For Release on Delivery

Expected at 8:30 a.m.

Thursday, September 28, 2000

GAO/T-HEHS-00-209

NURSING HOMES

Success of Quality

Initiatives Requires

Sustained Federal and

State Commitment

Statement of William J. Scanlon, Director

Health Financing and Public Health Issues

Health, Education, and Human Services Division

Testimony

Before the Special Committee on Aging, United States

Senate

United States General Accounting Office

GAO
Page 1 GAO/T-HEHS-00-209

Mr. Chairman and Members of the Committee:

I am pleased to be here today as you discuss quality of care in the nation’s

17,000 nursing homes for their 1.6 million residents. The federal

government has a major stake in ensuring nursing home care quality and

will have paid homes an estimated $39 billion in fiscal year 2000. Over 2

years ago, this Committee held a hearing to discuss nursing home care in

California. Troubled by our findings of poor care in the state’s homes and

weak oversight by the Health Care Financing Administration (HCFA) and

the state oversight agency,1 the Committee held additional hearings on

nursing home care and oversight nationwide. These hearings prompted the

Administration to announce a series of nursing home quality initiatives

and the states to initiate greater oversight activity. In our reports and

testimony since July 1998, we identified the following key weaknesses:

• State surveyors—the professional staff in state agencies who inspect

nursing homes—understated the extent of serious care problems, which

are those technically classified as causing “actual harm” to residents and

those placing residents’ health, safety, or lives in “immediate jeopardy.”

The understatement problem reflected procedural weaknesses in the

states’ performance of surveys, or inspections, of the homes and the

predictable timing of these surveys.

• Complaints by residents, family members, or facility staff alleging harm to

residents remained uninvestigated for weeks or months.

• When serious deficiencies were identified, federal and state enforcement

policies did not ensure that the deficiencies were addressed and remained

corrected.

• Federal mechanisms for overseeing state monitoring of nursing home

quality were limited in their scope and effectiveness.

In providing you information today on the status of federal and state

efforts to ensure improvements in nursing home quality since the

identification of these weaknesses and introduction of the quality

initiatives, my remarks will focus on (1) progress in improving the

detection of quality problems during annual surveys, (2) how the

prevalence of identified problems has changed, (3) the status of efforts to

strengthen states’ complaint investigation processes and federal

1California Nursing Homes: Care Problems Persist Despite Federal and State Oversight (GAO/HEHS98-202, July 27, 1998).

Nursing Homes: Success of Quality

Initiatives Requires Sustained Federal and

State Commitment
Nursing Homes: Success of Quality

Initiatives Requires Sustained Federal and

State Commitment

Page 2 GAO/T-HEHS-00-209

enforcement policies, and (4) additional activities occurring at the federal

level to improve oversight of states’ quality assurance activities. These

remarks are based on a report we are issuing today that addresses these

issues in more detail.2

Overall, the series of federal quality initiatives begun 2 years ago has

produced a range of nursing home oversight activities that need continued

federal and state commitment to reach their full potential. Certain of the

federal initiatives seek to strengthen the rigor with which states conduct

their required annual surveys of nursing homes. Others focus on the

timeliness and reporting of complaint investigations and the use of

management information to guide federal and state oversight efforts. The

states are in a period of transition with regard to the implementation of

these initiatives, partly because HCFA is phasing them in and partly

because states did not begin their efforts from a common starting point.

HCFA’s efforts toward improving the oversight of states’ quality assurance

activities have begun but are unfinished or need refinement.

The results from states’ recent standard surveys provide a picture of

federal and state efforts in progress. On average, a slightly higher

proportion of homes were cited nationwide for actual harm and immediate

jeopardy deficiencies on their most recent survey than were cited during

the previous survey cycle. While it was expected that more deficiencies

would be identified owing to the increased rigor in nursing home

inspections, the survey results could also suggest that nursing homes may

not have made sufficient strides to measurably improve residents’ quality

of care. The results also show a wide variation across states in the

proportion of homes with identified serious care deficiencies. While these

proportions are expected to vary somewhat from one state to another, the

wide range may reflect the extent to which the inspection of homes is

inconsistent across states. In our view, the full potential of the nursing

home initiatives to improve quality will more likely be realized if greater

uniformity in the oversight process can be achieved.

