Testimony of: 
Gregory E. Demske 
Office of Counsel to the Inspector General 
U.S. Department of Health and Human Services 
________________________________________________________________________ 
 
 
 
Good morning, Chairman Kohl, Ranking Member Smith, and distinguished members of 
the Committee.  I am Gregory Demske, Assistant Inspector General for Legal Affairs in 
the Office of Inspector General of the Department of Health and Human Services.  I 
appreciate the opportunity to appear before you today to discuss our work related to 
identifying and preventing the abuse of the elderly.  OIG shares your commitment to 
ensuring the proper oversight of programs designed to serve this Nations elderly with 
particular emphasis on the safety and well-being of this population.  I look forward to 
discussing with you today some of the ways OIG seeks to fulfill this goal.  
 
A large portion of OIGs work is aimed at identifying and recommending methods to 
minimize inappropriate payments, identifying ways to close loopholes that enable 
unscrupulous providers to defraud Federal health care programs, and examining payment 
and pricing methods to ensure that Medicare and Medicaid, those programs 
beneficiaries, and taxpayers realize good value for program expenditures.  Ensuring that 
appropriate payments are made for properly rendered services also reduces the possibility 
that the elderly are incurring unnecessary financial liabilities, such as copayments and 
deductibles, stemming from fraudulently billed services.   
 
However, OIG also conducts reviews to identify whether beneficiaries are able to 
promptly obtain needed health care services and monitors oversight activities designed to 
ensure that beneficiaries receive quality services.  In particular, OIG has long been 
concerned with the quality of care rendered in nursing facilities.  OIG efforts are 
threefold:  to evaluate the programs and systems involved in oversight of quality of care, 
to work with State and Federal agencies to investigate and prosecute cases of egregiously 
substandard care, and to provide guidance to providers to aid in their efforts to promote 
high quality care.   
 
In my testimony today, I will describe the spectrum of studies, enforcement actions, and 
initiatives that OIG has undertaken to identify cases of elder abuse, ensure that those who 
would harm the elderly are prosecuted to the fullest extent of the law and/or prevented 
from continuing to participate in Federal health care programs, identify where the 
programs and systems involved in the oversight of quality of care may be strengthened, 
and promote practices that will help prevent these abuses from occurring.   
 
 
 
 
 
Senate Special Committee on Aging  
Hearing:  July 18, 2007    Page 1  OVERSIGHT OF MECHANISMS DESIGNED TO ENSURE QUALITY OF 
CARE    
 
OIG has produced a large body of work related to quality-of-care issues in Federal health 
care programs in a variety of settings, such as hospitals, nursing homes, and clinical 
trials.  Quality-of-care issues in nursing homes have been of particular concern for OIG 
over the past decade because of the increasing number of beneficiaries in these settings 
and the vulnerabilities associated with this population.  
 
With respect to Medicare and Medicaid services rendered in long-term care settings, we 
have examined a variety of factors that may affect the provision of quality care.  First, we 
have done extensive work in examining the effectiveness of oversight and enforcement 
mechanisms used by the Centers for Medicare & Medicaid Services (CMS), its 
contractors, and the States.  Second, we have reviewed mechanisms used to screen 
potential employees of long-term care facilities.  And third, much of our work has 
focused on determining whether providers are potentially harming beneficiaries by taking 
advantage of financial incentives under various Medicare and Medicaid reimbursement 
systems to provide too few needed services, to end care too soon, ping-pong Medicare 
beneficiaries among different care settings, or limit access to potentially less profitable 
patients.  I will discuss each of these in turn.  
 
Oversight and Enforcement Mechanisms 
 
Regulating nursing homes that participate in the Medicare and Medicaid programs is 
primarily the responsibility of CMS and State agencies through their survey and 
certification efforts.  Through periodic facility inspections and individual complaint 
investigations, CMS and the State agencies assess nursing home performance and 
determine whether to certify facilities for participation in Medicare and Medicaid.  
Nursing facility certification is required by statute at least every 15 months, and the 
statewide average interval between certification of facilities cannot exceed 12 months.   
States are required to refer case information to CMS for enforcement action when 
facilities are found to be out of compliance for designated time periods or have 
deficiencies that put residents in immediate jeopardy.  Enforcement actions are 
mandatory to address particularly egregious cases of noncompliance.  Enforcement 
actions can include termination of the facilitys Medicare contract and denial of payment 
for new admissions.  Other enforcement actions include corrective action plans, civil 
monetary penalties, required changes in management, and decertification, all 
administered by CMS.   
 
