The country’s largest senior living company on Sunday found itself the subject of an inquiry related to a new federal minimum staffing mandate for nursing homes. Brookdale Senior Living President and CEO Lucinda “Cindy” Baier was one of three long-term care leaders receiving letters from five members of Congress.
In addition to Brookdale, letters were sent to The Ensign Group Executive Chairman Christopher R. Christensen and National HealthCare Corp. CEO Stephen F. Flatt from Sens. Richard Blumenthal (D-CT), Bernie Sanders (I-VT) and Elizabeth Warren (D-MA) as well as Reps. Lloyd Doggett (D-TX) and Jan Schakowsky (D-IL).
“We are contacting you to seek an explanation for the discrepancy between Brookdale Senior Living Inc.’s massive payouts in executive salaries, stock buybacks and dividends, and the nursing home industry’s simultaneous opposition — based on claims that they are too expensive — to new rules to increase staffing and protect nursing home residents,” they wrote. “These two competing claims do not add up.”
The new mandate, finalized in April, will directly apply only to Medicare- and Medicaid-certified skilled nursing facilities, although senior living advocates are concerned that senior living communities will be affected because they recruit from the same pool of workers. Among other requirements, the rule calls for nursing homes to deliver 3.48 hours of daily direct care per patient/resident. Implementation is not immediate, and the rules face opposition from some lawmakers and providers that may delay or prevent it from going into effect.
According to Sunday’s letter to the for-profit company, Brookdale arranged for almost $68 million in dividend payments and stock buybacks between 2018 and 2023, and Baier and other top executives received almost $50 million in pay and other compensation between 2018 and 2022. Together, the policymakers said, the three companies under their scrutiny spent a combined $420 million on stock buybacks and $220 million on executive pay between 2018 and 2023.
The lawmakers asked Brookdale to answer questions by May 20 about how its board determines executive compensation; the average compensation of registered nurses and nurse aides who work for Brookdale; the turnover rate of nursing staff members at the organization; the amount spent annually to train caregivers; “any complaints or comments submitted to the company by nurses or other staff including the words ‘under-staffed,’ ‘staffing,’ and ‘salary’”; and a list of all of Brookdale’s lobbying or advocacy expenses, including contributions “that may have been used to lobby or advocate against the finalized nursing home staffing standards from January 2021 through the present.” The same questions were asked of the other two companies.
Country’s largest senior living company
Even though the members of Congress focused their inquiry on the staffing mandate for nursing homes — and their correspondence says that the three companies sent letters are among “the largest publicly traded nursing home companies” in the United States, Brentwood, TN-based Brookdale primarily operates senior living communities.
The company topped both Argentum’s 2023 list of largest senior living providers and the 2023 ASHA 50 list of largest operators from the American Seniors Housing Association — and not for the first time. The company was No. 3 on the 2023 ASHA 50 list of largest senior housing owners.
Although Brookdale provides skilled nursing among its mix of offerings, skilled nursing represented just 2% of its offerings as of Dec. 31, according to a presentation on the company website. Senior living represents the other 98% — assisted living, 57%; independent living, 24%; and memory care, 17%.
The Sunday letter notes, however, that Brookdale submitted comments to the Centers and Medicare & Medicaid Services about the agency’s minimum staffing standards for nursing homes when they were proposed. In those comments, Baier told CMS that Brookdale operates 16 Medicare-certified nursing homes out of 672 communities, and she asked that CMS withdraw or revise the rule, which she said would be “extremely detrimental to the quality of patient services in skilled nursing facilities” as written.
The portfolios of San Juan Capistrano, CA-based Ensign and Murfreesboro, TN-based NHC, meanwhile, contain some senior living properties but are much heavier in skilled nursing.
In its 2023 annual report, for instance, NHC reported that, collectively, its properties contain 8,732 skilled nursing beds, 1,501 assisted living units and 475 independent living units.
Ensign spun off most of its senior living communities to The Pennant Group, based in Eagle, ID, in 2019, although some of those communities returned to Ensign in 2022. As of May 1, the company had 270 skilled nursing operations, 29 campuses that included both skilled nursing and senior living, and 11 senior living operations, according to a presentation on the company website.
On the assisted living front
Brookdale also was the target of another letter from a federal lawmaker earlier this year.
The company was one of three senior living providers that received a request from Senate Special Committee on Aging Chair Bob Casey (D-PA) in January for information and documents detailing how it communicates the cost of services to residents and their families, the rates it charges in each state, its schedules of services and costs, the average revenue per occupied unit it receives, statistics on elopement and injuries, how accessible information is about community complaints and citations, staffing levels, and employee job titles and pay rates.
The request, which Casey also sent to Atria Senior Living and Sunrise Senior Living, followed the publication of articles in The Washington Post in December, as well as in The New York Times and KFF Health News in November, reporting on the deaths of residents with dementia who eloped from communities, the industry pricing structure, rate increases or the for-profit status of most providers.
The January letters were sent a little more than a week before the Aging Committee held a hearing at which some senators pondered increased federal involvement in the industry and called for the Government Accountability Office to study how much federal money is spent on assisted living communities, the cost of assisted living services, and the transparency and availability of that information to consumers. The committee also asked consumers to share their bills and experiences interacting with providers.
Casey labeled the committee’s examination “the most significant congressional review of assisted living facilities in 20 years.” Blumenthal and Warren, who signed the new letter, also sit on the Aging Committee.
In February on Brookdale’s fourth-quarter and full-year 2023 earnings call, Baier said that Brookdale had cooperated with requests for information from the committee and that she was confident in the company’s priorities in the face of growing scrutiny of the industry by the lay media and policymakers.
“We’re an advocate for seniors, and we’re willing to partner with others to serve the best interests of residents and promote assisted living in the industry. We take great pride in serving our hundreds of thousands of residents at communities across the county over the last decade,” she said at the time. “At this point, it’s too soon to tell what the outcome of the inquiry could be, but I’m very comfortable our focus is and has always been providing quality care.”
Baier pointed out to investors and analysts on the February earnings call that Brookdale has had more assisted living and memory care communities recognized in the US News & World Report Best Senior Living program ratings than any other provider. The organization also ranked first in customer satisfaction ratings in the 2020 and 2022 JD Power US Senior Living Satisfaction Study for assisted living and memory care, the CEO said.
“The health and well-being of our residents has always been our top priority, and we are dedicated to providing high-quality care and services to residents and their families,” Baier said at the time. “As a company, we’re honored to enrich the lives of hundreds of thousands of seniors over the last decade, and our communities have been recognized as some of the best in the nation.”
Brookdale had not responded to a request for comment from McKnight’s about the latest letter as of the production deadline. The company’s next earnings call, covering Brookdale’s first-quarter 2024 performance, is tomorrow.
Ensign Group CEO Barry Port declined to comment at length Monday, but he told sister publication McKnight’s Long-Term Care News that the company is drafting a response to the lawmakers’ Sunday letter. NHC did not respond to a request for comment.
Read more coverage of the inquiry in sister publication McKnight’s Long-Term Care News, which focuses on skilled nursing.