Oversight of nursing homes is a shared federal and state responsibility. On

the basis of statutory requirements, HCFA defines standards that nursing

homes must meet to participate in the Medicare and Medicaid programs

and contracts with states to certify that homes meet these standards

2Nursing Homes: Sustained Efforts Are Essential to Realize Potential of the Quality Initiatives

(GAO/HEHS-00-197).

Background
Nursing Homes: Success of Quality

Initiatives Requires Sustained Federal and

State Commitment

Page 3 GAO/T-HEHS-00-209

through annual inspections and complaint investigations. The “annual”

inspection, called a survey, which must be conducted on average every 12

months and no less than every 15 months at each home, entails a team of

state surveyors spending several days in the home to determine whether

care and services meet the assessed needs of the residents. HCFA

establishes specific protocols, or investigative procedures, for state

surveyors to use in conducting these comprehensive surveys. In contrast,

complaint investigations, also conducted by state surveyors within certain

federal guidelines and time frames, typically target a single area in

response to a complaint filed against a home by a resident, the resident’s

family or friends, or nursing home employees. Quality-of-care problems

identified during either standard surveys or complaint investigations are

classified in 1 of 12 categories according to their scope (the number of

residents potentially or actually affected) and their severity (potential for

or occurrence of harm to residents).

Ensuring that documented deficiencies are corrected is likewise a shared

responsibility. HCFA is responsible for enforcement actions involving

homes with Medicare certification—about 86 percent of all homes. States

are responsible for enforcing standards in homes with Medicaid-only

certification—about 14 percent of the total. Enforcement actions can

involve, among other things, requiring corrective action plans, monetary

fines, denying the home Medicare and Medicaid payments until

corrections are in place, and, ultimately, terminating the home from

participation in these programs. Sanctions are imposed by HCFA on the

basis of state referrals. States may also use their state licensure authority

to impose state sanctions.

HCFA is also responsible for overseeing each state survey agency’s

performance in ensuring quality of care in its nursing homes. One of its

primary oversight tools is the federal monitoring survey, which is required

annually for at least 5 percent of the nation’s Medicare- and Medicaidcertified nursing homes. HCFA also maintains a central database—the OnLine Survey, Certification, and Reporting (OSCAR) System—that

compiles, among other information, the results of every state survey

conducted on Medicare- and Medicaid-certified facilities nationwide.
Nursing Homes: Success of Quality

Initiatives Requires Sustained Federal and

State Commitment

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Federal initiatives were introduced to strengthen the rigor with which

states conduct required annual surveys of nursing homes. The states we

visited have begun to use the new methods introduced by the initiatives to

spot serious (actual harm and immediate jeopardy) deficiencies when

conducting surveys,3 but HCFA is still developing important additional

steps, some of which will not be introduced until 2002 or 2003. HCFA and

the states have also attempted to address problems with the predictable

timing of the surveys, but improvements made have been modest at best.

In our prior work, we found that surveyors often missed significant care

problems—such as pressure sores, malnutrition, and dehydration—

because the methods they used to select a sample of a home’s residents

for review lacked sufficient rigor. To select the sample, surveyors rely on

information from prior surveys, a facility-prepared census of residents

grouped by medical condition, and observations of residents made during

an initial tour of the home. Certain HCFA initiatives effective July 1999

were intended to introduce greater objectivity in the sample selection

process. Under these initiatives, state survey agencies are instructed to use

“quality indicators” to guide their decisions on where to focus their

investigative efforts. Quality indicators are essentially numeric warning

signs that flag the prevalence of care problems, such as greater-thanexpected instances of weight loss, dehydration, or pressure sores. These

outcome measures enable surveyors to rank the facility against other

nursing homes in the state and the nation on 24 care dimensions. In

selecting a sample of residents for review, surveyors use information

developed from the quality indicators, which they later supplement with

personal observations.