In a March 2003 report, OIG reviewed trends in survey and certification deficiencies as 
well as the effectiveness and consistency of the survey and certification process.  For the 
time period studied (1998-2001), OIG determined that a large number of nursing homes 
had been cited for substandard care and that the number of deficiencies had increased.  In 
addition, our work identified inconsistencies in the way in which deficiencies were cited 
by the various State survey agencies.  These inconsistencies resulted from variations in 
survey focus, unclear guidelines, lack of a common review process for draft survey 
 
Senate Special Committee on Aging  
Hearing:  July 18, 2007    Page 2  reports, and high turnover of surveyor staff.  We recommended that CMS improve 
guidance to State agencies on citing deficiencies by providing guidelines that are both 
clear and explicit and that CMS, together with States, develop common review criteria 
for draft survey reports.  CMS has since issued guidance on assessing the severity of 
deficiencies related to quality of care and quality of life and is currently developing 
guidance to address other deficiencies.   
 
More recent work has focused on CMS and State enforcement mechanisms against 
nursing homes that are out of compliance for designated time periods or have deficiencies 
that put residents in immediate jeopardy.  For example, in an April 2005 report, OIG 
found that although $81.7 million in civil monetary penalties (CMP) were imposed 
during 2000 and 2001, CMS had collected only $34.6 million (42 percent) by the end of 
2002.  The unpaid portion included reductions resulting from nursing homes waiving 
their right to appeal, settlements and reductions resulting from appeals, payment delays 
caused by appeals or bankruptcy proceedings, and nonpayment of collectible CMPs.  We 
also found that CMS did not utilize the full dollar range allowed for CMPs and 
impositions were frequently at the lower end of the allowed ranges.  Low imposition rates 
and slow and/or difficult collection efforts may minimize the effect that CMPs ultimately 
have on noncompliant facilities.  A more recent OIG report, issued May 2006, found that 
for the majority of cases requiring mandatory termination of nursing facilities, CMS did 
not apply the remedy because of both late case referrals by States and CMS staffs 
reluctance to impose this severe remedy.  Based on the findings of these reports, we 
recommended that CMS provide guidance to regional CMS staff and States regarding 
appropriate CMP dollar ranges for types of violations and take required collection steps.  
We also recommended that CMS terminate noncompliant facilities participation in the 
Medicare and Medicaid programs within the required timeframe.  CMS has taken a 
number of actions, including implementing both case and incident-tracking systems, that 
should help to ensure that enforcement actions are properly taken when warranted and 
implemented more timely.   
 
The Omnibus Budget Reconciliation Act of 1987 requires States to provide timely review 
of complaints and to investigate allegations of neglect, abuse, and misappropriation of 
resident property.  In a July 2006 review, OIG found that State agencies did not 
investigate some of the most serious nursing home complaints within the required 
timeframe and that CMSs oversight of nursing home complaint investigations is limited.  
We recommended that State agencies be required to meet the 10-day timeframe for 
investigating complaints alleging actual harm (high) and that CMS eliminate its advance 
notice requirement for the Federal oversight and support surveys to allow its regional 
offices to more fully oversee State agencies investigations of the most severe 
complaints.  CMS has since updated the State Performance Standard, which it uses to 
hold State agencies accountable for the timeliness of their complaint investigations, to 
make the timeframe consistent with the 10-day requirement in its State Operations 
Manual.   
 
As part of our work looking at quality-of-care oversight in other long-term care settings, 
in April 2007, we released a report on the certification and oversight of Medicare 
 
Senate Special Committee on Aging  
Hearing:  July 18, 2007    Page 3  hospices.  This report found that 14 percent of hospices were past due for certification 
and, on average, had not been surveyed for 9 years3 years longer than the CMS 
standard at that time.  OIG also found that health deficiencies were cited for 46 percent of 
hospices surveyed and for 26 percent of hospices investigated for complaints.  The most 
frequent health deficiencies cited centered on patient care planning and quality.  For 
instance, OIG found that written care plans often were not prepared, lacked important 
elements, or did not contain sufficient measures to ensure quality patient care.  Of the 
hospices with deficiencies cited during complaint investigations, 49 percent had already 
been cited for the same deficiencies during the regular certification surveys.  Based on 
our findings, we recommended that CMS provide guidance to State agencies and CMS 
regional offices regarding analysis of existing data and identification of at-risk hospices, 
include hospices in Federal comparative surveys and annual State performance reviews, 
and seek legislation to establish additional enforcement remedies for poor hospice 
performance.  At present, CMSs only enforcement remedy is termination of hospices 
from the Medicare program.  CMS indicated that it is exploring and implementing 
methods to better target hospices in need of closer oversight.  CMS is also considering 
whether to pursue new enforcement requirements for poor hospice performance.  
However, citing budget constraints, CMS indicated that it does not plan to include 
hospices in the annual State performance reviews.   
 
