Department of Health and Human Services 

OFFICE OF 

INSPECTOR GENERAL 

STATE PROGRESS IN CARRYING OUT 

THE NURSING HOME SURVEY REFORMS 

MAY 1993 -1 

_— 
OFFICE OF INSPE~OR GENERAL 

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 three OIG operating components: the Office of Audit Services, the 

Office of Investigations, and the Office of Evaluation and Inspections. The OIG also informs 

the Secretary of HHS of program and management problems and recommends courses to 

correct them. 

OFFICE OF AUDIT SERVICES 

The OIGS 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 the Department. 

OFFICE OF INVESTIGATIONS 

The OIGS Office of Investigations (01) 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 01 lead to criminal convictions, 

administrative sanctions, or civil money penalties. The 01 also oversees State Medicaid fraud 

control units which investigate and prosecute fraud and patient abuse in the Medicaid program. 

OFFICE OF EVALUATION AND INSPECHONS 

The OIG’S Office of Evaluation and Inspections (OEI) conducts short-term management and 

program evaluations (called inspections) that focus on issues of concern to the Department, 

the Congress, and the public. The findings and recommendations contained in these inspection 

reports generate rapid, accurate, and up-to-date information on the efficiency, vulnerability, 

and effectiveness of departmental programs. 

This report was prepared under the direction of Mark R. Yessian, Ph.D., Regional Inspector 

General, and Martha B. Kvaal, Deputy Regional Inspector General, Boston Region, Office of 

Evaluation and Inspections. Participating in this project were the following people: 

Boston Headquarters 

Russell W. Hereford, Ph.D., Project Leader Cathaleen A. Ahern 

Joyce M. Greenleaf, Lead AnaZyst Linda M. Moscoe 
Depatiment of Health and Human Setices 

OFFICE OF 

INSPECTOR GENERAL 

STATE PROGRESS IN CARRYING OUT 

THE NURSING HOME SURVEY REFORMS 

my 1993 OEI-01-91415W 

EXECUTIVE SUMMARY 

PURPOSE 

To assess States’ progress in carrying out their Medicare/Medicaid nursing home 

survey responsibilities under the 1987 Nursing Home Reform Law. 

BACKGROUND 

The 1987 nursing home reforms marked a major shift in how States monitor nursing 

home quality. Prior to implementing those reforms in October 1990, State surveys of 

homes receiving Medicare or Medicaid stressed reviewing processes and records to 

document compliance with Federal standards. Now the process-focussed record 

review has taken a back seat to observing how well the staff meet individual resident 

needs and how well the home’s structure supports resident well-being. This shift 

reflects the recommendations called for in the Institute of Medicine’s 1986 study, 

Improving the Quality ofCare in Nuning Homes. 

In this report, we examine the States’ progress in carrying out their survey 

responsibilities. By survey responsibilities, we mean conducting the certification 

surveys, responding to complaints, and carrying out the follow-up activities these two 

entail, such as extended surveys. We sought information from the top 20 States 

ranked by number of nursing home beds and draw on interviews with 18 State survey 

agency officials and data from 19 of those top 20 States. The 19 States contain 73 

percent of the nursing home beds in the country; the 18, 70 percent. We interviewed 

nursing home surveyors and supefisors in two States. We also draw on information 

from the Health Care Financing Administration’s (HCFA) central and regional office 

staff and discussions with national groups representing nursing homes and residents. 

FINDINGS 

The 19 SkZes are mukikgpmgress h canyikg out t.heii new numikg home swvey 

responsibilitks cakki fw in the 1987 N&g Home Rejonn Law. 

�� Resources for nursing home survey and certification increased from FY 1990 to 

1992. The budgets increased in each of the 19 States; staff increased in 16 of 

the 19 States and decreased in 3. The average budget increase was 59 percent, 

and the average staff increase, 37 percent. 

�� State survey agencies are overseeing nursing homes with the new, outcomefocussed survey process. They are also taking steps to implement a new, more 

flexible survey cycle, which allows them to concentrate on problem homes. 

�� Seventeen of the 19 States are conducting the standard certification surveys on 

time. 

i 
Despite their pmgrq the 19 States are facing hpkmmta tion problem that couki 

jeoe “ theintentofthe nlushghome refoms. 

� State survey staff are experiencing problems adjusting to the new outcomefocussed survey. While sumeyor training has helped, both HCFA regional staff 

and State officials expressed concerns about that training. 

� State survey agencies contend with staff turnover and recruitment problems that 

are compounded by their own State fiscal pressures. At the time they 

responded to our survey, the 19 States reported over 700 vacancies among 

about 3,800 survey and support staff in FY 1992. 

� State survey agencies’ relationships with nursing homes are increasingly 

contentious as the reforms provide new incentives for nursing homes to refute 

deficiencies. This can result in surveyors citing fewer or less serious 

deficiencies. 

� The State survey and HCFA regional officials expressed concerns over long 

waits for HCFA regulations and, to a lesser extent, over unclear and 

inconsistent guidance from HCFA. This can result in confusion and 

inconsistent implementation. 

