U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

41–836 PDF 2008

S. HRG. 110–398

NURSING HOME TRANSPARENCY AND

IMPROVEMENT

HEARING

BEFORE THE

SPECIAL COMMITTEE ON AGING 

UNITED STATES SENATE

ONE HUNDRED TENTH CONGRESS

FIRST SESSION

WASHINGTON, DC

NOVEMBER 15, 2007

Serial No. 110–17

Printed for the use of the Special Committee on Aging

(

Available via the World Wide Web: http://www.gpoaccess.gov/congress/index.html 

SPECIAL COMMITTEE ON AGING 

HERB KOHL, Wisconsin, Chairman 

RON WYDEN, Oregon 

BLANCHE L. LINCOLN, Arkansas 

EVAN BAYH, Indiana 

THOMAS R. CARPER, Delaware 

BILL NELSON, Florida 

HILLARY RODHAM CLINTON, New York 

KEN SALAZAR, Colorado 

ROBERT P. CASEY, Jr., Pennsylvania 

CLAIRE McCASKILL, Missouri 

SHELDON WHITEHOUSE, Rhode Island 

GORDON H. SMITH, Oregon 

RICHARD SHELBY, Alabama 

SUSAN COLLINS, Maine 

MEL MARTINEZ, Florida 

LARRY E. CRAIG, Idaho 

ELIZABETH DOLE, North Carolina 

NORM COLEMAN, Minnesota 

DAVID VITTER, Louisiana 

BOB CORKER, Tennessee 

ARLEN SPECTER, Pennsylvania 

DEBRA WHITMAN, Staff Director 

CATHERINE FINLEY, Ranking Member Staff Director 

(II) 

C O N T E N T S 

Page 

Opening Statement of Senator Herb Kohl ............................................................. 1

Opening Statement of Senator Gordon H. Smith ................................................. 8

Opening Statement of Senator Larry Craig .......................................................... 9

Opening Statement of Senator Robert Casey ........................................................ 10

Opening Statement of Senator Ron Wyden ........................................................... 12

Opening Statement of Senator Bill Nelson ........................................................... 106

PANEL I 

Senator Charles Grassley, Ranking Member Senate Finance Committee ......... 3

PANEL II 

Kerry Weems, Acting Administrator, Centers for Medicare and Medicaid 

Services, U.S. Department of Health and Human Services, Washington, 

DC .......................................................................................................................... 13

PANEL III 

David Zimmerman, professor, College of Engineering, University of Wisconsin, and director, Center for Health Systems Research and Analysis, 

Madison, WI ......................................................................................................... 37

Arvid Muller, director of Research, Service Employees International Union, 

Washington, DC ................................................................................................... 52

Steve Biondi, vice president of Extendicare, Milwaukee, WI; on behalf of 

the American Health Care Association .............................................................. 61

Bonnie Zabel, administrator for Marquardt Memorial Manor, Inc., Watertown, 

WI; on behalf of the American Association of Homes and Services for 

the Aging ............................................................................................................... 73

Sarah Slocum, state long term care ombudsman, Office of Services to the 

Aging, Lansing, MI .............................................................................................. 97

APPENDIX 

Testimony submitted by Barbara Hengstebeck, advocate for nursing home 

residents ................................................................................................................ 115

Statement submitted by Stephen Guillard, executive vice president and chief 

operating officer, ManorCare .............................................................................. 136

Statement submitted by AARP ............................................................................... 143

(III) 

(1)

NURSING HOME TRANSPARENCY AND 

IMPROVEMENT 

THURSDAY, NOVEMBER 15, 2007 

U.S. SENATE, SPECIAL COMMITTEE ON AGING, Washington, DC. 

The Committee met, pursuant to notice, at 1:30 p.m., in room 

G–50, Dirksen Senate Office Building, Hon. Herb Kohl (chairman 

of the committee) presiding. 

Present: Senators Kohl, Wyden, Lincoln, Nelson, Salazar, Casey, 

Smith, and Craig. 

OPENING STATEMENT OF SENATOR HERB KOHL, CHAIRMAN 

The CHAIRMAN. We will get started right now. We are awaiting 

our first witness, Senator Grassley, who will be here momentarily. 

So we call this hearing to order. We welcome our witnesses today. 

In May this Committee held a hearing to examine the legacy of 

the 1987 Nursing Home Reform Act. We heard from various experts on how far nursing homes have come in the past 20 years. 

While our previous hearing was about looking back, today’s hearing 

is about moving forward and taking the next big step in improving 

our nation’s nursing homes. 

To do so, we have been working—I have been with my colleague, 

Senator Grassley, on our proposal to improve nursing home quality 

by increasing transparency as well as strengthening enforcement. 

We are very pleased to have Senator Grassley here today to make 

a statement. 

We believe that Americans should have access to as much information about a nursing home as possible, including the results of 

government inspections, the number of staff employed at a home, 

as well as information about the home’s ownership. The government should ensure that consumers can obtain this information in 

a clear, timely, and accurate manner so that they can make the 

right decision about where to place a loved one. 

Our bill will strengthen the government system of enforcement. 

Under the current system, nursing homes that are not providing 

good care or even worse, are putting their residents in harm’s way, 

can escape penalty from the government while they slip in and out 

of compliance with Federal regulations. If course, that is not acceptable. 

We need the threat of sanctions to mean something. Under the 

bill that I am working on with Senator Grassley, they will mean 

something. We also need to make sure that regulators are able to 

intervene quickly in order to protect the safety of residents. 

2

Today we will also hear from CMS Acting Administrator Kerry 

Weems. While working on our bill with CMS, we have discovered 

that many of our goals are aligned. Administrator Weems will testify shortly about the special focus facility program created by CMS 

to deal with those nursing homes exhibiting a consistent history of 

providing poor care to residents. 

We will be asking him about a significant move toward transparency that CMS is planning to undertake in the near future. In 

fact, in just over 2 weeks, CMS will be disclosing the names of the 

facilities taking part in this special focus facility program. 

I am pleased to say that CMS is beating us to the punch. Disclosing this list is a provision in our forthcoming bill. CMS does understand what we understand, that it is in everyone’s best interest 

to let consumers know which nursing homes are repeatedly demonstrating deficiencies and violating government standards. Those 

homes are obviously not doing their jobs. 

Often the only way to ensure the improvement of any entity is 

to bring its failings to light. Senator Grassley feels that way. CMS 

feels that way. I feel that way, too. 

I do honestly believe that more nursing homes will come back 

into compliance for good if they have the court of public opinion 

and the power of market forces as encouragement. At the same 

time, we acknowledge that our goal is not to close a home, but to 

fix the home because that is often what is best for the residents. 

As you will hear, the special focus facility program is helping these 

facilities make the changes that are needed to improve. 

Our hearing today also features a third panel of distinguished 

witnesses. In a rare stroke of good fortune, three of them come to 

us from my own home state. 

We will hear recommendations from national experts, organized 

labor, and representatives of the nursing home industry on the topics of transparency and enforcement. As always, I find it very important to state that while we are shining a light on poor performing homes, we believe that a vast majority of nursing homes 

in our country are doing a good job. Most homes provide exemplary 

care, the type of care that you would be happy to have a member 

of your own family receive. 

We will hear from one such home today, the Marquardt Memorial Manor in Watertown, WI. I can personally vouch for this home, 

as I have had the opportunity to visit it many times. 

So we thank everybody for being here today. We look forward to 

working with you all. I look forward also to hearing from the Ranking Member on this Committee, as well as Senator Craig. But I 

would ask them to defer for just a few minutes because Senator 

Grassley, whose statement we very much would like to hear, has 

only a limited time to be with us today. 

So, Senator Grassley, we recognize you.

3

STATEMENT OF SENATOR CHARLES GRASSLEY, RANKING 

MEMBER, SENATE FINANCE COMMITTEE 

Senator GRASSLEY. I thank you and my colleagues who are deferring to me. I thank you very much for not only that, but, of course, 

your very important role as leaders on this Committee. 

First of all, thank Chairman Kohl for his holding this very important hearing. When I had the privilege of serving as Chairman 

of this Committee, many of our efforts were focused on abuse and 

substandard care in America’s nursing homes. I am glad to see that 

under the leadership of Chairman Kohl this critical issue remains 

at a top priority. I applaud the Committee’s efforts. 

In America today there are nearly 1.7 million elderly and disabled individuals in approximately 17,000 nursing homes. This includes the men and women of the World War II generation. Our 

duty to ensure that these Americans receive high-quality care 

couldn’t be higher. 

But in addition to the people currently living in nursing home facilities, another issue lies on the horizon. That is the baby boom 

generation getting older. The number of Americans in nursing 

homes will go up dramatically. Therefore, it is critical that we confront the issue of safe and high-quality nursing homes today to be 

ready for tomorrow. 

As the Ranking Member of the Senate Finance Committee, I 

have a special interest in nursing home care. The industry is often 

the subject of both my investigative and legislative work, and today 

I would share some thoughts with you. 

I want to emphasize four areas: the problem of repeat offender 

homes; the issue of fire safety; the need for greater transparency 

in quality at these homes; and recent concern over reports that the 

rise of private equity firm ownership of nursing homes is resulting 

in poorer quality of care. In the nursing home industry, the vast 

majority of homes provide quality care on a consistent basis. They 

provide an invaluable service to our older and disabled. We applaud them for that service. 

But as in many sectors, this industry is given a bad name by a 

few bad apples that spoil the barrel. A critical tool in confronting 

these bad actors is the sanctions that CMS can place on homes for 

failure to meet certain standards of care. Yet too often, nursing 

homes are able to yo-yo in and out of compliance, temporarily correcting deficiencies and having the sanctions rescinded, only then 

to fall back into noncompliance. 

When sanctions are put in place, nursing homes currently have 

the incentive to file appeal after appeal after appeal, delaying the 

imposition of penalties and adding costs to the taxpayers. A recent 

Government Accountability Office report examined 63 nursing 

homes that had been identified as having serious quality problems. 

Of these, nearly half continued to cycle in and out of compliance 

between years 2000 and 2005. Twenty-seven of the 63 homes were 

cited 69 times for deficiencies warranting immediate sanctions. Yet 

in 15 of these cases sanctions were not even imposed. 

Eight of the homes reviewed cycled in and out of compliance 

seven or more times each period. This is unacceptable. 

But the real meaning of substandard care isn’t about numbers. 

It isn’t about statistics. It is about real people-our mothers, fathers, 

4

grandparents and loved ones. Every day there are stories reported 

across the Nation about residents suffering or even dying from preventable situations. 

Imagine, just recently I read about a nursing home resident in 

Florida who was taken to a hospital with bed sores, a partially inserted catheter, an infected breathing tube, and maggots in one of 

his eyes. 

Each and every one of you will agree with me. This is unacceptable. It is not humanitarian. It is an outrage. 

The current system provides incentives to correct problems only 

temporarily and allows homes to avoid regulatory sanctions, while 

continuing to deliver substandard care to residents. This system 

must be fixed. 

In ongoing correspondence that I have had with Kerry Weems, 

who is here and is Acting Administrator of CMS, and you will be 

hearing from him, that agency has requested the statutory authority to collect civil monetary penalties sooner and hold them in escrow pending appeal. I think that is a good start. 

Penalties should also be meaningful. Too often, they are assessed 

at the lowest possible amount, if at all. Penalties should be more 

than merely the cost of doing business. They should be collected in 

a reasonable timeframe and should not be rescinded so easily. 

These changes will help prod the industry and particularly, the bad 

actors to get their act together or get out of business. 

Another pressing issue is that of fire safety. As we saw in 2003, 

this is an issue of life or death importance. 

Sixteen people died in a nursing home fire in Hartford, CT, and 

15 died-in a home in Nashville in 2003. Neither home had installed 

automatic sprinkler systems. 

Despite the fact that a multiple-death fire has never occurred in 

a sprinklered home, there are approximately 2,773 homes still 

without full sprinkle systems. Following these terrible events, I 

requested the Government Accountability Office to look into this 

matter and have held an ongoing conversation with CMS on how 

we can better protect America’s nursing home residents from preventable fires. 

In October 2006, CMS began to move in this direction and expects to issue a final rule in the summer of 2008. This is muchneeded improvement that will surely save lives. 

While a better penalty system and better fire safety will do much 

to increase nursing home safety, we have also got to give nursing 

home residents and their families better access to information 

about these homes. To do that we obviously have to have more 

transparency than we presently have. 

The public does currently have access to some information on 

nursing homes through the Web site Nursing Home Compare, located on Medicare’s Web site. Yet for all the valuable information 

this Web site provides, it could be improved through the inclusion 

of information on sanctions, as well as an identification of the 

worst offending homes, often called special focus facilities. By listing these homes and the implemented enforcement action online, 

information the government already has, you don’t have to go out 

and get more information. The public then would have better acVerDate 0ct 09 2002 14:53 Jun 05, 2008 Jkt 000000 PO 00000 Frm 00008 Fmt 6633 Sfmt 6633 H:\DOCS\41836.TXT SAGING1 PsN: JOYCE
5

cess to nursing home information, and nursing homes would have 

an extra incentive to meet quality standards. 

The process of choosing a nursing home is a very important and 

personal one for thousands of American families every year. We 

owe it to them to give them complete information when they are 

making a decision of where to put a loved one. Acting Administrator Weems in a recent letter to me, gave his assurance that 

CMS would begin posting some of this information online. I thank 

him for his commitment and look forward to seeing that carried 

out. 

So for me, the key is to ensure that nursing homes provide quality care to residents consistently day in and day out. If they don’t, 

the public should be aware of that fact. In this area, as in others, 

a little sunshine will go a long way. 

Finally, I want to touch on an issue that has garnered a lot of 

attention lately, that of the purchase of nursing homes by private 

equity groups. Recent news reports have highlighted concerns over 

decreasing quality of care, decreasing staffing, and decreased budgets at nursing homes purchased by private equity groups. At one 

home, it is alleged that 15 residents died in 3 years due to negligent care at a home purchased by one of these groups. 

In response to these concerns, Senator Baucus and I have 

launched an inquiry into private equity firms and their ownership 

of nursing homes. Last month, we sent letters to five private equity 

firms asking for detailed information about their purchases and impending purchases of nursing facilities. 

In private equity ownership of nursing homes if that ownership 

is, in fact, having the effect of decreasing staffing, decreased budgets, and, in turn, decreased care, then something must be done 

about it. I plan to continue my inquiry and look forward to working 

with Senator Baucus to take whatever measures are appropriate to 

address the issue. 

Those four issues that are presented to you: ineffective enforcement; nursing home fire safety; the need for greater transparency; 

and concerns over private equity ownership affect millions of vulnerable Americans. The U.S. Senate has a great responsibility in 

addressing them. 

