Breaking from nursing-home group, for-profit chains strengthen alliance

The splintering of lobbying interests representing different sectors of the nursing-home industry, which reached a head last week when a former member of Congress was replaced as president of a major trade association, has culminated in a plan hatched by several for-profit chains to launch their own, separate organization.

The splintering of lobbying interests representing different sectors of the nursing-home industry, which reached a head last week when a former member of Congress was replaced as president of a major trade association, has culminated in a plan hatched by several for-profit chains to launch their own, separate organization.

The Alliance for Quality Nursing Home Care, an umbrella group founded more than five years ago by for-profit members of the American Health Care Association (AHCA), is laying the groundwork to formalize its organizational structure as most, if not all, of its 15 member companies have either quit AHCA or plan to leave, according to Jim Morrell of Quinn Gillespie & Associates, who spoke on behalf of the alliance.

Lobbyists for the nursing-home industry said that the schism has been in the making for some time but that clashes over the direction of the association with former Rep. Hal Daub (R-Neb.), who took the reins at AHCA last May, precipitated the departures.

“This fight has been brewing for a long, long time,” said Larry Minnix, president and CEO of the American Association of Homes and Services for the Aging (AAHSA), which represents nonprofit nursing homes and other long-term-care service providers.

So far, HCR Manor Care, Sun Healthcare Group, Tandem Health Care, Kindred Healthcare and Advocat Inc. have confirmed their plans to leave AHCA. “We’re expecting that it will be the vast majority of the alliance members” that sever ties with AHCA and participate in the new organization, Morrell said.

AHCA announced last week that Daub would be replaced on an acting basis with longtime nursing-home lobbyist Bruce Yarwood, who is highly regarded among nursing-home advocates and executives.

“If anybody can help put this thing back together, it’s Bruce Yarwood,” Minnix said. Asked whether any of these firms might opt to rejoin AHCA, Morrell said, “At this point … that’s an open-ended question.”

AAHSA will not seize this period of uncertainty at AHCA to increase its membership, Minnix said he promised Yarwood. “I don’t believe in kicking anybody when they’re down,” Minnix said.

The decisions to ramp up the operations of the alliance and to part with AHCA were motivated by “a desire to be able to put more time, energy and resources” into issues of particular concern to alliance members, Morrell said. These companies, for example, depend much more heavily on Medicare payments than most nonprofit nursing homes, which mainly serve Medicaid beneficiaries.

Heretofore, the alliance has been a loose confederation of like-minded companies employing only one full-time Washington-based policy adviser and a number of high-profile hired-gun lobbyists, such as former Rep. Vic Fazio (D-Calif.), former Republican National Committee Chairman Ed Gillespie and former Centers for Medicare and Medicaid Services Administrator Tom Scully.

Lobbyists identified Daub’s position on a Bush administration plan to restructure Medicare payments to nursing homes as a critical sticking point for the for-profit chains. The former congressman opted to take a more conciliatory approach in his dealings the administration and Congress than the heads of the alliance companies favored.
Daub maintained that a hard-line stance on those Medicare changes and other policy proposals viewed unfavorably by nursing homes would have harmed the industry, not helped.

“I view [AHCA’s] advocacy program as much improved,” Daub said.

Citing his experience as a four-term member of Congress and his close ties to the administration, Daub credited his approach to lobbying with softening the potential blows of Medicare and Medicaid payment cuts. Nursing homes faced an “Armageddon-type year” during his tenure at AHCA, Daub said, and ended up suffering only a fraction of the hit they could have.

Daub insisted that his departure from AHCA had nothing to do with personality conflicts but indicated that differences between him and the association’s board of directors over his management approach contributed to his departure, which he described as based on a “very amicable, positive [and] no-cause agreement” with the board. “You might say that my more aggressive style of leadership wasn’t sort of the best for some of AHCA’s members,” he said.

He also took credit for improving the association’s financial and organizational condition. “AHCA is a solid organization — much more solid now than it was a year ago” when Daub took over from Charles “Chip” Roadman, who ran the group for five years.

The defection of the alliance members is a blessing in disguise, Daub indicated. “Moving to a more streamlined organization more quickly was not where folks were headed” before the departures, he said. AHCA can now focus on issues that matter to the majority of its members, he added.

Minnix stressed that all nursing homes are better off if the three main trade associations can find a way to work together, noting that AAHSA shared the alliance’s position on the Medicare payment changes approved by the administration this spring. The elevation of Yarwood at  AHCA should facilitate more collaboration between the groups than took place over the last year, he said.

Daub is moving back to Omaha, where he used to be mayor, and yesterday resumed the full-time practice of government relations, commercial and corporate law at Blackwell Sanders Peper Martin. He already sold his Washington-area home and bought a house in Nebraska, he said.

Daub cautioned that his return to Nebraska should not be misinterpreted and categorically denied that he plans to challenge Sen. Ben Nelson (D-Neb.) next November. He did not rule out a future run at elected office, however.

“I learned a long time ago never to say ‘never,’” he said. He added that he intends to remain engaged in Washington, including continuing in his position as chairman of President Bush’s Social Security Advisory Board.