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New York Times Article Reveals How Nursing Homes Feed Money into Corporate Webs

January 03, 2018

A New York Times article published January 2nd uncovers the practice of nursing home owners outsourcing goods and services to companies that they also control or have a financial interest.  Nursing home owners say that these so-called "related party transactions" are an efficient way of running their businesses and help minimize taxes.  However, these arrangements allow owners to put together advantageous contracts in which their nursing homes pay higher rates and the owners pocket the higher profits, which aren't recorded on the nursing home's accounts.  Plus, these complicated arrangements make it more difficult for injured residents or their families to collect money from the related companies when they sue the nursing home. 

An analysis from Kaiser Health News revealed that "nursing homes that outsource to related organizations tend to have significant shortcomings: They have fewer nurses and aides per patient, they have higher rates of patient injuries and unsafe practices, and they are the subject of complaints almost twice as often as independent homes."

Read the article here.

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