Department of Health and Human Services

OFFICE OF 

INSPECTOR GENERAL 

S R
TATE  EFERRAL OF

N H
URSING  OME 

E C
NFORCEMENT  ASES

Daniel R. Levinson 

Inspector General 

December 2005

OEI-06-03-00400
 Office of Inspector General 

http://oig.hhs.gov 
The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, 
as amended, is to protect the integrity of the Department of Health and Human Services 
(HHS) programs, as well as the health and welfare of beneficiaries served by those 
programs.  This statutory mission is carried out through a nationwide network of audits, 
investigations, and inspections conducted by the following operating components: 
Office of Audit Services 
The Office of Audit Services (OAS) provides all auditing services for HHS, either by 
conducting audits with its own audit resources or by overseeing audit work done by others. 
Audits examine the performance of HHS programs and/or its grantees and contractors 
in carrying out their respective responsibilities and are intended to provide independent 
assessments of HHS programs and operations in order to reduce waste, abuse, and 
mismanagement and to promote economy and efficiency throughout HHS. 
Office of Evaluation and Inspections 
The Office of Evaluation and Inspections (OEI) conducts management and program 
evaluations (called inspections) that focus on issues of concern to HHS, Congress, and 
the public.  The findings and recommendations contained in the inspections generate 
rapid, accurate, and up-to-date information on the efficiency, vulnerability, and 
effectiveness of departmental programs.  OEI also oversees State Medicaid Fraud 
Control Units which investigate and prosecute fraud and patient abuse in the Medicaid 
program. 
Office of Investigations 
The Office of Investigations (OI) conducts criminal, civil, and administrative 
investigations of allegations of wrongdoing in HHS programs or to HHS beneficiaries 
and of unjust enrichment by providers.  The investigative efforts of OI lead to criminal 
convictions, administrative sanctions, or civil monetary penalties. 
Office of Counsel to the Inspector General 
The Office of Counsel to the Inspector General (OCIG) provides general legal services to 
OIG, rendering advice and opinions on HHS programs and operations and providing all 
legal support in OIG's internal operations. OCIG imposes program exclusions and civil 
monetary penalties on health care providers and litigates those actions within HHS. 
OCIG also represents OIG in the global settlement of cases arising under the Civil False 
Claims Act, develops and monitors corporate integrity agreements, develops compliance 
program guidances, renders advisory opinions on OIG sanctions to the health care 
community, and issues fraud alerts and other industry guidance.    EE XX EE CC UU TT II VV EE    SS UU MM MM AA RR YY   

OBJECTIVE 
To determine the extent to which State survey agencies refer nursing 
home enforcement cases, as required, to the Centers for Medicare & 
Medicaid Services (CMS). 
BACKGROUND 
The Omnibus Budget Reconciliation Act of 1987 established a survey 
and certification process to maintain Federal standards in nursing 
homes certified for participation in the Medicare and/or Medicaid 
programs. CMS has the responsibility for enforcement at the Federal 
level and contracts with States to survey facilities to certify compliance.  
Deficiencies in patient care are considered in conjunction with facility 
history to determine any CMS enforcement action.   
For CMS to enforce standards, States are required to refer three types 
of cases to CMS:  immediate jeopardy cases, which involve actual (or 
potential for) death or serious injury; double G cases, which identify 
facilities with a historical pattern of high-level noncompliance; and 
opportunity to correct cases, which involve facilities failing to correct 
less severe problems within a given timeframe. 
For this inspection, we identified cases between July 2002 and June 
2003 that were not referred, reviewed documentation for these cases 
from CMS and States, and interviewed CMS and State staff.   
FINDINGS 
States failed to refer almost 8 percent of required nursing home 
enforcement cases. Although States referred most nursing home cases 
warranting enforcement during the study period, we estimate that        
7.6 percent of cases were not referred.  Two problems accounted for        
78 percent of nonreferrals:  difficulty identifying double G cases and 
attempted referrals that were not recognized as such by CMS. The 
remaining nonreferrals were caused by random human error and a 
variety of other, less common policy and procedural problems. 
Difficulty identifying double G cases, resulting from problems with 
reviews of facility history, caused 47 percent of nonreferrals.  Double 
G cases require that State staff review facility history to establish a 
pattern of noncompliance.  We found two primary difficulties in properly 
identifying double G cases during these reviews:  State staff did not 
OEI-06-03-00400  STATE REFERRAL OF NURSING HOME ENFORCEMENT CASES  i  E X E C U T I V E   S U M M A R Y

conduct a thorough review to detect all prior high-level deficiencies, and 
State staff misunderstood the fairly complex double G criteria.  There is 
also evidence that these criteria are not completely clear to some CMS 
regional office staff.  In 21 percent of double G cases that were not 
referred, State staff received incorrect or insufficient guidance from 
CMS. 
Unsuccessful referrals, resulting in 31 percent of nonreferrals, were 
those attempted by States but not recognized as referrals by CMS. 
For these cases, States documented that they provided a referral to CMS, 
but CMS staff reported they never received the referral.  When we 
pursued these cases further, we found that either the methods States 
used to refer the cases were inadequate to alert CMS staff that a referral 
had been made, or that States sent sufficient documentation but the 
referrals were still missed.  Neither States nor CMS reported having a 
routine process for verifying whether CMS received referrals. 
RECOMMENDATIONS 
CMS should address the failure to identify double G cases.  CMS 
should clarify and communicate specific criteria for identifying double G 
cases to both State and CMS regional office staff, focusing on common 
areas of misunderstanding.  CMS should also provide technical 
assistance to States to assist in improving State reviews of facility 
history which would identify double G cases. 
CMS should address the incidence of attempted but unsuccessful 
referrals by developing a uniform referral process. To ensure that all 
State referrals are received, CMS should implement a uniform referral 
process that could include a standard referral document or an automated 
referral mechanism within the enforcement data system shared by States 
and CMS.  CMS should also develop a method for verifying that cases 
referred by States are received by CMS. 
AGENCY COMMENTS 
CMS concurred with our recommendations.  The agency further 
commented that it has recently or will soon implement all of the Office 
of Inspector Generals recommendations. 
OEI-06-03-00400  STATE REFERRAL OF NURSING HOME ENFORCEMENT CASES  ii    T A B L E   O F   C O N T E N T S  

EXECUTIVE SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i

I N T RO DUC T IO N  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  1

F I N D IN G S  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  6

Incidence of nonreferral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  6

Causes of nonreferral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  6

  DoubleGcases  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  7

Attempted but unsuccessful referrals  . . . . . . . . . . . . . . . . . . . . . . .  9

R E C O MMEN D A T ION S  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  11

E N D NO T ES  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  14

APPENDIXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  16

A:  DetailedMethdology. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  16

B:  Confidence Intervals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  22

C:  Other Policy and Procedural Problems. . . . . . . . . . . . . . . . . . .  23

