Nursing homes invest in lobbying, campaign contributions; reap millions in taxpayer money

by Clark Kauffman, Iowa Capital Dispatch
December 22, 2023

Editor’s note: Shortly after this story was published, the Iowa Health Care Association removed from its website the publicly accessible audio recordings of IHCA lobbyists and members. As a result, the links in this story to those recordings may not work.

It was early on a Monday afternoon in September 2022, and Iowa Gov. Kim Reynolds was at the Marriott Hotel in downtown Des Moines, delivering a speech to a group of nursing home executives gathered for their annual convention.

It was a friendly and receptive audience – as evidenced by the donations the Reynolds campaign had collected in the previous four weeks from some of those in attendance.

The political action committee that represents Iowa’s nursing home industry had donated $30,000 to Reynolds’ 2022 reelection effort. David Chensvold, nursing home consultant and president of HealthCARE of Iowa, gave $20,000. Ted LeNeave, CEO of Accura Healthcare, gave $10,000, as did Lisa Toti, president of Accura Healthcare. Richard Allbee, CEO of the ABCM nursing home chain, gave $5,000, as did Douglas Johnson, CEO of Blue Stone Therapy.

In her prepared remarks, Reynolds reminded industry officials of her efforts to loosen “regulatory barriers” and shield the companies from legal liability resulting from wrongful death claims and other lawsuits. She also spoke of her successful efforts to increase Medicaid funding for the industry by $23 million in 2019, and again by $19 million in 2021.

“You’re not getting much help from the federal government, which apparently has never seen something it doesn’t like to regulate or mandate,” she said. “I can’t control Washington’s approach, but I can promise this: In Iowa, you’ll continue to get the support you’re being denied in Washington.”

The same day Reynolds spoke, a group of state lawmakers assembled on the stage at the Marriott and posed with plaques in appreciation of their efforts on behalf of the industry during the 2022 legislative session.

Standing shoulder to shoulder were seven legislators — all Republicans, like the governor: Speaker of the House Pat Grassley, Senate President Jake Chapman, House Majority Leader Matt Windschitl, Rep. Joel Fry, Rep. Ann Meyer, Sen. Tim Kraayenbrink, and Sen. Mark Costello.

An Iowa Capital Dispatch review of legislation, campaign contributions, federal tax returns, inspection reports and audio recordings of industry lobbyists reveals the extent to which money influences critical public policy decisions related to the protection of Iowa’s elderly and people with disabilities.

The records document the flow of money from state-regulated care facilities, through a political action committee and into the campaign coffers of state lawmakers who have advanced bills to protect nursing homes while scuttling legislation intended to help elderly Iowans.

PAC spends $1.5 million

The appearance of the governor and state lawmakers at the 2022 convention of the Iowa Health Care Association wasn’t unusual. Reynolds and legislative leaders of both parties routinely appear at the annual gathering, and while state officials often walk away with awards or plaques, the state spends taxpayer money giving the industry its own awards.

In September 2021, for example, the state bestowed the Governor’s Award for Quality Care on Accura Healthcare’s nursing home in Stanton.

Two months after that award was announced, state inspectors cited the home for placing residents in immediate jeopardy. The inspectors alleged the home had a defective door alarm that enabled a resident of the home to leave the facility, walk about a third of a mile and cross a busy street before being spotted by someone in the neighborhood.

According to data from Centers for Medicare and Medicaid Services, the Accura chain operates 32 care facilities with an average overall rating of 2.5 stars on the agency’s five-star scale. The chain has been hit with more than a $1.1 million in fines for quality-of-care violations that have put elderly residents at risk, and regulators have suspended Medicaid payments to various Accura facilities at least 11 times.

LeNeave, the Accura CEO, donated $10,000 to Reynolds’ campaign shortly before her 2022 convention speech. State records show that since 2018, he has donated a total of $47,000 to Reynolds’ campaign coffers, and given $61,000 to the campaign committees of former Senate Majority Leader Jack Whitver, an Ankeny Republican.

LeNeave has also contributed $83,779 to Iowa Health PAC — the political action committee of IHCA, through which most of the industry’s political donations pass.

According to state records, Iowa Health PAC is one of the state’s biggest contributors to political campaigns, spending a total of $1,493,612 on campaign donations and related expenses since 2016.