In conjunction with the use of quality indicators, HCFA also instructed

surveyors to begin using a new set of investigative protocols, or

procedural instructions, intended to make the facility inspections more

thorough and more uniform, thus reducing the variation in the conduct of

surveys within and across states. However, HCFA’s new guidance on the

use of quality indicators and protocols does not address all of the

identified weaknesses in the survey methodology. HCFA needs to ensure

the reliability of the data on which the quality indicators are based,

because the data are self-reported by the nursing homes and are not

independently verified. Also, in our view, the size of the sample of resident

3In addition to visiting California, Missouri, Washington, and Tennessee, we contacted officials in

Maryland and Michigan, two states in which we had conducted reviews previously

Improvements Made

in Annual Survey

Methods

Improvements Made in

Standard Survey

Methodology
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Initiatives Requires Sustained Federal and

State Commitment

Page 5 GAO/T-HEHS-00-209

cases reviewed may not be sufficient to establish the prevalence of certain

identified problems. HCFA plans to introduce additional survey

methodology guidance in 2002 or 2003.

Surveyors can also miss care problems during the standard surveys when

the timing of these visits is predictable, allowing facilities time to present

themselves at inspection in ways that do not represent the home’s normal

routines or care practices. To address the predictability problem, HCFA

required states to start at least 10 percent of standard surveys outside

normal workday hours—either early morning, evening, or on weekends—

beginning January 1, 1999. HCFA also instructed the states to avoid, if

possible, scheduling a home’s survey for the same month as the one in

which the home’s previous standard survey was conducted.

HCFA’s tracking of states’ progress in implementing the off-hour survey

requirement has not been timely. Although the agency instructed states to

begin the off-hour initiative in January 1999, it did not modify its national

OSCAR database to enable identifying such surveys until 8 months later, in

August 1999, and did not instruct the states to enter the data on such

surveys until February 2000. It was another 6 months, in August 2000,

before HCFA began contacting those states that fell short of meeting the

10-percent requirement to elicit improved performance.

Our analysis of successive standard surveys shows that many homes in the

six states we reviewed continued to have their annual inspection within a

short time from the anniversary of their previous inspection or at the end

of the maximum allowed 15-month period between consecutive surveys.

Both circumstances allow a home to anticipate when their survey will

occur. (See table 1.)

Efforts to Reduce

Predictability in the Timing

of Standard Surveys Have

Been Modest
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Initiatives Requires Sustained Federal and

State Commitment

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Table 1: Predictability of Surveys

State

Number

of homes

Percentage

surveyed

within 15

days of

anniversary

of previous

survey

Percentage

surveyed

14-15

months

after

previous

survey

Percentage

surveyed

15-16

months

after

previous

survey

Total

percentage

of

surveys

considered

predictable

California 1,301 8.0 31.4 15.0 54.4

Maryland 243 4.9 14.8 9.0 28.7

Michigan 434 14.0 14.3 9.9 38.2

Missouri 476 11.1 13.9 8.8 33.8

Tennessee 351 56.1 0 0 56.1

Washington 278 15.1 17.6 1.0 33.7

Note: Data were extracted from OSCAR in August 2000. Homes not showing a prior survey

date were not included in this analysis.

Over half the surveys in Tennessee were conducted within 15 days of the

anniversary of the previous standard survey.4 In California and Maryland,

where a large share of the surveys occurred late in the 15-month cycle,

officials explained that an increased emphasis on conducting complaint

investigations more promptly drew on the same surveyor staff who

perform the annual surveys, which resulted in postponing many of the

surveys until as late as possible.

In our view, the off-hour scheduling of surveys is too limited a step to

effectively restrict homes’ opportunities to prepare for their annual

inspection. As we recommended in our July 1998 report, the predictability

problem could be mitigated by segmenting the surveys into more than one

visit. Currently, surveys are comprehensive reviews that can last several

days and entail examining not only a home’s compliance with resident

care standards but also with administrative and housekeeping standards.

Dividing the survey into segments performed over several visits,

particularly for those homes with a history of serious deficiencies, would

increase the presence of surveyors in these homes and provide an

opportunity for surveyors to initiate broader reviews when warranted.

With a segmented set of inspections, homes would not be able to relax

their efforts to provide quality care because they could no longer rely on

the likelihood of the next surveyor’s visit being 12 to 15 months away.

4Until recently, Tennessee law limited the annual inspection time frame to 12 months. In May 2000,

Tennessee modified this law to permit nursing homes to be surveyed at a maximum interval of 15

months.
Nursing Homes: Success of Quality

Initiatives Requires Sustained Federal and

State Commitment

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In reviewing the identification of actual harm and immediate jeopardy

deficiencies, we conducted an analysis of homes cited for these

deficiencies in the periods before and after the introduction of the quality

initiatives. We found the following:

• Overall, the proportion of homes with documented actual harm and

immediate jeopardy deficiencies increased marginally, although some

states experienced a decrease in the number of homes with these

deficiencies.

