Friday, October 2, 2009

Matt Gutwein of Health & Hospital Appears Before MCANA, Says Nursing Home Income Will Pay For New Wishard

This morning I had the opportunity to catch the appearance of Matt Gutwein, CEO and President of the Marion County Health & Hospital Corporation before the Marion County Alliance of Neighborhoods Associations, better known as "MCANA."

A number of thoughtful questions were asked by the audience, although I did not hear the one I would have asked. I'll get to that in a second.

Gutwein made it clear that HHC intends to pay for the new Wishard Hospital using revenue generated from the web of nursing homes HHC owns or leases throughout the State of Indiana. (HHC begin acquiring nursing homes throughout the state in the middle part of this decade.) Most of the bonds though are backed by property taxes. If the nursing home revenue stream somehow falls short, then property taxes will have to be used (and raised) to pay for the new hospital. In fact, the only thing preventing a tax increase to pay for the new hospital is HHC's promise that it doesn't need the revenue - that HHC can simply use its nursing home profits.

At the meeting, Gutwein was clearly proud of HHC's nursing home venture. He all but bragged about how HHC had taken these dilapidated nursing homes fixed them up and made millions in profit on them.

Which would have led me to the obvious question - why is it that HHC, which had no experience running nursing homes, is able to enter the industry and not only fix up a bunch of run-down nursing homes, but also turn a sizable profit on them?

Gutwein hinted at the answer. HHC uses its position to leverage more dollars from the federal government. He assured the MCANA crowd though this was okay because these tax dollars have already been paid by taxpayers...basically it is just money sitting there for someone to claim.

Gutwein is an attorney and should know better. Medicaid fraud looms large on the feds radar right now. St. Francis recently entered into a deal to admit guilt in bilking Medicaid and agreed to repay millions. And Gutwein thinks that the feds might not raise eyebrows in looking at the HHC nursing home operation?

Gary Welsh of Advance Indiana reported on the Medicaid fraud investigation of St. Francis Hospital and has suggested that HHC is involved in a similar scheme to bilk the federal government's Medicaid program out of potentially hundreds of millions of dollars. He explains that HHC is leasing a chain of nursing homes across the state of Indiana from Eagle Care, Inc. and then HHC, in turn, leases the facilities back to American Senior Communities, a for-profit nursing home company. According to Welsh, this creates the illusion that these facilities are owned by a county hospital providing indigent care, HHC is able to get reimbursements from Medicaid at about double the rate other nursing homes receive. Tax activist Carl Moldthan has collected data showing that HHC is collecting $8,000 a month per nursing home resident, double what most nursing homes receive from Medicaid per patient.

At the end of the day, it will be Marion County taxpayers footing the bill should the HHC's nursing home profit venture end up being derailed.


Downtown Indy said...

Our message should be clear:

Vote 'No' on the Wishard Referendum:

1. Matthew Gutwein has stated unquivocally that the hospital will pay for its project using its nursing home revenue stream.

2. Wishard only needs the referendum to pass so that property tax dollars could be used to secure the debt.

3. Since Matthew Gutwein doesn't need property tax dollars, he doesn't need the referendum to pass.

Taxpayers must protect themselves from cap-exceeding property tax rate increases by voting 'NO.'

Had Enough Indy? said...

DI is right - voting "no" in the referendum should not slow the project down, since Gutwein tells us he doesn't need more of our property taxes anyway.

If he can't sell that idea to bond buyers, taxpayers should not buy into it, either.

Downtown Indy said...

Doesn't it just make your blood boil when tax dollars are just seen as 'free money' by these kinds of folks?

Citizen Kane said...

Downtown Indy,

He needs to keep getting challenged on that very point. People seem to take it as a given that if we get money from the federal government, we should be thankful. Well, when the federal budget is a fraud, full of inflationary Fed money, borrowed money from China and theft from the so-called Social Security Fund, etc., we can not let those type of comments go unchallenged. We can't have lower taxes, less waste and prosperity, if we continue to have the mentality that we need to get back as much as we can from the feds. What we need to do is focus on limiting how much we send them to begin with.

And yes, I get so mad that smoke comes out of my ears when I hear Gutwein (or anyone else) say that the federal government or Congress is going to pay for part of this boondoggle.

Oh, either they will be called out on their fraud or the rules will change to eliminate the higher nursing home payments. One way or another the taxpayers will be on the hook.

Downtown Indy said...

Reality vs. Matt Gutwein
Waves Of New Funding Cuts Imperil US Nursing Homes

"A Medicare rate adjustment that cuts an estimated $16 billion in nursing home funding over the next 10 years was enacted at week's end by the federal Centers for Medicare and Medicaid Services -- on top of state-level cuts or flat-funding that already had the industry reeling.

"And Congress is debating slashing billions more in Medicare funding as part of health care reform.

"Add it all up, and the nursing home industry is headed for a crisis, industry officials say."