GAO-10-37R Nursing Homes and Use of Temporary Management 

United States Government Accountability Office

Washington, DC 20548 

November 20, 2009 

Congressional Requesters 

Subject: Nursing Homes: Opportunities Exist to Facilitate the Use of the Temporary 

Management Sanction 

The nation’s 1.4 million nursing home residents are a highly vulnerable population of elderly 

and disabled individuals for whom remaining at home is no longer feasible. The federal 

government plays a key role in ensuring that nursing home residents receive appropriate care 

by setting quality requirements that nursing homes must meet to participate in the Medicare 

and Medicaid programs and by contracting with states to conduct routine inspections—

called standard surveys—and complaint investigations.1

 To encourage compliance with 

quality requirements, Congress has authorized certain enforcement actions, known as 

sanctions, such as civil money penalties or termination from participating in the Medicare 

and Medicaid programs. The Centers for Medicare & Medicaid Services (CMS) is responsible 

for imposing federal sanctions, typically on the basis of states’ recommendations.2

 One 

sanction—temporarily replacing a home’s management—has been used infrequently. 

According to CMS guidance, temporary management may be used instead of termination in 

cases where nursing homes place residents at risk of death or serious injury—referred to as 

immediate jeopardy—or place residents at widespread risk of actual harm. CMS requires that 

a nursing home remove any immediate jeopardy within a short time frame of 23 calendar 

days after the survey or complaint investigation in which it was cited, with or without the 

assistance of temporary management. Otherwise, CMS will terminate the home from 

Medicare and Medicaid. In some cases, the nursing home’s owner may choose to sell the 

home to a new owner while the home is still under temporary management. 

You were interested in information on why the temporary management sanction has been 

used infrequently to address nursing home quality problems and asked us to study this issue. 

Specifically, we focused on (1) CMS and states’ experience with the use of federal temporary 

management and its effectiveness in achieving compliance in the short and longer term; and 

(2) obstacles to the use of federal temporary management and how such obstacles could be 

addressed. You also asked us to examine whether changes in ownership occurred when 

nursing homes were under federal temporary management and to identify obstacles to such 

ownership changes. We provide this information in enclosure I. 

 

1

Medicare is the federal health care program for elderly and disabled people. Medicaid is the joint 

federal-state health care financing program for certain categories of low-income individuals. Medicare 

covers up to 100 days of skilled nursing home care following a hospital stay; Medicaid also pays for 

long-term care services, including nursing home care. 

2

CMS is an agency within the Department of Health and Human Services. 
To examine CMS and states’ experience with the use of federal temporary management and 

its effectiveness in achieving compliance in the short and longer term, we identified the 

states where the sanction was used from fiscal years 2003 through 2008 by analyzing data 

from CMS’s Providing Data Quickly (PDQ) reporting system.3

 We assessed the short-term 

effectiveness of temporary management by the sanction’s ability to achieve its intended 

objective, which primarily was to return the home to compliance with federal quality 

requirements. We assessed the longer-term effectiveness of temporary management by the 

ability of a home to maintain substantial compliance after the conclusion of temporary 

management. From fiscal years 2003 through 2008, the federal temporary management 

sanction was used in 14 nursing homes across 10 states; these 10 states were located in 7 of 

10 CMS regions (see enc. II).4

 We interviewed officials from 1 of the 10 state survey agencies 

and its corresponding CMS regional office and then sent a set of similar questions to the 

remaining state survey agencies and regional offices.5

 Officials from all 10 states confirmed 

the use of the sanction and together with the seven CMS regional offices provided 

information for our analysis on: (1) common characteristics of instances in which the 

sanction was used; (2) the sanction’s ability to correct quality-of-care problems; and 

(3) instances of immediate jeopardy when federal temporary management was not used. In 

addition, we analyzed data from CMS’s On-line Survey, Certification, and Reporting system 

(OSCAR) on the compliance history of the 14 homes subject to federal temporary 

management from fiscal years 2003 through 2008.6

 To ensure the reliability of the OSCAR 

data we analyzed, we interviewed CMS officials, reviewed CMS documentation, conducted 

electronic testing to identify obvious errors, and traced a selection of records to another CMS 

reporting system. Based on these activities, we determined the data we analyzed were 

sufficiently reliable for our purposes. In addition, we used CMS data from PDQ and the 

Nursing Home Compare Web site to identify characteristics of the 14 homes, such as the 

number of certified beds and ownership type. To ensure the reliability of these data, we 

interviewed CMS regional officials, reviewed CMS documentation, and confirmed the 

accuracy of some data elements with state or CMS regional officials. Based on these 

activities, we determined the data were sufficiently reliable for our purposes. 

