After holding a series of meetings across the state on what it means to patient care when a private equity firm purchases nursing homes in Michigan, House Democrats rolled out a legislative package Wednesday that would require homes to be more financially sound and provide more information to residents regarding who owns their home.

Democrats announced the legislation the same day Michigan senior citizens held a lobby day at the Capitol.

Focus from the House Health Policy and Senior Health, Security and Retirement Committees on private equity purchases came after The Carlyle Group bought 28 nursing homes from HCR ManorCare.

In May, an official from Manor Care testified before the committees and told lawmakers that The Carlyle Group's purchase has not altered care at the homes and that HCR Manor Care now doesn't have to worry about Wall Street expectations allowing investments in the homes to be made for the long term (See Gongwer Michigan Report, May 8, 2008).

But officials in the industry and government have also told lawmakers the state doesn't have enough oversight of these kind of transactions to properly ensure that care of senior citizens is the foremost concern.

The legislation, which has yet to be introduced, would allow the Department of Community Health to decide on whether to license a nursing home when a large corporation purchases it, require notice to residents of the home of a change in ownership and for ownership information to be clearly posted, provide penalties for nursing home employees or administrators when they provide fraudulent information to surveyors or investigators, mandate that nursing home owners show they have proper funding, insurance and quality care to be licensed.

While the legislation would apply to all 425 nursing homes in the state, not just those purchased by private equity firms like Carlyle, Rep. Robert Jones (D-Kalamazoo) said, "When private investors come to Michigan shopping for nursing homes, it is our parents, grandparents, family friends and loved ones who may be adversely affected. We want to make sure that doesn't happen here."

Rep. Kathy Angerer (D-Dundee) said the bills would not affect Carlyle's transaction, but would apply to all nursing home owners going forward, including when a facility's license is up for renewal.

Asked what kind of effect this would have on how DCH operates, Long Term Care Ombudsman Sarah Slocum said while she couldn't comment specifically on its impact, she believes it will help staff carry out their jobs better because it gives them more tools to assess what's happening at these homes.