Screening of Long-Term Care Employees 
 
Residents of nursing homes and other long-term-care facilities have a right to reside in a 
safe and secure environment, free from abuse and neglect.  To help achieve this type of 
environment, each State is required to establish and maintain a registry of nurse aides, 
which includes information on any finding by the State survey and certification agency of 
abuse, neglect, or misappropriation of property involving the elderly.  CMS prohibits 
facilities from employing individuals who have been found guilty by a court of law or 
who have had a finding entered into the registry for abuse, neglect, or mistreatment of 
residents or misappropriation of their property.   
 
In several recent reviews, OIG found that States and nursing facilities use a patchwork of 
measures to identify persons posing a possible threat of elder abuse in nursing homes and 
to minimize and prevent such abuse.  For example, in a July 2005 report, we found that 
although most facilities check their State nurse aide registries prior to employing an 
individual, they do not routinely check those in other States, thereby potentially 
jeopardizing the safety of their residents.  Additionally, while most States require 
criminal background checks, the scope of these checks varies widely.  We also found that 
although some of the nursing facilities in our sample conducted more comprehensive 
checks than required by their State laws, about half of the background checks done were 
limited in scope, e.g., limited to one State.   
 
In another review, issued February 2005, that examined the accuracy of nurse aide 
registries maintained by States, OIG found that some States failed to adequately update 
registries with information on substantiated adverse findings against nurse aides.  In fact, 
some individuals with criminal records in one State were actively certified in other States.  
 
Senate Special Committee on Aging  
Hearing:  July 18, 2007    Page 4  Without accurate nurse aide registry information, nursing homes may inadvertently hire 
aides who have committed offenses such as abuse, neglect, and theft, thus placing 
residents at considerable risk.  Therefore, we recommended that CMS ensure that records 
of nurse aides with substantiated adverse findings are updated timely and work with 
States to ensure that registry records contain current information on nurse aides. 
   
In a December 2006 report, OIG reviewed the requirements for, and State oversight of, 
Medicaid personal care service attendants.  These attendants assist the elderly and 
persons with disabilities or temporary or chronic conditions with daily activities (e.g., 
bathing, dressing, meal preparation).  This review found substantial variation, both across 
States and within States, in the requirements for these attendants and found that oversight 
and administration of personal care programs were fragmented.    
 
In testimony before this committee in 1998, we recommended stronger Federal oversight, 
as well as stepped-up collaboration with the States, to improve the safety of the elderly.  
Specifically we recommended that CMS and the Administration on Aging (1) consider 
establishing Federal requirements and criteria for performing criminal background checks 
of all workers in nursing homes and other long-term care facilities and (2) assist in the 
development of a national abuse registry and expansion of the current State registries to 
include all workers who have abused or neglected residents or misappropriated resident 
property in facilities that receive Federal reimbursement.  Our updated work continues to 
demonstrate that there is no nationwide assurance that nursing home staff who could 
place elderly residents at risk are systematically identified and excluded from 
employment.  Therefore, to reduce the potential for nurse aides with substantiated 
findings to commit similar acts in another State, we again suggested in our 2005 reports 
that CMS could seek legislative authority to create a national nurse aide registry and 
recommended that CMS consider developing a Federal requirement for criminal 
background checks.   
 
Impact of Reimbursement Systems on Access and Quality of Care  
 
In recent years, OIG has also monitored the potential impact of various Medicare and 
Medicaid payment systems on the provision of services in inpatient hospitals, nursing 
homes, and home health agencies.  For example, in reports issued in July 2006, we 
examined beneficiary access to home health and skilled nursing facility care since the 
implementation of the prospective payment system and found that, although the vast 
majority of Medicare beneficiaries have access to care, some with certain medical 
conditions, such as those needing IV antibiotics and/or expensive drugs and those with 
complex wound care needs, may experience delays in obtaining necessary care.  In 
another report issued in 2006, we examined the hospital readmission and emergency 
department visit rates for Medicare beneficiaries discharged from hospitals to home 
health care to determine whether the rates have changed since the implementation of the 
home health prospective payment system in 2000.  We suggested that CMS closely 
monitor beneficiaries with particular health care needs most associated with problems in 
access and cases in which there is a greater likelihood of hospital readmission or 
emergency care. 
 