• The variation across states in the share of homes cited for actual harm and

immediate jeopardy deficiencies after the introduction of the initiatives

remained wide—ranging from under 11 percent of homes in Maine to 58

percent of homes in Washington—but narrowed slightly from the period

before the initiatives.

These results suggest that states may have become more rigorous in their

identification and classification of serious deficiencies. The results could

also indicate that, nationwide, the volume of such deficiencies may have

increased slightly, which may be attributable in part to reported facility

staff shortages during this time period. With regard to the variation in the

shares of homes cited for serious deficiencies, the expectation is that, as

the performance of standard surveys becomes more consistent across

states, differences in results will shrink. (See table 2.)

Increase in Identified

Deficiencies Difficult

to Interpret
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Initiatives Requires Sustained Federal and

State Commitment

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Table 2: Percentage of Homes With Actual Harm and Immediate Jeopardy Deficiencies Before and

After Implementation of the Quality Initiatives

Percentage of homes with actual harm

and immediate jeopardy deficiencies

StateaNumber of homes

surveyedb

(1/99 to 7/00)

Before initiatives

(1/97 to 7/98)

After initiatives

(1/99 to 7/00)

Percentage point

difference

Increase of 5 percentage points or greater

Arizona 125b17.2 36.8 19.6

Arkansas 253 b14.7 30.8 16.1

New York 606 13.3 27.6 14.3

Tennessee 353 11.1 24.1 13.0

North Carolina 409 31.0 42.1 11.1

New Jersey 336 b13.0 23.8 10.8

Oregon 157 43.9 53.5 9.6

Massachusetts 541 24.0 32.9 8.9

West Virginia 144 12.3 20.1 7.8

Indiana 581 40.5 48.2 7.7

Louisiana 365 b12.7 20.3 7.6

Georgia 364 17.8 25.0 7.2

Mississippi 196 b24.8 31.6 6.8

Oklahoma 394 b8.4 15.0 6.6

Colorado 229 11.1 16.6 5.5

Maryland 188 b19.0 24.5 5.5

Missouric 565 21.0 25.7 4.7

Change of less than 5 percentage points

Maine 124 7.4 10.5 3.1

Minnesota 437 29.6 32.5 2.9

Texas 1313 22.2 24.9 2.7

Michigan 442 43.7 45.9 2.2

Nation 16,854 27.7 29.5 1.8

Pennsylvania 774 29.3 30.7 1.4

Illinois 891 29.8 31.1 1.3

South Carolina 176 28.6 29.5 0.9

Connecticut 260 52.9 53.5 0.6

Montana 105 38.7 39.0 0.3

California 1,301 b28.2 28.2 0.0

Wisconsin 424 17.1 14.6 -2.5

Ohio 995 31.2 28.6 -2.6

Kentucky 306 28.6 25.2 -3.4

Decrease of 5 percentage points or greater

Virginia 282 24.7 19.5 -5.2

Washington 281 63.2 57.7 -5.5

Nebraska 241 32.3 26.6 -5.7

Alabama 225 51.1 41.3 -9.8

Kansas 404 b 47.0 36.9 -10.1

South Dakota 112 b40.3 29.5 -10.8

Florida 746 36.3 21.7 -14.6

Iowa 428 b 39.2 22.7 -16.5
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Initiatives Requires Sustained Federal and

State Commitment

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a

Twelve states and the District of Columbia were excluded from this analysis because they

had fewer than 100 homes surveyed since January 1999.

b

The number of homes cited in this state for the 1999-2000 period differed by 10 percent or

more from the number documented for the prior period. In part, these differences are

explained by the fact that some states have still not recorded the results of a home’s most

recent survey in OSCAR.

c

Although our work in Missouri focused on the agency that is responsible for surveying

nonhospital-based nursing homes, the state’s number of homes shown in this table also

includes hospital-based facilities.