VhherabiMies in both musing honws and other State-surveyed health fadiies could be 

kxming as States fixus on the impkmen@tion chalknges of the refoms. 

b Complaints about nursing homes increased for 15 and decreased for 3 of the 18 

responding States from FY 1990 to 1992. The average increase was 74 percent. 

Some State survey officials are concerned about their ability to respond to 

complaints quickly and effectively. 

� Some State survey officials report curtailing, delaying, and/or omitting surveys 

for facilities such as home health agencies, hospices, and hospitals. 

CONCLUSION 

Nursing home and resident advocates alike welcomed the nursing home reforms of 

1987 as a positive step in improving the lives of nursing home residents. And the 

intent of the reforms is beginning to be realized. The HCFA has an important role to 

play in fostering continued progress in the implementation of these reforms. Toward 

this end, it has opportunities in three areas. First, it could invigorate its surveyor 

training program to enhance surveyor skills. Second, it could use its annual evaluation 

of each State agency’s contract compliance to identify areas of weak performance, and 

then take action to prevent problems before they present any danger to users of Statesurveyed health facilities. Finally, HCFA has opportunities to improve its guidance to 

States by quickly issuing final regulations and ensuring the State Operations Manual 

reflects current HCFA policy. 

ii 
TABLE OF CONTENTS 

EXECUTIW SUMMARY 

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mugs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. O. . . ..”” ”OOOOOO� 0000000 

� 

� 

b 

Implementation Progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Implementation Problems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Looming Vulnerabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

1 

3 

3 

4 

8 

mN~USION . . . . . . . . . . . . . . . ...= . . ..=. .=~. .*” O*OOOOOOOOOOO” O1OO1O 

APPENDICES 

k Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..”” ”==soooooooooo D 

B:Notes . . . . . . . . . . . . . . . . . .=....... . . . ..””””=• OOOOOS=SOOOOOOO � 

A-1 

B-1 

... 

111 

INTRODUCTION 

PURPOSE 

To assess States’ progress in carrying out their Medicare/Medicaid nursing home 

survey responsibilities under the 1987 Nursing Home Reform Law. 

BACKGROUND 

The 1987 nursing home reformsl marked a major shift in how States monitor nursing 

home quality. Prior to implementing those reforms in October 1990, State surveys of 

homes receiving Medicare or Medicaid funds stressed reviewing processes and records 

to document compliance with Federal standards. Now the process-focussed record 

review has taken a back seat to outcomes, observing how well the staff meet individual 

resident needs and how well the home’s structure supports resident well-being. This 

shift reflects the recommendations called for in the Institute of Medicine’s (IOM) 1986 

study, Improving the Quality of Care in Nuning Homes. 

The 1987 reforms addressed the problems the IOM identified with the previous 

nursing home inspection process. That process included an annual survey, an annual 

inspection of the care provided to each Medicaid recipient (both utilization review and 

quality of care), and the ad hoc investigation of complaints. Among the problems 

IOM identified with that process were its predictability, insensitivity to resident needs, 

focus on paper compliance, and the ease with which substandard homes could avoid 

termination by maintaining compliance only long enough to become recertified. 

The reforms addressed the surveys’ predictability by eliminating nursing homes’ timelimited agreements (TLAs)2, so that the survey schedule could be more flexible. Now 

surveys must occur at least every 15 months, with a statewide average of 12 months. 

The reforms also called for surveyors to focus on outcomes, by determining how well 

nursing home residents are achieving their “highest practicable physical, mental and 

psychosocial well-being.”3 That new focus addresses IOM’S concerns not only about 

insensitivity to resident needs but also paper compliance because surveyors are now 

required to observe residents, not simply ensure the proper documentation of their 

records. And the reforms called for a range of intermediate sanctions to deter 

violations and support sustained compliance. 

About 90 percent of all nursing homes participate in Medicare and Medicaid.4 To 

participate in those programs, the homes must meet new Federal standards called for 

in the reforms. The Health Care Financing Administration (HCFA) contracts with 

State governments (i.e., survey agencies) to inspect the quality of care each home 

provides and ensure those standards are met. These State sumey agencies not only 

conduct certification surveys but also investigate complaints and license nursing 

homes.5 And they oversee other health care facilities, such as laboratories, hospices, 

home health agencies, and hospitals. 

1 
The HCFA details the procedures for each of the seven standard survey tasks in its 

State Operations Manual. The tasks are: (l)off-site preparation, (2) entrance 

conference and on-site preparation, (3) orientation tour, (4) resident sampling, 

(5) information gathering, (6) information analysis and decision making, and (7) exit 

conference. 

If the survey team finds the home meets the standards, then the State certifies that 

home to participate in Medicare and/or Medicaid. If certain standards are not met, 

the home can still be certified but has to correct its deficiencies through a written plan 

of correction. Based on deficiencies, the teams can also conduct extended surveys to 

focus on the home’s underlying policies and procedures that allow the deficiencies to 

exist.h 

The survey agencies must take more drastic actions if deficiencies threaten the health 

or safety of residents. The 1987 reforms require a range of enforcement remedies 

including payment denial, civil monetary penalties, temporary management, and 

termination from Medicare and Medicaid. They require criteria for enforcement that 

specify how and when the remedies be applied based on a deficiency’s scope and 

severity, speci& the amount of fines, minimize the time between the deficiency and 

remedy, and provide for more severe remedies for repeat deficiencies. 