D:  DoubleG Case Example . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  25

E:  AgencyComments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  26

A C K NO WL E D G M E N T S  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  30
   I N T R O D U C T I O N  

OBJECTIVE 
To determine the extent to which State survey agencies refer nursing 
home enforcement cases, as required, to the Centers for Medicare & 
Medicaid Services (CMS). 
BACKGROUND 
Enforcement Process 
The Social Security Act (the Act) establishes requirements for nursing 
home participation in the Medicare and Medicaid programs. The 
Secretary is responsible for ensuring that these requirements and their 
enforcement are adequate to protect the health, safety, welfare, and 
rights of residents and to promote the effective and efficient use of public 
moneys.1  The Omnibus Budget Reconciliation Act of 1987 establishes a 
survey and certification process for CMS and States to use to verify that 
Federal standards are maintained in nursing homes certified for 
participation in the Medicare and/or Medicaid programs.  
CMS has primary responsibility for enforcement of these standards, and 
contracts with State survey and certification agencies to survey each 
facility no less than once every 15 months to certify compliance with 
Federal standards.2  Surveyors revisit noncompliant facilities to 
determine whether deficiencies have been corrected and to investigate 
complaints.  These surveys are abbreviated versions of the standard 
surveys. Any deficiency in quality of care, safety, or patient rights, as 
determined through these surveys, may lead to CMS enforcement actions.  
Deficiencies identified during any facility survey are evaluated against a 
set of factors to determine a scope and severity rating.3  The Scope and 
Severity Grid (Table 1) ranks deficiencies according to how widespread 
they are and their outcomes, such as harm to residents.4  The scope and 
severity levels of the deficiencies are considered in conjunction with the 
facilitys compliance history to determine the enforcement actions taken 
by CMS, including imposing remedies such as denial of payment and civil 
money penalties.5  Successful referral of nursing home enforcement cases 
by States is essential to CMSs efforts to enforce Federal standards of 
care. 
OEI-06-03-00400  STATE REFERRAL OF NURSING HOME ENFORCEMENT CASES  1  I N T R O D U C T I O N