In July 2000, HCFA released a report indicating a direct relationship

between low nursing home staffing levels and poor quality of care.5 While

recruiting and retaining staff have been long-standing concerns, state

officials and nursing home surveyors we interviewed recently believe the

problem has become acute and has directly affected the quality of care

provided to nursing home residents. Reasons cited for the growing staffing

problems include a highly competitive job market resulting from a robust

economy combined with lower wages and benefits for nurse’s aides

compared with other health and non-health sector opportunities, and

increased demand for staff from alternatives to nursing homes, such as

assisted living facilities.6 We identified 16 states that have increased their

Medicaid payments to supplement nursing home staff wages and benefits

by a specific amount.7

5See Appropriateness of Minimum Nurse Staffing Ratios in Nursing Homes ,Vols. I-III (Baltimore, Md.:

HCFA, Summer 2000).

6A 1996 Institute of Medicine study documented similar reasons for turnover and retention problems

among nurses aides. Institute of Medicine, Nursing Staff in Hospitals and Nursing Homes: Is it

Adequate? (Washington, D.C.: National Academy Press, 1996).

7 Wage pass-throughs” provide a specific amount or percentage increase in reimbursement, earmarked

typically for the salaries, benefits, or both of direct care staff—such as nurses and nurse’s aides. States

that have enacted wage pass-throughs include Arkansas, California, Connecticut, Florida, Kansas,

Maine, Michigan, Minnesota, Montana, Oklahoma, South Carolina, Texas, Utah, Vermont, Virginia, and

Wisconsin. Four other states—Louisiana, Maryland, Massachusetts, and Missouri—only recently

passed legislation and have not yet implemented their wage pass-through programs.
Nursing Homes: Success of Quality

Initiatives Requires Sustained Federal and

State Commitment

Page 10 GAO/T-HEHS-00-209

The states we contacted have also made strides in addressing complaint

investigations, but not enough time has elapsed to fully implement or

evaluate the success of these efforts. For example, the states in our review

were not yet investigating within 10 days all complaints that allege actual

harm to a resident, as HCFA’s complaint investigation initiative now

requires, but they have efforts under way to reach that goal. Similarly,

HCFA has begun applying stronger enforcement policies to ensure that

homes comply with federal standards, but it is too early in their

implementation to determine whether these policies have been effective.

The states we contacted generally attributed their inability to meet the 10-

day investigative time frame for serious allegations to an increase in the

number of complaints received, limited staffing levels, and competing

priorities, particularly the need to complete standard surveys within the

required cycle. Nevertheless, the increased attention HCFA and the states

have placed on conducting complaint investigations in the past 18 months

has resulted in some improvements. For example, among the states in our

review, we noted the following:

• Increased survey resources. Several states have increased, or plan to

increase, the number of surveyors, some of whom will be assigned

specifically to conduct complaints investigations. Michigan created a

complaints investigation team of 11 surveyors, representing about 10

percent of the state’s total surveyor staff. Washington plans to increase its

number of complaints investigators from 8 to 13.

• Improvements in classifying complaints. All the states in our study require

the seriousness of complaints to be determined by an experienced

surveyor; Tennessee and Washington further require that the surveyor be a

licensed nurse. In Missouri, individuals without survey experience had

been responsible for classifying complaints, but now an experienced

district office surveyor, normally a nurse, does so. Nevertheless, the

proper classification of complaints remains an important issue. For

example, Michigan’s small number of complaints alleging actual harm—17

of 902 complaints (2 percent) in the last half of 1999—raises questions

about whether the complaints were appropriately classified. For the same

time period, Maryland put 62 percent of its complaints in the actual harm

category.

• Organizational changes. To improve control and oversight of complaints,

both Maryland and Michigan have consolidated their nursing home

complaint and survey activities into one office under a single manager.

Michigan also added a manager responsible for direct oversight of the

Complaint And

Enforcement

Processes Are

Improving, but More

Time and Refinement

Needed to Reach

Goals
Nursing Homes: Success of Quality

Initiatives Requires Sustained Federal and

State Commitment

Page 11 GAO/T-HEHS-00-209

complaint investigation team. Missouri created a state complaint

coordinator to ensure that complaints are handled in a timely manner.