Thus, these nursing home reforms mandated major changes in how States will ensure 

that the nursing homes where thousands of Americans live meet Federal standards. In 

addition, the Clinical Laboratory Improvement Act (CLIA) of 19907 also placed new 

burdens on State survey agencies. Given these changes plus the fiscal stress many 

States are operating under, State survey agencies are facing many challenges in 

implementing the reforms. 

More than two years have passed since the implementation of the reforms. The 

reduced use of physical and chemical restraints on nursing home residents is often 

cited as one positive and tangible outcome of the reforms to date. In this report, we 

examine the State survey agencies’ progress in carrying out the reforms in their survey 

responsibilities. By survey responsibilities, we mean conducting the certification 

surveys, responding to complaints, and carrying out the follow-up activities these two 

entail, such as extended surveys. We sought information from the top 20 States 

ranked by number of nursing home beds and draw on interviews with 18 State survey 

agency officials and data from 19 of those top 20 States. The 19 States contain 73 

percent of the nursing home beds in the country, the 18, 70 percent. We interviewed 

nursing home sumeyors and supervisors in two States. We also draw on information 

from the Health Care Financing Administration’s central and regional office staff and 

discussions with national groups representing nursing homes and residents. (Refer to 

appendix A for more detail on our methodology.) 

We conducted our review in accordance with the Quality Standards for Inspections 

issued by the President’s Council on Integrity and Efficiency. 

2 
FINDINGS 

Tke 19 Staiks are makhgpmgress in c*g out theih new raunhg how -q 

ruponsibiliiies called for h the 1987 N&g Home Refimn LAW. 

� Resources for nursing home survey and certification increased from FY 1990 to 

1992. The budgets increased in each of the 19 States; staff increased in 16 of 

the 19 States and staff decreased in 3. The average budget increase was 59 

percent, and the average staff increase, 37 percent. 

� State survey agencies are overseeing nursing homes with the new, outcomefocussed survey process. They are also taking steps to implement a new, more 

flexible survey cycle, which allows them to concentrate on problem homes. 

� Seventeen of the 19 States have conducted the standard certification surveys on 

time. 

The Medicare and Medicaid nursing home survey and certification budgets for the 19 

States and increased from $96,737,360 in FY 1990 to $152,823,544 in FY 1992.8 The 

increases ranged from a low of 10 percent to a high of 128 percent. The median was 

55 percent. In most States, both the Medicare and Medicaid budgets increased: in 16 

States Medicare budgets increased 62 percent on average, and in 17 States Medicaid 

budgets increased 99 percent on average. 9 The overall nursing home survey and 

certification budgets increased even in those States that experienced a decrease in 

either Medicare (three States) or Medicaid (two States) from FY 1990 to 1992. 

The 19 States that responded to our survey reported having 1,923 full-time equivalent 

(FTE) surveyors conducting nursing home surveys in FY 1990, most of them registered 

nurses. By FY 1992, that number increased 35 percent to 2,587, still mostly registered 

nurses. Likewise, the number of support staff, such as supervisors and clerks, 

increased 23 percent between FY 1990 and 1992. Overall, the staff (survey and 

support staff) increases ranged from a low of 2 percent to a high of 128 percent for 

the 16 States that had an increase; the median was 31 percent. 

These increases reflect the survey agencies’ increased workload under the nursing 

home reforms. The majority of the State survey officials responding to our inquiry 

reported that each of survey tasks we asked about took longer than before the 

reforms; no one said they took less. The tasks we asked about are: conducting the 

surveys on-site, preparing the survey paperwork before the survey, preparing the survey 

paperwork after the survey, conducting enforcement activities, and responding to 

complaints. Extended and partial extended surveys, begun since the reforms, also add 

to the workload. Prior to implementing them, HCFA estimated that the reforms 

would increase survey workload 

as much as 64 percent when an 

by a minimum of 40 percent for a standard survey to 

extended survey is needed.*O 

3 
In our discussions with them, the State survey officials indicated they were 

implementing the new flexible survey cycle as called for in the reforms.ll Some 

reported they will rely on a home’s compliance history, complaints, and/or turnover 

among key staff to select homes for more frequent surveys. Some also reported 

expecting this change to reduce some of the paperwork burden of the survey process. 

Before States began implementing this new survey cycle, HCFA required them to 

complete the standard recertification surveys before the 12-month agreements expired. 

With few exceptions, the States reported meeting those deadlines.12 And HCFA’S 

evaluation of the States’ timely conduct of the surveys also shows that, for the most 

part, States were up-to-date in completing those surveys.13 

Despite thdpqgr~ the 19 StaUX are facing impkmen@tim pmbkms that COW 

jeopadzze9 theiilk?ntofth e?umhghomer~m. 

�	 State sumey staff are experiencing problems adjusting to the new outcomefocussed survey. While surveyor training has helped, both HCFA regional staff 

and State officials expressed concerns about that training. 