To examine obstacles to the use of federal temporary management and how they could be 

addressed, we received additional information from 9 of the 10 states and seven CMS 

regional offices where the sanction was used from fiscal years 2003 through 2008.7

 We also 

sent a standardized set of questions to the remaining 41 states. Officials from 37 of the 41 

states confirmed that the sanction had not been used from fiscal years 2003 through 2008 and 

 

3

PDQ is an online reporting system that provides a variety of reports using CMS survey data. From 

fiscal year 1995—the first year the federal temporary management sanction was available—through 

fiscal year 2002, the sanction was used in 11 homes. Because of the likelihood that information on 

sanctions used so long ago would be limited, we focused on those instances in which the sanction was 

used from fiscal years 2003 through 2008. 

4

The 10 states that used federal temporary management were California, Colorado, Connecticut, 

Maine, Michigan, New Jersey, South Dakota, Tennessee, Texas, and Vermont. These states are located 

in the Atlanta, Boston, Chicago, Dallas, Denver, New York, and San Francisco CMS regions. 

5

Throughout this report, we refer to state survey agencies, including the District of Columbia agency, 

as “states.” 

6

One of the 14 homes began participating in Medicare and Medicaid the same year that temporary 

management was used, and therefore compliance history data prior to temporary management were 

not available for this home. 

7

One state provided information about its experience using federal temporary management, but did not 

provide information about obstacles to the use of the sanction and how they could be addressed. 

2 GAO-10-37R Nursing Homes and Use of Temporary Management 
responded to our questions.8

 Overall, we received and analyzed responses from 46 states and 

seven CMS regional offices on (1) obstacles to the effective use of the sanction; (2) existence 

and maintenance of state temporary manager lists; (3) use of state alternatives to federal 

temporary management; (4) obstacles to bringing about a change in ownership in cases 

where federal temporary management was used; and (5) suggestions for improving the 

federal temporary management sanction. Finally, GAO discussed state alternatives to 

temporary management, funding options for temporary management, and suggestions for 

improving the sanction at a membership meeting of the Association of Health Facility Survey 

Agencies (AHFSA), the organization that represents state survey agencies. 

We conducted this performance audit from February 2009 through November 2009 in 

accordance with generally accepted government auditing standards. Those standards require 

that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a 

reasonable basis for our findings and conclusions based on our audit objectives. We believe 

that the evidence obtained provides a reasonable basis for our findings and conclusions 

based on our audit objectives. 

Results in Brief 

Based on responses from officials in the 10 states and seven CMS regional offices that used 

the federal temporary management sanction from fiscal years 2003 through 2008, the 

sanction was used with success in the short term in homes where there was some 

combination of immediate jeopardy, a history of noncompliance with CMS quality 

requirements, or the failure of other sanctions to bring about compliance. In 11 of the 14 

homes, officials used the sanction with the objective of returning the home to compliance 

with federal quality requirements, and in 10 of those homes temporary management was 

successful in the short term at doing so. However, some homes continued to have 

compliance problems in the longer term, that is, since the conclusion of temporary 

management. For example, while 9 of these 10 homes remained open as of August 2009, CMS 

data showed that 4 of them were cited for immediate jeopardy after temporary management. 

Officials from 46 states and seven CMS regional offices identified several obstacles to using 

federal temporary management, including time constraints, a lack of qualified temporary 

managers, and inadequate funding to pay for a temporary manager. Specifically, officials 

from 24 states and five CMS regional offices characterized the 23 days as a short time frame 

in which to hire a temporary manager and remove immediate jeopardy before automatic 

termination from participation in Medicare and Medicaid, therefore making it difficult to use 

the sanction. Additionally, officials from 25 of the 46 states told us they did not maintain a list 

of potential temporary managers, which could impede their ability to identify qualified 

candidates on a timely basis. State and CMS regional officials also identified ways for CMS to 

address some of the obstacles to using the sanction, such as developing lists of qualified 

temporary managers and providing additional information that addresses best practices and 

when and how to use the sanction. In addition, several officials suggested the need for an 

approach to help ensure the longer-term success of temporary management. 

To improve the usefulness of the federal temporary management sanction, we are 

recommending that the Administrator of CMS take the following three actions: (1) create and 

maintain lists of qualified temporary managers; (2) develop information that identifies best 

practices such as when and how to use the sanction; and (3) develop guidance for states to 

 

8

Delaware, the District of Columbia, Nevada, and New York did not respond. 