• Upgrade of information systems. Several states are automating their

information systems to track complaints more effectively. The use of these

data systems enables oversight officials to ensure that states are

complying with HCFA guidance on setting complaint investigation

priorities and meeting prescribed investigation time frames. For example,

Missouri plans to implement a new automated system in 2001 that should

significantly improve management’s ability to track the status and results

of complaint investigations. Tennessee also is implementing a new system

that will replace the manual tracking of complaints. Washington has

modified its complaint tracking system to facilitate its use by the state

agency’s district offices.

HCFA intends to issue more detailed guidance to the states in 2001 as part

of its complaint process improvement project. Among other things, the

project will identify “best practices” for complaint investigations.

The Congress and the Administration recognized that additional resources

were needed to address expanded workloads associated with

implementing the nursing home quality initiatives.8 As a result, the

Medicare survey and certification budget was increased in fiscal years

1999 and 2000, of which $8 million and $23.5 million, respectively,

reflected funding for the nursing home initiatives. According to states’

expenditure reports on the fiscal year 1999 allocation, much of the $8

million appears to have gone unspent. However, a precise accounting of

these funds is not available. On the one hand, discrepancies between the

initiatives expenditure reports and the separate reports that capture all

survey and certification expenditures (including the initiatives) raise the

possibility that some states may have spent their initiatives funding but

failed to account separately for initiatives expenditures as required by

HCFA. On the other hand, the two sets of reports indicate that 28 states

did not use their full fiscal year 1999 initiatives or survey and certification

funding allocations, suggesting that a substantial portion of the $8 million

was not used for the nursing home initiatives in fiscal year 1999. States

have not yet submitted final expenditure reports regarding the fiscal year

2000 initiative allocations.

8HCFA determined that additional state resources would be consumed by initiatives requiring states to

better target and monitor poorly performing homes and to investigate any complaint alleging actual

harm within 10 days of complaint receipt. HCFA also anticipated that the use of quality indicators

would increase surveyor preparation time before visiting a nursing home and that this could lead to a

net increase in total survey time.
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Initiatives Requires Sustained Federal and

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HCFA has also strengthened the enforcement options available to impose

sanctions on nursing homes that are cited for actual harm and immediate

jeopardy violations. In September 1998, HCFA modified its policy to

require that states refer for immediate sanctions any nursing home with a

pattern of harming a significant number of residents on successive

surveys. Effective December 15, 1999, HCFA expanded this policy to

include deficiencies that harmed only one or a small number of residents

on successive surveys. In an earlier report, we estimated that this change

could increase the percentage of homes referred immediately for

sanctions from approximately 1 percent to as many as 15 percent of homes

nationally.9 Early indications from some states are that their referrals of

homes to HCFA for sanctions are on the rise.

Additional funds were also provided in fiscal years 1999 and 2000 to hire

more federal staff to reduce the large number of pending appeals by

nursing homes and collect assessed fines faster. The expectation is that

the more expeditious resolution of appeals will heighten the deterrent

effect of civil fines. It is too early to assess the effect of the additional

funding on the number of pending appeals because the new staff were

only hired within the past year and other changes in enforcement policy

are expected to increase the volume of nursing home appeals.

To improve nursing home oversight at the federal level, HCFA has begun

making changes, largely in how its regional offices and central office

interact, in information management capabilities, and in nursing home

oversight funding.

HCFA has made organizational changes to address past consistency and

coordination problems among its central office and 10 regional offices. In

our earlier work, we raised concerns about the diffusion of accountability

among HCFA’s central and regional office components responsible for

monitoring states’ survey agencies. The absence of clear and connected

organizational lines of authority weakened regional office oversight of the

state agencies and blurred accountability when problems arose. Regional

offices and state surveyors could not be assured of providing or receiving

consistent information on nursing home oversight policies and practices.

9Nursing Homes: HCFA Initiatives to Improve Care Are Under Way But Will Require Continued

Commitment (GAO/T-HEHS-99-155, June 30, 1999), p. 12.
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To address the problems of coordination and accountability, HCFA has

made or is in the process of making organizational changes. For example,

in May 2000 it established a policy oversight board covering nursing home

survey and certification issues. The board’s composition, which includes

both regional office and central office representatives, is intended to

improve communication and coordination among senior HCFA managers

responsible for nursing home oversight. HCFA has also designated two

officials, one from the central and one from a regional office, to direct the

daily management of nursing home oversight activities. The intention is to

provide a national perspective on oversight activities and help ensure

consistency across regions. In June 2000, the agency established a

clearinghouse, with representatives from HCFA’s central office, regional

offices, and state survey agencies, to ensure that regional office directives

to states are consistent with national policy.