The new survey process represents a major culture change for many surveyors.14 

They now look to see if the care provided by nursing homes allows the residents to 

achieve their “highest practicable level of physical, mental, and psychosocial wellbeing.” This attention to resident outcomes is a long way from the prior focus on a 

home’s capacity to meet Federal standards. Indeed, the focus on outcomes calls for 

developing new investigatory skills and enhancing skills many surveyors already have, 

such as interviewing and observation. 

A recent study involved the review of a random sample of 359 deficiency statements 

from 21 States.15 Deficiency statements are the paperwork, using specific HCFA 

forms, that surveyors prepare to document deficiencies they find during the survey. 

That study raises questions about the extent to which surveyors writing those 

statements have adjusted to the new outcome focus: 45 percent of the deficiency 

statements failed to consider either actual or potential negative outcomes. When 

those deficiencies related more to a home’s structure than to a resident’s outcome 

were excluded, 43 percent still failed to consider actual or potential outcome.lG 

Teaching hundreds of surveyors not only to shift their focus to outcomes and learn 

new skills but also become familiar with a barrage of new survey forms and processes 

is a daunting task. The HCFA undertook this task through training manuals and 

courses in Baltimore and the regions. In some respects, this training has been helpful 

and well-regarded; however, many with whom we spoke expressed some serious 

concerns about the content and availability of the training. 

Most of the State survey officials rated HCFA’S training highly: 14 of the 18 who 

answered the question said the training was moderately or significantly helpful. They 

cited a range of activities for which the surveyors had received training, 

conducting the standard and extended surveys, to completing the forms 

from 

and using 

4 
computers. Many praised the Principles of Documentation manual and course, which 

provide guidance on the proper documentation for deficiencies. That course 

addresses the types of concerns raised in the above-noted study on deficiency 

statements. 

Officials from HCFA regional offices, State survey agencies, and national groups 

representing nursing homes and residents expressed concerns about the content of the 

training. Both HCFA and State officials mentioned the lack of training in 

investigatory skills; one also mentioned the lack of training aimed at the needs of 

more experienced surveyors who account for as much as 75 percent of all 

surveyors.*7 Some questioned whether the focus of the training adequately reflected 

the focus of the reforms. For example, the basic surveyor training course18 includes 

a mock hearing, which few surveyors will likely ever attend. Some also expressed 

concerns about how most of the training was provided: structured lectures to large 

groups rather than a more interactive approach with smaller groups. Typical of the 

concerns of the national groups was this comment from one such official who, in 

questioning how well surveyors are coping with the new outcome focus, also 

questioned whether the training has taught “the spirit of OB~ not just the letter.” 

We also heard concerns about the amount of training available for surveyors. For 

example, many State officials noted inadequate space in the training courses, and 

HCFA regional officials echoed this concern. 19 In fact, as of October 1, 1990, when 

the new survey system was to begin, 924 State and Federal surveyors had attended 

HCFA’S 3-day course on the new survey process. At best, that represented about onefifth of all State surveyors. n Since then, of course, more sumeyors have attended 

that and other courses, such as the basic health facility course, designed for new 

surveyors. According to HCFA’S “train the trainer” approach, those who attend each 

course are expected to share their knowledge with those unable to attend. But based 

on HCFA’S own data, as many as one-third of State surveyors had not been trained by 

the end of FY 1992.21 

State survey agencies, of course, also have orientation and training programs for their 

surveyors. They often assign new surveyors to shadow more experienced surveyors 

until they know the ropes. But HCFA officials and others we spoke with expressed 

concerns that, because the more experienced surveyors may be the ones having the 

hardest time adjusting to the new focus on outcomes, this approach to training maybe 

counterproductive. 

To the extent that the new outcome focus of the survey process is not being 

implemented, the intent of the reforms is left unrealized. For example, the survey in 

one home we know about illustrates this threat. Surveyors cited this home for 

deficiencies that posed an immediate and serious threat to the health and safety of its 

residents. The survey agency gave the home 23 days to correct its problems or be 

terminated from the Medicare and Medicaid programs. At the end of the 23 days, the 

home had not only failed to correct its deficiencies, but the State survey agency had 

also determined that the conditions in the home constituted an emergency that directly 

5 
jeopardized many residents. The State survey agency therefore issued an emergency 

order for the relocation of these residents. When challenged by the home’s attorney, 

however, the State survey agency decided the residents could remain if the attending 

physician of each resident or the home’s medical director simply documented that 

each resident would not be at jeopardy in the home. And the physicians did just that. 

Thus the survey agency essentially erased the emergency relocation order based on 

documentation rather than actual improvement or correction of deficiencies. 

� State sumey agencies contend with staff turnover and recruitment problems that 

are compounded by their own State fiscal pressures. At the time they 

responded to our survey, the 19 States reported over 700 vacancies among 

about 3,800 survey and support staff in FY 1992. 

All but one of the State survey officials who responded to our sumey said they had 

turnover and/or recruitment problems. Several mentioned chronic vacancy rates of 15 

percent and 1 as high as 27 percent. Each of the 19 States for which we have data 

reported vacancies among their nurse surveyors--often long-term vacancies. In one 

State, only two of seven survey teams were fully staffed; in another, survey teams in 

one urban area have never been fully staffed. And in another large State, some of the 

district offices lack experienced surveyors. 