Reynolds’ campaigns collected $132,785 of that amount — which is more than she received from other major Iowa PACs such as those representing Farm Bureau, building contractors, banks, Realtors, and gun owners.

Between 2010 and 2016, Iowa Health PAC donated $155,288 to Reynolds’ mentor and predecessor as governor, Terry Branstad, who had campaigned on a pledge to end what he called the “gotcha” approach to nursing home inspections. “I have had a close and good relation with nursing home people for a long period of time,” Branstad told the Des Moines Register in 2016. “I meet with them on a regular basis.”

According to a U.S. Senate report, Iowa now ranks 49th among the states in its ratio of state inspectors to nursing homes. For every inspector Iowa has on staff, it has nine care facilities to oversee. By comparison, Kansas and Nebraska each have 5.7 facilities per inspector, Missouri has 2.7, and Illinois has 2.2, according to the report.

‘Money buys influence’

When asked about the governor’s acceptance of the PAC donations, spokesman Kollin Crompton said Reynolds “cares deeply about older Iowans and the care they receive, which is why she works closely with the health care industry, organizations, and providers to support a quality, safe, and affordable long-term care system for Iowa families.”

He said Reynolds has addressed the health care workforce shortage by investing $20 million in apprenticeship programs while investing more than $4 million in a program to recruit doctors and other health care professionals to rural Iowa.

Brent Willett, the head of IHCA and the PAC, declined to comment on the organizations’ lobbying and campaign contributions.

But in a recorded conference call with IHCA members — largely nursing home owners and administrators — at the end of the 2023 legislative session, Willett reminded them the decision-makers of the 2024 session would soon be running again for elected office. He pointed out the PAC was responsible for having just secured an additional $164 million in state and federal tax dollars for Iowa nursing homes.

“What does the impact of a total of $164 million of new Medicaid funding mean for your business? And what does it mean for your career — because these are personal dollars,” he said. “Consider that when you consider supporting this campaign.”

John Hale, a consultant and advocate for older Iowans, says the nursing home industry “plays the influence game as well as anyone — they make big campaign contributions, give out nice awards, and regularly hobnob with elected officials to get what they want — which is 800 million taxpayer dollars flowing to nursing home owners and operators annually with no expectations for how the dollars are used, and no questions asked about what they accomplish.”

Hale said the compensation of IHCA officials and top industry executives in Iowa is “scandalous,” particularly in light of the low wages paid to front-line caregivers that are in such short supply.

According to tax records, the IHCA paid Willett $732,275 in 2022 — reflecting a 50% raise from his previous year’s salary. Michael Beal, the head of the Iowa-based, nonprofit nursing home chain Care Initiatives, was paid $608,638 in 2021, according to tax records.

“At the Iowa Capitol, money buys influence,” Hale said.  “The system is corrupt and broken.”

“It’s a shame that so-called ‘advocates’ would rather publicly politicize issues than present solutions that are in the best interest of Iowans,” Crompton said. He added that any assertion that the governor’s actions are “motivated by campaign donations is absurd.”

Willett, the man who helped steer those donations to Reynolds, might disagree. In one of his recorded meetings with IHCA members, he credited the PAC as “the thing that keeps us successful” and said the grass roots advocacy of individual members wouldn’t work without a strong political operation.

“It is the strength of the Iowa Health PAC which has allowed us to continue to be at the table and not on the menu at the Statehouse,” Willett told the IHCA members before soliciting them for donations.

Dean Lerner, who headed the state inspections agency under a Democratic administration, has long complained that the money the industry spends lobbying state legislators originates with taxpayers.

Nursing homes, he says, collect most of their money from Medicaid, then pay the Iowa Health Care Association $2.3 million in annual dues. The association, in turn, pays its CEO and lobbyists a combined total of $1.2 million annually.

The IHCA, Lerner says, is “one of the most powerful lobbying organizations in Iowa. It has two objectives: more taxpayer dollars and less government oversight.”

Law mandates state awards for facilities

Although the Governor’s Award for Quality Care might appear to be a benevolent gesture on the part of Reynolds’ office, it’s actually a requirement of state law.

State legislators have mandated that the Iowa Department of Inspections, Appeals and Licensing — the same agency that inspects and regulates nursing homes — hand out at least one such award annually to a facility that “demonstrates provision of the highest quality care” to older Iowans.