 Table 1: Scope and Severity Grid for Deficiencies 
Deficiency Scope 
  Deficiency Severity 
Isolated  Pattern  Widespread
  Actual or potential for death or serious 
J  K  L 
  injury (immediate jeopardy) 
  Actual harm that is not immediate jeopardy  G  H  I 
  Potential for more than minimal harm  D  E  F 
Potential for minimal harm; substantial 
A  B  C 
compliance exists 
Source: CMS State Operations Manual, Chapter 7. 
Case Referral Requirements   
States are required by CMS to refer three types of enforcement cases to 
CMS regional offices, as described below.  When CMS receives such a 
referral, case information is entered into the Long Term Care 
Enforcement Tracking System (LTC), a compilation of each regions 
nursing home enforcement case files. Once a case is referred, CMS 
considers the State recommendations and imposes remedies on the 
facility. An enforcement case includes all enforcement activity with 
respect to a particular facility during a continuous period of 
noncompliance, which enforcement staff refer to as a cycle.6  The three 
types of cases requiring referral are: 
Immediate Jeopardy Cases. These are cases in which there is actual (or 
potential for) death or serious injury.  They involve the highest level of 
noncompliance by a facility, i.e., scope and severity ratings of J, K, and L.  
States must refer these facilities to CMS within 2 calendar days of finding 
the deficiency so that CMS can initiate required enforcement activities.7 
Because of the severity of noncompliance, CMS will terminate the 
Medicare contract of facilities with immediate jeopardy citations lasting 
23 days or more. 
Double G Cases.8 The Poor Performer Rule was developed in 1998 as a 
method for identifying historical patterns of high-level noncompliance by 
facilities and expanded in 1999 to the Double G Rule.9  The expanded rule 
OEI-06-03-00400  STATE REFERRAL OF NURSING HOME ENFORCEMENT CASES  2  I N T R O D U C T I O N  
requires States to establish a double G case when a facility is cited for  
G-level or higher deficiencies on two surveys, hence the term double G. 10 
When a G-level deficiency is cited on a current survey, State staff must 
review facility history to determine whether the facility was previously 
cited with a G-level deficiency.  However, not all G-level deficiencies found 
in facility histories count toward a double G.  Therefore, establishing a 
double G case hinges on correct identification of the prior G.   
Double G criteria are defined as follows:  double G cases are established 
when G-level deficiencies are cited on a current survey and on a prior 
survey. These surveys can be standard, complaint, or revisit surveys. 
Prior G-level deficiencies count toward establishing a case if they were 
cited on the most recent completed standard survey (completed indicating 
that compliance was eventually achieved).  Prior G-level deficiencies also 
count if they were cited on any intervening survey between the most 
recently completed standard survey and the current survey, as long as 
they are not in the same period of noncompliance as the current survey.  
(A pattern of noncompliance is indicated when the two G-level deficiencies 
occur in separate periods of noncompliance.)   
Opportunity to Correct Cases. For most cases that are not rated as 
immediate jeopardy or double G, facilities are provided an opportunity to 
correct problems.  In these cases, facilities are allowed a period during 
which they can come into compliance without the involvement of CMS.  
Upon revisit by State surveyors, if deficiencies at a scope and severity 
level of D or above are not corrected, States are required to refer the case 
to CMS. Generally, States are expected to conduct the revisit within 60 
days of the initial finding of noncompliance.  Then, if referral is needed, 
States are required to refer the case to CMS within 70 days of the initial 
finding of noncompliance. Adherence to this timeframe is important 
because it provides CMS time to impose a denial of payment for new 
admissions by the 90th day of noncompliance, as required in the Act.11 
The Referral Process  
The term referral describes the process by which State survey agencies 
notify CMS about cases of noncompliance and recommend enforcement 
actions.  Without a successful referral, CMS cannot fulfill its obligation to 
enforce Medicare standards for nursing homes. For the purposes of this 
report, a succesful referral indicates that the State agency appropriately 
identified the case as requiring CMS involvement and provided CMS with 
sufficient information to alert them to begin the enforcement process. To 
assist in determining case referrals, CMS provides guidance to States 
through written instructions provided in the State Operations Manual 
OEI-06-03-00400  STATE REFERRAL OF NURSING HOME ENFORCEMENT CASES  3  I N T R O D U C T I O N  
(SOM) and ongoing dialogue between State and CMS regional office staff. 
Once the case is referred, CMS determines what enforcement action to 
take and imposes remedies. 
Shared Data Systems  
After referral, case information is maintained through data systems 
shared by CMS and States. Traditionally, CMS has used the Online 
Survey, Certification and Reporting System (OSCAR) to record the results 
of standard, complaint, and revisit surveys.  In October 2004, CMS 
completed national implementation of the new Automated Survey 
Processing Environment (ASPEN) Enforcement Manager (AEM).  The 
ASPEN is used by CMS and States to record and access both survey 
results and enforcement data.  State surveyors enter survey findings into 
a local ASPEN database, then upload the data into a central ASPEN 
system and also into OSCAR.   
CMS Oversight 
Although there is no explicit requirement that CMS oversee State referral 
of nursing home enforcement cases, the Act gives CMS responsibility for 
enforcing Federal requirements regarding the health and safety of 
nursing home residents.12  The Act also specifies that States must assist 
in enforcement procedures as part of the survey process.13 State 
performance in survey and certification is evaluated annually through 
State Performance Reviews (SPR), which are conducted by CMS regional 
offices and include general performance standards.  One of the SPR 
standards addresses the referral process, but only with regard to the 
timeliness of referrals. 
METHODOLOGY 
To determine the extent to which States refer required nursing home 
enforcement cases to CMS, we analyzed available administrative data 
and reviewed case documents obtained from CMS regional offices and 
State agencies.  Based on our initial review of OSCAR data, we identified 
3,663 cases believed to require referral as the result of Medicare 
certification surveys conducted between July 1, 2002, and June 30, 2003.  
A review of the regionally based LTC revealed evidence of referral for 
3,106 of those cases.  Timeliness of those referrals was not assessed. 
For the remaining 557 cases, we selected a stratified random sample 
consisting of 200 records for further investigation.  Stratification was 
based on the case type (i.e., immediate jeopardy, double G, or opportunity 
to correct) initially identified through analysis of the OSCAR data.  For 
OEI-06-03-00400  STATE REFERRAL OF NURSING HOME ENFORCEMENT CASES  4  I N T R O D U C T I O N  
each sample case, we requested case information and documentation of 
referral from State agencies and CMS regional offices.  Their combined 
responses were used to categorize each sample case into one of three 
categories:  successful referral, nonreferral (referral error), or did not 
require referral.  Referral errors were further evaluated to determine a 
primary cause of nonreferral and those causes were then explored during 
interviews with CMS and State staff.   
Our overall estimate reflects necessary adjustments to the population to 
remove cases found not to require referral.  Adjustments to the population 
had minimal impact on our estimates.  Additional information on 
adjustments and the specifics of our methodology are presented in 
Appendix A.  Confidence intervals for point estimates are provided in 
Appendix B. 
Quality Standards 
This study was conducted in accordance with the Quality Standards for 
Inspections issued by the Presidents Council on Integrity and Efficiency. 
OEI-06-03-00400  STATE REFERRAL OF NURSING HOME ENFORCEMENT CASES  5  F  I FN ID NI ND GI NS G  S  
States failed to refer almost 8 percent of cases  While States referred most of the cases 
warranting enforcement, thereby limiting CMSs  requiring referral to CMS during the 
study period, we found that 7.6 percent 
ability to address poor care at some facilities 
of enforcement cases (estimated 253 of 
3,323) were never referred or the attempted referral did not adequately 
alert CMS regional office staff that a referral was made.  Because CMS 
was not aware of these cases, the agency had no opportunity to address 
noncompliance. The potential result of not enforcing Federal standards is 
continued poor-quality care of residents in the facilities involved in these 
cases. 
States are required to refer three types of cases:  immediate jeopardy, 
double G, and opportunity to correct.  Immediate jeopardy casesoften 
the most serious cases, involving actual or the potential for death or 
serious injurythat were not referred included a case of a resident who 
sustained a bone-breaking fall as the result of a building hazard.  Double 
G casesthose with a pattern of noncompliancethat were not referred 
included citations for improper treatment of pressure sores and 
employment of staff previously found guilty of abuse.  Opportunity to 
correct casesthose involving deficiencies of a lower scope and severity 
that were not corrected over timethat were not referred included a case 
of inappropriate use of physical restraints. 
For the 7.6 percent of enforcement 
Two causes accounted for 78 percent of 
cases not referred, two problems 
nonreferrals:  difficulty identifying double G  
emerged as the primary causes of 
cases and attempted referrals that were not 
nonreferrals (see Chart 1 on page 7). 
recognized as such by CMS staff 
Difficulty identifying double G cases 
was the most prominent cause, accounting for 47 percent of total 
nonreferrals.  Unsuccessful referrals accounted for 31 percent of total 
nonreferrals and occurred when States attempted to refer a case but the 
referral was not recognized as such by CMS regional office staff.   
An additional 9 percent of total nonreferrals were due to random human 
error. We found no patterns indicating systemic problems in these cases 
and we do not discuss them further.  The remaining 13 percent of 
nonreferrals were the result of less-common policy and procedural 
problems, primarily involving incorrect decisions to not refer cases or to 
delay referral. Detailed descriptions of these problems are included in 
Appendix C. 
OEI-06-03-00400  STATE REFERRAL OF NURSING HOME ENFORCEMENT CASES  6  F I N D I N G S  