In explaining the problems, many survey agency officials cited the onerous travel 

required of the surveyors and lack of competitive salaries, especially for registered 

nurse surveyors and registered dietitians. 22 They also cited State salary and hiring

freezes, early retirement programs, and cumbersome hiring procedures as exacerbating 

these problems. 

These problems can have serious implications for the State survey agencies. Twelve of 

the 18 survey agencies that responded to our survey reported having inadequate 

capacity to conduct either their standard surveys, extended surveys, and/or complaint 

investigations. Officials from 11 States reported cutting back on survey activities in 

some ways, most often by not conducting all the follow-up required to monitor a 

home’s progress in correcting deficiencies. The surveyors we spoke with in two States 

reported needing more time for some of the survey tasks, particularly observing 

residents and reviewing medical records for the quality of care assessment. And in 

another State, the survey agency officials have cut HCFA’S required survey samples in 

half because of staffing shortages. 

b State survey agencies’ relationships with nursing homes are increasingly 

contentious as the reforms provide new incentives for nursing homes to refute 

deficiencies. This can result in surveyors citing fewer or less serious 

deficiencies. 

We heard about the increasingly contentious relationship from both HCFA and State 

officials, as well as officials from groups representing residents and nursing homes. 

For example, they reported a trend of more and more homes refuting deficiencies and 

6 
appealing sanctions--although neither HCFA nor any of the nursing home or resident 

associations we asked track how many deficiencies are refuted or how many sanctions 

are appealed. 

That trend may be in response, at least in part, to two stimuli: increasing numbers of 

malpractice suits against nursing homes~ and HCFA’S proposed enforcement 

regulations. Survey reports and deficiencies can become evidence in malpractice suits, 

and recent cases have resulted in significant awards against homes.x And the 

proposed enforcement regulations call for sanctions when homes are found to have 

provided substandard care n for three consecutive sumeys. This means the stakes are 

higher for homes having even one deficiency in any one survey. 

We also heard about a related trend that speaks to the increasingly contentious 

relationship: homes submitting plans of correction that more and more often contain 

a disclaimer stating that preparing and executing such a plan does not indicate the 

home agrees to the facts alleged in the deficiency. For example, the disclaimer in one 

plan of correction we reviewed read as follows: “Preparation and/or execution of this 

plan of correction does not constitute admission or agreement by the provider of the 

truth of the facts alleged or conclusions set forth in the statement of deficiencies. The 

plan of correction is prepared and/or executed solely because it is required by the 

provisions of federal and state law.” The homes may view such a disclaimer as 

valuable if they were to appeal a sanction or if they were to defend themselves against 

a malpractice suit. 

of course, that the relationship can be contentious is not always problematic, nor is it 

a surprise--after all, the relationship between the home and the surveyor is one of the 

regulated and the regulator. Indeed, to the extent that a contentious relationship 

causes the surveyors to improve by being more careful and precise in documenting 

deficiencies, it is welcome. But the trends we describe also have other implications 

that can threaten the intent of the reforms. For example, surveyors, seeking to avoid 

a lengthy battle or appeals process, may cite fewer or less serious deficiencies. or 

they may become involved in long appeals or malpractice cases, meaning they have 

less time for their routine survey, follow-up, and enforcement activities. 

� The State survey and HCFA regional officials expressed concerns over long 

waits for HCFA regulations and, to a lesser extent, over unclear and 

inconsistent guidance from HCFA. This can result in confusion and 

inconsistent implementation. 

The nursing home reform legislation provided statutory deadlines for implementing 

major parts of the reforms. The HCFA failed to issue proposed or final regulations 

timely for both of the two major sets of regulations upon which State survey agencies 

rely. One is related to survey and certification, which had a statutory deadline of 

January 1990; the other, enforcement, had a statutory deadline of October 1988. The 

proposed regulations for both were 

yet to be issued. 

published August 28, 1992; final regulations have 

7 
Both State and HCFA regional officials with whom we spoke called the delays 

unacceptable and expressed deep frustration with them. They are concerned that the 

lack of final regulations leaves inadequate guidance for the States and invites provider 

challenges, such as refuting deficiencies or appealing sanctions. With such challenges, 

HCFA faces the threat that proposed regulations will be interpreted through the 

courts. 

Both State officials and HCFA regional staff with whom we spoke also cited 

inconsistent and unclear guidance from HCFA as presenting implementation problems 

for the States. Confusion over what constitutes HCFA policy is part of the problem. 

For example, HCFA regional offices routinely submit questions to the central office, 

which responds in a memorandum. Each regional office receives a copy. Whether 

these memoranda apply only to the specific question posed or constitute policy is 

interpreted differently among the HCFA regional offices. And since the regional 

offices interpret these memoranda differently, guidance to the States may also differ. 

In another example, reported in an industry newsletter and referred to by several 

people with whom we spoke, a HCFA regional office responded in September 1992 to 

a consumer group’s question about what nursing homes are allowed to ask of 

prospective residents’ finances. Shortly thereafter, HCFA central office issued another 

response. With HCFA and consumers sparring not only over the consistency but also 

the correctness of the two HCFA responses, State survey agencies are left unsure 

about how to enforce the policy in question. 