Over the years, that’s proven to be difficult at times, with the award going to care facilities recently cited for widespread unsanitary conditions or a basic failure to meet its residents’ nutritional needs.

In some cases, the homes are cited for violations shortly after the Governor’s Award is given. On other occasions, the awards are given to homes run by companies with a long history of violations and an equally long history of donating money to legislators.

Six months ago, Larry Johnson, the director of the state inspections agency, bestowed the Governor’s Award for Quality Care on LaPorte City Specialty Care in Black Hawk County.

“This is a great facility,” Johnson said in a press release announcing the honor.  The release stated that “the cozy fireplace and sitting area at the front entrance this lodge-style facility immediately impressed DIAL staff who toured the facility.”

Just six months earlier, state inspectors working for Johnson’s agency had cited the LaPorte home for failing to provide a clean, homelike environment; failing to accurately assess and report residents’ needs; and failing to provide timely plans of care for residents.

The inspectors noted that one out of the four bathrooms they checked had smeared “brown substance” on the walls, floor and baseboard. A housekeeper informed the inspectors there was no supervisor at the 44-resident facility.

“I am the only housekeeper in the building today,” she reportedly said. “The toilets should be cleaned every day, and I would say they are not getting done every day but maybe every other day.”

The owner of the LaPorte facility is Care Initiatives, the West Des Moines corporation whose workers have been implicated in several alleged cases of death by neglect.

In 2004, Care Initiatives was one of the few nursing home corporations to face a criminal investigation tied to resident care. The corporation agreed to pay the federal government $500,000 to settle the allegations against it, but two of its nurses and one regional director, Larry Hinman, were indicted after being accused of conspiring to hide resident injuries from state inspectors. In 2005, the criminal charges were dropped after the three completed a pretrial diversion program.

Other winners of the Governor’s Award for Quality Care include:

The Bridges at Ankeny:  In September 2022, this care facility received the governor’s award from DIAL. Six weeks later, DIAL cited the home for failing to notify the state’s long-term care ombudsman of resident transfers; failing to accurately complete assessments of residents’ conditions; and failure to store and serve food in accordance with food-safety standards.Newton Village: In August 2022, this Jasper County facility won the award, and Reynolds announced that “Newton Village goes above and beyond to give its residents the quality care they need.” One year later, inspectors cited the home for failing to have a trained, qualified infection-control specialist on staff, failing to adequately treat pressure sores and failing to ensure residents were up to date on immunizations.Lake Mills Care Center: In October 2021, this Winnebago County home received the governor’s award. Two months later, inspectors cited the home for inadequate incontinence care, with the staff indicating they performed no competency checks on the nurse aides. The  home was also cited for failing to review a resident’s medications for five months.

Executives fund political campaigns

Care Initiatives has made no direct political donations to candidates in Iowa. That’s not surprising since political candidates can accept contributions from individuals, but are barred from accepting contributions from corporations.

However, the top executives at Care Initiatives have made direct and indirect contributions to the campaign coffers of Statehouse leaders and the governor, with most of that money routed through Iowa Health PAC.

State campaign finance reports suggest some form of coordination among the executives. The donations tend to be made on the same day and they also tend to fluctuate up or down at the same time. In addition, multiple executives appear to be consolidating their donations, with numerous “individual” donations delivered through a single transfer of funds to the PAC.

For example, on Sept. 8, 2022, Iowa Health PAC received several individual donations from Care Initiatives’ employees. But all of the donations were collected by the PAC via “check no. 490139” — suggesting a single electronic transfer of bundled donations.

When asked whether the PAC donations attributed to individual executives are being coordinated, bundled or paid by Care Initiatives, vice president and spokesperson Jessica McDyer said that “any decision by a Care Initiatives team member to make a political contribution is a personal and individual choice.

“A decision whether to contribute, as well as the amount of any contribution, is within the sole discretion of such a team member. Many team members, including some members of the senior leadership team, have chosen to contribute to the Iowa Health PAC in support of the overall long-term care profession in Iowa.”

