Name: Indiana public hospital CEOs can keep their multi-million dollar compensation a secret
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Indiana public hospital CEOs can keep their multi-million dollar compensation a secret

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In 2013, he made $5 million.Three years earlier, he made $8 million.That’s the kind of money you might expect the CEO of one of the largest hospital chains in the country to earn.But Ray Ingham isn’t the chief executive of a major health system. He’s a local government employee, the chief executive of Witham Health Services, a county hospital in rural Boone County whose motto is “Small Hospital, Big Medicine.”A small county hospital executive pulling in that kind of money? “That would be something I would be asking a lot of questions about,” said Christine Mackey-Ross, a health care executive search consultant.But Ingham isn’t answering such questions. He ignored multiple interview requests for this story, did not respond to a list of questions emailed to his office, and rejected a public records request for information about his compensation.&nbsp;Public employees typically must disclose their taxpayer-funded salaries, but Ingham and other county hospital executives across Indiana are hiding behind a&nbsp;rare exemption added to state law in 2016.&nbsp;As county hospitals bought up more than 90% of Indiana’s nursing homes —&nbsp;giving the hospitals access to billions of supplemental Medicaid nursing home dollars —&nbsp;state officials granted them secrecy provisions that allowed them to hide how the money is spent, IndyStar has learned. How many of those executives, if any, used that money to pad their salaries instead of improving nursing home care is now a government secret in a state where nursing home deaths are running rampant.In response to public records requests from IndyStar, all 22 public hospitals cited the secrecy clause in denying the request. Many hospitals&nbsp;have also denied requests to show how much money they have diverted&nbsp;from the homes.So how did IndyStar discover that a county hospital executive in Boone County&nbsp;pulled down $8 million in a year? His pay was disclosed in a separate public document&nbsp;— a tax filing prepared for county hospital foundations.But those filings showed compensation at only three county hospitals. In addition,&nbsp;IndyStar obtained executive compensation data from the Health &amp; Hospital Corp. of Marion County, which is not covered by the 2016 exemption.That means, in all,&nbsp;IndyStar obtained CEO salary information for only four&nbsp;out of 22 county hospitals that own nursing homes.Combined, the documents paint an interesting if incomplete picture of executives whose salaries continued to rise with no apparent link to the quality of care at the nursing homes they rushed to buy. revealed that those 22 county hospitals across Indiana purchased more than 90% of the state’s nursing homes, at least on paper, since 2003.But as they used at least $1 billion of those funds, and potentially two times more, to build new hospitals and clinics around the state, Indiana’s nursing home residents suffered in homes that ranked 48th in the nation in terms of nursing home staff hours per patient.The consequences were often deadly. Yet the secrecy continues.All units of government in Indiana are required to disclose to the state and public what their employees make —&nbsp;except county hospitals. From the $3.5 million salary paid to Indiana University men’s basketball coach Archie Miller to the $27,000 paid to the Ohio County custodian, Hoosiers have access to all other public employee salaries.That kind of carveout is unusual among public entities, according to Adam Marshall, a senior staff attorney for the Reporters Committee for Freedom of the Press.“Ultimately, these are public employees, were paid for by public tax dollars, and who carry out the public's business,” he said. And while county hospital salaries are funded through a mixture of sources, including private insurance, a large portion of county hospital revenue comes from public dollars in the form of Medicare or Medicaid.“The communities that they serve, and that they represent, deserve to know how much they're being compensated,” Marshall said.County hospital salaries were public in Indiana until 2016. Late in the legislative session, lawmakers tacked on the secrecy amendment —&nbsp;ironically, onto a government transparency bill —&nbsp;that carved out the exemption for county hospitals.The author of that bill, former State Sen. Pete Miller,&nbsp;said he does not recall what specifically inspired the amendment, except that it had to do with hospitals competing for employees. In video testimony, Tim Kennedy, a lawyer for the Indiana Hospital Association, argued that unlike other public entities, county hospitals competed fiercely with private hospitals for talent.The hospitals’ “concern is, (administrators’) salaries have been made publicly available, then they can be, they can be cherry picked,” he testified.Kennedy, who is currently representing a county hospital in relation to a public records request&nbsp;by IndyStar, did not respond to a request for an interview.Mackey-Ross, the health care executive search consultant, said she does not buy the competition explanation.“It's certainly, in my mind, not a credible argument to protect anything other than your rank-and-file staff,” Mackey-Ross said. Many high-ranking executives sign agreements that prohibit them from leaving to immediately work for a competitor. And, anyway, private hospitals typically must disclose executive pay, either in IRS filings for nonprofits or for-profit hospital disclosures to the U.S. Securities and Exchange Commission.