HCFA also intends to intensify its use of management information to verify

and assess states’ oversight activities and view more closely the

performance of the homes themselves. For one thing, it plans to make the

federal OSCAR database more user-friendly. Although OSCAR provides

extensive information about state surveys—such as the timing of surveys,

the deficiencies cited, and the time spent conducting various survey

activities—computer programming knowledge is typically needed to

conduct data analysis. Unless the data are analyzed, regulators will not

have a complete picture of an individual facility’s performance record, of

the facility’s performance relative to others in the state, and of state and

regional oversight performance relative to their counterparts nationwide.

Refinements will allow users to access such information with much

greater ease and are expected to be completed by the summer of 2001.

In another effort to enhance the use of management information, HCFA

recently directed the regional offices to prepare and submit periodically 18

“tracking” reports on areas that measure both state and regional office

performance. Examples include weekly reports on nursing home

terminations, monthly reports on surveys for “special focus” facilities,

quarterly reports on meeting OSCAR data entry deadlines, semiannual

tallies of state surveys that find homes deficiency-free, and annual

analyses of the most frequently cited deficiencies by states. HCFA will

begin using these reports effective October 2000. In standard format, the

reports will enable regions to make comparisons within and across states.

This information should help surface problems and identify the need for

intervention, either on the part of the HCFA regional or central office.

The value of these data, which were previously available but not

systematically reviewed, is illustrated by the case of Missouri’s

Improvements in

Federal Oversight of

Nursing Home Quality

Are Under Way or

Planned
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Initiatives Requires Sustained Federal and

State Commitment

Page 14 GAO/T-HEHS-00-209

“deficiency-free” homes in the 1999-2000 survey cycle that we reviewed.

Had HCFA oversight officials cross-checked Missouri’s survey results with

the homes’ history of complaint allegations, it would have found that the

state’s 84 supposedly deficiency-free homes had received 605 complaints.

One of these homes had 39 complaints and 19 homes had 10 or more

complaints. Significant numbers of these complaints were substantiated

when investigated.

HCFA’s efforts remain weak in one area that is rich in the potential to

provide useful information—federal monitoring surveys. HCFA conducts

two types of federal monitoring surveys to assess how well states are

performing their standard annual inspections. One type is called a

comparative survey, in which a team of federal surveyors conducts a

complete survey of a nursing home—subsequent to and independent of

the state’s standard survey of that home—and compares the results of the

two surveys. The other type is called an observational survey, in which

generally one or two federal surveyors accompany state surveyors to a

nursing home either as part of the home’s annual standard survey, as part

of a follow-up visit to a home found to be out of compliance with federal

standards, or as part of a complaint investigation. In an observational

survey, federal surveyors watch state surveyors perform a variety of tasks,

discuss their observations with the state surveyors under review, and later

provide a written performance rating to the surveyors’ supervisors.

Last November, we reported that the observational surveys, which HCFA

relied on most of the time, were of limited value in evaluating the

adequacy of the state survey process because they may have caused state

surveyors to perform their tasks more attentively than they would have if

the federal observers had not been present. At the same time, HCFA’s use

of comparative surveys was negligible, despite their merit in providing a

more objective measure of state surveyors’ performance. Between

October 1998 and May 2000, 70 percent of the 157 federally conducted

comparative surveys found more serious care problems than did the state

surveys of the same facilities. In our November 1999 report, we

recommended that HCFA increase the proportion of federal monitoring

surveys conducted as comparative surveys.10 In response, HCFA is

considering either increase the number of federal surveyors available to

conduct comparative surveys or narrowing their scope to allow more such

surveys to be done.

10Nursing Home Care: Enhanced HCFA Oversight of State Programs Would Better Ensure Quality

(GAO/HEHS-00-6, Nov. 4, 1999).
Nursing Homes: Success of Quality

Initiatives Requires Sustained Federal and

State Commitment

Page 15 GAO/T-HEHS-00-209

HCFA is also planning to change its process of allocating funding for

survey and certification activities to the states. Under the current budget

process, funding requests and state funding allocations are based on

states’ historical activity levels and costs. Such a process rewards states

that spent substantial amounts in the past and holds down funding for

those that historically spent little on these activities. HCFA’s fiscal year

2001 annual performance plan, as required under the Government

Performance and Results Act of 1993, establishes a performance goal of

moving from the current budget process to a need-based process. HCFA

proposes developing national standard survey measures and costs that

would be used to price the workload for each state survey agency.

