Assisted living operator finds regulatory loopholes, newspaper reports

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Assisted Living Concepts found a loophole in Iowa's state law that lets care facilities avoid visits from state regulators by forfeiting licensure. Now it's looking to do the same with its facilities in New Jersey, The Des Moines Register reported.

When one of its Iowa facilities was fined $75,000 for having poor quality care, the company gave up its licenses in five of its Iowa homes. They became unregulated apartment building or boarding houses, which are not subject to inspections, the newspaper said. Then Assisted Living Concepts had its subsidiary, Swan Home Health, provide healthcare services for residents of the building. Meanwhile, the company has been forcing Medicaid recipients out of facilities in favor of private-pay residents who generate more revenue, the newspaper reported. The company, which has 211 facilities in 20 states, has argued that Medicaid doesn't pay enough to offset the cost of resident care, the newspaper said.

Earlier this year, Iowa lawmakers proposed legislation to fix the loophole but ultimately decided not to act due to pressure from industry lobbyists. New Jersey legislators are taking steps to require unlicensed facilities to set up escrow accounts for residents that have used up their savings. Another New Jersey proposal would require homes to designate 10% of their beds for Medicaid recipients.