CHART 1 
CAUSES OF 
Unsuccessful 
NONREFERRALS OF  Referral 
NURSING HOME  31% 
ENFORCEMENT CASES 
Difficulty 
Identifying 
Double G 
47% 
Other Policy 
and
Random 
Procedural 
Human Error 
Problems 
9% 
13% 
Source: OIG analysis of 125 cases requiring referral, July 2002June 2003. 
Double G Cases 
Difficulty identifying double G cases, which account for 47 percent of 
nonreferrals, resulted from problems with reviews of facility history.  
Because double G cases are based on establishing a pattern of high-level 
noncompliance, identifying double G cases requires that State staff review 
facility survey history to determine if a prior G-level deficiency has been 
cited and whether the case should be referred. State staff must follow 
specific criteria for determining whether G-level deficiencies previously 
cited for the facility count toward a double G designation.  We found two 
difficulties in identifying double G cases:  staff did not conduct a thorough 
review of facility history (34 percent), and staff misunderstood Federal 
double G criteria (13 percent). 
State staff missed prior G-level deficiencies when conducting reviews of 
facility history 
In our case reviews, we found that 34 percent of nonreferrals resulted 
from State staff failing to identify a G-level deficiency from a prior survey.  
When staff offered an explanation, they either reported that they 
neglected to review the facility survey history, or that they reviewed the 
history but missed the prior deficiency.  CMS staff confirmed in 
interviews that it can be difficult to find prior G-level deficiencies in 
survey records.   
Based on case reviews and interviews with CMS and State staff, the 
following two factors contribute to staff missing prior G-level deficiencies 
during reviews of facility survey history:  
OEI-06-03-00400  STATE REFERRAL OF NURSING HOME ENFORCEMENT CASES  7  F I N D I N G S  
Facilities with many surveys can have complicated histories. Cases in our 
sample had as many as 12 surveys for State staff to review for a single 
facility (including standard and complaint surveys, as well as revisits), 
each with varying levels of deficiencies and encompassing multiple 
periods of noncompliance.  In these cases, determining whether a prior 
G-level deficiency meets Federal double G criteria requires substantial 
and careful scrutiny of survey records.  
OSCAR and ASPEN data can be inaccurate. State staff reported that they 
often rely on data in OSCAR and ASPEN to review facility histories, yet 
prior G-level deficiencies were not always included in database records of 
cases in our sample.  In interviews, State and CMS staff identified the 
following potential causes of inaccurate data:  State staff not entering 
survey data timely due to workload, neglecting to upload data into the 
national ASPEN and OSCAR databases after entering the data in their 
local ASPEN system, failing to correct and resubmit data that were 
rejected in the uploading process as the result of errors, and failing to 
upload deficiencies retained after an informal dispute resolution.14 
State staff failed to identify double G cases due to misinterpretation of Federal 
double G criteria 
In some cases, we found that State staff misinterpreted Federal criteria 
for identifying double G cases.  Such errors accounted for 13 percent of 
total nonreferrals.  Both CMS and State staff reported that this 
misunderstanding is caused in part by the complexity of the double G 
criteria.  Correctly identifying a double G case requires that State staff 
fully understand which prior G-level deficiencies count toward a double G 
and correctly apply the criteria to individual cases. 
State staff responses in case reviews and interviews indicated a number 
of misunderstandings regarding double G criteria.  For example, staff in 
eight sample cases did not understand that the prior standard survey that 
creates the timeframe for review has to be the most recent completed 
standard surveymeaning the last one for which compliance was 
eventually achieved (see example in Appendix D).15  Other examples 
include the misperception that only deficiencies cited on standard surveys 
(not complaint or revisit surveys) should count toward a double G, and 
that the two G-level deficiency findings must involve the same specific 
deficiency (even though the nature of the deficiency does not matter). 
Other State staff reported they believed (incorrectly) that they should 
review all surveys in the same period of noncompliance as the most recent 
completed standard survey to find the prior G-level deficiency, rather 
OEI-06-03-00400  STATE REFERRAL OF NURSING HOME ENFORCEMENT CASES  8  F I N D I N G S  
than just looking to the most recent completed standard survey and any 
intervening surveys.  This misunderstanding could cause staff to count 
prior G deficiencies that were cited before the most recent completed 
standard survey but in the same period of noncompliance, inappropriately 
designating a double G to facilities that did not meet the criteria.  
Insufficient or incorrect guidance from CMS contributed to State staff 
misunderstanding of double G criteria 
Our case reviews and staff interviews revealed difficulties with CMS 
guidance to States.  We found that State staff involved in our sample 
cases had difficulty applying the written instructions in the SOM to the 
actual cases that they were reviewing.  The SOM provides only a brief 
description of double G criteria and does not provide examples of its 
application.16 A clarification was added to the manual in May 2004, but it 
addresses just one aspect of the criteria (that double G cases must involve 
two distinct cycles of noncompliance).17 
In addition to guidance provided in the SOM, State staff frequently 
contacted CMS regional offices for additional clarification when making 
double G determinations.  However, this guidance sometimes contributed 
to the misunderstanding of double G criteria.  Specifically, we found that 
in 21 percent of nonreferred double G cases, State staff received incorrect 
or incomplete guidance from CMS. Further, interviews with CMS 
regional office staff confirmed that they sometimes have the same 
difficulties as State staff in fully understanding and applying double G 
criteria.  For example, staff from 5 of the 10 CMS regional offices gave 
descriptions of double G criteria that were inconsistent with the criteria 
developed by the CMS central office and included in the SOM.18 
Attempted but Unsuccessful Referrals 
Thirty-one percent of nonreferrals were attempted by States but not 
recognized as referrals by CMS regional offices 
For these cases, States documented or attested that they provided some 
type of notice to CMS, but CMS regional office staff reported they never 
received the referral.  Unsuccessful referrals in our sample included all  
3 case types and 7 of the 10 CMS regions.  When we pursued these cases 
further, we found that either the methods States used to refer the cases 
were insufficient to alert CMS staff that a referral had been made, or that 
States sent sufficient documentation but CMS still missed the referrals.  
Neither States nor CMS reported having a routine process for verifying 
whether referrals are actually received. 
OEI-06-03-00400  STATE REFERRAL OF NURSING HOME ENFORCEMENT CASES  9  FFF III NNN DDD III NNN GGG SSS  
In 15 percent of nonreferrals, States only sent CMS a copy of the 
noncompliance letter that the State sent to the facility as notice of an 
enforcement action. Forwarding copies of these letters might appear to be 
an efficient way to alert CMS of the enforcement case because these 
letters include the deficiencies cited and the recommended remedies. 
However, CMS regional office staff reported they might miss these 
referrals because there is no clear request that action be taken by CMS, 
regional offices receive large volumes of mail, and letters may be 
intermingled with communication regarding other business. 
The remaining 16 percent of nonreferrals in this group were unsuccessful 
because, although States sent what appeared to be sufficient referrals, 
CMS staff still did not recognize them. While it is difficult to determine 
why this happened in specific cases, both CMS and State staff reported 
occasional careless practices that could cause missed referrals. Examples 
include a report of staff in one State mailing all referral documents in a 
large box at the end of each week with no cover letter or list of contents, 
and staff in one CMS regional office reporting that documents received on 
a shared fax machine are not always routed to the appropriate person to 
initiate enforcement. 
An underlying cause of unsuccessful referrals may be that CMS does not 
require States to use a uniform referral process or a standard referral 
document. Staff in four CMS regional offices reported that they do not 
specify any method or content for State referrals and that they will accept 
as sufficient a copy of the facility noncompliance letter or a brief e-mail 
message. However, even though these are considered acceptable referral 
methods, we documented cases sent to the regions by these methods that 
were not recognized by CMS staff as referrals. 
OEI-06-03-00400  STATE REFERRAL OF NURSING HOME ENFORCEMENT CASES  10    R E C O M M E N D A T I O N S  