Virilities in both musing homes and other Statk-surveyed health fadities could be 

kmning as Saks f-on the impkmentation challenges of the refioms. 

�	 Complaints about nursing homes increased for 15 and decreased for 3 of the 18 

responding States from FY 1990 to 1992. The average increase was 74 percent. 

Some State survey officials are concerned about their ability to respond to 

complaints quickly and effectively. 

b Some State survey officials report curtailing, delaying, and/or omitting surveys 

for facilities such as home health agencies, hospices, and hospitals. 

Officials from 11 States expressed concerns about their ongoing ability to respond to


complaints--more so than other areas of their survey responsibilities that we asked


about. The dramatic increase in complaints ranged from 4 percent to as high as 438


percent in those 15 States. The median was 23 percent. The increase, coupled with


the sumeyors’ limited investigatory skills, have taxed States’ ability to respond.


Officials for those 11 States reported having inadequate capacity to investigate those


complaints appropriately. Even among the States that reported having adequate


capacity to investigate their complaints, some officials mentioned cutting back in other


areas, such as follow-up visits to veri& plans of correction, in order to investigate


complaints.


8 
Investigating complaints requires many skills and even contacts within the nursing 

home’s community, particularly complaints alleging resident abuse or misappropriation 

of resident property. And while no State official reported having studied their 

increased complaints, 7 of the 17 State officials who responded to our question 

thought that the nature of the complaints might be changing. They mentioned more 

complaints of resident abuse, neglect, and misappropriation of resident property most 

often. In those types of cases, the complainant may wish to press criminal charges, so 

that preserving evidence, identif@g witnesses, and contacting proper authorities (such 

as the police and/or State Medicaid Fraud Control Units) are vital to the proper 

investigation of the complaint. 

Areas other than complaints may also become vulnerable as States continue to focus 

on the nursing home reforms. Indeed, officials from 10 of the 19 States we heard 

from reported cutting back their State licensure or survey activities for facilities other 

than nursing homes. For example, one State official reported deferring hospice and 

home health agency surveys in order to devote more staff to nursing home surveys. 

Officials from HCFA regional offices also expressed concern about the lack of 

attention to these other facilities. While recognizing nursing homes as the largest 

portion of survey agencies’ workload, they also warned that other areas not be 

neglected. 

In 13 of the 19 responding States, the same surveyors that are responsible for nursing 

home surveys also conduct surveys of other health facilities, such as hospitals, home 

health agencies, hospices, and end-stage renal disease (ESRD) facilities, among others. 

Each of these surveys requires some specialized knowledge. One State official 

elaborated on these concerns about surveyors’ abilities to keep up with each field and 

noted particularly infection control techniques for facilities relying on high or quickly 

changing technologies, such as ESRD and hospitals. 

9 

CONCLUSION 

Nursing home and resident advocates alike welcomed the nursing home reforms of 

1987 as a positive step toward improving the lives of nursing home residents. And the 

intent of those reforms is beginning to be realized. In this report, we addressed both 

the progress State survey agencies have made in implementing the reforms and the 

implementation problems they face. We also reported on some dangers: survey 

agencies’ continued focus on nursing home reforms could be at the expense of both 

adequately responding to complaints and attending to other State-surveyed health 

facilities. 

Clearly, State sumey agencies operate in a complex environment of myriad State fiscal 

pressures and responsibilities, Federal oversight, and an array of State and Federal 

regulations. And while implementation of the nursing home reforms is underway, 

State survey agencies also face the implementation of the Clinical Laboratory 

Improvement Act of 1988, which calls for unannounced inspections of all laboratories 

testing human specimens--an enormous undertaking. 

The HCFA’S role is crucial in helping the States maintain progress in realizing the 

nursing home reforms. The HCFA has opportunities to foster the momentum through 

its surveyor training initiatives, its evaluation of State survey agencies, and its guidance 

to the States. Renewed efforts to be responsive to State and HCFA regional office 

concerns in each of the these areas could enhance the partnership between HCFA 

and the States, and promote further progress in realizing the full intent of the nursing 

home reforms. 

� Surveyor Training 

The HCFA has an opportunity to invigorate its surveyor training program and ensure 

its focus reflects the goals of the reforms and the needs of the surveyors. The HCFA 

has many resources from which to draw to do that. For example, HCFA recently 

completed a provider survey that offered insights on the providers’ views of the survey 

process and how well surveyors convey their findings. Likewise, HCFA will soon have 

a report for which it contracted on surveyor decision-making and consistency as well as 

quality-of-life and quality-of-care measurement.27 The HCFA will also have the 

results of its Surveyor Minimum Qualifications Test (SMQT).% Each of these 

resources, plus this report, should provide HCFA with ample information to draw on 

in assessing ways to improve its training programs, for example, to enhance surveyor 

skills for assessing resident outcome and address other training needs that are 

identified. 