Again, I thank Chairman Kohl and the members of this Committee for holding this hearing and look forward to working with 

you all on these matters. I also want to acknowledge the efforts of 

the group that is entitled Advancing Excellence in America’s Nursing Homes. This group is a broad coalition of organizations dedicated to improving the quality of care and quality of life of nursing 

home residents. 

Coalitions such as this are vital to our efforts. All of us-and I 

mean private organizations. I mean families. I mean residents. I 

mean caregivers, nursing home advocates, the government, all of 

the above and maybe more that I haven’t mentioned, have a role 

to play in this important work if we want to be successful in our 

efforts to continue improving nursing home care. 

Indeed, much work needs to be done. So, I thank you for taking 

my testimony and wish you well. You are doing good work in this 

area. Because where we were 10 years ago the job is still not done. 

Thank you very much. 

6

The CHAIRMAN. That was a great statement, Senator Grassley. 

We appreciate your stopping by and making it. As a former Chairman of the Committee, what you have to say is valued, appreciated. We will take into consideration everything you have said 

with the greatest seriousness. 

Senator GRASSLEY. Thank you. 

[The prepared statement of Senator Grassley follows:] 

PREPARED STATEMENT OF SENATOR GRASSLEY

Good morning. I want to begin by thanking Chairman Kohl and the members of 

the Senate Special Committee on Aging for holding this important hearing. When 

I had the privilege of serving as chairman of this committee, many of our efforts 

were focused on abuse and substandard care in America’s nursing homes. I’m glad 

to see that under the leadership of Chairman Kohl, this critical issue is remains a 

top priority and I applaud the committee’s efforts. 

In America today, there are nearly 1.7 million elderly and disabled individuals in 

approximately 17,000 nursing home facilities. This includes the men and women of 

the world war two generation—and our duty to ensure that they receive the quality 

care they deserve couldn’t be higher. 

But in addition to the Americans currently living in nursing home facilities, another issue lies on the horizon. As the baby boom generation gets older, the number 

of Americans in nursing home facilities is going to rise dramatically. Therefore, it’s 

critical that we confront the issue of safe and high quality nursing home care today. 

As the Ranking Member of the Senate Finance Committee, I have a special interest in nursing home care. The industry is often the subject of both my investigative 

and legislative work, and today I’d like to share some of my thoughts. In particular, 

I want to emphasize four area that are of concern in the nursing home industry 

from my perspective: 1) the problem of repeat offender homes, 2) the issue of fire 

safety, 3) the need for greater transparency in nursing home quality, and 4) recent 

concern over reports that the rise of private equity firm ownership of nursing homes 

is resulting in poorer quality of care. 

In the nursing home industry, the vast majority of homes provide quality care on 

a consistent basis. They provide an invaluable service to those who can no longer 

care for themselves, and we applaud them for this service. But as in many sectors—

this industry is given a bad name by a few bad apples that spoil the barrel. A critical tool in confronting these bad actors are the sanctions CMS can place on homes 

for failure to meet certain standards of care. Yet too often, nursing homes are able 

to ‘‘yo-yo’’ in and out of compliance, temporarily correcting deficiencies and having 

the sanctions rescinded, only to fall back into noncompliance. When sanctions are 

put in place, nursing homes currently have the incentive to file appeal after appeal, 

delaying the imposition of penalties and adding costs to the taxpayer. So for me the 

key is to ensure that nursing homes provide quality care to residents consistently—

day in and day out—and if they don’t, the public should be aware of that fact. 

A recent GAO report examined 63 nursing homes that had been identified as having serious quality problems. Of these, nearly half continued to cycle in and out of 

compliance between fiscal years 2000 and 2005. Twenty seven of the 63 homes were 

cited 69 times for deficiencies warranting immediate sanctions, yet in 15 of these 

cases sanctions were not imposed. Eight of the homes reviewed cycled in and out 

of compliance seven or more times each period. This is unacceptable. 

But the real meaning of substandard care isn’t about numbers and statistics—it’s 

about real people—our mothers, fathers, grandparents and other loved ones. Every 

day there are stories reported across this nation about residents suffering or even 

dying from preventable situations. Imagine, just recently I read about a nursing 

home resident in Florida who was taken to a hospital with bed sores, a partially 

inserted catheter, an infected breathing tube, and maggots in one of his eyes. Each 

and every one of you will agree with me—this is unacceptable. It is an outrage. 

The current system provides incentives to correct problems only temporarily and 

allows homes to avoid regulatory sanctions while continuing to deliver substandard 

care to residents. This system must be fixed. In ongoing correspondence I’ve had 

with Kerry Weems, the acting administrator of CMS, that agency has requested the 

statutory authority to collect civil monetary penalties sooner, to be held in escrow 

pending the decision on appeal. I think this is a good start. Penalties should also 

be meaningful—too often, they are assessed at the lowest possible amount, if at all. 

Penalties should be more than merely the cost of doing business; they should be collected in a reasonable timeframe; and should not be rescinded so easily. These 

7

changes will help prod the industry’s bad actors to get their act together or get out 

of the business. 

Another pressing issue is that of fire safety, and as we saw in 2003, this is an 

issue of life-or-death importance. That year, 16 people died in a nursing home fire 

in Hartford, Connecticut, and 15 died at a home in Nashville, Tennessee. Neither 

home had installed automatic sprinkler systems. Despite the fact that a multipledeath fire has never occurred in a sprinklered home, there are approximately 2,773 

homes still without full sprinkle systems. 

Following these terrible events, I requested that GAO look into the matter, and 

have held an ongoing conversation with CMS on how we can better protect America’s nursing home residents from preventable fires. In October 2006, CMS began 

to move in this direction, and expects to issue a final rule in the summer of 2008. 

This is a much needed improvement that will surely save lives. 

While a better penalty system and better fire safety will do much to increase 

nursing home safety, we’ve also got to give nursing home residents and their families better access to information about these homes. And to do that you need more 

transparency. 

The public currently has access to some information on nursing homes through 

the website ‘‘Nursing Home Compare,’’ located on Medicare’s website. Yet for all the 

valuable information this website provides, it could be improved through the inclusion of information on sactions, as well as an identification of the worst offending 

nursing homes, often called ‘‘Special Focus Facilities.’’ By listing these homes and 

the implemented enforcement actions online—information the government already 

has—the public would have better access to nursing home information and nursing 

homes would have an extra incentive to meet quality standards. 

The process of choosing a nursing home is a very important and personal one for 

thousands of American families every year—we owe it to them to give them complete information when making this decision. Acting Administrator Weems, in a recent letter to me, gave his assurance that CMS would begin posting this information 

online. I thank him for his commitment and look forward to seeing this carried out. 

In this area, as in others, a little sunshine will go a long way. 

Finally, I want to touch on an issue that has garnered a lot of attention lately—

that of the purchase of nursing homes by private equity groups. Recent news reports 

have highlighted concerns over decreasing quality of care, decreased staffing, and 

decreased budgets at nursing homes purchased by private equity groups. At one 

home, it is alleged that 15 residents died in three years due to negligent care at 

a home purchased by one of these groups. 

In response to these concerns, Senator Baucus and I have launched an inquiry 

into private equity firms and their ownership of nursing homes. Last month, we 

sent letters to five private firms asking for detailed information about their purchases and impending purchases of nursing facilities. If private equity ownership is 

in fact having the effect of decreased staffing, decreased budgets, and, in turn, decreased care, then something must be done about it. I plan to continue my inquiry 

and look forward to working with Senator Baucus to take whatever measures are 

appropriate in addressing this issue. 

Those four issues—ineffective enforcement mechanisms, nursing home fire safety, 

the need for greater transparency, and concerns over private equity ownership—affect millions of vulnerable Americans and the United States Senate has a great responsibility in addressing them. Again, I thank Chairman Kohl and the members 

of this committee for holding this hearing, and look forward to working with you 

all on these matters. I also want to acknowledge the efforts of the group ‘‘Advancing 

Excellence in America’s Nursing Homes.’’ This group is a broad coalition of organizations dedicated to improving the quality of care and quality of life of nursing 

home residents. Coalitions such as this are vital to our efforts. In closing, all of us—

and I mean private organizations, families, residents, caregivers, nursing home advocates, and the government—have a role to play in this important work if we want 

to be successful in our efforts to continue improving nursing home care. Indeed, 

much work remains to be done. Thank you.

The CHAIRMAN. Thank you. 

Now, I would like to turn to our Ranking Member, Senator 

Smith, for his statement. 

8

OPENING STATEMENT OF SENATOR GORDON H. SMITH, 

RANKING MEMBER 

Senator SMITH. Thank you, Mr. Chairman. I appreciate this important hearing and this continuing discussion we are having on 

nursing home quality. 

These discussions are necessary to ensure that those in need of 

long-term care get the quality care that they deserve. The issue of 

nursing home quality and safety is of particular interest to me and 

all members of this Committee. I thank our panelists today for 

being here. 

I, like Senator Kohl, appreciate Senator Grassley. As a former 

Chair of this Committee and having served as both Chairman and 

Ranking Member of the Senate Finance Committee, the interest of 

our citizens in nursing homes has long been a priority for him. 

We know that the need for long-term care is expected to grow 

significantly in the coming decades. Almost two-thirds of the people 

currently receiving long-term care are over the age 65. This number is expected to double by 2030. 

We also know that the population over age 85, those are the ones 

most likely to need long-term services and supports. They are expected to increase by more than 250 percent by the year 2040 from 

4.3 million to 15.4 million. 

Today, millions of Americans are receiving or are in need of longterm care services and support. We don’t have to wait that long. 

It is already here. 

Surprisingly, more than 40 percent of the persons receiving longterm care are between the ages of 18 and 64. The past decade has 

revealed a shift in the provision of long-term care. 

A great example of this is in my home State of Oregon, where 

much of the care is provided in community settings and in recipients’ homes. We also have seen that long-term care providers are 

offering services that put the patient at the center of care, encouraging inclusion of families in decisionmaking, and giving more 

choices in the location of care, such as community-based and home 

care settings. 

As I have said in this Committee before, ensuring patient safety 

is a responsibility that rests with no one party or entity. It is 

shared by care providers, by Federal and State governments, law 

enforcement agents, local agencies, and community advocates. It is 

a responsibility that I and my colleagues take very seriously. 

We must all work together more collaboratively to curb the incidence of elder abuse. We owe that to the millions of seniors who 

have placed their trust in our nation’s long-term care system and 

to those who remain in their homes and in their communities. 

With the passage of the Elder Justice Act, this would be a wonderful and much-needed step toward this goal. Apart from improving communication and cooperation of enforcement activities, there 

would be new stronger policies in place to ensure that seniors receive the safest long-term care possibily. 

To that end, I have introduced the Long-Term Care Quality and 

Modernization Act with Senator Blanche Lincoln. This bill encourages a number of important improvements to nursing homes and 

the long-term care system that aim to enhance the quality and 

safety of care provided to our seniors. I look forward to continuing 

9

to work with the many advocates, industry representatives, and 

regulators here today to ultimately pass this important legislation. 

I would like to applaud the work that Senator Kohl has done in 

this area as well, and especially in regard to helping nursing 

homes and other facilities better identify potential bad actors in the 

workforce and to ensure families are informed of facility quality. It 

is essential that we find more effective ways to help poor performing facilities operate at a much higher level or to consider 

ways that they can be phased out of the system. We cannot let the 

inappropriate actions of a few continue to destroy the trust our nation’s seniors have placed in the long-term care system. 

I am confident this fine panel of experts will be able to provide 

a fresh light, some fresh insight into the work that is being done 

at the Federal, State, and local levels to reduce elder abuse and 

provide the safest, highest quality care that is possible. Thank you. 

The CHAIRMAN. Thank you, Senator Smith. 

In order of arrival, we have Senator Craig first and then Senator 

Casey. 

Senator Craig. 

OPENING STATEMENT OF SENATOR LARRY E. CRAIG 

Senator CRAIG. Mr. Chairman, thank you very much. A special 

thanks to you and our Ranking Member, Senator Smith. 

Before Senator Grassley left the room, there were either four 

former or currently serving chairmen. I think once you have served 

on this Committee a time, your passion for its mission never leaves 

you because we have always viewed our aging community as one 

of our more vulnerable communities. Thank you for the work you 

are doing and for the work Senator Smith has done. 

The challenge of nursing home improvement is a prime example 

of the Aging Committee’s importance of putting a spotlight on 

issues that are of vital significance to our senior population and 

their families. This Committee also plays a valuable role in crafting 

solutions to challenges facing our aging population. 

During my tenure as Chairman of this Committee, I spent some 

time examining long-term care and issues relating to the well-being 

of our vulnerable seniors. While our aging population is moving 

more toward home and community-based services, as Senator 

Smith has mentioned, there still is going to be a need for nursing 

home care. 

Now, I look forward to the hearing and to our witnesses today, 

and to all of your comments. Transparency is an important factor 

in ensuring that our nursing homes are safe places. It is important 

for families to have the necessary background information when 

choosing a nursing home. Most people are not going to choose a 

poor performing facility for their loved ones. 

So making inspection information readily available to the public 

is also a great incentive for nursing homes to meet their standards. 

Unfortunately, like all good ideas, the devil is in the details. 

CMS’ nursing home compare is a great step for those who want 

more information about nursing homes. However, more can be done 

to make information on the Web site easier to understand so that 

families know what the deficiencies that a facility receives actually 

mean and how this actually impacts a senior in these facilities. 

10

Families who are looking for a nursing home are often overwhelmed by this tremendous lifestyle change that is about to hit 

their family. They do not have the time to become the expert in 

nursing home oversight and inspection. 

I also want to stress the importance of information on nursing 

home compare being kept as up to date as possible. It is unfair to 

both the nursing home provider and seniors when only outdated information about the problem at a particular facility is available online. 

With that said, I look forward to our hearing today. 

Mr. Chairman, it is an important one as legislation moves forward on this issue. I thank you. 

The CHAIRMAN. Thank you, Senator Craig. 

Senator Casey. 

OPENING STATEMENT OF SENATOR BOB CASEY 

Senator CASEY. Mr. Chairman, thank you very much for chairing 

this hearing and for your work as the Chairman of our Committee. 

This is an incredibly important hearing, for a lot of reasons. I was 

going to tell some personal stories that I think demonstrate to me 

how critical this hearing is and the subject matter of the hearing. 

I also want to thank Senator Grassley for his testimony. I missed 

part of it, but I know his commitment and so many others who are 

here. 

This issue for me is probably more personal than most because 

it affected both the work that I did before I got to the Senate, as 

well as has had an impact on my own family background. My work 

as a State official, the auditor general, allowed us to audit the oversight by the Pennsylvania Department of Health of nursing homes. 

