March 17, 2021

At Senate Finance Committee Hearing, Senator Warren Calls Out Genesis' Corporate Greed While Leaving Its Workers and Residents Without Adequate PPE and COVID-19 Safety Supplies

Nearly 3,000 Genesis Nursing Home Residents and Staff Died in COVID-19 Pandemic; CEO Paid $8 Million in 2020 and Left Company Just Two Months After $5 Million "Retention" Payout

Washington, DC - In a Senate Finance Committee hearing today, United States Senator Elizabeth Warren (D-Mass.) highlighted new details she revealed earlier today about Genesis Healthcare, a for-profit nursing home chain, for its failed response to the COVID-19 pandemic and excessive CEO pay. Genesis gave its then-CEO -- who left the company in near bankruptcy in January 2021 -- $8 million in salary and bonuses since the start of the pandemic while leaving its workers and residents without adequate PPE and COVID-19 safety supplies. Additionally, Genesis also accepted $665 million in state and federal grants and loans last year, and yet, the company was still driven into near bankruptcy.

In response to Senator Warren, Adelina Ramos, a certified nursing assistant (CNA) at a Genesis-owned facility, described her harrowing experience working throughout the COVID-19 pandemic without adequate resources.

Dr. David Gifford, who attended the hearing on behalf of the American Health Care Association, which represents nursing homes, agreed with Senator Warren that a review of nursing homes' use of federal funding was appropriate and stated that compensation decisions at nursing homes at all levels would need to be "looked at."

Earlier today, Senator Warren also released Genesis' response to her January letter revealing new details on the company's massive CEO payout and information that the company -- which "restructured" itself earlier this month, delisted from the New York Stock Exchange and handed over much of its control to private equity -- received $665 in state and federal aid in 2020. She also released her new letter to Genesis, raising additional questions about why the company lavishly rewarded its CEO after more than 2,800 of its residents died of COVID-19 and despite the fact that the CEO left the company in dire financial conditions.

Transcript: A National Tragedy: COVID-19 in the Nation's Nursing Homes
U.S. Senate Committee on Finance
Wednesday, March 17, 2021

Senator Warren: Alright. Thank you, Mr. Chairman. I'm sorry, Senator Thune. But I'm sure we'll get this straightened out.

You know, when the coronavirus hit, nursing homes were ground zero. To date, at least 130,000 nursing home residents and 1,600 staff members have died of COVID-19.

Responding to coronavirus was challenging for every health care provider. Genesis Healthcare, a nursing home chain with over 350 facilities across the country, was one provider that struggled.

Ms. Ramos, you work at Greenville Nursing Center, a Rhode Island nursing home owned by Genesis. From your testimony, it sounds like working at the facility last year was harrowing. So let me just ask, did you have the resources and the staff you needed to properly care for COVID-19 patients?

Ms. Ramos: Thank you for your question. No. We didn't have enough resources or staff that we needed. But those -- like I said before -- aren't new issues. Sometimes, we have two residents with serious need. At the same time, but we have to choose who to-- who deserves our care and every one of them deserves our care a hundred percent. But it's sad that we've been put in that situation all the time.

Senator Warren: And you're right. It is sad to be put in that situation. But basically, what you're saying is that you didn't have the supplies, you didn't have the staff you needed when the coronavirus hit. And I know that a lot of nursing homes around the country were in the same boat-which is why Congress passed COVID-19 relief packages, like the CARES Act, earlier to get providers the resources they needed.

Now, in January, I wrote to Genesis, which owns the nursing home where you work, and I received information that shows that they accepted $665 million in state and federal grants and loans last year. And guess what Genesis did: it gave its then-CEO a $5.2 million retention bonus-just a few months before he left the company, which was - and is - in dire financial condition. In total, the CEO, George Hager, received $8 million in compensation since January of 2020.

Ms. Ramos, you told us about how one of your coworkers died by trying to care for COVID-19 patients, while working at a facility with a $14-an-hour starting wage. So, let me just ask you your view on this. Should a top corporate executive have received a multimillion-dollar bonus while you were struggling to keep patients alive and keep yourself alive? Or, let me ask it another way, what could have been done to improve patient care with that $5.2 million retention bonus that the CEO received?

Ms. Ramos: No. I don't think they should make millions of dollars in bonuses because it's Medicare money. That money should be going to patient care. So with that $5 million that he received it, we could have put a higher wage so we could attract more staff to the field.

Senator Warren: More staff. More PPE. And that's exactly what Genesis should have done. It should have invested in workers like you.

So, let me ask you, Dr. Gifford. You're here on behalf of the American Health Care Association, which represents nursing homes. Do you think it's right that nursing home CEOs received multimillion-dollar bonuses while workers like Ms. Ramos fought for more PPE, more tests, and more resources?

Dr. Gifford?

Dr. Gifford: Senator, as a medical director having worked in nursing homes in Rhode Island, I did not have the pleasure of working with Ms. Ramos there. I saw first hand, as you've pointed out and Ms. Ramos, how hard the CNAs worked relative to everyone else. And they really are the life-blood of an organization. I think early on in this pandemic, there was not PPE worldwide anywhere. And we were hearing from every type of facility out there about the need for getting PPE and getting staffing. And we were calling it. And what was available was not prioritized for nursing homes. It was going to hospitals and elsewhere. And I think that idea of how we prioritized and used that. The PRF fund that came to us were lifesaving. Many of the nursing homes out there are small family run nursing homes, second and third generation, and--

Senator Warren: I'm sorry to interrupt, but let me just-- that was not my question. My question was whether or not nursing home executives should be paid multimillion-dollar retention bonuses, or whether or not those millions of dollars should be invested in the resources that are needed to keep staff and residents safe and healthy?

Dr. Gifford: Yeah. I think it's a good question to think through how compensation is done at all levels and how are we going to be able to compete for retaining and recruiting staff at all levels throughout their-- in the health care system. And that's something that we'll need to look at. I think we are fully supportive of transparency regarding how these funds were used going forward.

Senator Warren: Well, I appreciate that you're going to look at it. But I just want to be clear on this. We can't allow corporate greed to determine whether or not workers and seniors in this country live or die. And that's why I wrote to Genesis requesting information about their financial decisions. And today, I'm going to release their response, which comes in the wake of reports that Genesis will soon be under private equity ownership.

I'll be opening an investigation into for-profit nursing homes-including those run by private equity firms. And the next time there's a pandemic, seniors shouldn't be stuck in subpar institutions run by greedy CEOs and vulture firms in order to make a quick buck. Congress needs to act, now, before tragedy strikes again.

Thank you. Thank you, Mr. Chairman.

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