� Evaluation 

The HCFA also has an opportunity to address whether it is getting enough meaningful 

information from its State Agency Evaluation Program (SAEP). Its existing SAEP 

10 
workgroup could consider new areas for data collection, such as the number and types 

of deficiencies refuted by providers and the number and outcome of appealed 

sanctions. Workgroup members could assess the extent to which SAEP data could be 

used to monitor not only each States’ contract compliance, but also patterns of weak 

performance. They could also consider a shift in the SAEP’S focus from process to 

outcomes--thereby reflecting the shift in the survey’s focus. Such careful data 

collection and monitoring through the SAEP could enable HCFA to take action and 

to avert potential problems before they present any danger to nursing home residents, 

hospital patients, and others relying on State-surveyed health facilities for services. 

� Improved Guidance 

Finally, HCFA has opportunities to improve its guidance to the States. It could move 

quickly to issue final regulations. It could ensure the State Operations Manual that 

survey agencies rely upon is up-to-date and consistent with proposed and/or final 

regulations. It could also ensure that other sources of policy information, such as 

memoranda, are clearly labeled as such and incorporated into that manual as 

appropriate. This could reduce the confusion we heard about from both State survey 

agency officials and HCFA regional office staff. 

11 
APPENDIX A 

Methodology 

Our methodology for this study included collecting information from and about the top 

20 States ranked by the number of nursing home beds. These 20 States account for 

about 75 percent of all the nursing home beds in the country. Beginning with those 

having the most nursing home beds, they are: California, Texas, New York, Illinois, 

Ohio, Pennsylvania, Florida, Indiana, Missouri, Michigan, Wisconsin, Massachusetts, 

Minnesota, New Jersey, Louisiana, Georgia, Iowa, Tennessee, Oklahoma, and Kansas. 

We received budget and evaluation data from the HCFA regional and central offices 

for the 20 States for FYs 1990, 1991, and 1992. The evaluation data is based on 

HCFA’S annual, formal review of the State agencies’ performance. We also wrote to 

the survey directors in each State and requested both data on their nursing home 

suxvey staff and activities and answers to open-ended questions on the implementation 

of the reforms. We received data from 19 of the 20 States (all except Minnesota) and 

responses to our open-ended questions from 18 of the 20 States (all except Minnesota 

and Louisiana). The 19 States contain 73 percent of the nursing home beds in the 

country; the 18, 70 percent. We also held telephone interviews with a total of nine 

surveyors and surveyor supervisors in two States. 

We talked to HCFA regional office staff in each of the eight regions responsible for 

States in our sample. We asked them how well they thought the reforms were being 

implemented and what constraints they thought the States face in implementing the 

reforms, among other things. 

We also talked to several officials of national groups representing nursing homes and 

nursing home residents and researchers and consultants involved in this field. These 

intemiews included officials from the American Health Care Association, American 

Association of Homes for the Aged, National Citizens’ Coalition for Nursing Home 

Reform, National Association of State Long Term Care Ombudsmen, Abt Associates, 

and a former staff member of the Institute of Medicine who was involved in 

researching and writing the 1986 report, Improving the Quality of Care in Nursing 

Homes. 

Finally, we reviewed relevant materials such as legislation, articles, and the abovenoted Institute of Medicine book. 

A -1 

APPENDIX B 

1. The 

(Public 

2. 

12 

3. 

4. 

The 

reforms are contained in 

Law 100-203), which was 

agreement requiring that 

Notes 

the Omnibus Budget Reconciliation Act of 1987 

enacted on December 22, 1987. 

nursing homes be sumeyed and recertified every 

months. 

47 FR 5365. 

National Citizens’ Coalition for Nursing Home Reform, Nursing Home Reform Law: 

Z%eBasics (Washington, DC) 1991. 

5. All nursing homes are subject to State licensure, even if they do not receive funds 

from Medicare and Medicaid. 

6. Surveyors must conduct extended surveys if they find any Level A deficiency in the 

following requirements: Resident Rights, Resident Behavior and Facility Practices, 

Quality of Life, or Quality of Care. 

7. The CLIA (Public Law 100-578) set standards for improving the quality of testing 

in all clinical laboratories that test human specimens. It calls for State survey agencies 

to assess compliance with the new standards through unannounced laboratory 

inspections, among other things. 

8. These budget data from HCFA reflect Medicare budgets requested and approved 

by HCFA. They also include Intermediate Care Facilities and Medicaid nursing 

homes because HCFA cannot separate them from other nursing home survey and 

certification data. The national nursing home survey and certification budgets 

(Medicare and Medicaid) increased from $120.2 million in FY 1990 to $213.3 million 

in FY 1992. 

9. Medicare increases ranged from a low of 9 percent to a high of 276 percent 

median of 79 percent. Medicaid increases ranged from a low of 7 percent to a 

135 percent with a median of 49 percent. 

with a 

high of 

10. Based on the HCFA survey time parameters used for Medicare surveys in nursing 

homes before and after OBRA 1987. These show that a survey before OBRA would 

take about 148 hours on average, nationally, and 207 after OBRA. An extended 

survey would require an additional 36 hours. 

B-1 
11. Our contact with State survey agencies began shortly after HCFA issued its 

implementation instruction for eliminating time-limited agreements. The HCFA issued 

that instruction on September 15, 1992. We mailed our surveys to the States on 

September 24, 1992 and began calling them shortly thereafter. 