Although successful referrals occurred in most cases, improvements could 
be made to the process to better ensure that all cases are referred.  Our 
recommendations speak to reinforcement of procedures or policies already 
in place that States and CMS staff do not always practice.  They address 
the following problems:  difficulty identifying double G cases and 
attempted referrals that are unsuccessful because they are not recognized 
as such by CMS staff.  
CMS should address the failure to identify double G cases by ensuring that 
CMS and State staff apply double G criteria correctly and by working with 
States to improve reviews of facility history 
CMS should clarify and communicate specific criteria for identifying double G 
cases.  Misunderstanding of the criteria for determining double G cases 
was a primary cause of nonreferral and was found among both State and 
CMS regional office staff.  CMS should clarify and communicate these 
criteria to staff, including ensuring that the SOM serves as a clear and 
practical guide to determining double G cases.  
Owing to the complexity of the double G criteria, clearer instruction may 
not completely alleviate problems. CMS might also wish to consider 
simplifying the double G criteria while still preserving their purpose of 
identifying facilities with a pattern of noncompliance.  
CMS should provide technical assistance to States to address inaccurate data. 
CMS and State staffs reported that inaccurate data in OSCAR and 
ASPEN contributed to staffs missing double G cases when reviewing 
facility histories.  CMS should ensure that States properly enter survey 
results in these databases and target specific problems raised by staff, 
such as not entering survey data timely, neglecting to upload data to the 
national ASPEN and OSCAR databases, failing to correct and resubmit 
data that were rejected as the result of errors, and failing to upload 
deficiencies retained after an informal dispute resolution.    
CMS should address the incidence of attempted but unsuccessful referrals 
by developing a uniform referral process and verifying that referrals are 
received 
Twenty-nine percent of State referrals were unsuccessful in alerting CMS 
that a referral was made.  To ensure that all State referrals are received, 
CMS should implement a uniform referral process.  This process could 
include a standard referral document that could be adapted to various 
State transmittal methods, such as mail, fax, or e-mail, yet still be easily 
recognized by CMS staff.  Alternatively, CMS could create an automated 
OEI-06-03-00400  STATE REFERRAL OF NURSING HOME ENFORCEMENT CASES  11  referral process in ASPEN that would notify regional offices of any 
enforcement case entered by State staff.  Regardless of the uniform 
process chosen, CMS should also develop a method for verifying that cases 
referred by States are received by CMS.  
AGENCY COMMENTS 
CMS concurred with each of our recommendations, and commented that it 
has recently or will soon take action related to each of them.  We agree 
that these actions will be useful in addressing the problems identified.  
However, based on our report findings, we are concerned that CMSs 
comments to the draft report may not fully address each recommendation.  
The areas that we continue to believe require additional attention by 
CMS are listed below: 
Double G Criteria 
In response to our recommendation that CMS should clarify and 
communicate specific criteria for identifying double G cases, CMS cited its 
May 2004 addition to the SOM, discussed on page 9 of this report.  This 
addition instructed State staff to ensure that the two G-level deficiencies 
that constitute a double G case are found in separate periods of 
noncompliance. While it is an important clarification, it addresses only 
one of several problems with interpretation of the double G criteria by 
State and CMS regional office staff. In conducting this study, we found it 
clear from our discussions with State and CMS staff that specific 
technical assistance or training, beyond the issuance of the SOM 
clarification, is needed to encourage proper application of the criteria and 
to address common areas of misunderstanding. 
We continue to recommend that the guidance provided to States, in the 
form of the language used in the SOM and the ongoing dialogue between 
State and CMS regional office staff, be improved to better clarify and 
communicate double G criteria. 
Inaccurate Data 
In response to the recommendation that CMS should provide technical 
assistance to States to address inaccurate data, CMS articulated steps 
taken to address data problems through full implementation of 
enforcement-related components of the ASPEN data system. We agree 
that the newly implemented data systems have the potential to help 
ensure that survey and enforcement case information is accurate, but 
CMS should specifically and proactively address problems with data 
accuracy to more fully alleviate them. 
OEI-06-03-00400  STATE REFERRAL OF NURSING HOME ENFORCEMENT CASES  12  AA GG EE NN CC YY    CC OO MM MM EE NN TT SS
CMS also addressed in its comments our finding that failing to upload 
case and survey information was a barrier to data accuracy, citing 
recently issued guidance to States regarding requirements for uploading 
data timely. We agree that this may improve State accountability in this 
area; however, other problems with data accuracy remain, including 
coordination among multiple points of data entry and problems with 
uploading data that are initially rejected by the data system. 
Attempted but Unsuccessful Referrals 
Regarding our recommendation that CMS should address the incidence of 
attempted but unsuccessful referrals, CMS referenced a specific field in 
the AEM that will allow regional office staff to identify cases that have 
been referred by States and anticipate their arrival. If used routinely, 
this would address the incidence of cases wherein States sent sufficient 
case information and the referral was not recognized as such by CMS, but 
it would not address cases that were not referred by States at all. CMS 
believes these nonreferred cases can be detected as regional office staff 
monitor key dates in the AEM. However, our understanding is that 
regional offices are not specifically tasked with such monitoring and are 
likely to do so only on an ad hoc basis, if at all. Therefore, CMS should 
direct regional offices to make full use of these promising tools. 
Technical Comments 
CMS submitted technical comments, and we have made changes where 
appropriate (which caused slight changes to some of the percentages CMS 
referenced in its comments). 
The full text of CMSs comments is presented in Appendix E. 
OEI-06-03-00400  STATE REFERRAL OF NURSING HOME ENFORCEMENT CASES  13    E N D N O T E S  

1 	 Section 1819 (f)(1) of the Social Security Act (SSA). 
2 	 42 CFR  488.330.  
3  42 CFR  488.404, 488.406, and 488.408; and the State Operations 
Manual (SOM), Chapter 7,  7400 (E)(3) (2003). 
4 SOM, Chapter 7,  7400 (E)(1) (2003). 
5 	 42 CFR  488.404 and 488.406.  
6  When the results of a survey indicate that a facility is not in substantial 
compliance with Federal regulations, it is considered to be noncompliant 
until it returns to substantial compliance.  If the facility requires further 
enforcement action as a result of new deficiencies without first reaching 
compliance on the original deficiencies, all enforcement activity is 
considered to be in the same cycle of noncompliance and a part of the 
same enforcement case. 
7	 Although findings of immediate jeopardy must be included in the initial 
2-day notice, the State has 5 calendar days to forward all documentation 
(notice letter, contact reports, and Form HCFA-1539 Statement of 
Deficiencies, if completed) to the CMS regional office.  42 CFR  488.410, 
as well as SOM, Chapter 7,  7309(A) (2003).  
8 CMS requires referral of cases in which facilities are not given an 
opportunity to correct, but which do not involve immediate jeopardy. 
Nearly all of the cases in this category are double G cases, but in a small 
number of cases States may have chosen not to give the facility an 
opportunity to correct due to other circumstances.  Because we are only 
able to identify double G cases in OSCAR and they represent nearly all of 
the cases in this category, we will use double G cases to represent the 
group of cases not given an opportunity to correct deficiencies.  
9  In 1998, CMS issued a memorandum to State survey agencies instructing 
them to include nursing homes cited with repeated patterns of actual 
harm (H-level or above) deficiencies in the category of poor-performing 
facilities that are denied an opportunity to correct, which became known 
OEI-06-03-00400  STATE REFERRAL OF NURSING HOME ENFORCEMENT CASES  14  as the Poor Performer Rule.  In 1999, CMS issued a second memorandum 
that expanded this provision to include facilities cited with G-level 
(isolated actual harm) deficiencies. 
10 Double G criteria apply to any G-level or higher deficiencies. For this 
report, when we refer to a G-level deficiency it should be assumed that 
we refer to any deficiency at a G level or higher. 
11 SSA  1864 and SOM, Chapter 8,  8000(D)(7) (2003). 
12 SSA  1819 (f)(1) (2003). 
13 SSA  1864 and SOM, Chapter 8,  8000(D)(7) (2003). 
14 When an IDR is pending, State staff are instructed by CMS to delay 
uploading deficiencies into the ASPEN system until the IDR is resolved.  
Because ASPEN data are uploaded to OSCAR, the objective behind this 
is to avoid displaying deficiencies in the Nursing Home Compare 
directory while they are in dispute. 
15 A recent addition to the SOM addresses this issue, stating If the most 
recent standard survey is within the currently running noncompliance 
cycle, then look back to the most recent standard survey that is not in the 
currently running noncompliance cycle in making double G 
determinations.  SOM, Chapter 7,  7304 (B)(1) (2004). 
16 The SOM guidance states A double G facility is one that has been 
identified as noncompliant with a scope and severity level of G or higher 
on a current survey and on the previous standard survey or any 
intervening survey (i.e., any survey between the current survey and the 
last standard survey).  SOM, Chapter 7,  7304 (B) (2003). 
17 See endnote 16 for text.  SOM, Chapter 7,  7304 (B)(1) (2004). 
18 As indicated in Appendix A (Detailed Methodology), to ensure that this 
inspection relied on the correct interpretation of double G criteria to 
make case type and referral determinations, we consulted with CMS 
central office staff via telephone interviews and other correspondence. 
OEI-06-03-00400  STATE REFERRAL OF NURSING HOME ENFORCEMENT CASES  15    A P P E N D I X   ~   A  