We put out a report, which was very critical. I hit that agency very 

hard in 1998. That led to a lot of work down the road. 

I don’t want to spend a lot of time on that, but suffice it to say 

that some of the problems that we will talk about today, some of 

the questions that we will ask, some of the priorities that we enunciate from this platform, but also at the witness table, remind me 

of what we were doing in 1998 and 1999. So there is still much 

work to be done. 

But two personal insights, Mr. Chairman. One is a meeting I had 

across the street from a nursing home. When we got into this work 

pretty deeply, a lot of families were contacting us. We know from 

the work in long-term care that this is an issue that isn’t just 

about older citizens in the twilight of their lives. It is about the 

whole family. 

Younger members of the family worry about where a loved one 

is placed. They worry about the care. They worry about the expertise and the professionalism that will be brought to bear on their 

loved one. 

So we set up a meeting with a woman whose husband was in a 

nursing home. We wanted to meet her across the street first to talk 

to her, and then we went for a visit. As soon as she sat down across 

from me in—I think it was a deli or a coffee shop. As soon as she 

sat down, I shook her hand. She looked at me. Before she could 

talk, she started to cry. 

11

Now, she wasn’t crying because he was getting terrible care. 

There was no crisis necessarily. But she was crying because, like 

a lot of Americans, it is a traumatic decision, as others have said 

today, to place a loved one in a nursing home. Once they are there, 

you worry about them. 

I think the basic worry that most people have, especially a 

spouse or a close family member, is will that person get the same 

kind of care in this facility, as good as it might be, as they would 

get in the home or they would receive from a husband or a wife 

or a family member. That is the principle worry that people have. 

Our obligation in the Senate is to do everything possible to understand that fear and that worry and that sometimes the failure 

to have the kind of peace of mind that people deserve and to bring 

about policies that will do our best to meet that obligation so that 

someone who makes that decision, a family decision, can have that 

kind of peace of mind. 

The second example in my own life is my father. He suffered 

from an incurable disease in the later part of his life. He was a big, 

tough, powerful person in his day. But at the end of his life, he had 

no power. His mind was fine, but he had no power to move. 

So when he was in a long-term care setting, moving from here 

to here, I mean, literally inches, he couldn’t do on his own. So he 

relied upon the skill and the expertise of long-term care workers, 

nurses, nurses aids, the whole gamut of expertise. 

I learned a lot about that. He got great care. But I remember distinctly being in the hospital one night when he was getting very 

bad care from one particular nurse. 

She just happened to be an agency nurse who was there temporarily. She didn’t know him, didn’t know much about his medications. She made a terrible error. 

So, I had a glimpse, a fleeting glimpse into what bad care can 

result in. Fortunately, he wasn’t permanently impacted by that 

poor care. 

So all these personal and human memories come back when I 

think about this issue. It is particularly disturbing in light of this 

new phenomenon with regard to private equity firms purchasing, 

acquiring long-term care facilities. 

It is bad enough when the government is not doing its job in 

terms of oversight. I saw that at the State level. Fortunately, it is 

better today, at least in terms of what we were identifying. 

That was bad enough. But when you have the added problem of 

private entities that stand to make a lot of money on the initial 

purchase, but also stand to make a lot of money in the long run, 

sometimes at the expense of good care, that makes the problem all 

the worse. 

I was just citing a report that I know from the back of the room 

by the Service Employees International Union, ‘‘Equity and Inequity: How Private Equity Buyouts Hurt Nursing Home Residents.’’ What is in this report is not just disturbing to me, it reminds me what I was working on almost a decade ago in Pennsylvania. I am sure the same was true in a lot of other states. 

What is identified in this report is disturbing. It is troubling, to 

say the least. It cries out for action by this Committee, by the U.S. 

Senate, and, frankly, by the administration. Frankly, the adminisVerDate 0ct 09 2002 14:53 Jun 05, 2008 Jkt 000000 PO 00000 Frm 00015 Fmt 6633 Sfmt 6633 H:\DOCS\41836.TXT SAGING1 PsN: JOYCE
12

tration doesn’t always need a new law or a new regulation to move 

forward. The administration should focus more acutely on this. 

So we have a lot of work to do. This is a very personal issue for 

a lot of Americans. I feel that obligation very deeply. 

I know, Mr. Chairman, you do, and the members of this Committee. I look forward to the testimony today. Thank you. 

The CHAIRMAN. Thank you, Senator Casey. 

Senator Wyden. 

OPENING STATEMENT OF SENATOR RON WYDEN 

Senator WYDEN. Thank you, Mr. Chairman. I want to commend 

you and Senator Smith and so appreciate the bipartisan approach 

that you all take to this issue. 

I just make three points very quickly. First is something is out 

of whack in this country when it is a lot easier to find information 

about the quality of a washing machine than it is to get information about the quality of long-term care facilities. That is a fact. 

All over this country you can easily get access to information 

about home appliances and a variety of other retail purchases you 

make. But you can’t get information about the essential health care 

services that are available. 

I think that is why it is so good that you are going forward in 

your leadership, Senator Kohl and Senator Smith. 

Second, on this trend toward the large chains and private equity 

firms getting into the field. I think it is worth noting Senator 

Smith and I see it as we have a great many long-term care facilities in our State that are essentially small, family owned facilities. 

I think it is pretty clear that those kinds of health care facilities 

do a lot more to make information available to families, share information with respect to long-term care choices than some of these 

big chains. 

So this notion that you can’t be straight with the public and with 

the consumer and the families, as Senator Casey speaks so eloquently about, that is not correct, No. 1. and No. 2, we have some 

concrete examples of how to have more transparency in long-term 

care. 

That is particularly in a lot of our small towns where you have 

family owned long-term care facilities. They are showing how to get 

information out to families, work with families, and make sure 

they know more about their choices. 

One last point, Mr. Chairman. As you and I have talked about, 

in the Healthy Americans Act, the legislation I have, we now have 

11 United States senators. It is the first bipartisan universal coverage bill in more than 13 years here in the U.S. Senate. We have 

a significant long-term care section in that legislation, both on the 

public side and on the private side. 

One of the reasons I think your hearings are so helpful, Mr. 

Chairman, it is my intent to take the information that you all get 

through the leadership in this Committee and to add to that legislation some of what you have found about how to promote transparency. Frankly, we have taken some baby steps in the legislation 

to get more information out. 

But as a result of your good work and these important hearings, 

it is my intent to take the information that comes out of these 

13

hearings on long-term care facilities and transparency, take that 

information and put it into our legislation. I think that is one additional way the Senate can work in a bipartisan way to promote better long-term care choices for our people. 

Mr. Chairman, I thank you. I look forward to working with you. 

The CHAIRMAN. Thank you very much, Senator Wyden. 

At this time, we will call Kerry Weems to make a statement to 

us. Kerry Weems is the CMS Acting Administrator. 

Mr. Weems was tapped in September 2007 to take over the helm 

of the agency that administers Medicare and Medicaid, as well as 

the State children’s health insurance program, which does provide 

health care services to more than 100 million Americans. We are 

very pleased to have Administrator Weems here today to provide 

us with an account of CMS initiatives to enforce existing standards 

as well as to address the problem of poor performing nursing 

homes to which we have referred already today several times. 

So, Mr. Weems, welcome, and thank you for coming. We would 

be delighted to hear your statement. 

STATEMENT OF KERRY WEEMS, ACTING ADMINISTRATOR, 

CENTER FOR MEDICARE AND MEDICAID SERVICES, U.S. 

DEPARTMENT OF HEALTH AND HUMAN SERVICES, WASHINGTON, DC 

Mr. WEEMS. Mr. Chairman, good afternoon. Thank you for holding this hearing. Senator Smith, other distinguished members of 

the panel, it is my pleasure to be here today to discuss the Centers 

for Medicare and Medicaid Services’ initiatives to promote and improve nursing home quality. 

Roughly 1.5 million Americans reside in the nation’s 16,400 nursing homes on any given day. More than 3 million rely on services 

provided by a nursing home during any point in the year. These 

individuals and an even larger number of their family members 

and friends must be able to count on nursing homes to provide reliable care and consistently high quality. 

Charged with overseeing the Medicare and Medicaid programs, 

whose enrolled populations comprise the vast majority of nursing 

homes, CMS takes nursing home quality very seriously. Our efforts 

in this area are broad, including initiatives to enhance consumer 

awareness and transparency as well as rigorous surveying and enforcement processes focused on safety and quality. 

As Acting Administrator of CMS, nursing home quality is a professional priority, but also a personal cause. My mother-in-law was 

a nursing home resident who suffered from Alzheimer’s disease and 

was bedridden. During the time that my nomination to this position was under consideration in my household, my wife, Jean, went 

to this nursing home to visit her mother and noticed a large bruise 

over her mother’s eye. 

If this wasn’t upsetting enough, the staff wasn’t able to tell her 

what happened. This is exactly the kind of situation that CMS’ 

safety and quality initiatives are intended to prevent. 

When Jean returned from the visit with her mother, she told me 

that I could accept the nomination to be the next CMS administrator, that if I was going to do that, I needed to make quality 

nursing home care a priority. So advancing nursing home quality 

14

is not only a condition of my employment, you see, it is also the 

condition of a harmonious marriage. 

Now, if I could bring your attention to the chart on display-and 

you also have the materials in front of you-I am prepared to lay 

out a set of milestones for further improvement in nursing home 

care. We talk about accountability in government. This is our plan. 

The only caveat that I would add is as CMS administrator, I am 

not the sole decisionmaker on these. These are our aspirational 

goals. This is where we would like to find ourselves over the next 

year. 

Senator Grassley mentioned our participation in Advancing Excellence in America’s Nursing Homes campaign. That will continue. 

The next item. By December 1 of this year, we will post on the 

CMS nursing home compare Web site the names of the special 

focus facilities. I will discuss that in greater detail in a moment. 

In early 2008, we plan to expand the quality indicator survey 

pilot to a sixth-State. The program is currently testing ways to improve the traditional survey process in Florida, Connecticut, Kansas, Louisiana and Ohio. We are seeing promising results. 

The survey employs methodological data analysis and technology 

to better focus surveyors on probable areas of concern. Data collected from a particular facility are used to derive quality of care 

indicators, which can be then compared to national norms that will 

help guide our surveyors’ assessments. 

In spring of 2008 CMS hopes to issue a solicitation to begin the 

process of inviting states and nursing homes to participate in a 

value-based purchasing demonstration. The program would adjust 

payment in a manner that recognizes the quality improvement in 

nursing home quality, thus stepping up incentives for high-quality 

care, which is, in the end, what we care about, high-quality care. 

In April CMS plans to co-sponsor a national symposium to examine and support culture change in the nursing home community. 

This culture change will move nursing homes to a more person-centered approach, an environment that respects individuals, and inspects nursing home quality at all levels, staff management and 

ownership. Some of this is very simple things such as teaching the 

aids to knock on the door before they enter, to ask simple permissions, to move the care to a very patient-centered form of care. 

CMS is working on the final evaluation of a 3-year pilot demonstrating the comprehensive system of criminal and other background checks for prospective new hires. 

I know this is a particular concern of yours, Mr. Chairman. 

Our goal is to issue this final report in May 2008. In June we 

expect to report on the progress of an ongoing national campaign 

to reduce the incidents of pressure ulcers in nursing homes and reduce the use of restraints. In that same month we hope to issue 

guidance to surveyors on infection control and nutrition in nursing 

homes. These new guidelines will be the latest of an ongoing set 

of CMS efforts to improve consistency and effectiveness of the survey process. 

Senator Grassley mentioned a final CMS regulation on fire safety 

protection, which would require all nursing homes to be fully sprinkled by a defined phase-in period. It is currently expected to be released in August 2008. 

15

Also, in August, a new CMS contract for quality improvement organizations will take effect. CMS hopes to build into that a 3-year 

agenda for the QIOs to begin working with nursing homes who 

have poor quality, including the special focus facilities. 

In September 2008, CMS will issue a report describing feasible 

methodologies for improving the accuracy of staffing information 

submitted by nursing homes for posting on the CMS nursing home 

compare site. Finally, CMS has stated on the record previously before this Committee-Senator Grassley mentioned that as well-that 

we would envision supporting legislative efforts to permit the collection and escrow of deposit for civil monetary penalties as soon 

as the penalties are imposed. Our expectation is that such legislation might be reasonably enacted by the Congress by 2008. 

I will now turn to a particular CMS effort that I understand is 

of interest to the Committee, the special focus facility initiative. Facilities we target for special focus consistently provide poor quality 

care. Yet oftentimes they pass isolated surveys by just fixing the 

number of problems to enable them to satisfy the survey. They 

then fail the next survey, often for many problems that they had 

ostensibly fixed. 

Of course, this in and out or yo-yo compliance does not address 

the homes’ underlying systematic problems. The special focus facility program is designed to put an end to fluctuating compliance. 

Once a facility is placed on the special focus program, CMS applies 

a progressive enforcement until the nursing home takes one of 

three paths: graduates from the program because it has made significant long-lasting improvements; is terminated from participation in the Medicare or Medicaid programs; or is given more time 

because we see potential for improvement such as the sale of the 

nursing home to a new owner with a better track record of providing quality care. 

We are finding that the special focus initiative really works. Here 

is one example. 

A nursing home in rural South Carolina was a special focus 

nursing home that failed to improve during its first 18 months 

after selection. As a result, in April 2007 CMS issued a Medicare 

notice of termination to the facility. We were prepared to see the 

132 residents located to another facility that provided better care. 

We all know the trauma that that brings with it. 

At that point, however, the nursing home operators evidenced a 

willingness to implement serious reforms with clear potential to 

transform their quality of care. CMS agreed to extend the termination date on the condition that the nursing home would enter 

into a legally binding agreement to adopt specific quality focus programs. We required a root cause analysis of their underlying system of care deficiencies, which was conducted by a QIO selected by 

CMS but paid for by the nursing home. 

We required an action plan based on the root cause analysis and 

also an $850,000 escrow deposit to finance the needed reforms. Our 

interventions were successful. The nursing home passed its subsequent survey, was purchased by another owner, and is now on 

track to graduate from the special focus facility. The nursing home 

operator is now seeking to replicate this approach in the other 

nursing homes that it operates. 

16

In closing, I would stress that CMS’ quality and safety assurance 

mandates extend to every nursing home in the Nation, large, small, 

public or private. Regardless of setting or ownership, quality care 

for Medicare and Medicaid beneficiaries is of utmost importance to 

CMS. 

To that end, I hope the milestones I have shared with you demonstrate our tireless work to quality at CMS. Thank you. I would 

be pleased to answer any questions you might have. 