Senate Special Committee on Aging  
Hearing:  July 18, 2007    Page 5   
Most recently, in a report issued last month, we assessed services provided to 
beneficiaries with consecutive Medicare stays involving inpatient and skilled nursing 
facilities and found that 35 percent of consecutive stay sequences were associated with 
quality-of-care problems and/or fragmentation of services for which Medicare paid an 
estimated $4.5 billion.  Quality-of-care problems that reviewers found included medical 
errors, accidents, failure to treat patients in a timely manner, inadequate monitoring and 
treatment of patients, inadequate care planning, and inappropriate discharges.  We 
recommended that CMS (1) direct Quality Improvement Organizations (QIO) to monitor 
fragmentation and quality of care across consecutive stay sequences and the quality of 
care provided during the individual stays within those sequences and (2) encourage both 
QIOs and fiscal intermediaries, as appropriate, to monitor the medical necessity and 
appropriateness of services provided within these consecutive stay sequences.  CMS 
concurred with our recommendations and indicated that it intends to place a greater 
emphasis on continuity of care in all settings and on measuring the rate of adverse events, 
such as hospital readmissions.   
 
OIG is also concerned about whether payments to nursing homes are correct and whether 
the funds are being used for patient-care-related activities.  For example, in a series of 
audits issued in 2004 and 2005, we examined the adequacy of Medicaid payments to 
nursing facilities in States that have enhanced payment programs for public nursing 
facilities.  As part of these studies, OIG determined that Medicaid reimbursements to 
States for nursing home care are being diverted from the nursing homes to other State 
programs.  To illustrate, OIG examined nursing homes from each of three States (New 
York, Tennessee, and Washington) and found that these nursing homes were required by 
their State or county to return 90, 96, and 94 percent, respectively, of their enhanced 
funding.  These nursing homes had received the most unfavorable survey ratings the 
States can issue.  These homes might have provided better quality of care had they been 
able to retain all the funding they initially received. 
 
 
OIG INVESTIGATIONS AND ENFORCEMENT 
 
Although OIG investigates cases of significant abuse or neglect and takes appropriate 
administrative actions, CMS and the States bear the primary responsibility for regulating 
and policing the quality of health care provided to patients as well as referring 
appropriate cases to law enforcement.  CMS issues regulations and program guidance 
that set the requirements for quality of care in entities participating in Federal health care 
programs.  And, as previously described, CMS and the States coordinate to conduct 
surveys and review providers under the certification process.  When deficiencies are 
identified, CMS may take enforcement actions, such as imposition of CMPs, denial of 
payment for new admissions, and termination.  In addition, State licensing boards for 
physicians, nurses, and other health professionals (including nursing home 
administrators) revoke or suspend the health care licenses of many individuals for poor 
care or patient abuse.  Finally, through Medicaid Fraud Control Units (MFCU), States 
investigate and prosecute individuals and entities for patient abuse, as well as fraud.  
 
Senate Special Committee on Aging  
Hearing:  July 18, 2007    Page 6  To supplement or, when appropriate, substitute for CMS or State enforcement actions, 
OIG pursues administrative remedies, often in conjunction with civil actions brought by 
the Department of Justice (DOJ).  The False Claims Act, the Federal Governments 
primary civil enforcement tool for fraud, has been used successfully to address poor 
quality of care.  In addition, OIG has exercised its administrative authorities in these 
cases to exclude providers from participation in Federal health care programs and to 
impose substantial compliance requirements and monitoring on those providers that 
continue to participate.  This combination of civil and administrative enforcement actions 
has effectively complemented the administrative and regulatory oversight by CMS and 
the States and criminal prosecutions by the States. 
 
Civil and Criminal Actions and Law Enforcement Coordination 
 
OIG partners with DOJ, MFCUs, and other state law enforcement offices to investigate 
and prosecute instances of substandard care that led to patient harm.  Under the False 
Claims Act, the Government is authorized to collect substantial penalties against anyone 
who has knowingly caused the submission of false or fraudulent claims to the Federal 
Government.  DOJ is responsible for representing the United States in these civil cases, 
which often involve allegations that claims to Medicare or Medicaid are false because 
they misrepresent the services that have been provided to beneficiaries.  Over the past 
decade, DOJ has successfully pursued False Claims Act cases under the theory that 
egregiously substandard care is a failure of care and that claims for such care are 
fraudulent.  Medicare and Medicaid cover only costs that are reasonable and necessary 
for the diagnosis or treatment of illness or injury.  The provision of medically 
unnecessary or substandard care exposes patients to health risks and imposes needless 
expenses on the Federal health care programs.    
 
