Glendale attorney, Russ Balisok, alleges on behalf of his clients California Advocates for Nursing Home Reform, in a new lawsuit, that state regulators allow nursing home companies to siphon money away from patient care and send it to the wallets of the corporations that manage the facilities.
Current state law allows nursing homes to outsource their management to third party corporations. The company that owns the nursing facility can shop around different management companies and pay them a fee to control the day to day operations. The management company designates a portion of its pay towards managing the facility and another portion as a management fee. The management company also receives a portion of the revenues from the home(s) it operates. These agreements are state approved agreements.
Balisok argues that the percentage the management companies takes off the top deprives the nursing homes of vital revenue needed to ensure quality care and services for the patients. The management companies do not operate for the good of the patients, but instead collect money off the top of the revenues and run the nursing facilities for as low a cost as possible.