The CHAIRMAN. Thank you, Mr. Weems. The special focus facility 

program-you have, I understand, compiled the list of facilities that 

will likely appear on that program? 

Mr. WEEMS. We currently have 62 facilities, the names of which 

we will be prepared to put on the Web site on or before December 

the 1st. 

The CHAIRMAN. That interim period is for what reason? 

Mr. WEEMS. Senator, we want to make sure that we have notified the facilities and the facilities have had an opportunity to talk 

to their staff, talk to the residents, talk to the family of the residents so they understand the nature of the action being taken. One 

of the things that we want to make sure that we do is make clear 

the three possible paths, that by being in a special focus facility it 

is possible to improve. But termination is also possible. We don’t 

want to induce panic among the residents or among the staff. 

The CHAIRMAN. In terms of improving the quality of these facilities, are you optimistic that this kind of a program will be serious 

enough to really make a marked difference in a relatively short period of time? Because of the nature of the sanctions and the awareness that children will have about their parents being in a facility 

that is not performing up to standard, are you optimistic that this 

over a reasonable period of time will result in a marked improvement as well as a big-time reduction in the number of facilities on 

this program? 

Mr. WEEMS. Well, Senator, it certainly will produce a result for 

those facilities that are in the program. They are going to go down 

one of those three paths that we have mentioned. Also disclosing 

these facilities and giving people a good understanding about what 

they mean, I think, also provides the right kind of incentives to improve quality system-wide. 

The CHAIRMAN. Thank you. 

Senator Smith. 

Senator SMITH. Mr. Chairman, thank you. 

Mr. Kerry, thank you for being here. 

Mr. WEEMS. Good to see you, sir. 

Senator SMITH. I recognize that this is probably your last appearance before this Committee for the balance of this year. With the 

chairman’s indulgence, I need to ask you to answer a couple of 

questions about two topics that we have had hearings on in this 

Committee, in no way to take away from the importance of the 

questions being asked or this topic. But they affect seniors, and 

they affect people in nursing homes. 

I need some answers from CMS that I fear I am not getting. It 

first relates to the 1-800-Medicare call centers. 

Mr. WEEMS. Yes, sir. 

17

Senator SMITH. In anticipation of your appearance here today, I 

had my staff make 15 calls to these centers this past week. They 

asked very basic questions that should have a quality control so 

that there are very easy and accurate answers given. 

Like what is the difference between Medicare Part D and Medicare Advantage. Pretty basic. What are the enrollment periods for 

these plans? Pretty important. Can a beneficiary switch plans after 

enrollment if they aren’t satisfied with their plan? They were given 

false information repeatedly. 

Under what circumstances is the late enrollment penalty assessed? Again, very divergent kinds of answers. 

I guess my point in raising this is I think you need some quality 

control at 1-800-Medicare. I am hoping that you can tell me what 

you are going to do about it. 

Mr. WEEMS. Well, Senator, I certainly will look into it. Those are 

basic questions that——

Senator SMITH. Ought to have real scripted answers. 

Mr. WEEMS. We audit answers given. We do have quality control 

processes in place. Obviously if you and your staff are getting these 

kinds of answers, those aren’t adequate. So let me try to make 

them so. 

Senator SMITH. There were 15 calls in the past week, and the answers were all over the board. They were often inaccurate. 

Mr. WEEMS. Well, that is not acceptable, Senator. 

Senator SMITH. Second, another hearing we had was on the validity of genetic testing. Here is a Wall Street Journal article last 

week talking about genetic testing. Is there a heart attack in your 

future? Genetic tests promise to map your personal health risks. 

But some question usefulness. 

CMS has spent 6 years trying to write guidelines for this. They 

have just abandoned it. This field is proliferating. 

It’s usefulness is clearly in question. So I would like to know 

what you will do since CMS is apparently walking away from a felt 

need—I mean, an obvious need if the Wall Street Journal is questioning it and other publications as well—what CMS is going to do 

to re-pick up the ball and try to put forward some guidelines so 

that the questions as to validity can be assured. Because a lot of 

seniors are getting this stuff, often scaring them to death and often 

without any medical validity at all. 

Mr. WEEMS. Well, Senator, first of all, this was brought to my 

attention just before this hearing so I will respond in writing and 

with clarity as to what our plans are. The FDA, of course, has responsibility for the initial approval of such tests. Then CMS would 

work with them under the Clinical Laboratory Improvements Act. 

But exactly what actions we have taken in the past and our current trajectory I will provide you in writing. 

Senator SMITH. Well, I appreciate it. It is a national issue. It is 

a legitimate concern of this Committee and I think many of the 

Senators on this panel. 

I don’t think we are meeting our public responsibility if this field 

is growing. Whether it is snake oil or not, it is attracting a lot of 

money. 

I am not saying it is, but I am saying it may be. To make sure 

it isn’t, there ought to be some Federal standard at which people 

18

can have confidence that it is being met so that people aren’t just 

being scammed. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you so much. 

Senator Craig, then Senator Casey, then Senator Wyden, and 

then Senator Salazar. 

Senator CRAIG. Mr. Chairman, again thank you. 

Mr. Weems, thank you for being with us. Your testimony is 

appreciated. 

In my opening comments I talked about information and its 

value. How much of the information on nursing home compare isI should say much of it-is vague about what deficiencies actually 

mean for the patient. At least that is certainly my interpretation 

of it. Are there any initiatives underway to make the language 

easier for the average individual to read and actually understand 

what the practical affects of the information are on the patient? 

Mr. WEEMS. The Web site itself has been run through several 

focus groups to make sure that that information is more understandable. We work with focus groups to continue to improve to try 

and make it as understandable as possible. 

There is a lot of information on the Web site. For each quality 

indicator that there is given, there is an explanation of what that 

means. We do strive to make it as user-friendly as possible. 

Senator CRAIG. Do you have any idea how many people utilize 

nursing home compare? 

Mr. WEEMS. Senator, we measure it in page reads. Last year we 

had about 12 million page reads, which is a significant number. Actually, up until the Part D program, it was our most visited Web 

site. 

Senator CRAIG. That is good. What kind of outreach have you 

done or are you continuing to do as it relates to making more people aware of nursing home compare? 

Mr. WEEMS. Well, we work with a number of partners at the 

local level as somebody is being essentially moved into a nursing 

home so that they know that that potential exists. We push it at 

the-you know, through our national site. There are also education 

efforts that go with physicians and discharge nurses who can help 

in education efforts. 

Senator CRAIG. In your testimony you talked about improvements in a nursing home in South Carolina that was about to be 

shut down. Could some of these tough measures that were implemented in that situation, such as a root cause analysis of the problem at the facility, been tried earlier in the process when the facility was failing? 

Mr. WEEMS. Senator, the method that we take with the special 

focus facilities is progressive enforcement. So when they first enter, 

we begin with some enforcement efforts. Those enforcement efforts 

get more progressive as the facility fails to improve. 

This ‘‘last chance’’ systems change that we announced really is 

sort of the end of the road. Either the facility is going to improve, 

or they are going to be terminated. 

The thing about the special focus facilities and this sort of ‘‘last 

chance’’ program is it is highly resource-intensive. So working out 

individual agreements with the nursing home the way that that 

19

one was worked out is very, very resource-intensive. So we try and 

spread our resources through progressive enforcement. 

Senator CRAIG. OK. Thank you very much, Mr. Weems. 

Mr. WEEMS. Certainly. 

Senator CRAIG. Mr. Chairman, thank you. 

The CHAIRMAN. Thank you, Senator Craig. 

Senator Casey. 

Senator CASEY. Thank you, Mr. Chairman. 

Mr. Weems, we appreciate your testimony, but, of course, even 

more so your service. It is important work you are doing. I appreciate you sharing your own personal story. 

I have a couple of questions that center on staffing. But I wanted 

to first of all talk about the issue that a number of us have mentioned and I think is on the minds of a lot of people because of the 

public coverage of this, the New York Times. I cited the SEIU report. 

Mr. Chairman, I guess I would ask unanimous consent that this 

SEIU report, ‘‘Equity and Inequity: How Private Equity Buyouts 

Hurt Nursing Home Residents,’’ be made part of the record of the 

hearing. 

The CHAIRMAN. Without objection. 

[The information referred to follows:]

20


41836.001
21


41836.002
22


41836.003
23

Senator CASEY. Just, I guess, on two levels. One is how you 

would compare what you set forth in your testimony where you say 

that, starting on page five under the heading of nursing home ownership-and then on page six, you say, ‘‘CMS has developed a new 

system called the provider enrollment chain and ownership system, 

known by the acronym PECOS. This new system is designed to 

track and maintain information regarding entities that own 5 percent or more of a nursing home to ensure only eligible providers 

and suppliers are enrolled and maintain enrollment in the Medicare program.’’ Then it goes on from there. Your testimony talks 

about the function of this application process, gathering information about the provider, whether that provider meets State licensing qualifications, where it practices or renders its services, the 

identity of the owner, going on from there. 

The concern that I think a lot of us have is that this initiative, 

your initiative might be just getting up and running. That is one 

concern I have. I would like to have you address that. 

Second, whether or not the concerns that have been expressed already about the impact of this kind of ownership, whether those 

concerns about the ownership and how it has led to some really 

questionable ownership practices that lead to a diminution in the 

quality of care. So if you could just do a comparison here. Then if 

you can amplify that in a written record after the hearing, we 

would appreciate that as part of the record. 

Mr. WEEMS. I would be happy to do that, Senator. The system 

that you mentioned, the PECOS system, is gathering information 

about ownership and fractional ownership of nursing homes. That 

data base right now is about 60 percent complete. We continue to 

gather that information. 

Once complete, we will be able to perform the kinds of analysis 

that you allude to as to whether or not type of ownership affects 

quality of care. But we are not in a position to reach that conclusion just yet, sir. 

Senator CASEY. I would ask you as you are developing this system to keep in mind these reports. I am just reading from the summary of the SEIU report. But here is what it says in part talking 

about two different chains. 

I quote—this is from the executive summary. ‘‘We see increases 

in the number of resident care deficiencies along with a trend toward restructuring that, in effect, No. 1, limits liability; No. 2, 

minimizes tax responsibilities; and No. 3, makes it difficult for the 

public,’’ as Senator Wyden was alluding to, ‘‘to determine how effectively Medicare and Medicaid dollars are spent and the care that 

is a part of that.’’ 

I would ask you to take a look at this report and other reports 

that are on the public record and compare that to how you are 

gathering this information. I think that is going to be critically important. 

I would also want to ask you about—one idea that has been floated is to have a surety bond requirement that is proportional to the 

number of beds in the facility. Do you consider that kind of requirement or anything else-any other hurdles or hoops through which a 

firm, an entity or a person has to go through before they would be 

allowed to make that kind of a purchase? 

24

Mr. WEEMS. Let me begin with the comment on the first part. 

First of all, CMS has the ability to enforce civil monetary penalties, 

to not provide reimbursement for new admissions or to terminate 

somebody from the program, regardless of how they are owned. So 

that kind of ownership we still have the ability to enforce good 

quality in those areas. 

So we will need to see if ownership affects quality. We have not 

reached that conclusion yet. But nonetheless, we believe that we 

still have the ability to take actions against bad quality. 

Senator CASEY. I am out of time. But just a quick answer to the 

question on a surety bond. 

Mr. WEEMS. With respect to surety bonds, we are looking at it. 

We think our survey techniques, especially a survey that happens 

when a sale happens, are probably sufficient. We do worry about 

surety bonds in this and other arenas where they might limit access. 

Senator CASEY. Thank you. 

The CHAIRMAN. Thank you, Senator Casey. 

Senator Wyden. 

Senator WYDEN. Thank you, Mr. Chairman. 

Mr. Weems, one, let me thank you for that kind note about the 

Wyden twins. It was gracious of you to acknowledge their arrival. 

Let me pick up just on one last question on the very good points 

that Senator Casey was making. 

The issue with the change, of course, is about hidden ownership. 

Mr. WEEMS. Yes. 

Senator WYDEN. I am not clear. Can the government now identify all the nursing homes throughout the country owned by one 

corporate entity? 

Mr. WEEMS. Probably not is the answer. We know nursing homes 

by the provider agreement that we have with them, especially as 

there is fractional ownership we have difficulty telling that. The 

PECOS system that Senator Casey alluded to that we are building 

will give us the ability to determine who owns a facility down to 

the fraction of 5 percent. 

Senator WYDEN. So it is not possible to have the information 

today, but essentially information about hidden ownership is going 

to be made available and brought to light under your project essentially down to these small fractions? 

Mr. WEEMS. Yes, sir. 

Senator WYDEN. When will that be available? 

Mr. WEEMS. At our current pace, that would be 2009 to have a 

completely populated database. 

Senator WYDEN. OK. One question with respect to the information that is being made available to consumers. We have been trying to go through some of that. I am looking at a page involving 

a facility in Illinois, Hillcrest Home. There is a long section that 

has involved a variety of things. 

I am looking at a category called vertical openings deficiencies. 

This says something about exit doors and the like. Have you all 

brought together consumers and families to have them involved in 

looking at whether this kind of information is useful to them? 

Mr. WEEMS. We have brought together focus groups in that regard. We still need to improve the way that that information is 

25

useful. We need to, first of all, make sure that the information that 

we are providing is useful in making a decision. Then second, we 

need to make sure that it is understandable. 

But I would also tell the panel that there really is no substitution for visiting a nursing home when making that decision, that 

it is absolutely critical that a visit occur. On the CMS Web site you 

can get actually a fairly simple checklist of when you go to a nursing home what you should look for that might help ask the right 

questions in that visit. 

Senator WYDEN. Let me ask just one last question. Again, it sort 

of speaks to the way decisions get made in the real world. 

A lot of older adults and their families have to make quick decisions about nursing home placement typically while you have a 

senior in the hospital. At that point, the discharge planner plays 

a very important role with respect to getting out information about 

the quality of facilities. What are you all doing to get the discharge 

planners involved in this quality area? 

Mr. WEEMS. We work with the discharge planners to make sure 

that they are aware of the choices in the area. But we also want 

to make sure that the families are involved in that decision as well. 

Senator WYDEN. It just seems to me that if the families are going 

to get timely information-and I share your view about how important they are-it is the discharge planner who, in a lot of instancesis going to lay that information out. In other words, in a typical instance, you are not going to have a family in a position to run to 

a Web site and crank up their laptop and look at the information. 

They are going to ask that discharge planner to help them with 

the choices. I hope you all will be more aggressive in reaching out 

to them because I think that, in the real world, is the way a lot 

of these decisions get made. I look forward to working with you and 

also on the Finance Committee as well. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you, Senator Wyden. 