“How many CEOs get poached, how many C-suite employees get poached? No, you don't do that,” Mackey-Ross said.The amendment passed with no resistance, and the secrecy provision was signed into law by then-Gov. Mike Pence.The law now adds to a blanket of state-sanctioned secrecy that hospitals have used to grant themselves broad discretion to deny requests for information. A 2006 law also provides a specific carve out for county hospitals to “keep all proprietary and competitive information concerning the hospital” confidential.It’s this law that some hospitals cited when refusing to disclose the amount of money they divert from the nursing homes to their own coffers. The hospitals also cited this law to hide one of the most fundamental public documents: government contracts.Almost all of the county hospitals rejected requests for copies of contracts between the hospitals and the organizations that run the day-to-day operations at the nursing homes. Those documents could contain key insights into the hospitals’ relationships with the nursing homes, such as how much power they have given to the private, often for-profit companies to make staffing decisions.Why county hospital executive pay in Indiana is kept secretDwight Adams, dwight.adams@indystar.comIndyStar attempted to find executive compensation data for all 22 county hospitals that own nursing homes, but was able to obtain information about just these four: Witham Health Services in Boone County; Major Hospital in Shelby County; HHC of Marion County; and Greene County General Hospital.In each case, executive compensations increased during the time the hospitals acquired nursing homes.&nbsp;IndyStar has already documented how HHC’s nursing home buying spree generated more than $1 billion that was diverted from nursing homes to county hospital projects, including the $754 million Sidney &amp; Lois Eskenazi Hospital. Following in Marion County’s footsteps, executives at Witham and Major made deals with roughly 40 nursing homes each across the state.&nbsp;The extra money generated by the homes funded million-dollar projects for Major Hospital, including the $89 million medical complex on I-74. Representatives for Witham have never answered IndyStar’s questions about how they use the extra funds. In 2013, Witham’s CEO, Ingham, told the Indianapolis Business Journal that the money “allows critical-access hospitals and rural-independent hospitals, like Witham, to remain solvent in a very competitive marketplace.”Nearly a decade later, the nursing home operations have become significant parts of the hospitals’ revenues.The lion’s share of Major’s growth under&nbsp;the leadership of Jack&nbsp;Horner, Major Hospital's CEO,&nbsp;has come from its nursing home operations. Based on the figure Horner provided and financial statements filed with the state, the hospital’s revenue has grown about 35% since 2012. When factoring in the nursing homes, Major’s revenue grew by more than 280%.Nursing homes now bring in as much revenue as all of Major’s outpatient services, making up 40% of Major’s annual revenues.Horner’s compensation&nbsp;as CEO, meanwhile nearly doubled between 2009 and 2018, from&nbsp;$287,656 in 2009 to&nbsp;$549,580 in 2018. His compensation included more than $417,000 in bonuses, most of which he received since Major started to acquire nursing homes.The hospital’s dependence on the extra nursing home funds has caught the eye of at least two credit rating agencies. In November, Moody’s cited the nursing home strategy when it downgraded Major’s credit rating.“Major's nursing home strategy will continue to provide disproportionate cash and cash flow as long as the program remains in place,” Moody’s analysts wrote. “While the nursing home affiliations will net significant additional funding, we believe the strategy exposes the system to potential reputational risk and extends the systems reach well beyond its natural service area.”In August, a different agency affirmed its ‘A’ credit rating for Major, but noted in its analysis that, while the agency doesn’t expect the nursing home funds to go away anytime soon, “Major's overall reliance on it poses a potential risk to operating performance,” and that, without the nursing home relationships, Major’s financial performance was “modest.”Under Ingham’s watch, Witham has likewise seen nursing home operations become a large part of its annual revenues. Since 2011, the hospital has purchased, at least on paper, 40 nursing facilities located throughout the state. Witham reported that nursing homes accounted for 39% of the hospital's revenue in 2019.Horner insisted that his pay is not connected to Major's nursing home operations. Yet&nbsp;executive pay is often linked to, among other things, the revenues and complexity of an organization, said Mackey-Ross. &nbsp;A doubling in pay, like&nbsp;what Horner received,&nbsp;would be unusual if the hospital’s operations didn’t expand.Alan Sager, professor of health law, policy and management at Boston University, agreed.“In light of his success obtaining extra revenue for the nursing homes, a share of which was diverted to the hospital itself —&nbsp;it strains credulity to assert that CEO did not enjoy a bump in pay by helping to acquire extra revenue, some of which was diverted to the hospital that he runs,” he said.&nbsp;Horner said via email that Major uses “consultants and available compensation data to create salary ranges for all positions.”Such analyses typically exclude public hospital compensation packages, which are typically smaller than that of private hospital executives.Therefore, these types of analyses have the tendency to inflate the compensation of executives across the industry, according Sager.