How for-profit nursing home regulators can use the powers they already have to fix growing problems with poor-quality care

Governments at both state and federal levels have yet to fully wield their authority to fight poor-quality care at for-profit nursing homes nationwide, leaving the pressing need for elder care accountability unmet.

Medicare has the power to improve financial accountability at nursing facilities by capping profits while requiring that a percentage of revenues be spent on direct care expenditures. Already, four states – New Jersey, New York, Massachusetts and Pennsylvania – have shown this can be done, passing laws requiring minimum percentages of expenditures on direct care while limiting profits.

I am a behavioral scientist at the University of California, San Francisco who studies the economics of nursing homes and the implications for care. I am also the co-author of an investigative piece in The Conversation about for-profit nursing homes.

States also have the power to suspend and disqualify nursing home owners from the Medicaid program when they provide poor-quality care, commit fraud or harm residents.

For example, after the New Jersey comptroller concluded that the abrupt closure of the Princeton Care Center nursing home in September 2023 jeopardized the health and safety of residents, the state took action. It moved in January 2024 to impose an eight-year ban on the owners’ ability to receive Medicaid reimbursement at any nursing home and to require them to divest themselves from two other facilities they already ran.

The federal government can also take aggressive actions to force the industry to shape up, even without new legislation. A 2023 law review article demonstrates that state and federal governments could use state licensure laws and federal nursing home certification requirements to prevent abuse. The article argues that governments could set clear nursing home ownership and operation criteria for individuals and companies, which can include experience, expertise, reputation, past performance and financial solvency standards.

Even federal prosecutors have largely unused powers to crack down on the industry. The Department of Justice has taken actions against many nursing home owners and chains but rarely has moved to remove the certification of facilities despite having the authority to do so. Instead, nursing homes subject to legal action by the department generally are placed under what is known as a corporate integrity agreement and assigned a monitor to oversee regulatory compliance.

For example, Saber Healthcare Holdings, which owned 126 nursing homes in 2024, was placed under a corporate integrity agreement in 2021.

The question remains: Why haven’t governments fully flexed their existing regulatory muscles to enforce vital reforms in nursing homes? With the welfare of vulnerable residents at stake, the urgency for decisive action has never been clearer.

Read The Conversation’s investigation to learn more about the nation’s for-profit nursing homes and how they’re cutting corners on safety.

Harrington is a advisory board member of the nonprofit Veteran's Health Policy Institute and a board member of the nonprofit Center for Health Information and Policy. Harrington served as an expert witness on nursing home litigation cases by residents against facilities owned or operated by Brius and Shlomo Rechnitz in the past and in 2022. She also served as an expert witness in a case against The Citadel Salisbury in North Carolina in 2021.