Senator Salazar. 

Senator SALAZAR. Thank you very much, Chairman Kohl. Hello? 

Thank you very much, Chairman Kohl. 

I have to leave to go preside, but I wanted to just make a quick 

statement. First of all, I would ask unanimous consent that my full 

statement be made a part of the record. 

The CHAIRMAN. Without objection. 

Senator SALAZAR. Let me also say, Chairman Kohl and Senator 

Smith and the members of this Committee, I think that for all of 

us there is no doubt that we have been through the experiences of 

both the joys and the heartaches and the realities of nursing homes 

with loved ones as we have visited these places. I know I have 

often been in those places in my State of Colorado. 

At the end of the day, what concerns us, what concerns me, what 

concerns all of us is that the consumer of the service at the nursing 

home is getting the best quality care possible. Certainly, during my 

days as attorney general there were times when we had to prosecute those who were in charge of nursing homes because of the 

abatament which had occurred in those nursing homes with patients where we actually had to go in in several occasions and file 

criminal charges against nursing homes. 

26

We hope that that is, in fact, the exception and not the rule and 

that indeed the enforcement powers of both the Federal Government shared with State Government as well as the self-regulation 

that occurs with some parts of the nursing home industry results 

in the desired end, the desired end being that our loved ones, our 

elderly population in this Nation are taken care of in these facilities. 

So I very much appreciate the fact that you decided to hold a 

hearing on this very important issue. I do believe that in a major 

way, just like the issues of Social Security and Medicare will continue to be huge issues for us here in Washington, here in the Congress, that the aspect that deals with nursing homes and long-term 

care will continue to be a huge issue. I appreciate your interest and 

your leadership on this issue. 

I will make just a comment about the private equity issue and 

the ownership matter, which has been discussed already, I am 

sure, in this Committee. I think Mr. Weems can respond to some 

of the questions from other members of the panel. 

You know, it is an issue that has been raised with legitimate 

concerns. I do think that we need to take a look at it from the point 

of view that in the context of trying to create wealth within a private equity firm that we are not somehow displacing the quality of 

service that ought to be provided to seniors who are being served 

in these homes. So I think it is a very important inquiry that has 

been raised here. 

So I thank you very much, Chairman Kohl. I look forward to 

working with you on this issue. 

The CHAIRMAN. Thank you very much, Senator Salazar. 

Before we let you go, Mr. Weems, I would like to ask Senator 

Lincoln if she would like to say a word or two to CMS Director 

Weems, make a statement, ask a couple of questions, whatever you 

wish. 

Senator LINCOLN. Thank you, Senator Casey. 

I don’t, Mr. Chairman. I just want to thank you so much. I think 

this is such a critical issue. As always, you have come right to the 

mark in terms of bringing us to the awareness and bringing up the 

appropriate individuals in here for us to visit with. 

We appreciate you, Mr. Weems. Thank you. 

The CHAIRMAN. Mr. Weems, we thank you very much for being 

here with us today. I had the opportunity to visit with you myself. 

I am very impressed with you as a person of great capability and 

ambition and focus. 

Obviously you know I am particularly interested in your special 

facilities program. I agree with you that making it transparent and 

bringing a bright light to shine on those relatively few, very few 

facilities who are not getting the job done will do an awful lot to 

eliminate the problem or vastly reduce the problem, if not to eliminate it. 

My sense is that it is pretty difficult for a facility to continue to 

function if it is on this list. I think you feel the same way. So, that 

having this list and being, as I am sure you will be, very judicious 

in its use, will tend to vastly improve the performance of those facilities that are on the very lowest end of our nursing homes. 

27

So, you know, I think that is really important. I appreciate your 

responsiveness to this issue. I wish you well. I am sure we will be 

dealing with each other frequently. Thank you for being with us. 

Mr. WEEMS. Thank you for your comments, sir. 

[The prepared statement of Mr. Weems follows:]

28


41836.004
29


41836.005
30


41836.006
31


41836.007
32


41836.008
33


41836.009
34


41836.010
35


41836.011
36


41836.012
37

The CHAIRMAN. I will call our third and final panel. Our first 

witness will be professor David Zimmerman, who is a distinguished 

professor of health systems engineering. He is also the head of the 

Long-Term Care Institute at the University of Wisconsin, Madison. 

In this capacity, Dr. Zimmerman leads pioneering work to improve nursing homes that operate under corporate integrity agreements with the HHS Office of Inspector General. Dr. Zimmerman 

has worked with more than 900 nursing homes to improve the care 

that they provide. 

Next we will hear from Arvid Muller, who is the assistant director of research for the Service Employees International Union. For 

the last 14 years, Mr. Muller has conducted much of the analytic 

work underpinning SEIU’s positions on nursing home ownership, 

reimbursement, and quality issues. 

Next we will hear from Steve Biondi, who is vice president for 

clinical services at Extendicare Health Services in Milwaukee. Mr. 

Biondi is a registered nurse, licensed nursing home administrator, 

and has been certified by CMS as a nursing home surveyor. 

He co-chairs the American Health Care Associations Survey and 

Regulatory Committee. He also serves on the quality improvement 

Committee, which seeks to advance quality improvements in the 

use of evidence-based practices. 

The fourth witness will be Bonnie Zabel, also a registered nurse 

and a nursing home administrator for the last 15 years. Ms. Zabel 

runs an exemplary operation at the Marquardt Memorial Manor facility in Watertown, WI. She is also a member of an advisory group 

sponsored by the Wisconsin Association of Homes and Services for 

the Aging charged with developing training materials for facilities 

throughout the State of Wisconsin. 

Our final witness will be Sarah Slocum. For the past four years, 

Ms. Slocum has served as Michigan’s long-term care ombudsman. 

She is the lead advocate on behalf of residents living in licensed 

long-term care facilities. As the State ombudsman, Ms. Slocum 

oversees a network of paid staff and volunteers working in every 

region of Michigan to improve the quality of life and the quality of 

care for that State’s most vulnerable citizens. 

So we welcome you all here today. 

Mr. Zimmerman, we will start with you. 

STATEMENT OF DAVID ZIMMERMAN, PROFESSOR AND 

ACADEMIC DIRECTOR OF THE COLLEGE OF ENGINEERING, 

UNIVERSITY OF WISCONSIN, MADISON, WI 

Mr. ZIMMERMAN. Thank you very much, Mr. Chairman and the 

other members of the Committee. My name is David Zimmerman. 

As the Chairman has said, I am a professor of health systems engineering and the director of a research center at the University of 

Wisconsin, Madison. I am also the president of a nonprofit organization that was created to assist in the monitoring of quality of 

nursing home care in organizations with Corporate Integrity Agreements with the DHHS Office of the Inspector General. I have been 

conducting research in nursing home quality of care and performance measurement for 25 years. 

Our researchers developed the original set of quality indicators 

used by all 17,000 nursing homes and 50 State survey agencies. 

38

More recently, the Long Term Care Institute has been involved in 

13 monitoring engagements with national and regional corporations under OIG corporate integrity agreements covering more than 

1,000 nursing homes and 100,000 nursing home residents. 

Our researchers and monitors have conducted visits to more than 

900 nursing homes in the past 6 years. We have observed or participated in more than 100 quality improvement meetings, including more than 30 such sessions at the corporate level of organizations. I have spoken to at least 15 corporate boards or board committees and met with individual board members about quality of 

care issues. 

These activities have given us important insights into the world 

of nursing home quality assurance, and they provide the background for my remarks this afternoon. 

There has been increasing attention focused on the quality of 

nursing home care, most recently because of the rise in the number 

of ownership transactions between nursing home corporations, and 

the tendency for these transactions to involve a transfer of ownership from a public corporation to entities commonly referred to as 

private equity firms. At the heart of this debate and scrutiny over 

this particular phenomenon, I believe that the single most important issue that we need to face, and soon, is the issue of transparency. 

I have five suggestions for how we should proceed with respect 

to progress on that problem. My first suggestion is that there 

should complete transparency on full ownership of every nursing 

home, including both the operating entity and the landlord. 

The Federal Government, which spends billions of dollars on 

nursing home care every year, should have the right to know the 

complete ownership structure of every nursing home participating 

in the Medicare and Medicaid program no matter which or what 

type of entity owns them. 

The complete ownership structure of all entities involved in the 

provision and administration of resident care should be fully reported to CMS as a matter and a condition of participation in the 

Medicare and Medicaid program. 

The ownership reporting responsibility should be that of the provider organization. That is, it should not be the function or the responsibility of the Federal Government to ferret out the information on who owns what and which entity is providing what part of 

the care to residents. 

The principle of transparency should apply no matter what level 

of complexity in the labyrinth of organizational structures exists. In 

fact, the more complex the web, the greater the need for the more 

detailed transparency that I am calling for. The greater the complexity, the more reasonable it is that those who have created the 

complexity should have the responsibility for explaining it in very 

detailed terms to the Federal Government. 

My second suggestion is that staffing information for every nursing home should be reported in a standardized format to the Federal Government. In other words, there should be transparency on 

the staffing in nursing homes so the purchaser of care can know 

the labor resources that are being devoted to this task. Nursing 

39

home care is what we call a high-touch industry. The labor resources need to be known. 

This information should be based on payroll data, which exists 

in accessible form for virtually every nursing home in this country. 

The technological means exist to achieve this goal. We have been 

in enough nursing homes that I can make that statement with absolute confidence. 

Reasonable people representing all stakeholders can make sound 

decisions about how to structure the definitions into a common taxonomy for the purpose of reporting. Acuity-based staffing in this industry, frankly, is far more crowed about than practiced; but to the 

extent that it is necessary to make adjustments for acuity of residents, this can be done. 

My third suggestion is that there needs to be greater ability to 

expand the scope of observation and analysis from individual facilities to nursing home corporations and networks. In many situations, it is the corporate entity’s policies and procedures that govern the system of resident care in the facility. In some cases, these 

corporate policies and procedures are not adequate to provide proper governance to the delivery of that care. Yet in many other cases, 

the problem at the facility and resident care levels is that reasonable corporate policies and procedures are not being executed consistently across facilities in their own networks. A stronger focus 

on this level of management would be a very efficient way to improve care systematically across an organization, as opposed to one 

facility at a time. 

Yet currently there is virtually no way that a State regulatory 

agency can expand its scope across State lines. CMS does have 

greater authority to expand the scope to a more systematic examination of multi-facility networks, even to some extent across State 

lines, but much more could be done to utilize the available information in an aggregated fashion to focus on regional and even national nursing home networks. 

Our center produces monthly reports on survey deficiencies comparing the largest national corporations and provides them to the 

OIG and to each specific corporation that is covered by a corporate 

integrity agreement. I have provided de-identified examples of 

these types of reports with this testimony. 

We provide similar information on the MDS quality indicators 

and quality measures to the same parties on a quarterly basis. 

This information can and should be provided on all national and 

regional corporations on a routine basis. 

My fourth suggestion is that there needs to be greater use of intermediate corrective measures, as several speakers have talked 

about earlier. There have been calls for broader and more innovative ways to incentivize, exhort, and pressure providers into taking 

better and more systematic corrective actions to improve care and 

sustain that higher care level. Care problems need to be identified 

earlier and addressed in meaningful ways more promptly and with 

more ingenuity and commitment. 

There needs to be increased scrutiny on providers at both the facility and corporate network level who have not demonstrated the 

ability to adequately self-identify a problem and fix it and then 

keep it fixed. 

40

One measure that has demonstrated success in both process and 

outcomes is the use of monitors to provide additional scrutiny on 

the care provided in problematic facilities, as well as the systems 

put in place to correctly identify problems and sustain that fix, including systems that actually have their origin in the corporation 

itself as opposed to just the facility. 

Our previously mentioned work with several national corporations has provided a number of insights into barriers to and 

facilitators of quality improvement efforts. Monitoring can correctly 

place the focus on the systems of care that need to be implemented 

consistently across every facility, every shift, and every bedside. It 

is the systems more than it is the leaders that, in fact, really deliver good quality care. 

Providers sometimes place too much reliance on finding leaders 

and then do not provide those individuals with the kind of support 

they need to be able to do their jobs. When there is a failure of 

care, there leaders are the ones who typically are the scapegoats. 

I call that concept the ‘‘awesome goat’’ phenomenon. 

The monitoring process can also promote and expand the concept 

of transparency described earlier. Facilities and organizations that 

have demonstrated problems in providing quality care should be 

the focus of additional scruting with the transparency that monitors can provide to determine the providers capability to improve 

their systems. 

My final solution is that I think we absolutely have to increase 

the focus on the landlord as well as the licensed operator in nursing homes. Currently, the entity owning the actual physical asset 

of the nursing home, what is typically referred to as the bricks and 

mortar, has virtually no responsibility or accountability for the adequacy of the care provided at that facility. Yet we have seen cases, 

many of them in our monitoring work, in which actions or inactions 

of the landlord have had deleterious and sometimes direct effects 

on the quality of care in the facility. 

There are sometimes restrictive clauses in the lease agreements 

that effectively prohibit the licensed operator from making needed 

upgrades or renovations consistent with evidence-based care practices. Other restrictive lease practices might make the implementation of physical or structural changes so onerous financially that it 

becomes prohibitive for the licensed operator to even consider such 

changes, especially under some of the new lease agreements that 

we see. Frankly, those lease agreements in some cases are the most 

important single document in the practice of care in the facility and 

create major constraints on the ability to adequately deliver care. 

Holding the landlord to the identical certification and licensing 

requirements as the operator may not be feasible. But consideration should be given to making sure that these lease provisions 

are transparent, along with other aspects of ownership, and we 

should find a way to ensure that if lease agreements stand in the 

way of corrective actions there is a way to deal with these situations. 

All the solutions that I have proposed have to do, in some way, 

with increasing the transparency of information about who provides care and who owns whatever entity or entities responsible for 

the decisions pertaining to that care. Transparency is essential to 

41

the continued delivery of nursing home care through existing private and public markets. 

With full transparency, of ownership so we know who is and 

should be accountable, and transparency on staffing, so we will 

know who is providing care, we can examine the outcomes as they 

are produced through the survey process and resident level status 

measures. Facilities and organizations demonstrating their ability 

to deliver adequate care can continue on with this critical task, and 

with our appreciation. Facilities and organizations that have demonstrated an inability to deliver adequate care should expect to see 

additional scrutiny and even greater transparency requirements, 

including outside monitors to assure that they can earn our trust 

to provide care and protect the health and safety of our most vulnerable population. Thank you very much. 