The Government has pursued this civil cause of action only in cases that involve systemic 
and widespread problems of quality or significant harm to patients.  For example,  United 
Memorial Hospital in Michigan pleaded guilty in Federal court to wire fraud based on its 
failure to properly investigate medically unnecessary pain management procedures 
performed by a physician on its medical staff.  In another case, Redding Medical Center 
in California and its corporate parent, Tenet Healthcare Corporation, paid a total of   
$59.5 million to settle False Claims Act allegations that the hospital inadequately 
performed credentialing and peer review of cardiologists on its staff who then performed 
medically unnecessary invasive cardiac procedures.  
 
In another example, the Government settled a False Claims Act case with Life Care of 
Lawrenceville, a Georgia nursing home, for $2.5 million.  The Government alleged poor 
care in the following areas:  (1) diabetes care, (2) resident nutrition and hydration,         
(3) assessments and evaluations of residents needs, (4) care planning and nursing 
interventions, (5) medication management, (6) fall prevention and management, and  
(7) pressure ulcer care.  Many of the problems were related to chronic understaffing.  
Among the examples of poor care alleged by the Government, a resident on coumadin 
medication died of toxic poisoning because the facility staff failed to check his blood 
levels.  Another resident allegedly fell four times during her 4-month stay and fractured 
 
Senate Special Committee on Aging  
Hearing:  July 18, 2007    Page 7  and refractured her hip.  Still another resident allegedly developed maggots in her mouth 
and died of larvae infestation because the facility staff failed to provide basic oral 
hygiene care. 
 
Federal prosecutors in Missouri charged American Healthcare Management (AHM), a 
long-term care facility management company, its Chief Executive Officer, and three 
nursing homes with criminal conspiracy and health care fraud based on their imposition 
of budgetary constraints that prevented the facilities from providing adequate care to 
residents.  The investigation found that numerous residents suffered from dehydration 
and malnutrition, went for extended periods of time without cleaning or bathing, and 
contracted preventable pressure sores.  The corporate defendants were convicted and 
fined, entered into a False Claims Act settlement of $1.25 million, and agreed to be 
excluded.  The primary owner was convicted of a false statement misdemeanor offense, 
sentenced to 2 months incarceration, and agreed to be excluded for 20 years.  Finally, in 
February 2007, AHMs former CEO was sentenced to 18 months of incarceration and 
fined $29,000.   
 
In addition to our close collaboration with DOJ on these Federal cases, since the 
enactment of the Deficit Reduction Act of 2005, OIG has increased coordination with 
MFCUs, with particular focus on quality of care investigations.  As part of these efforts, 
OIG organized a September 2006 national training conference with representatives from 
MFCUs, State Medicaid agencies, and DOJ.  Since that time, OIG has continued this 
collaboration in regional conferences with MFCU and OIG investigators focusing on how 
to identify and build quality of care cases. 
 
Exclusions 
 
In addition to the administrative sanctions available to CMS and the States and the 
criminal and civil tools available to the States and DOJ, OIG often utilizes its 
administrative exclusion authority to address poor quality of care.  Once a person is 
excluded, Federal health care programs will not pay for items or services furnished by 
that person.  Exclusions related to quality of care arise in the following situations: 
  OIG must exclude any person convicted of an offense related to the abuse or 
neglect of a patient in connection with the delivery of health care (Section 
1128(a)(2) of the Social Security Act). 
  OIG may exclude any person whose license to practice health care has been 
revoked or suspended for reasons bearing on the persons professional 
competence or professional performance (Section 1128(b)(4) of the Social 
Security Act). 
  OIG may exclude any person who has furnished items or services to patients:    
(1) substantially in excess of the needs of such patients or (2) that fail to meet 
professionally recognized standards of care (Section 1128(b)(6)(B) of the Social 
Security Act).  
 
Senate Special Committee on Aging  
Hearing:  July 18, 2007    Page 8    Based on the referral of a QIO, OIG may exclude a physician or other practitioner 
for failing to comply with the obligations to provide Medicare beneficiaries only 
medically necessary services that meet professionally recognized standards of 
care (Section 1156 of the Social Security Act).   
  OIG may exclude anyone who has caused the submission of false or fraudulent 
claims to a Federal health care program (Section 1128(b)(7) of the Social Security 
Act).  This provision parallels the False Claims Act and is implicated in any case 
in which the Government is asserting a failure-of-care theory in a civil case.  
 
The exclusion actions described above fall under two broad categories:  (1) derivative 
(based on an action by another Government agency or tribunal) and (2) affirmative 
(initiated independently by OIG).  OIG has exercised all of these exclusion authorities to 
build upon and supplement enforcement actions taken by States, CMS, and DOJ.  To 
provide protection to Federal health care program beneficiaries, OIG imposes derivative 
exclusions of persons who have been convicted of patient abuse or neglect or who have 
lost medical, nursing, or other health care licenses for reasons related to abuse or neglect 
of patients or professional competence.  In fiscal year 2006, OIG excluded 295 persons 
based on convictions of patient abuse or neglect and 1,867 persons based on revocation 
or loss of a health care license.    
 