Detailed Methodology 
For this inspection, we examined nursing home enforcement cases that 
required State referral to CMS regional offices. Cases requiring referral 
include immediate jeopardy cases, double G cases, and opportunity to 
correct cases that failed to achieve subsequent compliance in the required 
time period.  Our sampling frame was limited to cases resulting from 
surveys conducted during the 12-month period between July 1, 2002, and 
June 30, 2003. We used a combination of case reviews and interviews to 
determine the extent to which States refer required nursing home 
enforcement cases and to reveal any problems affecting the referral 
process. This study does not address the timeliness of referrals, but 
rather whether cases were referred at all.  
Sampling Design 
Initial identification of cases requiring referral was based on CMSs 
Online Survey, Certification and Reporting System (OSCAR) data.  
Immediate jeopardy cases included all surveys containing a scope and 
severity rating of J, K, or L.  Opportunity to correct cases that required 
referral included surveys and complaints with two or more associated 
revisits.  Because of the complexities involved in identifying double G 
cases, a listing of those cases was provided by CMS central office staff 
who had previously developed an algorithm to extract such cases using 
OSCAR data.   
We compared the cases identified in the OSCAR data as requiring referral 
to case information in CMSs Long Term Care Enforcement Tracking 
System (LTC).  If case information was present in the LTC, we considered 
the case to have been successfully referred.  From our population of cases 
(those that appeared to require referral based on our analysis of OSCAR) 
we identified two groups:  those with evidence of referral in the LTC and 
those with no evidence of referral.  Only cases in the second group (no 
evidence of referral in LTC) were included in our sampling frame, and 
then the two groups of cases were ultimately combined to calculate an 
overall rate of nonreferral.   
We selected a stratified random sample of 200 cases from the group that 
did not have evidence of referral in the LTC. Forty-two States and all 10 
regional offices were represented in this sample.  Cases were stratified 
based on case type; i.e., immediate jeopardy, double G, and opportunity to 
correct, as determined through our initial review of OSCAR data.  The 
breakdown of our sample by case type is presented in Table 2.   
OEI-06-03-00400  STATE REFERRAL OF NURSING HOME ENFORCEMENT CASES  16  A P P E N D I X   ~   A  

Table 2: Sample Design for Cases With No Evidence of Referral 
Strata  Population  Sample 
Double G  254  75
Opportunity to Correct  234  70
Immediate Jeopardy  69  55
 Total  557  200 
Source: OIG analysis of 3,323 cases requiring referral, July 2002June 2003. 
Case Type Identification 
The three strata are based on our determination of case type using 
OSCAR data.  The case types are, by definition, the reason referral is 
required.  We opted to stratify our sample based on this designation for 
two reasons: to ensure our ability to include issues involving the most 
egregious deficiencies (immediate jeopardy) and to be able to identify 
differences between the case types. Some enforcement cases have 
multiple reasons for referral, meaning that the case may meet the 
definition of more than one case type.   
In our initial determination, we prioritized these reasons by severity of 
the situation:  immediate jeopardy, double G, and opportunity to correct.  
In reviewing the cases, however, we found the order of events to be more 
indicative of the reason for referral and adjusted the case types from our 
initial determinations.  For example, if an initial survey meets the 
definition of a double G and a subsequent revisit meets the definition of 
an immediate jeopardy, then our case type classification would have 
switched from immediate jeopardy to double G.  We did not, however, 
change the strata from which they were selected.  Because of these 
changes, we are not providing error estimates for individual case types. 
Document Requests 
For cases in the sample, we requested case documentation pertaining to 
referral from both the State and the CMS regional office responsible for 
oversight of the facility.  From the States, we asked for documentary 
evidence that a referral had taken place or an explanation of why the case 
had not been referred.1  We also allowed State staff who could not produce 
1 Acceptable forms of documentation included electronic mail, facsimile transmission reports, 
or any other documentation that included case-specific information and a date the 
information was sent. 
OEI-06-03-00400  STATE REFERRAL OF NURSING HOME ENFORCEMENT CASES  17  A P P AE PN PD IE XN  D~  I AX  
  ~   A
documentation to attest that a referral to CMS had been made.  From the 
CMS regional offices, we requested verification of whether the case was 
received and for additional comments pertaining to its referral.  We 
followed up with individual States and regional offices to resolve 
inconsistencies and unclear responses. 
Criteria 
Case reviews were used to determine nonreferrals, as well as to catalogue 
the causes of nonreferral.  Cases were categorized as successfully 
referred, referred in error, or did not require referral. The projected 
numbers, including the error rate, were calculated so that cases that did 
not require a referral were excluded.  We determined a successful referral 
to include: 
  cases with evidence of referral in the LTC system, 
  cases that CMS acknowledged receiving, and 
  cases for which States provided clear documentation of referral. 
State and regional office responses to our requests yielded numerous 
explanations of why specific referrals were not believed to be required.  
We carefully considered these comments, but our decision for assessing 
whether a case required referral was based on clarifications sought from 
the CMS central office. 
We identified 75 cases in our sample that did not require referral. 
Reasons for not requiring referral include inaccurate OSCAR data and 
Medicaid-only facilities, among others.  Cases that did not meet the 
criteria for successful referral or were exempt from referral were 
determined to be referral errors.  As stated previously, we did not always 
accept CMS regional office or State responses that a case did not require 
referral.  Some of these cases were classified as referral errors and are a 
source of our data to identify policy misinterpretations by CMS and/or 
State staff. 
After identifying referral errors, we determined a cause for each.  When 
there were multiple causes for a single case, we selected a primary cause 
which appeared to be most responsible for the error. 
Population Adjustments 
Our review identified 75 cases that did not ultimately require referral (see 
Table 3). These cases were excluded from our projected numbers. 
Adjustments to the population had minimal impact on our estimates, 
changing our overall error rate from 7.4 percent to 7.6 percent. 
OEI-06-03-00400  STATE REFERRAL OF NURSING HOME ENFORCEMENT CASES  18  A P P E N D I X   ~   A  