[The prepared statement of Professor Zimmerman follows:]

42


41836.013
43


41836.014
44


41836.015
45


41836.016
46


41836.017
47


41836.018
48


41836.019
49


41836.020
50


41836.021
51


41836.022
52

The CHAIRMAN. Thank you very much, Professor Zimmerman. 

Mr. Muller I would like to request that you all hold your statements to the 5 minutes when the red button appears. 

Mr. MULLER. OK. 

The CHAIRMAN. Go ahead. 

STATEMENT OF ARVID MULLER, DIRECTOR OF RESEARCH, 

SERVICE EMPLOYEES INTERNATIONAL UNION, WASHINGTON, DC 

Mr. MULLER. Chairman Kohl and other distinguished members 

of the Committee, thank you for giving me the opportunity to appear before you today. I am the assistant director of research for 

SEIU, which represents almost 1 million health care workers, including more than 150,000 nursing home workers. 

SEIU appreciates Chairman Kohl’s commitment to improving the 

quality of care in nursing homes. We also want to acknowledge 

Senator Grassley’s long-time leadership on these issues. We look 

forward to continuing our work with both senators on this issue. 

Twenty years after Congress passed landmark nursing home reform legislation, SEIU remains concerned that there are serious 

problems with quality of care across the industry. We fear the current enforcement system is simply not working. It is also difficult 

for families and residents to get the information they need because 

the industry still lacks transparency. 

SEIU analyzed OSCAR deficiency data from CMS. It is unfortunate that any way you cut the data the analysis shows that nursing homes have far too many quality problems. In fact, our research indicates care appears to be getting even worse. 

In our analysis we do not include life safety code violations, nor 

do we include complaint violations. So the total number of problems found by State inspectors in any given year was actually 

worse than our numbers indicate. 

By compiling all the deficiencies from annual inspections for the 

years 2004 through 2006, we were able to determine if the number 

of violations per inspection increased or decreased from year to 

year. Unfortunately the trends we found were quite disturbing. 

Overall the number of violations per inspection increased each year 

for a total increase of 13.8 percent from 2004 to 2006. 

The next analysis we did was to look at the severity of the violations. Violations of resident care, otherwise known as deficiencies, 

have four levels of severity: deficiencies with potential for minimal 

harm, deficiencies with potential for actual harm, deficiencies that 

cause actual harm, and finally, the most serious deficiencies, those 

that cause immediate jeopardy. 

When we looked at the same data sets and broke down the violations by severity, we found that while the least serious violations 

decreased during this time, the more serious violations increased. 

Violations that had only potential for minimal harm decreased 

from 2004 to 2006 by almost 10 percent. However, violations that 

had potential for actual harm increased by 17.8 percent. Violations 

that were found to have caused actual harm increased by an even 

greater 19.5 percent. 

Since the average number of violations per facility is between six 

and seven during this period, we also looked to see whether there 

53

was an increase in the number of facilities that had significantly 

more violations. For this analysis, we looked at all the facilities 

that had 10 or more violations during a single inspection in any 

given year. 

We discovered an increase in the number of facilities that got 

cited by State inspectors for at least 10 violations from 20.9 percent 

in 2004 to 26 percent in 2006. This means that more than one out 

of every four facilities inspected in 2006 had 10 or more violations 

of minimum Federal resident care standards. 

In addition, as has been mentioned here today, a new breed of 

nursing home operator, private equity, has entered the nursing 

home markets;. and for the companies we analyzed, this had a 

clearly negative effect on care. 

Private equity firms take on a lot of debt, have ownership structures that are particularly complex and a business model that is 

based on buying and selling businesses within a relatively short period of time. This private equity model lacks transparency and accountability and may be exacerbating the care problems we find in 

the overall industry. 

In our analysis of deficiency data, we released a new report today 

in which we compared the number of violations per inspection from 

just before they got bought by private equity to their most recent 

inspection. In the case of the private equity buyout of Mariner 

Health Care in December 2004, we found that since the buyout the 

total number of Mariner Home violations increased by 29.4 percent, 

more than double the increase of the non-Mariner facilities in those 

same states. 

Moreover, actual harm violations for the Mariner Home increased by an incredible 66.7 percent, while the other homes in 

these states saw an increase of just 1.5 percent. During their most 

recent inspections, over 43 percent of Mariner facilities were cited 

by State inspectors for 10 or more violations compared to only 25 

percent before the sale. 

Most importantly, we must remember that each of these statistics reflect a fragile nursing home resident whose needs are not 

met or who is or who could be injured because of the nursing 

home’s poor performance. We owe it to our seniors to do better. 

The bottom line is that reform is needed to improve transparency 

and enforcement throughout the industry. CMS must improve the 

efficiency of the enforcement system in ways that will catch the 

homes that need to make improvements. They need to do so earlier 

in the process than many do now before fragile nursing home residents are injured. Furthermore, given the increase in the number 

of homes cited for 10 or more violations, it is imperative to focus 

more attention on homes that are chronic poor performers. 

We are encouraged that the Chairman and Senator Grassley are 

considering legislation to address these concerns, and we urge you 

to consider the following policy changes: increase the transparency 

and accountability of corporate ownership, require full disclosure to 

the CMS of all affiliated entities with a direct or indirect financial 

interest in the facility and their parent company, amend the provider agreement to require that providers deposit assets in a bond, 

require CMS to certify the provider agreements annually, and, require CMS to post enforcement actions against facilities. 

54

In order to promote improved staffing, we urge you to require 

CMS to collect electronically submitted data from facility payroll 

records and temporary agency contracts on a quarterly basis. We 

would ask you to require that information on cost reports for Medicare be reported based on five cost centers: direct care nursing 

services, other direct care services, indirect care, capital costs, and 

administrative costs. Finally, we ask that you require CMS to conduct audits of nursing staff data reports and cost reports at least 

every 3 years. 

Taxpayers trust that Medicare and Medicaid dollars will go toward providing seniors and the disabled with the quality care they 

deserve. I thank you for inviting me here today to testify about 

SEIU’s concerns about the quality of care in nursing homes today. 

The CHAIRMAN. Thank you, Mr. Muller. 

[The prepared statement of Mr. Muller follows:]

55


41836.023
56


41836.024
57


41836.025
58


41836.026
59


41836.027
60


41836.028
61

Mr. Biondi. 

STATEMENT OF STEVE BIONDI, VICE PRESIDENT OF 

EXTENDICARE, MILWAUKEE, WI; ON BEHALF OF THE 

AMERICAN HEALTH CARE ASSOCIATION 

Mr. BIONDI. Thank you, Chairman Kohl and members of the 

Committee. I am pleased to be here representing the American 

Health Care Association and the nursing home profession. My 

name is Steve Biondi. I have been an ombudsman, a State regulator of health care, a health facility operator, and a consumer who 

has had a family member cared for in a nursing home. By profession I am a licensed nursing home administrator and a registered 

nurse and have worked in acute care, long-term care, and home 

care. 

First I want to thank you, Chairman Kohl, for your leadership 

in this important Committee and for introducing the Patient Safety 

and Abuse Prevention Act, which the AHCA supports. I also want 

to acknowledge Senator Grassley’s longstanding commitment to 

issues of aging and the millions of Americans our profession cares 

for each and every day. I also commend the other members of this 

Committee, especially Senators Smith, Lincoln, and Collins who 

have put forth some of the most important regulatory reform concepts of the past 20 years. 

Their Long-Term Care Quality and Modernization Act takes an 

important step toward broadening the culture of cooperation among 

long-term care stakeholders and benefits the patients and families 

we all serve. My comments build on testimony of my colleague, 

Mary Ousley offered to this Committee about the refinements of 

OBRA 1987 that are still needed to support the vision of patientcentered care. 

What was undeniable 20 years ago, is undeniable today and will 

be undeniable 20 years from now is the unbreakable link between 

stable funding and quality and the critical need for well-qualified 

staff who deliver quality care each and every day. We are proud of 

the progress we have made and the transparency we have around 

improving quality. 

Our latest initiative is advancing excellence in America’s nursing 

homes. It is a voluntary program co-founded by the American 

Health Care Association and a coalition of providers, caregivers, researchers, government agencies, workers, and consumers. Advancing excellence focuses on specific measurable clinical quality and 

organizational goals. The resources for providers include best practices and are all evidence-based. 

Perhaps the most unique feature of this campaign is how it encourages greater partnership among the stakeholders, both nationally and at the State level to improve care and services. Our profession is also focusing on consumer satisfaction. Consumers, including patients and families, are being asked how they judge our services and whether they would recommend them to a friend. 

A very high percentage are truly pleased. Providers use these 

independent satisfaction surveys to improve the patient quality, 

quality of care and quality of life. My own company uses these consumer feedback mechanisms to make changes within our facility 

operations. 

62

These kinds of focused efforts have improved quality and clinical 

outcomes. CMS OSCAR data shows a positive trend in the quality 

measures posting on nursing home compare with improvements in 

key areas for short-term and long-term stay patients and residents 

in pain, restraints and pressure ulcers. 

I think it is important to expand the concept of transparency beyond just facilities to include the survey and enforcement process 

itself. We have been working with CMS for more than a year with 

some success trying to better understand its special focus facility 

program. We still need clarity around the formula that CMS uses 

to identify those facilities and the successful strategies that more 

than 60 facilities thus far have used to achieve sustained compliance. 

Clearly, all of us share a commitment to quality. Transparency 

around this program would improve regulatory compliance and reduce the number of poor performing facilities. 

From our perspective the quality improvement organizations are 

a valuable external resource for all facilities, even those that are 

already doing well in terms of quality. The commonwealth fund 

study looking at residents’ quality of life found that QIOs work 

with nursing homes ‘‘a sound investment for health care dollars.’’ 

However, when we look at internal resources, our greatest challenge is attracting, training, and retaining quality long-term care 

staff. Today we have nearly 100,000 vacant nursing positions. We 

could use your help in addressing the critical shortage of nurses, 

which is driven as well by the nurse educator shortage. 

For the consumer, AHCA has an easy to understand Web site to 

educate consumers about long-term care. Since beneficiaries generally look to CMS for guidance in this arena, we have a number 

of recommendations on improving nursing home compare in my 

written testimony. The main point we want to make is that nursing home compare does not currently give consumers understandable information that they can use in truly choosing a nursing 

home. 

Last, as we look at our survey and enforcement system, what 

most people haven’t considered is how the survey process impacts 

caregivers and nursing homes. The system focuses solely on operational shortcomings with rare positive acknowledgement for the 

quality of services provided. It is important that we begin to recognize our most valuable resource, the human capital that work within our facilities and within our profession. 

We personally appreciate your focus on long-term care, Senator 

Kohl. AHCA looks forward to working with this Committee toward 

our mutual interest of continuing the progress we are making in 

improving nursing home quality. Thank you. 

[The prepared statement of Mr. Biondi follows:]

63


41836.029
64


41836.030
65


41836.031
66


41836.032
67


41836.033
68


41836.034
69


41836.035
70


41836.036
71


41836.037
72


41836.038
73

The CHAIRMAN. We thank you, Mr. Biondi. 

Ms. Zabel. 

STATEMENT OF BONNIE ZABEL, ADMINISTRATOR FOR 

MARQUARDT MEMORIAL MANOR, INC., WATERTOWN, WI; ON 

BEHALF OF THE AMERICAN ASSOCIATION OF HOME SERVICES FOR THE AGING 

Ms. ZABEL. Thank you. My name is Bonnie Zabel. I am pleased 

to be here representing Marquardt Memorial Manor in Watertown, 

WI and the American Association of Homes and Services for the 

Aging. I am grateful for this opportunity to fulfill my personal desire to tell you from my heart what I feel is needed for quality longterm care. This is based upon my 20 plus years in long-term care. 

True quality of care has to include all providers at all levels of 

service from acute care to long-term care to assisted care in the 

home setting. We all need to provide the same quality. 

Consistency in care is especially important at the time of admission to the nursing home. Currently hospital discharge decisions 

are made with little if any family input or time to visit or check 

out a nursing home. Consumers often are stressed and don’t know 

that they can challenge the hospital’s decision. 

Often they have neither the time nor the knowledge to make a 

good decision. No one says, ‘‘When I grow up, I want to live in the 

home,’’ and decides in advance where they want to go. People are 

in crisis when the decision must be made. 

I recently experienced such a crisis with my own father. He had 

a joint infection in his knee which required urgent surgery and I.V. 

antibiotics. He hasn’t gotten out of bed in his first 24 hours in the 

hospital, even though there were orders to do so. He happens to be 

86 years old. 

I informed them that he couldn’t urinate without standing. They 

put a catheter into his bladder three times that first 24 hours. He 

urinated blood for 2 days after that. 

On his first post-op day, the discharge planner came in and told 

us that he needed to go to a nursing home the next day because 

he wasn’t walking well enough. I told her that he wasn’t going to 

a nursing home the next day. Her response was she would be back 

at 8 a.m. the next day and, yes, he would be going to a nursing 

home. 

The next day his drain was out, his dressing changed, he was 

dressed and ready to go home. Her response, ‘‘What a difference a 

day can make.’’ 

In reality if I were not a nurse and administrator, my father 

most likely would have been discharged to a nursing home. I could 

challenge the hospital decision in a way that most consumers cannot. Discharge planners too often take the path of least resistance, 

which is calling a facility and getting the resident admitted within 

an hour or two. 

Marquardt Manor was actually reprimanded by our local hospital 

for wanting to assess a resident prior to admission and requiring 

doctor orders the afternoon before admission so we could be sure 

that the resident’s needs could be met. Their rationale, given by a 

physician and the vice president of patient services, was, ‘‘People 

74

get infections and die and there are multiple medication errors that 

can kill in hospitals. We need to get them out as soon as possible.’’ 

How should the hospital discharge and nursing home admissions 

system work? We make sure that our staff knows about the resident and family and their needs prior to admission. All supplies 

and equipment are available. 

For the past 10 years, all of our residents have had private 

rooms with private baths. A one-day admission process improves 

quality and allows the family to personalize the room. This is not 

an additional cost to Medicare. Poor transitions have cost, too. 

Families are in crisis when they hear that admission to a nursing home is needed. If they have time to choose, they don’t know 

what to look for. Nursing home compare is written in industry language and only tells consumers about problems in facilities, not 

about what to look for in quality. 

For example, the site tells you if the home has a separate dementia unit, but the availability of dementia units doesn’t necessarily 

mean that the residents receive specialized care. Questions need to 

be asked. 

How does staffing differ from regular units? How many hours of 

activities are provided beyond the regular units? How long will my 

mother stay on this unit, until the end of her life, only while ambulatory, only while continent? 

Wisconsin’s consumer information report does a much better job 

of explaining the survey results for consumers. But it, too, is limited by its focus on deficiencies and compliance. However, the CIR 

also reports on nurse staffing and retention, which is a very good 

piece of information. 