12. The major exceptions are Michigan and California. The Michigan survey agency 

recently caught up on a large backlog of nursing home surveys. In California, the 

survey agency refused to implement the reforms because it believed its State law 

exceeded the new Federal standards. On October 1, 1990, the National Senior 

Citizens Law Center took California to court to force implementation. Meanwhile, 

over one hundred Federal surveyors flew to California to enforce the law. In March 

of 1991, California, HCF~ and the administration negotiated an agreement allowing 

the State to make changes in the surveyor instructions, and California resumed its 

survey activities. 

13. According to the State Agency Evaluation Program Reports we reviewed for 

FY 1992, HCFA required 3 of the 19 States in our sample to submit corrective action 

plans based on poor performance in completing the surveys on time. In addition to 

Michigan and California, HCFA also identified Massachusetts. Massachusetts officials 

we spoke with indicated no backlog, nor did data from that State which we reviewed. 

The HCFA’S concerns in its review of the State’s performance appear to relate more 

to paperwork problems. 

14. For a discussion of social systems’ active resistance to change, referred to as 

“dynamic conservatism,” see Donald A. Schon, Bevond the Stable State, New York: 

W. W. Norton & Company, Inc. 1971. 

15. The sample included statements from the period April 1, 1991 to March 30, 1992. 

Jean Johnson-Pawlson, Study of SurveyorPerformance, The George Washington 

University, October 26, 1992. This study was funded by the American Health Care 

Association. 

16. Letter from the American Health Care Association to HCF~ April 28, 1993. 

17. Personal communication with a representative of Abt Associates. Under contract 

with HCF~ Abt is undertaking an evaluation of the surveyors’ decision-making. One 

part of that evaluation involved a mail survey to 750 State surveyors. Preliminary 

results of that mailing indicate that 75 percent of the surveyors were surveying nursing 

homes prior to October 1990, when the new survey process was implemented. 

18. The HCFA requires all surveyors to attend its basic health facility training course 

within their first year of employment to participate fully as a survey team member. 

19. Many State officials said they would like to see more training opportunities in the 

regions rather than Baltimore, and the HCFA regional staff also noted wanting to 

offer more. The HCFA regional officials noted that their training budgets for such 

projects were limited, especially because funds for training compete with funds 

B-2 
required for the Federal sumeyors to conduct their monitoring sumeys at the 

mandated 5 percent of the homes in each State. 

20. Based on HCFA’S estimated 4,111 State nursing home surveyors in FY 1990 and 

its training records indicating that 924 State and Federal sumeyors attended that 

course by October 1, 1990. These data include all States. 

21. Based on HCFA’S estimated numbers of State nursing home surveyors (5,255) in 

FY 1992 and actual number of State and Federal surveyors (3,568) completing the 

long-term care specialty training, the basic training, or a course on resident assessment 

from FY 1990 through-FY 1992 as tracked by the-training 

data include all States. 

22. We asked some State officials about recent pay raises 

retention problems. Eleven States official reported raises, 

branch in HCFA. These 

to address recruitment and 

mostly for the registered 

nurses and often based on union negotiations, although the raises were generally small 

cost-of-living increases. 

23. Malcolm J. Harkins and Bradley L. Kelly. 7he Impact of iVuning Home Survey 

Repotis in Tort and Criminal Cases. Washington, DC: Cassons and Harkins. 

April 1992. 

24. For example, a jury in Texas awarded $39.4 million to the family of a woman 

strangled in a restraint and a jury in Alabama awarded $2 million in punitive damages 

for a home’s alleged mismanagement of a resident’s bedsores. See David T. Marks. 

Nuning Home Litigation Exchange Repoti. Houston, TX: Association of Trial Lawyers 

of America. July 28, 1992, and l?ze Impact of Nursing Home Survey Reports in Tort and 

Criminal Cases, op. cit. 

25. Substandard care means care furnished in a facility that has one or more 

deficiencies in any area with a severity level of 3 (potential physical harm) or 4 (actual 

physical harm), regardless of scope; or a level 2 (negative outcome or resident rights 

violation, or in the survey team’s judgement, the ability of the individual to achieve the 

highest practicable physical, mental or psychosocial well-being has been compromised, 

or both) in severity with a level 3 (pattern) or 4 (widespread) in scope in the quality of 

care requirements for long term care facilities. 

26. See Long Term Care Management. HCFA 

Questions. October 15, 1993:3. and Consumen, 

Screening Ruling. March 10, 1993:1. 

BansHomes From Asking Financial 

HCFA Dkpute LTC Financial 

27. The HCFA’S contract is with Abt Associates. 

28. The reforms mandated a surveyor training and testing program, and the SMQT is 

HCFA’S response to that mandate. It is a standardized test that all sumeyors will have 

to pass to participate fully as team members. Those who fail can participate as 

trainees, will receive feedback on their test results, and must undertake remedial 

B-3 
training. The pretest was held December 7, 1992, and HCFA has modified the test 

and its administration of the test based on those results. The operational test will be 

held in the late summer, 1993. 

B-4