In addition to imposing these large numbers of derivative exclusions, OIG initiates 
affirmative exclusions to strategically address serious quality-of-care concerns that have 
not been addressed through other enforcement actions.  And, just as we exclude direct 
caregivers who pose a risk to patients, OIG investigates the owners and managers who 
are responsible for allowing the abuse of patients or provision of substandard care, as 
well as entities that have demonstrable, systemic poor quality of care.  For example, OIG 
excluded a nursing home owner for causing the provision of substandard care in his 
facilities as a result of providing insufficient staffing and financial support.  Because, the 
owner was not a licensed health care professional (or nursing home administrator), the 
exclusion was the best remedy to bar him from involvement in Federal health care 
programs.  In another example, OIG initiated proceedings to exclude Redding Medical 
Center for conduct that resulted in the $59.5 million False Claims Act recovery.  As 
described earlier, the Government found a pattern of inappropriate and medically 
unnecessary invasive heart procedures and a lack of appropriate controls to detect and 
address such problems.  To resolve OIGs exclusion case, Tenet divested the hospital to a 
new owner/operator.   
Corporate Integrity Agreements 
 
As part of the resolution of False Claims Act cases, OIG often agrees to not exclude a 
defendant in exchange for the defendant entering into a corporate integrity agreement 
(CIA) with OIG.  A CIA is a contract that imposes systems, monitoring, and reporting 
requirements on providers.  A CIA generally requires the entity to employ a compliance 
officer, establish a compliance committee, implement a code of conduct and policies and 
procedures, train staff, establish internal reporting mechanisms for compliance issues, 
 
Senate Special Committee on Aging  
Hearing:  July 18, 2007    Page 9  report and repay overpayments, screen employees and contractors to prevent hiring of 
excluded persons, report and remedy probable violations of law, and hire an independent 
review organization to review claims submitted to Federal health care programs.  The 
entity must also report to OIG annually and when certain significant events occur.  If the 
entity fails to comply with the CIA, OIG may impose stipulated monetary penalties and, 
for substantial material breaches, exclusion.  OIG currently monitors about 350 health 
care entities of all types operating under CIAs. 
 
In CIAs arising from failure of care cases, OIG has also required the providers, often 
nursing home chains, to hire independent quality monitors selected by OIG.  These 
quality-of-care CIAs place particular emphasis on the providers policies and systems 
that affect the quality of care provided to individual patients.  Under these CIAs, the 
monitors have extensive access to facilities, staff, patients, and records.  Using that 
access, survey results, and other quality-related data, the monitors identify quality 
problems and, in consultation with the provider, recommend enhancements to systems 
and controls to improve the quality of care.  The independent monitors effectively build 
upon and complement the actions of surveyors, who are necessarily focused on specific 
incidents at specific facilities.  By examining and consulting on systems improvements 
and controls throughout an organization, quality-of-care CIAs help create an environment 
that promotes better care throughout a provider, whether it is a single site or a national 
chain.        
  
Over the last 7 years, many major nursing home chains, smaller groups, and individual 
health care facilities have operated under CIAs with independent quality monitors.  Since 
2002, over 1,300 health care facilities, mostly nursing homes, have operated for some 
period of time under a quality-of-care CIA.  OIG currently has 10 CIAs with nursing 
homes and psychiatric facilities (or chains) with independent quality monitor 
requirements.  These 10 active quality-of-care CIAs cover operations in about 400 long-
term care and psychiatric facilities across the country.  In addition to conducting our 
ongoing monitoring efforts, OIG is examining the performance of nursing home chains 
operating under CIAs over the past several years to evaluate the effect of those CIAs on 
the quality of care and compliance by those chains. 
 
 
COMPLIANCE GUIDANCE AND RESOURCES 
 
In addition to conducting enforcement activities, OIG provides nonbinding guidance to 
providers regarding how to establish systems and controls to promote and monitor 
compliance with Federal health care program requirements.  Much of this voluntary 
guidance focuses on the importance of providing high quality health care to patients.  For 
example, in the Compliance Program Guidance for Nursing Facilities, OIG identified 
quality of care as the first major risk area and outlined specific examples of 
circumstances that raised significant compliance concerns.  This guidance next outlined 
the importance of safeguarding residents rights.  As part of our ongoing review of 
existing guidance in light of current concerns, OIG plans to begin the process of 
proposing and issuing an updated guidance for nursing facilities that will focus even 
 
Senate Special Committee on Aging  
Hearing:  July 18, 2007    Page 10  more on quality-of-care issues.  These compliance guidance documents provide concrete 
information that can be applied by a providers management to its own circumstances. 
 
