Ironton administrator disputes state figures

COLUMBUS (AP) — New numbers from the state show some 200 Ohio nursing homes are paying six-figure administrator salaries and the industry is spending millions of Medicaid dollars to employ owners’ family members and to hire related side businesses.

An administrator at an Ironton nursing home singled out disputed the data and contends the state is missing the big picture of the impact on these facilities.

An Associated Press review of data compiled by the Office of Health Transformation for release Thursday comes as Gov. John Kasich’s administration is in an emotionally charged faceoff with the nursing home industry over its spending.

The governor’s $55.6 billion state budget proposal cuts nursing homes’ Medicaid funding by $222 million over the two years beginning July 1. The financial impact on the industry is estimated at $427 million, however, because costs and demand are expected to continue to rise. Medicaid is the state program for those who can’t afford medical care.

Kasich seeks to expand access to home care programs, such as PASSPORT, and increase quality incentives to nursing homes as part of a health care system overhaul led by the transformation office.

For-profit nursing home operators cried foul in a recent television commercial, which urged Ohioans to lobby state senators to restore some of the funding. “Call now, before it’s too late,” the ad said, as a plug was pulled from the wall and a heart monitor flat-lined. Kasich, AARP and an association representing nonprofit homes decried the ad, and the group behind it pulled it off the air.

Amid their fight against the cuts, data from 2009 cost reports filed by more than 900 nursing facilities statewide showed 216 paid their administrator more than $100,000. On average, administrators make about $80,000 — slightly below the national average. The reports are the latest available.

Jo-Lin Health Center Inc. in Ironton topped the list, reporting paying its administrator $301,663. The median salary in Lawrence County, where the center is located, is $34,596, according to state data.

The Associated Press reported that a message left at Jo-Lin was not returned, but administrator Jo-Linda Heaberlin talked to The Tribune, adamantly refuting the state’s data.

“That’s wrong,” she said. “… No, I did not draw that in my pay check.”

Heaberlin said the reason her salary looks inflated is because when her father passed away in 1994, she acquired his 60 percent share of the company, assuming that she also take over payments on a $1 million bank note tied to the facility.

“And it’s all just a paper thing,” Heaberlin said. “I own the nursing home so I have to pay so much on that note. I don’t get that money. It’s a wash out.”

Heaberlin also said the decision to cut nursing home’s budgets would “hurt care severely.”

“Everything here has gone up, our groceries, the electric,” Heaberlin said. One food vender, she said, can cost anywhere from $4,000 to $6,000 a week. Heaberlin said Medicaid is using the same rate that it did four years ago, despite the fact that operating expenses continue to rise.

Jo-Lin’s provides 159 beds.

“Far from what everybody believes, that all the money is going to the administrators, that’s wrong,” Heaberlin said. “I don’t know about the other facilities, but in my facility, management hasn’t had a raise in five years.”

Heaberlin also said Jo-Lin is feeling the effects of cuts already made by the government. “Bundling,” she called it, was implemented last year, causing things like patient transportation costs to be billed directly to the nursing home instead of directly to Medicare or Medicaid. She said the transportation costs have cost up to $10,000 per month.

“There’s not a lot of other places you can cut,” Heaberlin said. “We tried to go back to getting the best rate. We’re into group buying. But there again, I’m an independent owner. I don’t have the amount of people in my health care program to bring the cost down like you would if you had thousands of people in it.”

Heaberlin said this is just a continuation of the state’s attacks on nursing home facilities, instead seeming to favor in-home care, which she contends often includes not an “apples to apples” cost comparison.

“It infuriates me. We are providing the best care,” she said, adding that her facility offers 24-hour nurse care, staff physicians, dieticians, activities and more. “We have struggled these past few years. It is just horrible (what the state cuts are doing).”

Sanford Gerber, the administrator at Belle Manor Nursing Home in New Carlisle, laughed when told he appeared to be among the highest paid administrators in the state, with reported wage of $206,003.

“If you’re thinking that they’re paying administrators here $200,000 a year to run a 60-bed nursing home, boy, I’d love to have one of those jobs,” Gerber said. He declined to disclose a different salary than what is listed on the facility’s state form.

Gerber said exorbitant salaries would mean “there’d be nothing left for food or rent or supplies.”

The $201,452 salary reported by Broadview Multi-Care Center in Parma includes salary and benefits for administrator Isaac Lifschutz, as well as continuing education and other expenses he incurs, said chief financial officer Barry Stump.

“On the surface it may sound a little bit high, but keep in mind you are dealing with one of the larger facilities in the state. We’ve got 218 beds,” he said.

The system Ohio began moving to in 2005 reimburses nursing homes at rates representing the prices it has determined services should cost. In the past, nursing homes were reimbursed for actual costs – with caps set on wages, family member employment, and side businesses. Kasich’s plan would complete the transition to a so-called price-based system, with adjustments to the earlier formula.

“If that line would have had one dollar on it or a million dollars, it wouldn’t have changed, not by one penny, the reimbursement that Broadview gets from Medicaid. Not by one penny,” Stump said.

State data show Broadview is also among facilities paying the highest compensation to family members of the owner. It paid $370,569 in 2009, coming in third behind Crestview Rehabilitation and Skilled Nursing Services in Lancaster that reported paying $873,305 and Jo-Lin, which reported paying $474,223.

About 1,100 family members o f owners are employed around the state, according to reports.

Lifschutz said these are family businesses that do their best to serve the community.

“This is a family business that puts a lot of money back into the facility, into continuing to improve resident care, improve the building and grounds, improve quality of life,” he said. “Our single biggest cost is nursing.”

Spokesman Eric Poklar said the health transformation office is working to compile extensive data on state health programs that can be easily accessed by the public.

“We’re not trying to interpret the numbers,” he said. “This is something we would really avoid reaching conclusions on and leave that to the policymakers.”

Overall, nursing facilities reported spending $44.1 million on businesses in which owners have an interest. Green’s Nursing and Rehabilitation Center in Lyndhurst spent the most: almost $2.2 million. Newark Health Care Centre in Licking County spent the second high est: $1.2 million.

Erin Kennedy, executive director of the Newark home, told The Advocate newspaper that expenses reported in the data go to a contractor that provides physical, occupational and speech-language therapy services “to help our patients and residents regain their lives and return home as quickly as possible.”

The AP on Thursday obtained results of a poll conducted by the Ohio Health Care Association, representing for-profit facilities, after it aired the flat-line ad. The survey of 708 Ohio voters found 74 percent of those surveyed somewhat disapproved or strongly disapproved of Kasich’s proposed cuts. The poll had a margin of error of plus or minus 4 percent.

Pete Van Runkle, association executive director, said businesses in which owners have some business interest might provide groundskeeping, medical supplies or food.

“It’s going for services for patients and those services are composed of a number of components,” he said. “You have t o have groundskeeping of the facility at some level in order to have a decent place to live.”

Cathy Levine, executive director of the Universal Health Care Action Network of Ohio, an advocacy group, said nursing home expenses deserve review.

“We have terrifying unmet needs for basic human services like food and medical care that people are going without that need to be addressed through our government,” she said. “So we need our lawmakers to scrutinize how every dollar is being spent on administration and overhead to make sure those resources are going to deliver care to the frail elderly and older adults.”

(Tribune reporters Michelle Goodman and Michael Caldwell contributed to this AP report.)