Over the past 2 years, the considerable attention focused on nursing home

quality of care has resulted in heightened awareness and responses at

many levels—the federal government, the states, and the nursing home

industry. Many of the resulting new policies and practices have only

recently been instituted and will need time to take hold. For example,

better detection and classification of serious deficiencies through the

standard survey process will require further methodological developments

aimed at improving the selection of resident cases for review. New efforts

will be required to reduce the opportunities for homes to predict the

timing of and prepare for these inspections. States’ efforts to expedite

complaint investigations and systematize the reporting of investigation

results are at various stages of completion. More time must elapse to know

whether strengthened federal enforcement policies in fact create the

incentives and environment that discourage poor care and ensure

permanent corrections. Similarly, with respect to improved federal

oversight, the effectiveness of recent internal HCFA reorganizations and

management information reporting enhancements can only be judged in

the months to come.

Vigilance by both state and federal officials must be unrelenting to ensure

the safety and well-being of the nation’s nursing home residents. The

performance of oversight can neither be taken for granted nor relaxed,

which means that neither HCFA nor the states can afford to lose their

current momentum. The Congress, too, can play an important role in

keeping the spotlight on oversight agencies and the nursing home industry

to achieve quality improvements. We will continue to assist this

Committee and the Congress as needed to assess progress on these issues.

Conclusions
Nursing Homes: Success of Quality

Initiatives Requires Sustained Federal and

State Commitment

Page 16 GAO/T-HEHS-00-209

Mr. Chairman and Members of the Committee, this concludes my prepared

statement. I will be happy to answer any questions you may have.

For future contacts regarding this testimony, please call Kathryn G. Allen

at (202) 512-7118 or Walter Ochinko at (202) 512-7157. Connie Peebles

Barrow, Jack Brennan, Hannah Fein, Robert Lappi, Peter Oswald, Peter

Schmidt, Don Walthall, and Opal Winebrenner also made contributions to

this statement.

GAO Contacts and

Acknowledgments
Page 17 GAO/T-HEHS-00-209

Nursing Homes: Sustained Efforts Are Essential to Realize Potential of the

Quality Initiatives (GAO/HEHS-00-197, Sept. 28, 2000).

Nursing Home Care: Enhanced HCFA Oversight of State Programs Would

Better Ensure Quality (GAO/HEHS-00-6, Nov. 4, 1999).

Nursing Homes: HCFA Should Strengthen Its Oversight of State Agencies

to Better Ensure Quality Care (GAO/T-HEHS-00-27, Nov. 4, 1999).

Nursing Home Oversight: Industry Examples Do Not Demonstrate That

Regulatory Actions Were Unreasonable (GAO/HEHS-99-154R, Aug. 13,

1999).

Nursing Homes: HCFA Initiatives to Improve Care Are Under Way but Will

Require Continued Commitment (GAO/T-HEHS-99-155, June 30, 1999).

Nursing Homes: Proposal to Enhance Oversight of Poorly Performing

Homes Has Merit (GAO/HEHS-99-157, June 30, 1999).

Nursing Homes: Complaint Investigation Processes in Maryland (GAO/THEHS-99-146, June 15, 1999).

Nursing Homes: Complaint Investigation Processes Often Inadequate to

Protect Residents (GAO/HEHS-99-80, Mar. 22, 1999).

Nursing Homes: Stronger Complaint and Enforcement Practices Needed to

Better Ensure Adequate Care (GAO/T-HEHS-99-89, Mar. 22, 1999).

Nursing Homes: Additional Steps Needed to Strengthen Enforcement of

Federal Quality Standards (GAO/HEHS-99-46, Mar. 18, 1999).

California Nursing Homes: Care Problems Persist Despite Federal and

State Oversight (GAO/HEHS-98-202, July 27, 1998).

California Nursing Homes: Federal and State Oversight Inadequate to

Protect Residents in Homes With Serious Care Violations (GAO/T-HEHS98-219, July 28, 1998).

(201108)

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