Documents reveal hundreds of nursing homes flagged for 'serious problems' and 'deficiencies' in care collected millions in PPP loans

Documents reveal hundreds of nursing homes flagged for 'serious problems' and 'deficiencies' in care collected millions in PPP loans

August 17, 2020
  • The coronavirus has walloped nursing homes. They represent more than 40% of the national caseload and 8% of the total COVID-19 fatalities, according to The New York Times.
  • Still, more than 200 of the United States' worst-performing nursing homes and companies that own and operate such facilities received hundreds of millions of dollars by way of Paycheck Protection Program loans.
  • Health care and fire safety violations earn troubled long-term care facilities a place on the Centers for Medicare & Medicaid Services' Special Focus Facility Program.
  • A review of inspection reports from such facilities revealed a lack of hygiene and infection control, unmet medical and nutritional needs, and elder abuse and neglect, which resulted in injuries and even death.
  • Some experts who talked to Business Insider underscored the need for a "standard of care" requirement when federal money is on the line, while others said this would complicate matters during a rush to keep businesses afloat.
  • Visit Business Insider's homepage for more stories.

A resident at South Carolina-based Commander Nursing Home "went 20 hours without the prescribed tube feeding."

A man at Kingston Healthcare Center, in California, fell off his bed, naked, and hit his head on the ground. He "experienced vomiting, sleepiness, elevated blood pressure and heart rate, and decreased level of consciousness" and was unable to recognize his wife, but employees "delayed his transfer to a higher level of care for almost 10 hours."

And seniors who lived at the Mescalero Care Center were subject to "abuse, fear, and intimidation" because a nursing assistant, who they'd complained was "rough" and "verbally abusive," stayed on staff at the New Mexico facility.

This is a snapshot of a handful of the more than 200 worst-rated nursing homes in the US that were awarded millions in coronavirus relief funds despite a years-long history of violations.  

According to a Business Insider review of data compiled by ProPublica, CMS, PPP, and Medicare, around 220 nursing homes that have been flagged for a litany of violations benefitted to the tune of millions of dollars by way of Small Business Administration Personal Protection Program loans.

This lending program is part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a $2.2 trillion bill that was passed by Congress in March in response to the pandemic's blow to the economy. In all, SFF-cited nursing homes as well as hospitals and business entities that own and/or manage those facilities received anywhere from $149 million to $427 million.*  

"If Chrysler provided non-functioning cars to the federal government, people would demand that the government not pay for them. But for some reason, we hand out billions to poorly performing nursing homes with no accountability whatsoever," Alex Lawson, the executive director of advocacy group Social Security Works, told Business Insider.

Nursing homes serve the most vulnerable segments of society, which makes a years-long history of violations particularly egregious, said Brian Lee, the executive director of Families for Better Care. Lee said in some cases poor quality of care has transformed nursing homes into coronavirus "killing fields."  

"The downplaying of infection control infractions and the 'look-the-other-way' staffing enforcement exacerbated the invasion of COVID-19 into nursing homes," Lee said.

As of Monday, the US has recorded over 5.4 million coronavirus cases and more than 170,000 deaths from the disease, according to data compiled by Johns Hopkins University.

Although the coronavirus has affected people of all ages, it is particularly dangerous for those over 65 with pre-existing health conditions.

Some 402,000-plus residents and employees have tested positive for coronavirus at long-term care facilities — about 41% of the national caseload — and at least 68,000 people have died — about 8% of total fatalities, The New York Times reported.

A resident was left in 'a wet brief with a puddle under her chair'

The Centers for Medicare & Medicaid Services (CMS), which is part of the Department of Health and Human Services (HHS), conducts regular inspections of Medicare- and Medicaid-certified nursing homes to "determine if they are providing the quality of care" that these programs find necessary for the "health and safety" of residents, its website says.

Deficiencies result in citations and can land these nursing homes on the Special Focus Facility (SFF) program.

SFF-designated facilities have "more problems" — both in quantity and severity — than other nursing homes as well as "a pattern of serious problems that has persisted over a long period of time," the SFF website said.

Reports of the nursing homes on the SFF list depict nightmarish scenes.