The Care Initiatives’ executives who have donated include:

Michael Beal, chief executive officer: In 2022-23, Beal donated $8,190 to Iowa Health PAC, plus $1,000 to Reynolds’ gubernatorial campaign, plus $250 to each of the campaigns by Republican Statehouse leaders Pat Grassley and Jack Whitver.Dave Dixon, chief financial officer: Dixon donated $10,725 to Iowa Health PAC over the past two years, plus $1,000 to Reynolds’ campaign and $250 to both Grassley’s and Whitver’s campaigns.Jeramy Kuhn, chief compliance officer: Kuhn donated $2,145 to Iowa Health PAC in the past two years. He has been making donations to the PAC since 2012, averaging one donation per month.Joseph Reese, chief operating officer: Reese donated $2,800 to the PAC in 2022-23.  

The executives’ PAC donations and campaign contributions pale in comparison to the amount of money that Care Initiatives, as a corporation, has given to the IHCA, the industry’s main Statehouse lobbyist. In 2021, Care Initiatives reported spending $204,000 on IHCA membership dues, plus another $59,000 on dues for IHCA’s parent organization.

‘I can’t fight these lobbyists’

During the 2023 legislative session, IHCA lobbyist Merea Bentrott gave Iowa’s nursing home owners weekly updates, via Zoom, on the status of various bills in the House and Senate.

The audio portion of the updates, which was recorded by IHCA and posted to the organization’s website, sheds considerable light on the industry’s efforts to kill legislation that would have prevented nursing homes from refusing to let the families of residents put surveillance-style cameras — sometimes called “granny cams” — in the rooms of their loved ones.

Other states have approved such legislation, but IHCA has repeatedly, and successfully, fought advocates such as Diane Hathaway of Glenwood on the issue. Hathaway’s mother, Evelyn Havens, was living in a nursing home when she was twice hospitalized for severe dehydration, bed sores and an infection.

Although state inspectors would later determine Hathaway’s complaints about the nursing home were valid, citing the facility for five regulatory violations, the home had refused Hathaway’s request to place a camera in her mother’s room. After her mother died, Hathaway launched a campaign to win approval of legislation that would prevent care facilities from barring the use of cameras.

“I just don’t understand how people can turn a blind eye to this,” Hathaway said after the legislation stalled in 2022. “But I’m just one person. I can’t fight these lobbyists.”

In her Zoom call with IHCA members this year, Bentrott said she was “locked, loaded and ready to go” in opposing the newly resurfaced legislation early in the 2023 session. As things turned out, legislators didn’t put up much of a fight.

“This is something we’ve opposed for many, many years,” Bentrott told the IHCA members. She said she and her colleagues were asked to come up with their own version of a bill that would be acceptable to the industry, but she was able to persuade a committee chairman to spike the bill and prevent it from moving forward.

“I’m happy to say that yesterday we were able to kill that legislation,” Bentrott said in the conference call. “That is good news. That was on the House side of things. The bill never had legs in the Senate. We talked to them very early on and we were able to get them to a point where they agreed that camera legislation was not something that they would make an issue this year. So, we were confident we would be able to kill the bill in the Senate, but we didn’t even want it to get to a subcommittee in the House and we were successful in preventing that from happening. So that is a big win.”

During a subsequent Zoom call, Bentrott warned the IHCA members that the camera legislation would likely come up again in the future.

“This is something that will probably come up every single year,” she said. “Best case scenario is that we kill it before it even gets any legs.”

IHCA ‘targets’ lawmakers with geo-fencing

Last February, in another of the recorded conference calls with lobbyists and IHCA members, an association administrator identified only as Lori on the recording and believed to be Lori Ristau, then an IHCA vice president, discussed the organization’s latest attempts to connect with state lawmakers and influence their votes.

She explained that IHCA was using geo-fencing internet technology to direct industry-created content to lawmakers while they were inside the Capitol Building. The organization was spending $100,000 on advertising “specifically targeting legislators,” Ristau said.

She added that IHCA had also identified 50 key legislators who were either in leadership positions or were known to have influence over their colleagues. “And we specifically targeted their local newspapers and local media and asked several (IHCA) members to write op-eds, and we’re getting those placed now in local media channels where their legislators can see them,” she said.

The association was also targeting the press by meeting with “key media influencers” who could produce stories others were likely to emulate. “Reporters tend to follow other reporters,” Ristau said.

Early in the year, IHCA also sent nursing home administrators across the state a memo with a list of “talking points” to use with state lawmakers in persuading them to increase Medicaid payments to care facilities.