OIG has more recently increased its focus on the role of boards of directors or trustees in 
promoting and overseeing compliance and quality of care at health care providers.  It is 
essential that members of boards of health care providers focus at least as much attention 
on the quality of care furnished by the provider as on financial performance.  Like direct 
caregivers, those responsible for overseeing a health care provider have an obligation to 
safeguard patients and ensure the resources and conditions are present to allow for the 
provision of high quality care.  Last month, OIG issued a resource document for board 
members of health care providers, Corporate Responsibility and Health Care Quality:  A 
Resource for Health Care Boards of Directors.  This document, developed jointly with 
leaders in the American Health Lawyers Association, outlines the relevant background 
and principles that apply to a board members responsibility to oversee the quality of care 
furnished by a health care provider.  The resource document suggests questions that a 
board member may want to ask as part of his or her inquiry into the organizations quality 
safeguards.  These questions focus on the quality improvement infrastructure, leadership, 
policies and procedures, performance metrics, risk assessment, reporting mechanisms, 
resources, peer review and credentialing, and the handling of adverse patient events.   
 
OIG plans to build on this recently issued resource document through holding a future 
roundtable discussion including representatives from the long-term care industry, OIG, 
and other stakeholders.  This roundtable will explore the reasons that providing good 
quality of care is not only the right thing to do for the benefit of the patients but is also in 
the long-term interests of the provider.  One goal of this roundtable will be to generate 
practical, concrete ideas regarding how board members can receive useful information 
about quality to fulfill their oversight role.  One concept we plan to explore in this 
roundtable is guidance on how to construct a dashboard that would allow board 
members (and management) to monitor a discrete set of indices that reflect on the quality 
of care provided by the organization.  After reviewing the results of this roundtable 
examining long-term care facilities, we hope to initiate a similar dialogue with 
representatives of the hospital industry and other provider groups.  These efforts should 
raise board and management awareness of the importance of quality care as well as 
provide practical guidance to those individuals in positions of authority about how they 
can monitor and improve the quality of care. 
 
 
CONCLUSION 
 
Today I have described some egregious examples of abuse and neglect of the elderly, 
with the results ranging from dehydration and malnutrition to the provision of 
unnecessary heart surgery.  I have also described our extensive work examining the 
oversight and enforcement systems designed to identify and prevent the continuation of 
abuse in a variety of health care settings, and our work with our law enforcement partners 
to investigate and sanction cases of abuse or neglect.   
 
 
Senate Special Committee on Aging  
Hearing:  July 18, 2007    Page 11  We are continuing to evaluate systemic issues that directly affect patient care.  For 
example, studies are currently underway to examine the cyclical noncompliance of home 
health agencies with conditions of participation, the use of psychotherapy services in 
nursing homes, payments and care for hospice beneficiaries residing in nursing homes, 
the oversight of quality of care in Federal health centers, and the impact of Medicare Part 
D on dual eligible residents in nursing homes.  OIG is also undertaking a congressionally 
mandated review of serious medical errors, referred to as never events, because they 
should never occur, for example, a physician performing surgery on the wrong patient.  
  
OIG will continue to work collaboratively with our Federal and State law enforcement 
partners to investigate and sanction those responsible for egregiously substandard care.   
In addition to direct care-givers, OIG will also hold managers and decision-makers 
accountable when beneficiaries are harmed as a consequence of placing financial 
interests over clinical needs.  Because of the vulnerability of nursing home residents, we 
will continue our focus on quality of care in these facilities.  As we look forward, we 
expect to expand our focus on quality of care to other types of facilities serving the 
elderly that are funded through the Federal health care programs, including Intermediate 
Care Facilities for People with Developmental Disabilities and Institutions for Mental 
Disease.   
 
We recognize that these oversight mechanisms and enforcement actions are designed to 
identify and address quality-of-care problems after they have already occurred.  
Therefore, OIG is committed to working with stakeholders including Congress and 
industry representatives to identify practices that will help prevent these types of abuses 
from occurring.  For instance, we have recommended establishing a national nurse aide 
registry and requiring long-term care facilities to conduct criminal background checks, 
steps that would help to ensure that this Nations elderly are not exposed to those who 
would take advantage of their vulnerabilities.   
  