“It's a game of leapfrog where one person gets another 40,000 bucks a year," he said. "And that becomes the comparable standard."Horner declined to be interviewed for this story and stopped responding to emails from IndyStar. In emails, Horner vehemently denied that his compensation was based on the hospital’s nursing home strategy and attempted to discourage IndyStar from pursuing this story. He has also refused to disclose the share of nursing home funds Major diverts.Because of the secrecy allowed under state law, it’s impossible to know if the pay of any of the executives&nbsp;IndyStar obtained pay data for runs higher than the average county hospital executive in Indiana, or if other hospital executives saw salary bumps as they pursued the nursing home agreements.Even prior to the passage of the 2016 secrecy law, hospitals used a 2006 law regarding county hospitals and competitive information to keep salary information secret.Here’s what we can say:Indiana’s county hospital executives may have been rewarded for their role in bringing supplemental nursing home funds into the hospitals. Things did not work out, however, for some of the residents at the facilities.Indiana nursing homes generate hundreds of millions of dollars in extra Medicaid funds that are used at county hospitals instead. Meanwhile, some&nbsp;residents suffer in squalid, understaffed homes.IndyStar’s investigation found several instances of residents who suffered severe, sometimes deadly injuries in Indiana’s county-owned nursing homes. Staffing was often referenced as a contributing factor: A woman who fell 16 times before. Failing to order a ventilator for a woman who later died. Delaying treatment of a resident’s pneumonia.&nbsp;A further review of inspection reports and wrongful death claims uncovered similar problems in homes owned by Major and Witham.At a Major-owned&nbsp;Demotte facility, inspectors observed strong urine odors and said the facility failed to thoroughly investigate after a resident had been found with bruising on her forehead, cheeks, nose and chin.Inspectors&nbsp;cited a Marion facility for not having enough staff to distribute medications at the right times. Residents told inspectors that there were not enough staff to care for them. Inspectors said staff failed to monitor a resident’s blood sugar after administering a dose of fast-acting insulin. She was found dead the next morning.In a statement sent to IndyStar in March, Horner cited Major’s “long and documented commitment to quality” and said that Major had turned down deals with at least 26 nursing homes “solely because we did not have a comfort level that our mission and values aligned with the potential manager.”Yet quality at 72% of its facilities&nbsp;are rated “below” or “much below” average by the Centers for Medicare and Medicaid Services. And roughly one in five Major-owned facilities have attracted special attention from regulators for having a pattern of serious problems. Of the 15 facilities being considered for this enhanced scrutiny, eight belong to Major.Similar staffing problems were found at some of Witham’s facilities. A resident at Lindberg Crossing Senior Living was found with “dry crusty foul smelling material” between her toes after going without a shower for weeks. Nursing assistants told inspectors that staff didn’t have enough time to help all of the residents shower.&nbsp;Another resident was hospitalized with “severe septic shock” and ultimately died after developing serious bed sores at the facility. Clinical notes say one bedsore on her buttocks measured more than 1.5 inches deep.Ingham did not answer questions about the quality at Witham’s homes. Again,&nbsp;neither executive would say how much money they’ve diverted from the nursing homes to hospital operations over the past several years.It’s against this backdrop of secrecy that the COVID-19 crisis in nursing homes is playing out.&nbsp;Early in the pandemic, Gov. Eric Holcomb repeatedly refused to disclose which homes had had outbreaks, leaving many families in the dark about whether they should remove their loved ones from the home. He likewise refused to disclose how many residents had died of the virus at individual facilities, citing his respect for private businesses even though 90% of Indiana’s nursing homes are owned by counties. The state changed its policy in July, but only after federal regulators required the information be made public and the state’s nursing home lobby expressed approval.The state health department has also yet to provide IndyStar with records, requested in May, that would shine light on whether facilities failed to inform families about cases and deaths and facilities that faced shortages of staff and personal protective equipment.In October, Holcomb announced that the Indiana National Guard would deploy more than 1,300 members to help an “exhausted” nursing home staff, sending teams to the hardest-hit homes first. Megan Wade-Taxter, a spokeswoman for the Indiana State Department of Health, refused to answer questions from IndyStar about which nursing homes would receive help soonest. (An industry group later published the list on its website.)Now, nearly 3,300 Hoosiers have died after contracting COVID-19 in long-term care facilities.IndyStar asked if, after all the deaths and questions around nursing homes this year, whether he would support a state law mandating disclosure of the amount of money county hospitals divert from nursing homes.Holcomb, through a spokeswoman, said, he "will have more to say about what his agenda does and does not include in the coming weeks."Emily Hopkins is a data reporter for IndyStar's investigative team. Reach them at 317-444-6409 or .Contact IndyStar reporter Tony Cook at 317-444-6081 or&nbsp;tony.cook@indystar.com. Follow him on Twitter:&nbsp;@IndyStarTony.Contact Tim Evans at 317-444-6204 or&nbsp;tim.evans@indystar.com. Follow him on Twitter:&nbsp;@starwatchtim.

In 2013, he made $5 million.Three years earlier, he made $8 million.That’s the kind of money you might expect the CEO of one of the largest hospital chains in the country to earn.But Ray Ingham isn’t the chief executive of a major health system. He’s a local government employee, the chief executive of Witham Health Services, a county hospital in rural Boone County whose motto is “Small Hospital, Big Medicine.”A small county hospital executive pulling in that kind of money? “That would be something I would be asking a lot of questions about,” said Christine Mackey-Ross, a health care...

Indiana public hospital CEOs can keep their multi-million dollar compensation a secret

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