In a recent IndyStar investigation, it has been recently uncovered that at least one billion dollars in supplemental Medicaid funding meant for nursing homes has been diverted to the state’s county hospitals since 2003. The total is likely much more. It could be nearly three billion dollars.To get that money, the hospitals embraced a plan pioneered by Matthew Gutwein, the chief executive of Marion County’s public health system. He has been hailed as a visionary. He balanced the budget and built a gleaming new hospital without raising taxes, but Gutwein didn’t perform a fiscal miracle. What he did is game the Medicaid system.
Amid the thousands of pages of Medicaid rules, Gutwein’s agency found an opportunity. Medicaid provides extra funding to nursing homes that are owned by local government. So two decades ago, Gutwein’s agency, Health & Hospital Corp. of Marion County, began buying nursing homes, at least on paper, to qualify for those funds. Then it exploited lax federal and state rules that allowed the hospital to pocket much of the money.As early as 2005, HHC worried federal officials could view the nursing home program as “a sham.” But state and federal regulators signed off. More than 20 other county hospitals jumped in. Now, 22 county hospitals own 93% of Indiana’s nursing homes and siphon off hundreds of millions of dollars, leaving Hoosiers with some of the worst nursing homes in America.
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