Nursing home industry lawsuit claims Pennsylvania illegally withheld funds

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(Photo by Craig F. Walker/The Boston Globe via Getty Images)

HARRISBURG, Pa. - The nursing home industry has filed suit against Pennsylvania, claiming the state illegally withheld more than $150 million that was intended to help long-term care facilities shoulder the financial burden of the coronavirus pandemic.

The lawsuit, filed in state court and announced Tuesday, contended the Department of Human Services is refusing to provide supplemental payments to nursing homes as required by law, depriving them of crucial funding to fight the pandemic.

“The department is well aware that nursing facilities have borne the brunt of the pandemic’s impact and that they have a long path ahead to ensure the proper treatment and protection of their patients,” said the suit, which accused state officials of “disregarding the substantial need of the commonwealth’s most vulnerable citizens.”

The suit asked Commonwealth Court to order the state agency to restore the funding. The plaintiffs are three trade groups representing more than 900 long-term care facilities in Pennsylvania, including county-owned nursing homes.

An email was sent to a Department of Human Services spokesperson seeking comment.

Long-term care facilities in Pennsylvania and nationwide have been hit especially hard by the pandemic. Across the state, about 40,000 residents of more than 1,300 nursing and personal care homes have contracted the virus to date. About 7,000 have died, representing more than 60% of the statewide toll, according to the Health Department.

The legal dispute centers on federal coronavirus relief legislation that temporarily boosted funding for Medicaid, a joint federal and state health care program for poor and disabled people.

The new law should have generated an extra $153 million in Medicaid funds for Pennsylvania nursing homes, according to the lawsuit, but the facilities have not received any additional money because the Department of Human Services simply reduced state aid from other funding sources and diverted that money to other programs.

The suit noted that state law requires long-term care facilities to pay an annual assessment that helps the state generate additional federal funding for the Medicaid program.

“The department’s refusal to distribute the federal funds is particularly egregious here because the funds were only received as a result of assessments paid by the nursing facilities,” the suit said. “In other words, the department is taking money earned from the contributions of cash-strapped nursing facilities and using the funds derived from those contributions to support other programs instead of nursing facility services.”

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