The administrators were instructed to tell legislators they needed to act immediately or the state’s entire long-term care industry would go under — with IHCA letting each administrator choose the actual date of the projected financial calamity:

“The long-term care sector in Iowa will be completely insolvent by (date) without a $60 million rebase rate adjustment in 2023.”

Although Iowa care facilities serve residents with varying needs, the administrators were also coached to tell lawmakers, “Individuals residing in our facility have very advanced care needs,” and, “Their care needs can only be met in a facility. These individuals require care 24/7, and it is no longer safe for these individuals to be at home alone.”

Among the homes that received the “insolvency” script from IHCA were those run by Care Initiatives — a corporation that has reported to the IRS that it has based the compensation for division directors “upon the profitability of care” that’s being delivered.

In addition to the $608,638 Care Initiatives paid its CEO in 2021, the nonprofit paid Charleen Schlepp, who didn’t work at all for the organization due to her retirement the year before, $417,630 in severance pay. Several other executives collected $249,000 to $350,000 in pay.

The year before, Care Initiatives’ departing CEO, Miles King, worked six months and was paid $620,295, which included more than $300,000 in severance pay.

More Medicaid, more tort reform  

While the nursing home industry often pleads poverty when asking state lawmakers for increased Medicaid payments, federal records show Care Initiatives made $223.9 million in revenue during 2021, an increase of $11 million from the previous year. After expenses — which included more than $2 million paid to just six executives — it cleared $2.7 million in net income.

The profits and salaries are notable in that Care Initiatives, unlike most Iowa nursing home chains, is a nonprofit charity that has been granted tax-exempt status due to its stated mission of “improving the quality of life for Iowans and their families.”

Overall, however, Care Initiatives has a mixed record on quality of care. According to federal data, four of its facilities are candidates for inclusion on the federal “special focus facilities” list of the worst nursing homes in the nation. Six of its care facilities are flagged for resident abuse. On average, Care Initiatives’ facilities have a two-star CMS overall rating on a scale of one to five stars.

Recently, state officials cited one of the chain’s western Iowa homes, Correctionville Specialty Care, for allegedly retaliating against a resident who reported that a male aide in the home had sexually assaulted her in his car in the facility’s parking lot. The facility allegedly evicted the woman and loaded her into a cab that dropped her off, with no advance notice, at a homeless shelter.

The manner in which the woman was dropped off is similar to an incident that took place several years ago at another Care Initiatives facility, Ravenwood Specialty Care in Waterloo. On the night of April 14, 2016, a doctor ordered that an acutely ill resident in respiratory distress be taken to the hospital. Rather than summon an ambulance, the home called Dolly’s Taxi Service, which dropped the resident off, alone, outside a hospital emergency room.

A physician at the hospital later told inspectors no one at Ravenwood had called the emergency room staff to alert them a patient was en route and that the nurses were “horrified” a patient in urgent need of care had been “dropped off and left alone.” Ravenwood’s nurse manager allegedly told inspectors that taxi cabs were a less costly alternative to ambulances.

During the 2023 legislative session, lawmakers made it harder for Iowans to sue care facilities for abuse, neglect and wrongful death. The Legislature passed, and the governor signed into law, a bill that caps at $1 million the non-economic damages — such as pain and suffering — that can be claimed in lawsuits against nursing homes. While the law has no effect on economic damages, that’s of little consequence to seniors who are retired and have no future earning capacity.

At the time, Willett, the head of the IHCA, praised the new law as a “highly important victory” for the industry. But he also warned the owners and administrators of Iowa’s nursing homes that new challenges lay ahead in 2024.

“Because of the complexity and the controversial nature of our sector in the public eye, we start with two hands tied behind our back every legislative session,” he said. “We are an incredibly easy interest group to punish and to ignore and to push back against our priorities.”

He asked the industry officials to donate money to Iowa Health PAC in anticipation of the upcoming elections. He also reminded them that it costs money “to play and to be prominent donor — which is what we need to be with major, major leaders in the Iowa Legislature and the governor’s office.”

Iowa Capital Dispatch is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Iowa Capital Dispatch maintains editorial independence. Contact Editor Kathie Obradovich for questions: info@iowacapitaldispatch.com. Follow Iowa Capital Dispatch on Facebook and Twitter.