Table 3: Ineligible Cases 
Referral Not 
Strata  Initial Sample  Required  Final Sample 
Double G  75  16  59 
Opportunity to Correct  70  46  24 
Immediate Jeopardy  55  13  42
 Total  200  75  125 
Source: OIG analysis of 3,323 cases requiring referral, July 2002June 2003. 
Opportunity to correct.  Two-thirds of the opportunity to correct cases in the 
initial sample were found not to require referral.  The number in this 
stratum was reduced from 70 to 24. The cause of this significant change 
was the data proxy used to identify opportunity to correct cases. To 
create our proxy, we identified any case in OSCAR with more than one 
revisit (not including a superceding immediate jeopardy or double G 
designation) as having had an opportunity to correct.  However, our proxy 
did not distinguish between documentation-only desk reviews and onsite 
revisits.  Many cases with desk reviews (34 of 46) met the definition of 
substantial compliance and did not require referral.  A second, but less 
frequent, problem was the result of the proxy being based on the number 
of revisits rather than the timeframe for referral (we subsequently 
determined that the 70th day of noncompliance is the critical point for 
requiring referral).  The remaining opportunity to correct cases found not 
to require referral were the result of various data inconsistencies. 
Cases with evidence of referral in LTC. Because cases not requiring referral 
were prevalent in our sample, we took an additional sample of 300 cases 
from those deemed as successful referrals based on their presence in the 
LTC system. We randomly selected 100 cases from each stratum:  double 
G, immediate jeopardy, and opportunity to correct.  We reviewed case-
specific data in OSCAR and LTC to ascertain that the case (1) was 
correctly identified as a referral, (2) had the appropriate case type 
designation, and (3) was eligible for review.  Eleven of the 300 cases 
reviewed in this group were determined to be ineligible.  Of these cases, 
three were from the immediate jeopardy stratum, four were from the 
double G stratum, and four were from the opportunity to correct stratum.  
All 11 were the result of the enforcement cycle being represented more 
than once. 
OEI-06-03-00400  STATE REFERRAL OF NURSING HOME ENFORCEMENT CASES  19  A P P E N D I X   ~   A  

Table 4: Subpopulation Adjustments 
Evidence in LTC  Record Review 
Original  Adjusted  Original  Adjusted 
Stratum  Population  Population  Population  Population 
Double G  1,382  1,327  254  200 
Opportunity to Correct  908  872  234  80 
Immediate Jeopardy  816  792  69  53
 Total  3,106  2,990  557  333 
Source: OIG analysis of 3,323 cases requiring referral, July 2002June 2003. 
Adjustment calculations.  Population estimates were created by removing 
ineligible cases from the sample but retaining the original population 
weights (see Table 4).  These estimates were used in the calculation of an 
overall error rate.  Adjustments reduced the total population only slightly, 
from 3,663 to 3,323, with a confidence interval of plus or minus 3.0 
percent (see Table 5).  Further analysis confirmed that the impact on our 
overall estimate was minimal, changing our error rate from 7.4 percent to 
7.6 percent. 
Table 5: Overall Population Adjustments 
Adjusted Population  Confidence Interval 
In LTC  2,990  2,922 to 3,058 
Record Request  333  301 to 364
Total  3,323  3,223 to 3,422 
Source: OIG analysis of 3,323 cases requiring referral, July 2002June 2003. 
Statistics 
The SUDAAN statistical software was used to obtain population 
estimates for each group.  The estimates for each group were combined to 
provide an estimate of the nonreferral rate overall.  The estimates are 
reflective of population adjustments described above.  Analysis of these 
adjustments was conducted by our mathematical statistician.2 
Our response rate was 100 percent. Confidence intervals were calculated 
at the 95-percent level and are presented in Appendix B.   
2 RAT-STATS is a statistical program developed by the Office of Audit Services, Office of 
Inspector General, Department of Health and Human Services. 
OEI-06-03-00400  STATE REFERRAL OF NURSING HOME ENFORCEMENT CASES  20  A P P E N D I X   ~   A  

Interviews/Focus Groups 
During the course of this inspection, two sets of interviews were 
conducted to help us better understand the causes of nonreferral and 
CMSs oversight of this process. Prior to reviewing specific case data, we 
conducted interviews with CMS regional and central office staff.  The 
purpose of these interviews was to improve our understanding of the 
causes of nonreferral and to assess CMS guidance and oversight.  
Interviews were conducted in person by OEI analysts using a structured 
protocol.  Additionally, we conducted follow-up telephone interviews with 
all CMS regions and 10 State agencies.  States were selected for 
interviews to represent a broad range of case experiences.  In these follow-
up interviews, we raised issues that were identified during the individual 
case reviews.  We asked respondents to provide us with additional context 
and plausible explanations or causes of nonreferral.  Although many of 
the questions were related to specific cases, we provided the same 
scenarios in each interview to assess the potential for problems in other 
States and regions. 
After transcribing the interviews, analysts reviewed the material from all 
interviews collectively, identifying similarities and differences among the 
responses of different offices and gauging the impact of the information on 
the referrals process. 
Limitation 
Because we used the OSCAR database to identify sample cases, our 
analysis does not include any cases that States may have inappropriately 
omitted from OSCAR.  To the extent that State survey agencies did not 
enter cases requiring referrals into ASPEN (and therefore OSCAR), our 
results would underestimate the extent of nonreferrals.  However, 
because payments are based on these data (creating an incentive for 
States to enter the information) and because the annual State 
Performance Review includes components on survey conduct and data 
entry, we do not expect this limitation to substantively affect our 
estimates. 
OEI-06-03-00400  STATE REFERRAL OF NURSING HOME ENFORCEMENT CASES  21    A P P E N D I X   ~   B  