Consumers should be looking for places that provide person-directed care. But nursing home compare doesn’t give you the tools 

to do this or even say that this is an important element of quality. 

Person-directed care is a philosophy, not a building design, animals, plants or buffet dining. It is about individuals as people, people who are someone’s mother, father, brother, sister or spouse, 

people who were teachers, butchers, farmers, factory workers, business people. Their lives made a difference in America, and they deserve to be treated with dignity, caring, and respect. 

Finally, I would like to emphasize the importance of adequate 

funding, especially for Medicaid. Funding has declined and continues to decline. There was no Medicaid Title 19 increase in Wisconsin this year, zero. My facility loses $65 per day per Title 19 

resident. Sixty-five to 70 percent of my residents are on Title 19. 

Facilities are limiting Title 19 admissions or eliminating them altogether. I fear the return of the ‘‘poor farm’’ of the 1950’s. Not 

funding Title 19 will certainly get us there. 

Without adequate financing there cannot be quality. We are a 

service industry that requires good staff. I identified that 20 years 

ago. 

I have been proactive and innovative in creating programs to attain and maintain good staff. Adequate wages and benefits are a 

necessity. High standards for performance and adequate training, 

equipment, and supplies run a close second. That does not mean 

an increase in the time of training. It means adequate training. 

75

Consistent, caring hands-on managers cannot be overlooked. 

Eight years ago I created a gratitude attitude program in my facility. It has made a big difference in staff quality and retention. Our 

workers compensation costs are minimal due to adequate training, 

equipment, and oversight. Our staff retention surpasses most. Our 

customer relations and satisfaction are excellent. 

We need your help to change our current system of educating 

consumers. Consumers need adequate time to make decisions and 

good information to base those decisions upon. The system already 

has lots of regulations and the means to enforce them. It is time 

to focus on getting the word out on quality. 

I thank you for this opportunity of a lifetime. 

[The prepared statement of Ms. Zabel follows:]

76


41836.039
77


41836.040
78


41836.041
79


41836.042
80


41836.043
81


41836.044
82


41836.045
83


41836.046
84


41836.047
85


41836.048
86


41836.049
87


41836.050
88


41836.051
89


41836.052
90


41836.053
91


41836.054
92


41836.055
93


41836.056
94


41836.057
95


41836.058
96


41836.059
97

The CHAIRMAN. Thank you, Ms. Zabel. 

Ms. Slocum. 

STATEMENT OF SARAH SLOCUM, STATE LONG TERM CARE 

OMBUDSMAN, OFFICE OF SERVICES TO THE AGING, 

LANSING, MI 

Ms. SLOCUM. Thank you, Senator Kohl, Senator Smith, and 

members of the Committee. I deeply appreciate this important 

hearing that you are holding today. Chairman Kohl, the National 

Association of State Ombudsman Programs particularly wants to 

thank you for your years of work on behalf of nursing home residents. 

Twenty years after the passage of OBRA we see too many instances of poor quality care and continuing poor performance by 

certain providers. Given the vulnerability of residents, we must ensure the public has access to meaningful information about ownership, enforcement actions, financial solvency, and staffing in all 

nursing facilities. 

On ownership, Congress should require CMS to publish information on the nursing home compare Web site that shows ownership 

linkages. It should publish information about ownership also of 

other services such as pharmacy, laundry, and food services. Owners should be required to submit audit results and financial data 

to demonstrate fiscal solvency of all commonly owned entities. 

Why is ownership important? Here is one example. During 2005, 

two nursing facilities in Michigan burned. One resulted in two resident deaths and partial facility evacuation during the Easter holiday. The other resulted in two resident deaths and 60 residents 

sent to the hospital along with a complete evacuation in mid-December. 

There was no overt connection between these two facilities such 

as the same name. It took considerable effort by the ombudsmen 

to learn of their common management company. Neither facility 

had provided specific training and drills to ensure that staff knew 

how and when to use fire extinguishers and fire doors. Had a connection been apparent, regulators could have required a review of 

emergency procedures in all facilities operated by this management 

group prior to these terrible events. 

Enforcement-all enforcement actions—should be published by facility name on the nursing home compare web site. Actions such as 

denial of payment for new admissions, civil money penalties, directed plans of correction, mandatory temporary management, 

monitors, terminations, and special focus facilities should all be 

clearly listed on the Web site. Plain English explanations of these 

terms must be included. 

Residents of facilities, their loved ones, and the community at 

large should be notified of enforcement action. For too many residents and families, the termination action is their first notification 

of the facility’s problem. Information on enforcement actions would 

help individuals make informed decisions in choosing a nursing 

home and would give residents and families information about 

areas that require vigilance in their home. 

The complete text of the survey results, the 2567 form, should be 

published on nursing home compare. The descriptive text found in 

98

these reports helps consumers get a better idea of what violations 

are cited and what is needed to correct these problems. 

Another essential tool for residents, families, and friends is a 

standard complaint form. This type of form helps people by prompting them to identify and include all basic information needed to investigate a complaint. Survey and complaint units must also continue to provide for telephone complaints where staff assists consumers in reducing the complaint to writing. 

On civil money penalties, Federal CMP funds should be collected 

without any discount for non-appealed violations. If the CMP is not 

correct or is too harsh and the facility appeals the decision, the appeal process will deal with any reductions or deletions that are 

merited. Federal CMP funds should be returned to the State survey and certification agency for, first, increased staffing for survey 

teams and ombudsmen programs; second, funding to carry out financial viability audits and reports; and, third, financial restitution 

to any individual resident who has suffered harm. 

Staffing: Staffing shortages continue to plague residents and 

staff at many nursing facilities. A recent revisit survey at a Michigan facility resulted in a citation for pressure sores. In the narrative for the citation, there is an interview with a certified nursing 

assistant who had not turned a resident as stated in his care plan. 

The CNA said, ‘‘I have 14 residents to care for, and 11 residents 

are total care. It is very hard to turn people every 2 hours because 

sometimes we just can’t.’’ One resident at this facility was admitted 

in December 2006 with no pressure ulcers. By February 2007, he 

had a pressure ulcer on his left heel. By September 2007, he had 

a maggot infestation and infection that required surgery on his 

stage four pressure sore and removal of part of his heel. 

Congress should enact safe and clearly enforceable staffing requirements to ensure no other residents suffer this fate. The 

amount and type of nursing staff, RNs, LPNs and CNAs serving 

residents in each nursing facility should be posted on nursing home 

compare. Substantiated complaints about staffing levels should also 

be listed. 

Ombudsman access to information: All information about ownership, enforcement actions, civil money penalties, staffing, and special focus status must be shared immediately by State agencies 

with long-term care ombudsmen. Ombudsmen serve as a source of 

counseling and information for consumers and their families as 

they consider long-term care options. When ombudsmen know 

about sanctions and facility status, they can increase visits to safeguard residents, and they can help consumers through the trauma 

should there be a closure. 

Ombudsmen should be consulted in the development of lists of 

potential and actual special focus facilities. Data from the ombudsman program about complaints and issues at facilities would add 

a consumer perspective to the decisionmaking process. 

There are very serious effects on residents of the enforcement actions taken. For years ombudsmen in many states have expressed 

a need for CMS to hold poorly performing facilities accountable, to 

consistently use strong enforcement action when violations exist, 

and to enforce all requirements for quality of care and quality of 

life. At the same time, ombudsmen have expressed great concern 

99

over the harm suffered by residents when these same enforcement 

actions bring about decertification and closure. 

The special focus facilities program has brought these competing 

concerns into sharp relief as chronically poor performing facilities 

receive additional scrutiny in a shortened enforcement cycle. On 

average, five Michigan facilities, slightly more than one percent of 

our nursing home supply, close each year. 

During fiscal year 2007, 445 nursing facility residents were 

forced to move from their homes because of these closures. We 

must take resident welfare very seriously and consider that at 

every point in the enforcement process. 

Some recommendations about enforcement and closure that I 

would like to make in closing here. State survey and certification 

agencies must always take control of the relocation of residents. 

Voluntary closures result in chaos and in lack of resident choice too 

many times. 

Specific timelines for each closure must be established by CMS 

and the State survey agency. Timelines may vary depending on the 

number of residents, the availability of acceptable options, and the 

risk of harm to residents who remain at the facility. 

Medicare and Medicaid payments should not be limited to 30 

days after the termination date. Thirty days is often not adequate 

to choose a better facility or transition to home and communitybased services. A 30-day timeline pushes residents to move to far 

away homes or to substandard facilities. 

Every day I hear from consumers who are thirsty for reliable and 

understandable information. The National Association of State Ombudsmen Programs stands ready to provide information on resident 

experiences and how information can be made accessible, transparent, and meaningful to consumers. 

We are grateful for your determined efforts to inform, to protect, 

and to empower each long-term care resident. Thank you. 

[The prepared statement of Ms. Slocum follows:]

100


41836.060
101


41836.061
102


41836.062
103


41836.063
104


41836.064
105


41836.065
106

The CHAIRMAN. Thank you, Ms. Slocum. 

I would like to call now up Senator Bill Nelson who has not had 

an opportunity to speak yet. 

We would be delighted to recognize you, Senator Nelson. 

OPENING STATEMENT OF SENATOR BILL NELSON 

Senator NELSON. Thank you, Mr. Chairman. 

Thank all of you for your participation on what is an increasingly 

going to be an aspect of American life. Naturally you would expect 

from my State of Florida that we see a greater proportion of nursing homes per 1,000 of population. That is the good fortune that 

we have in Florida of having so many people decide to spend their 

twilight years in Florida, the land called paradise. 

Now, I want to ask you, Mr. Muller. You have come up with this 

study here. It is about-well, it is entitled, ‘‘How Private Equity 

Buyouts Hurt Nursing Home Resident.’’ I am curious what are the 

unique concerns with private equity owned chains? Why single out 

them as your concern with nursing homes? 

Mr. MULLER. As I think I mentioned in my testimony, the private equity model sort of has a couple of things that are relatively 

unique about it, specifically that they take on a lot of debt. They 

need to make money quickly in order to sell the nursing home assets again quickly. 

While it is true that all nursing homes need to do better, as our 

research and the New York Times article have pointed out, things 

seem to get even worse when private equity takes over. As I mentioned in the testimony, with Mariner Homes, actual harm deficiencies increased by 66.7 percent versus 1.5 percent for the overall 

industry. 

We think Congress must take action to improve transparency 

and accountability enforcement for all nursing homes. But regulations must also keep up with industry trends. Private equity is one 

of those new trends that requires new regulation. 

Senator NELSON. So what is it about private equity? Would you 

state that again? 

Mr. MULLER. Sure. 

Senator NELSON. Without reading it. 

Mr. MULLER. OK. 

Senator NELSON. I want you to just tell me. 

Mr. MULLER. I think as I said before, with private equity what 

makes it different from other type of ownership situations is that 

private equity when they buy a nursing home company takes on a 

lot of debt. Right? They create a maze of operating structures. They 

need to make money very quickly because they have a relatively 

short time horizon in which to get in and get out. Right? 

We are concerned that those business imperatives are incompatible with providing quality care, given what we have seen at Mariner. Right? Which is a company that was bought by a private equity firm. The number of increases in violations we saw there compared to the violations in peer group homes in those states. 

Senator NELSON. How many private equity firms-let me put the 

question the other way. How many nursing homes are owned by 

private equity firms? 

107

Mr. MULLER. That is a very good question and one to which I 

don’t know the answer. I think it is very hard to figure that out 

in part given the maze of ownership and structures, the way private equity sets themselves up. It is very hard to figure that out. 

I would certainly not want to contradict the gentleman from 

CMS who spoke earlier who said he doesn’t know. So, I don’t think 

we know, either. 

Senator NELSON. Carlyle, a private equity firm, as you point out 

in this document, has announced its intention to buy Manor Care. 

What are your concerns about this? 

Mr. MULLER. Well, Manor Care is one of the largest nursing 

home——

Senator NELSON. I don’t want you to read your answer. I want 

you to talk your answer to me. 

Mr. MULLER. OK. Manor Care is one of the largest nursing home 

companies in the country. So, that is a cause for concern right 

there. Second, when we have looked at the history of Manor Care 

violations over the last three inspection cycles, their care deficiencies have increased by about 23 percent compared to about 14.5 

percent for the other homes in the states they operate. 

We are concerned, given the history of private equity and the 

trends we have seen in other companies, that the care at Manor 

Care will get worse with Carlyle Group coming in. 

Senator NELSON. Now, the other side says something different. 

In a recent Washington Post article, Manor Care’s general counsel 

was quoted as saying that they will continue to control all their assets and it will be a transparent company. But in your review of 

the applications that Carlyle filed, can you tell us does that appear 

to be true? 

Mr. MULLER. What we saw in the public filing was that there 

was a separation of the operating company from the property company and different layers of ownership set up between the ultimate 

parent corporation and the operating company, that is, the nursing 

home, the licensee. 

Senator NELSON. Down in my State, the Florida Agency for 

Health Care Administration recommends that our State expand its 

definition of controlling interest to include all subsidiary operations. It recommends that this information be kept current with 

an online reporting mechanism and, of course, be available to the 

public. Do you think these recommendations are enough to make 

sure that we know of the transparent ownership of nursing homes? 

Mr. MULLER. I have not had a chance to read those recommendations, so I wouldn’t want to categorize them as being enough or not. 

But they certainly seem like a step in the right direction. 

Senator NELSON. What would you say would be additional things 

that we must require to make sure that we have transparency? 

Mr. MULLER. I think some of the things I mentioned in my testimony about requiring surety bonds to make sure that the assets of 

the entire company are available in case the Federal Government, 

State regulators or other parties need some form of redress. 

Senator NELSON. Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you, Senator Nelson. 

Senator Casey. 

Senator CASEY. Thank you very much, Mr. Chairman. 

108

I wanted to thank all the witnesses for your testimony and the 

obvious expertise that you bring to these issues. Most of the focus 

that I wanted to bring to the discussion centers on staffing. Many 

of you have not just a lot of experience with this issue, but a whole 

list of recommendations, many of which could be the subject of 

many more hearings and certainly the subject of legislation. 

But it has been my experience in State Government looking at 

this fairly closely as a public official that often in many places, 

many facilities it kind of begins and ends with staffing. You can 

make determinations very quickly about the quality of care based 

upon staffing. 

I guess I would ask you to first of all outline-maybe I will start 

with you, Ms. Slocum, just to-and some of this is by way of reiteration of your testimony—but what you think is not happening now 

with regard to Federal initiatives, first of all, with regard to improving staffing in terms of the quality of the staff and second, 

with regard to what CMS is not doing in terms of providing information to consumers, to families before they make a determination 

about where to place a loved one. Because I will tell you, listening 

to CMS talk about the information they are providing, I think it 

is a heck of a lot better than it was 10 years ago. 

