc., and declining occupancy rates in facilities in rural Minnesota.

Many nursing homes in Minnesota are barely breaking even or have negative operating margins, and many are having to pay $2,000 cash bonuses to recruit staff, Cullen said. All told, 81 nursing homes have shut their doors since 2000, including a dozen facilities in just the past three years, according to industry data.

"We are concerned that, by only focusing on the isolated incidents [of abuse] … as tragic as those incidents are, it's a real chilling effect, both on keeping our great caregivers as well as recruiting new people in this profession," Cullen said in Senate testimony last month.

But those pushing for reforms, including senior advocacy groups like Minnesota AARP, have objected to what they consider the industry's casual response to a five-year surge in complaints of abuse and neglect at care facilities.

They point to a video posted on the Care Providers website, encouraging members to donate to the industry group's political action committee, CARE-PAC. In the video, lobbyists can be seen waving cash while singing a parody of the song "Do-Re-Mi." "Dough, the stuff that buys us time!" the lobbyist sings while waving $20 bills. "Far, a long, long way dough goes!"

To elder care advocates, the video epitomizes what they see as an imbalance of power between the industry and elder residents.

"We are pushing hard for reform, but they have resources that we don't," said Kristine Sundberg, president of Elder Voice Family Advocates, a volunteer coalition of family members of abuse victims.

But lawmakers say the industry's influence stems more from its relationships than its money.

The industry has deep roots in many rural areas where Republicans, who control both chambers of the Legislature, are counting on strong support in this fall's election. In many small towns, nursing homes are among the largest employers and a source of peace of mind for families with aging relatives.

Almost every legislator from greater Minnesota is on a first-name basis with at least one nursing home manager or owner, said Sen. Jim Abeler, R-Anoka, chairman of the Senate Human Services Finance and Policy Committee. Some even have relatives who work in the facilities and have experienced firsthand the difficulties with recruiting staff, he said.

"Their halo is a little tarnished" from the increase in abuse reports, Abeler said. "But the typical [senior] care facility truly is a treasured institution in the community. They command respect."

Industry lobbyists also have a track record of getting things done.

With its strong ties to legislators in both parties, the industry in 2015 won an overhaul of the system by which they are reimbursed through Medicaid. For the first time, their compensation would grow automatically with the costs and quality of care. The monumental change is forecast to generate more than $360 million in increased Medicaid payments to nursing facilities through 2019, while eliminating the need for perennial pleas for rate increases.

Even seemingly modest changes are often challenged by the senior care lobbyists, who have a history of showing up for every legislative hearing and task force meeting, said Iris Freeman, a board member of the Minnesota Elder Justice Center and a former public policy director for the Alzheimer's Association, Minnesota-Dakotas chapter. For years, she said, advocates struggled to get the industry to embrace basic training standards for dementia care.

"A modest proposal can sometimes take much longer than you expect," Freeman said.

In 2016, industry groups pushed back on legislation allowing families to monitor the care of their loved ones with electronic recording devices, without fear of retribution. The legislation came on the heels of well-publicized cases in which hidden-camera footage corroborated reports of abuse and neglect at Twin Cities-area nursing homes. Instead of passing a bill, however, lawmakers created a 17-member work group that produced a lengthy report last year but did not recommend any changes to state law.

For now, the industry has embraced some incremental changes, such as tougher criminal penalties and better information sharing with families of abuse victims. At the same time, they have resisted broader reforms, including a proposal to establish a licensing framework for the state's fast-growing assisted-living industry, which operates under less scrutiny than traditional nursing homes.

"Sometimes, there is a lack of urgency … they seem to forget that people's lives are at stake," said Sen. John Hoffman, DFL-Champlin, a member of the Senate Aging and Long-Term Care Policy Committee.

At a Senate hearing last week, after hours of testimony from Housley and industry lobbyists, senior care advocates made it clear they are not giving up on their campaign to create basic standards of care for assisted-living and stronger consumer protections, including a "private right of action" for lawsuits when vulnerable seniors are abused.

"We had a list [of reforms] that was a mile long because the system was that broken," said Mary Jo George, associate state director of advocacy at Minnesota AARP, in testimony. "We are going to continue to push."

Staff researcher John Wareham contributed to this report.