In the next step of our ongoing efforts to provide guidance to the health care providers, 
we will build upon our recently issued resource document and engage in a dialogue with 
stakeholders about quality measures and how board members can effectively oversee the 
quality of care provided by their health care organizations.  The guidance that arises from 
this process, as well as from the updating of our compliance program guidance for 
nursing facilities, will provide practical information about how leaders of health care 
providers can implement the systems, policies, and controls that will improve the quality 
of care and reduce the risk of abuse of patients.  
 
 
--------- 
 
This concludes my statement.  Thank you for the opportunity to testify today.   
 
At this time, I would be happy to answer any questions you may have. 
 
Senate Special Committee on Aging  
Hearing:  July 18, 2007    Page 12   
Selected Reports and Resources 
U.S. Department of Health and Human Services 
Office of Inspector General 
 
 
Consecutive Medicare Stays Involving Inpatient and Skilled Nursing Facilities (OEI-07-
05-00340; June 2007) http://oig.hhs.gov/oei/reports/oei-07-06-00340.pdf
Corporate Responsibility and Health Care Quality:  A Resource for Health Care Boards 
of Directors, June 2007 
http://oig.hhs.gov/fraud/docs/complianceguidance/Corporate%20Responsibility%20and
%20Health%20Care%20Quality%206-29-07.pdf
Medicare Hospices:  Certification and Centers for Medicare & Medicaid Services 
Oversight (OEI-06-05-00260; April 2007) http://oig.hhs.gov/oei/reports/oei-06-05-
00260.pdf
States Provider Safeguards for Medicaid Personal Care Services (OEI-07-05-00250; 
December 2006) http://oig.hhs.gov/oei/reports/oei-07-05-00250.pdf  
Nursing Home Complaint Investigations (OEI-01-04-00340; July 2006) 
http://oig.hhs.gov/oei/reports/oei-01-04-00340.pdf
Beneficiary Access to Home Health Agencies (OEI-02-04-00260; July 2006) 
http://oig.hhs.gov/oei/reports/oei-02-04-00260.pdf
Medicare Beneficiary Access to Skilled Nursing Facilities Under the Prospective 
Payment System (OEI-02-04-00270; July 2006) http://oig.hhs.gov/oei/reports/oei-02-04-
00270.pdf  
Nursing Home Enforcement:  Application of Mandatory Remedies (OEI-06-03-00410; 
May 2006) http://oig.hhs.gov/oei/reports/oei-06-03-00410.pdf
Effect of the Home Health Prospective Payment System on the Quality of Home Health 
Care (OEI-01-04-00160; February 2006) http://oig.hhs.gov/oei/reports/oei-01-04-
00160.pdf
Nurse Aide Registries:  Long Term Care Facility Compliance and Practices (OEI-07-04-
00140; July 2005) http://oig.hhs.gov/oei/reports/oei-07-04-00140.pdf
 
Senate Special Committee on Aging  
Hearing:  July 18, 2007    Page 13  Adequacy of New York States Medicaid Payments to A. Holly Patterson Extended Care 
Facility (A-02-03-01004; April 2005) 
http://oig.hhs.gov/oas/reports/region2/20301004.pdf
Nursing Homes Enforcement:  The Use of Civil Money Penalties (OEI-06-02-00720; 
April 2005) http://oig.hhs.gov/oei/reports/oei-06-02-00720.pdf  
Adequacy of Tennessees Medicaid Payments to Nashville Metropolitan Bordeaux 
Hospital, Long-Term-Care Unit (A-04-03-03023; April 2005) 
http://oig.hhs.gov/oas/reports/region4/40303023.pdf
Adequacy of Washington States Medicaid Payments to Newport Community Hospital, 
Long-Term-Care Unit (A-10-04-00001; March 2005) 
http://oig.hhs.gov/oas/reports/region10/100400001.pdf
Nurse Aide Registries:  State Compliance and Practices (OEI-07-03-00380; February 
2005) http://oig.hhs.gov/oei/reports/oei-07-03-00380.pdf
Adequacy of Medicaid Payments to Albany County Nursing Home (A-02-02-01020; 
June 2004)  http://oig.hhs.gov/oas/reports/region2/20201020.pdf
Nursing Home Deficiency Trends and Survey and Certification Process Consistency 
(OEI-02-01-00600; March 2003) http://oig.hhs.gov/oei/reports/oei-02-01-00600.pdf
Final Compliance Program Guidance for Nursing Facilities  (65 FR 14289; March 16, 
2000) http://oig.hhs.gov/authorities/docs/cpgnf.pdf
 
 
 
 
Senate Special Committee on Aging  
Hearing:  July 18, 2007    Page 14