CONFIDENCE INTERVALS 
POPULATION 
95% Confidence Interval 
Estimate 
Low  High 
Error Rate*  7.6%  6.81%  8.30% 
Error Cases  253  228  278 
SUBSET OF NONREFERRAL ERRORS 
95% Confidence Interval 
Estimate 
Low  High 
Difficulty Identifying Double G  47.0%  38.24%  55.76%
 - Staff Missed Double G  34.4%  25.60%  43.28% 
- Staff Misinterpreted Double G Policy  12.6%  5.94%  19.16% 
Unsuccessful Referral  31.1%  22.12%  40.08% 
- State Sent Only Copy of Facility Letter  14.8%  7.63%  21.97%
 - Referral Documented but Never Received  16.3%  9.68%  22.92% 
Random Human Error  8.5%  2.80%  14.20% 
Other Policy and Procedural Problems  13.4%  6.68%  20.12% 
SUBSET OF DOUBLE G ERRORS 
95% Confidence Interval 
Estimate 
Low  High 
Incorrect CMS Guidance Given to State  31.40%  18.97%  43.83% 
Source: OIG analysis of 3,323 cases requiring referral, July 2002June 2003. 
*The majority of cases were considered successful referrals based on their presence in the LTC data. 
Only errors in the remaining portion required estimation. 
OEI-06-03-00400  STATE REFERRAL OF NURSING HOME ENFORCEMENT CASES  22    A P P E N D I X   ~   C  

Other Policy and Procedural Problems 
An additional 13 percent of nonreferrals were attributable to specific 
Federal policies which are unclear or not routinely followed by state staff 
Although most nonreferrals were caused by problems with identifying 
double G cases and insufficient notice to CMS, a smaller number of 
nonreferrals (20 sample cases) were caused by a variety of other policy 
and procedural problems.  We identified four specific problems within 
these cases that, although the cause of few nonreferrals, reflect either 
unclear Federal policies or incorrect State practices. 
Staff may restart correction period upon finding new deficiencies. Nonreferral of 
11 cases in our sample was the result of State staff not fully  
understanding Federal referral policy regarding opportunity to correct 
cases.  Opportunity to correct cases which fail subsequent compliance 
should be referred within 70 days of the initial finding of noncompliance. 
In the case of these nonreferrals, the facilities were cited with new 
deficiencies when surveyors revisited them.  Mistakenly thinking they 
must provide the maximum time for correction of the new deficiency, the 
States restarted the 70-day referral period at the time of the revisit.  This 
allowed the facilities to be out of compliance for longer than 70 days 
without referral. 
State staff may determine not to refer.  For four cases in our sample, States 
chose not to follow Federal referral policy at their own discretion. In 
these cases, State staff decided to delay referral pending the outcome of a 
second revisit.  As a result, these cases were out of compliance past the 
date that CMS is required to impose a mandatory remedy for 
noncompliance.  State staff reported that they did not refer these cases 
because they believed the facility would achieve compliance soon without 
imposition of a remedy. 
Informal Dispute Resolutions may delay referral.  All respondents in our State 
and CMS interviews reported correctly that an Informal Dispute 
Resolution (IDR) would not delay enforcement action.  However, our case 
reviews revealed three examples in which the State held referral of cases 
for a pending IDR, then never ultimately referred the cases because the 
IDR overturned the deficiency that warranted referral.  This indicates 
that all State staff may not be clear regarding the required referral of 
enforcement cases regardless of whether the facility has initiated an IDR.   
OEI-06-03-00400  STATE REFERRAL OF NURSING HOME ENFORCEMENT CASES  23  A P P E N D I X   ~   C  

Abated immediate jeopardy. According to CMS central and regional office 
staff, immediate jeopardy cases must be referred by States to CMS, even 
when the deficiency constituting the immediate jeopardy is removed 
(abated) while the survey is still in progress.  In four CMS regions, staff 
reported that States are allowed more time to refer these cases than the 
required 2-day referral period for an immediate jeopardy case.  For example, 
one CMS region requires States to refer abated immediate jeopardy cases 
within the time period expected for double G cases (10 days).  However, in 
two cases in our sample, surveyors did not refer immediate jeopardy cases 
that were abated and gave the abatement as their reason for not referring 
them. 
OEI-06-03-00400  STATE REFERRAL OF NURSING HOME ENFORCEMENT CASES  24    A P P E N D I X   ~   D

Double G Case Example 
Illustrating Federal criteria which require that States use the most recent 
completed standard survey in establishing a timeframe for review of 
facility survey history 
This example illustrates a potential problem in identifying double G 
cases (see Figure 1).  In this case, a G-level deficiency is cited during a 
revisit.  If State staff reviewed history only back to the most recent 
standard survey (following which the facility has not yet acheived 
compliance), the staff would incorrectly determine that this is not a 
double G case because the highest deficiency cited on that survey was 
an F-level. Rather, State staff should review history back to the most 
recent completed standard survey, meaning the most recent for which 
compliance was eventually achieved.   
The double G criteria are designed to identify a historical pattern of 
noncompliance. Counting deficiencies within the current period of 
noncompliance can limit the timeframe for review to as little as a few 
days or weeks. If State staff followed the incorrect policy of reviewing 
facility history only to the most recent standard survey, they would 
overlook a pattern of noncompliance. 
Source: Example drawn from OIG 2004 analysis of 3,323 cases requiring referral, July 2002June 2003. 
OEI-06-03-00400  STATE REFERRALS OF NURSING HOME ENFORCEMENT CASES  25    A P P E N D I X   ~   E  
Agency Comments to Draft Report 
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 A P P E N D I X ~ E  

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OEI-06-03-00400  STATE REFERRALS OF NURSING HOME ENFORCEMENT CASES  28  A P P E N D I X ~ E  

OEI-06-03-00400  STATE REFERRALS OF NURSING HOME ENFORCEMENT CASES  29    EA NC DK NN OOTWE LS E  D G M E N T S  
This report was prepared under the direction of Judith V. Tyler, Regional Inspector General for 
Evaluation and Inspections of the Dallas Regional Office, and Kevin Golladay, Assistant 
Regional Inspector General of the Dallas Regional Office.  Other principal Office of Evaluation 
and Inspections staff who contributed include: 
Amy Ashcraft, Team Leader 
Ruth Ann Dorrill, Project Leader 
Blaine Collins, Program Analyst 
Sarah Craren, Program Analyst 
Clark Thomas, Program Analyst 
Susan Wolfe, Program Analyst 
Sandy Khoury, Program Specialist 
Technical Assistance 
Barbara Tedesco, Mathematical Statistician 
Kevin Farber, Mathematical Statistician 
David Graf, Program Analyst 
Scott Horning, Program Analyst 
Linda Moscoe, Program Analyst 
Field Assistance 
Tara Bernabe, Program Analyst, Philadelphia 
Sylvia Chin, Program Analyst, San Francisco 
Tricia Fields, Program Analyst, Kansas City 
Graham Rawsthorn, Assistant Regional Inspector General, Atlanta 
David Rudich, Program Analyst, New York 
Marco Villagrana, Program Analyst, Chicago 
OEI-06-03-00400  STATE REFERRALS OF NURSING HOME ENFORCEMENT CASES  30