But what you and others have outlined here today is we have 

still got a long, long, long way to go to provide the kind of information that people need and especially in the context of staffing. I 

guess I want you to comment on both what CMS needs to be doing 

better, but also what the Federal Government needs to do to ensure that we have quality staff. 

Ms. SLOCUM. OK. Thank you for that question. First of all, I 

would say I-and I believe my ombudsman colleagues will applaud 

CMS continuing to add to and improve all of the data that is on 

nursing home compare. 

Posting staffing data by particular job types and license types 

will actually help consumers have a more specific idea of how a 

particular facility is staffed. Using payroll data that facilities have 

to submit would also make it more specific. 

So CMS is taking some steps. The ombudsmen will continue to 

comment to them and provide input about how we think that 

would be most useful to consumers. Part of the issue between State 

staffing requirements and Federal requirements—for example, in 

my State, we have staffing ratios and requirements that were enacted in 1978. They are extremely low. 

It only requires 2.25 hours per day per resident of direct nursing 

time. That includes essentially everyone except the director of 

nursing—the CNAs, the LPNs and the RNs in the building. So that 

has become in Michigan essentially a meaningless staffing requirement. I have only in my four years, I think, seen one facility, which 

was in the process of closing, fall below that level. 

The Federal requirements, despite all the great language and requirements that are in the OBRA 1987 law and the subsequent 

regulations, there is not a specific enforceable staffing level required. There have been well-respected studies that show just the 

average nursing facility needs to staff at about 4.1 hours of direct 

care per resident per day just in order to meet basic needs. That 

109

is the average resident mix, not particularly a super-high acuity 

population in a facility. 

In Michigan, we are running-I believe the current number is 3.8 

hours per resident per day on average. So obviously some facilities 

are below that, and some are staffing above that. 

But given that we have some data and studies about what is actually needed to provide adequate care, it seems like it is time, I 

think, to revisit some of the requirements and that Congress certainly could take an active role in looking at how to and what is 

a reasonable staffing requirement that is measurable so that we 

can know do all the facilities meet the requirement or not. 

Senator CASEY. I want to ask you-I know I am a little low on 

time, but I wanted to ask others. But the focus really that I am 

trying to bring to this is the question of what can the Federal Government do in a strategic way, not just in terms of setting. As you 

said, various states do this with regard to the hours of care. That 

is obviously very important. 

But what can the Federal Government do to better prepare that 

person who is the staffer? We heard stories all the time in Pennsylvania. They would train 10 people for a couple of weeks, and they 

would retain two. This whole recruitment and retention crisis is so 

central. 

Ms. Zabel, if you wanted to comment on that. 

Ms. ZABEL. I would love to. The only way that we can get good 

staff and keep good staff is to treat them like human beings. That 

means that we have to develop programs within our organizations. 

We have to pay them decent wages. 

The starting wage in my facility right now is $13.95, which is 

probably the highest in Wisconsin. Believe it or not, we are in a 

rural wage scale as far as-a rural wage area as far as the Medicare 

program, which lost my facility over $100,000 a year. But I believe 

that the 3.8 hours is probably pretty high. That is not around the 

average. 

In our State of Wisconsin, 2.8 hours are the amount of hours that 

our funding—Title 19 reimburses us that. So if you would make it 

4.1, most of our facilities who run a high Title 19 census would not 

be able to survive. You certainly need to keep that in mind. 

We have plenty of regulations and enforcement. But we have to 

look at enabling facilities to treat people well, provide adequate 

equipment, adequate supplies. CNAs shouldn’t have to hide diapers 

in their ceiling for their favorite residents because the supply 

comes the first of the month and if it is gone by the 28th of the 

month, sorry, you can’t have disposable, good diapers. We have to 

look at that sort of thing. 

In Wisconsin, our reimbursement situation sets ceilings. There is 

a ceiling for administration, ceiling for direct care, ceiling for the 

supplementary care. Most of the facilities in Wisconsin exceed that 

ceiling as far as reimbursement. My facility is way over the top on 

that. But we still manage to survive. 

We have to look at that. We can’t have facilities that are just trying to meet that ceiling, the minimum amount of investment. We 

have to invest in these people. It doesn’t require more regulation. 

It requires us to really be looking at how is the money being spent. 

110

Indeed, our State association provides a financial report that 

tells you where your facility is in each of those areas compared to 

the national, compared to the State average, comparing for-profit, 

not-for-profit and governmental. That information is available. Perhaps that should be made available to the consumer. 

But you have to remember the consumer is not involved in the 

admission process. It is the discharge planners. That has to change 

at that level, please. 

Senator CASEY. I may want to come back to it. I know I am well 

over time. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Members of the panel, in the range of all the 

problems that we are discussing here today, how many of them go 

back to financing and adequate financing in order to do the job? 

How much of it is basic competence of the people that are involved? 

Who would like to take a crack? Is financing inadequate, financing of the nursing home industry the biggest problem we have? 

Or what would you say, Ms. Zabel? 

Ms. ZABEL. That is part of the problem. But I think as management——

The CHAIRMAN. Management? 

Ms. ZABEL. That comes from management, whether it be from a 

corporate level or an individual facility level. You set the tone for 

what is going to happen in your facility. You have to be hands on 

management, not living in an ivory tower. You have to know what 

is happening in your building. You have to be available to the people that work in your building. You have to support them. 

They have a life outside of your facility. That means that they 

can’t just be giving in their work life. We have to support their 

home life as well and understand their needs. You can do that 

without really a very large investment in capital. 

I have seen it happen from the day that I started 20 years ago. 

One of the things that you need to do is enforce your disciplinary 

policy. If you say she should be getting a warning, but I am not 

going to give it to her because we really need her to be here because we are short staffed today, then the good employees pack up 

and leave. 

Why should I stay here when I work so hard, and all these other 

people do a mediocre job and they are still here? So you have to 

start at the basic founding of what is the mission of the organization and how can you care for these people. You establish that before you look at the money. 

The CHAIRMAN. Good management and proper financing? 

Ms. ZABEL. Correct. 

The CHAIRMAN. Good management starts with the person at the 

top. 

Ms. ZABEL. Yes. 

The CHAIRMAN. It is you. 

Ms. ZABEL. Well, it could be higher than me, but it is my ability 

to be a good manager——

The CHAIRMAN. At your facility that is you. 

Ms. ZABEL. Yes, it is. 

The CHAIRMAN. Anybody else? 

Yes, Ms. Slocum? 

111

Ms. SLOCUM. I agree with much of what Ms. Zabel has said. She 

has made some excellent points about staff need to be treated in 

a humane way so that they can treat residents in a humane way. 

I would say financing is certainly an area we need to look at. You 

can’t have quality care without reasonable financing. But reasonable financing does not guarantee quality. 

We have seen in Michigan because of large turnover rates in 

some of the issues that Ms. Zabel is bringing up, a lot of money, 

millions, over $100 million a year is one estimate, wasted on staff 

turnover. So there is money in the system, but we need to take a 

very careful look at how it is being spent, the oversight of that 

money, and making sure that the best system practices are in place 

so that it is well-used and we do actually achieve quality. 

The CHAIRMAN. As an ombudsman, how much of an impact do 

you think this list that is going to be published by CMS on December 1st in terms of really highlighting those poorest performing facilities? Will that have a big impact on the industry in terms of lifting up the standards, at least at the bottom? 

Ms. SLOCUM. I think it will be an excellent piece of information 

for consumers to have. I hope very much that it is viewed by the 

provider community as a very strong reason to make sure that nobody falls below that bottom line into the lowest rung and ends up 

on that list. I think it is an important step. 

The CHAIRMAN. Anybody else want to comment? 

Mr. Biondi. 

Mr. BIONDI. Senator, if I could offer a few comments. I talked in 

my oral testimony about the survey process. One of the components 

that I think is important in our arena is when you think about 

what staff spends a lot of their day doing is difficult, difficult work. 

I think Ms. Zabel has made very excellent comments regarding 

many of the things I would have said in terms of treating people 

right. 

We have got to find a way to reward and praise people, both in 

the survey process and find the good things that people are doing. 

Most people strive to do good things. Yet our survey process really 

doesn’t identify any of that. 

We all have to collectively every day find ways to make people 

feel proud about what they are doing, pay them decent wages, 

make sure we are getting paid in the Medicaid system for what we 

are doing. Clearly, from a staffing perspective, I have looked at it 

many a times where I think we have even been over-staffed or 

under-staffed in some of our facilities. Sometimes either way can 

cause a problem with delivering good quality care and services. 

It really is dependent on the physical plant, the size of the facility, the way it is laid out, the type of residents you have there, and 

how stable that staff is, how educated, how trained they, whether 

they know the residents, know how to do the job correctly. There 

is a delicate balance, and we have to strive to find that delicate 

balance. 

The CHAIRMAN. Thank you. 

Mr. BIONDI. Thank you. 

The CHAIRMAN. Anybody else want to make comment before I 

pass it on to Senator Casey for his last question or two? Anybody 

else? 

112

Professor Zimmerman. 

Mr. ZIMMERMAN. I think that it certainly is the case that we 

have states in which the Medicaid payment rate is probably not 

adequate to sustain a reasonable amount of care with a reasonable 

staff component. I also think that there are places in which the 

amount of each dollar of revenue that is spent on resident care varies substantially. That is, resident care relative to either a lease 

payment or some other form of a capital grab. 

I think we have to be very attuned to how much of the expenses 

at a particular facility are retained at that facility and are used for 

facility improvements and facility care. That is not to say that any 

work is incapable of a system that gives sufficient money to the facility to do its job. 

But I think we have to be very careful to make sure that the 

Federal Government, which deserves to know because it pays so 

much of the bill-how much of the expense sheet is going to resident 

care. That is a reasonable thing to know. 

If somebody is more efficient and can get the job done more efficiently, that should be rewarded as well. But there are certain reasonable, intuitively compelling staff levels that are so low one 

would say you can’t deliver care with this amount of staff. You 

have to have a greater staff component. 

So that is why I am calling for transparency. It is reasonable to 

know what amount of staff is being used to provide care in a facility. That is not an unreasonable thing to know and to be reported. 

The CHAIRMAN. Thank you. 

Senator Casey. 

Senator CASEY. Thank you. 

I wanted to follow up, Professor Zimmerman, on your testimony 

as compared to what Mr. Weems presented. I asked him about the 

provider enrollment chain and ownership system, PECOS. Your 

testimony focused on the broad question of transparency. 

Then you had, I guess, five-was it five-solutions. How would you 

compare what is in place now with regard to transparency as it relates to CMS, what CMS is doing or promising to do? How do you 

compare that with what you are recommending? 

Mr. ZIMMERMAN. I think that as I understand the PECOS system-and I have not looked at it in detail-I think it has a lot of the 

elements that I think are going to be necessary in terms of ownership information. I think in some cases restricting it to only 5 percent may end up to be problematic because sometimes it is not the 

proportion of the ownership, but the way it is structured which 

may end up being the problem. 

That is a segue into another point, which is that this issue of the 

landlord, as opposed to the operator, is something that we really 

have to investigate more and have more transparency about. I was 

deeply troubled by some of the statements made by individuals 

quoted in the New York Times article about the fact that, rather 

cavalierly, they were saying that the landlord simply has no responsibility. 

Indeed, there are many cases in which the lease restrictions will 

provide major constraints for an operator who is the licensee to be 

able to make the changes sometimes that are going to be required 

by the State in order to fix things that come out of a survey. So 

113

I think that there are really issues around the landlord and operator arrangement that are going to be necessary. 

Frankly, I think we are starting to see some lease agreements 

that are so detailed and so constraining that they may end up putting major restraints on the ability of the operator to run the facility. Operators, frankly, can be replaced in days. That is a problem. 

The operator is the licensee. So I think that actually the PECOS 

system starts the job, but what needs to happen is that they will 

need to go beyond that to be able to really ferret out who is it that 

is actually making decisions to control the care or direct the care 

in the facility. I think that is possible to do. 

The OIG does it in the corporate integrity agreements. They basically say we want to know every part of this structure and who is 

making these decisions. I am not suggesting that we have to investigate it to that level of detail. 

This should be based on permitting the people who are delivering 

decent care on the basis of the outcomes to continue doing so, as 

I said in my testimony. It is when they start to have problems that 

there should be the increased scrutiny immediately, that means 

that they will have to start answering questions about whether or 

not there may be some siphoning off of finances from the facility. 

The purchaser of care has the right to know that. 

Senator CASEY. I know we are short on time. I would just ask 

you to consider an assignment, if you don’t mind, for the record. 

Mr. ZIMMERMAN. Thank you very much. I am very good at giving 

them. 

Senator CASEY. I know it would help me, and I am sure it would 

help others if you could take a closer look at the so-called PECOS 

system as compared to the recommendations you make, kind of a 

side-by-side and see where you think the holes are. I don’t want to 

sell it too short, but I am troubled by the fact that they could summarize it in a couple of lines and your testimony is more detailed 

than that. 

That is probably not a fair way to assess it. But I think a more 

exhaustive look at it would help us. 

Mr. ZIMMERMAN. It is likely that it probably will need at least 

some tweaking, given the increasing complexity of some of these 

Byzantine corporate structures. 

Senator CASEY. I have got lots more questions, but I know we 

have to go. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you, Senator Casey. 

I would like to thank all the members of the panel that have 

journeyed here today to be with us to give us your expertise, your 

advice, your counsel. We, as you can tell, are determined to upgrade, along with you, the quality of performance of our nursing 

homes across the country. You have made a big contribution to that 

today. 

I think we certainly should expect to see some measurable improvement in our nursing home operation across the United States 

in the months and in the year or two to come. So we thank you 

for your contributions. With that, the hearing is closed. 

[Whereupon, at 3:53 p.m., the Committee was adjourned.] 

(115)

A P P E N D I X 


41836.066
116


41836.067
117


41836.068
118


41836.069
119


41836.070
120


41836.071
121


41836.072
122


41836.073
123


41836.074
124


41836.075
125


41836.076
126


41836.077
127


41836.078
128


41836.079
129


41836.080
130


41836.081
131


41836.082
132


41836.083
133


41836.084
134


41836.085
135


41836.086
136


41836.087
137


41836.088
138


41836.089
139


41836.090
140


41836.091
141


41836.092
142


41836.093
143


41836.094
144


41836.095
145


41836.096
146


41836.097
147


41836.098
148


41836.099
149


41836.100
150


41836.101
151


41836.102
152

Æ


41836.103