Fifteen health citations have been levied against Commander Nursing Center, which has been fined over $288,000 in the last three years, per It still managed to rake in between $1 and $2 million in PPP loans. 

Reports revealed that residents lost weight due to unmet nutrition needs and weren't protected from sexual abuse. An inspector spoke to a woman who "sat in a wet brief with a puddle under her chair" while "staff failed to provide incontinent care" to another resident for nine hours, a report said. 

Meanwhile, Kingston Healthcare Center has been cited 39 times and fined over $11,600,

Reports detailed a lack of care plans to protect residents from infections, along with mold and leaks in the building. In one case, staff didn't document or report a resident's repeated attempts to get up without assistance despite being a "high fall risk." Ultimately, "this failure resulted in a fall with a major injury and death," according to an inspector. 

Even so, Kingston was awarded between $1 and $2 million in PPP loans.

A similar situation played out at Mescalero Care Center, which has been cited 30 times and fined around $169,000. It received a PPP loan between $350,000 and $1 million.

Inspection reports revealed inadequate dental services, physical therapy, and ulcer prevention measures while nurse notes indicated that surveyed residents who were receiving hospice care were bathed only about once a week. It's unclear if this reflects a substandard care plan or incomplete notes, both of which the facility was responsible for alongside the hospice care provider.

At the time of publishing, Kingston and Commander had not responded to Business Insider's requests for comment and Mescalero had declined to comment.

'Modern banking technology surely could have done far better than it did'

Experts who talked to Business Insider about this issue were split on whether there should be a "standard of care" requirement when federal money is on the line.

"The CARES Act rewarded lots of companies, not all of which had a great track record of good behavior. If you want to get $2 trillion out the door, having a litmus test of being 'worthy' would have increased bureaucratic barriers and ended up eliminating a lot of companies from being recipients," Vincent Mor, a professor at the Brown University School of Public Health, said.

Donald H. Taylor, Jr., director of Duke University's Social Science Research Institute, agreed, underscoring the SBA's goal of bolstering small businesses and staunching unemployment.

"Any rapid emergency effort like that needs to be as simple as possible to meet its stated goal of keeping small businesses afloat. If you started overlaying industry-specific rules of this type, it would be hopelessly complicated," he said.

David Grabowski, a professor of health care policy at Harvard Medical School expressed concern that such demands could result in the closure of already struggling nursing homes.

"Without relief funds, these facilities will close or provide substandard care," he said. "That is not fair or humane to the individuals living at these facilities or the staff working there."

Although a proponent of supporting such homes, Grabowski added that it is necessary to "hold them accountable for using relief funds on direct care."

However, Danielle Brian, executive director of the Project On Government Oversight, criticized the ease with which "institutions with histories of violations" received loans.

"I realize there was a premium on getting the money out quickly, but modern banking technology surely could have done far better than it did," she said.

The government needs to crack down harder on nursing homes, some experts believe

CMS released a statement on Friday, touting the fact that it has collected roughly $15 million in fines from nursing homes found to be in "noncompliance with infection control requirements and the failure to report coronavirus."

But Lee said that's not enough.

"Good or bad, rain or shine, abuse or neglect, nursing homes still get paid. So the threat of nominal enforcement is something operators have grown to comfortably live with because, at the end of the day, they will still get paid regardless of the quality," he said.

For nursing homes to become safer for residents, Lee called on leaders to "ratchet up fines and prosecute for neglect more often," adding, "If that happened, care would begin to incrementally improve."

To Lawson, deficient long-term care is not only a human rights violation, but also a signal that the US isn't "serious about stemming the tide of the pandemic."

"That needs to change," he said.

Asked what lessons nursing homes should learn, Lee said it's more important for us as a nation to smarten up to whether such facilities should exist at all.

"Nursing homes are a dinosaur that COVID-19 will make extinct — and it should," he added.

"COVID-19 has not created problems in the long-term care industry, it has exposed ones that pre-existed," Taylor Jr. said.

Julie Gerstein, Dave Winkler, Kimberly Leonard, and Zach Tracer contributed to this report.

*Editor's note: At the time of publishing, the program only released ranges of awards, not specific award amounts. Additionally, this story only takes into account PPP loans over $150,000. 

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