3 GAO-10-37R Nursing Homes and Use of Temporary Management 
help ensure the longer-term compliance of homes that have undergone temporary 

management. We provided a draft of this report to the Department of Health and Human 

Services and AHFSA for comment. In response, CMS said that our study added value to the 

important public policy discussions regarding the use of temporary management, an 

important tool that states can recommend and CMS can impose in situations of immediate 

jeopardy. CMS said that it endorsed the spirit of our recommendations but did not fully agree 

with all of them. Specifically, CMS agreed to develop additional information that identifies 

best practices for states and said that it would explore alternatives to the development of 

state guidance intended to help ensure the longer-term compliance of homes. However, the 

agency indicated that it did not plan to create lists of temporary managers. AHFSA agreed 

with the need for CMS to provide clearer information on the temporary manager process, but 

did not say whether it agreed with our other two recommendations. While we recognize that 

the development and maintenance of lists of temporary managers will require time and 

resources on the part of states and CMS, we maintain that the full potential of what CMS 

characterizes as an important tool will not be fully realized without such lists. 

Background 

Titles XVIII and XIX of the Social Security Act established minimum federal quality 

requirements that all nursing homes must meet to participate in the Medicare and Medicaid 

programs, respectively.9

 With the Omnibus Budget Reconciliation Act of 1987 (OBRA 87), 

Congress focused the requirements on the quality of care actually provided by a home.10

Ensuring Compliance with Federal Quality Requirements

CMS contracts with states to assess whether nursing homes meet federal quality 

requirements through standard surveys and complaint investigations.11 A standard survey 

involves a comprehensive assessment of quality requirements, while complaint investigations 

generally focus on a specific allegation regarding resident care or safety. States classify 

deficiencies identified during either standard surveys or complaint investigations in 1 of 12 

categories, labeled A through L, according to their scope (i.e., the number of residents 

potentially or actually affected) and severity (i.e., the degree of relative harm involved). 

Homes with deficiencies at the A through C levels are considered to be in substantial 

compliance with federal quality requirements, while those with D-level or higher deficiencies 

are considered noncompliant (see table 1). Deficiencies at the J level or higher constitute 

immediate jeopardy, a situation in which the home’s noncompliance with one or more 

requirements of participation has caused, or is likely to cause, serious injury, harm, 

impairment, or death to a resident. 

 

9

By law, obtaining a state license to operate—by meeting specific state requirements—is one 

prerequisite for a home to participate in Medicare and Medicaid. 42 U.S.C. §§ 1395i-3(d)(2)(A), 

1396r(d)(2)(A). 

10Pub. L. No. 100-203, §§ 4201, 4211, 101 Stat. 1330, 1330-160, 1330-182 (codified in pertinent part at 

42 U.S.C. § 1395i-3 and 42 U.S.C. § 1396r). 

11Every nursing home receiving Medicare or Medicaid payment must undergo a standard survey not 

less than once every 15 months, and the statewide average interval for these surveys must not exceed 

12 months. 

4 GAO-10-37R Nursing Homes and Use of Temporary Management 
Table 1: Scope and Severity of Deficiencies Identified during Standard Surveys and Complaint 

Investigations 

Scope 

Severity Isolated Pattern Widespread 

Immediate jeopardyaJ K L 

Actual harm G H I 

Potential for more than minimal harm D E F 

Potential for minimal harmbA B C 

Source: CMS. 

a

Actual or potential for death/serious injury. 

b

Nursing home is considered to be in “substantial compliance.” 

Federal and State Enforcement

Nursing homes that fail to meet federal quality requirements may be subject to statutory 

federal enforcement actions known as sanctions. CMS and the states share responsibility for 

federal enforcement actions. States are responsible for enforcing federal requirements in 

homes with Medicaid-only certification and may also impose enforcement actions under state 

licensure authority.12

In general, federal sanctions are (1) initially proposed by the state based on a cited 

deficiency, (2) reviewed and imposed by CMS regional offices, and (3) implemented—that is, 

put into effect—by the same regional office, usually after a required notice period.13

Sanctions are generally reserved for serious deficiencies—those at the G through L levels—

and the severity of sanctions typically increases with the severity of the deficiency. Sanctions 

include fines known as civil money penalties (CMP), denial of payment for new Medicare or 

Medicaid admissions (DPNA), directed plan of correction, state monitoring, temporary 

management, and termination from the Medicare or Medicaid program, or both.14

 

When a nursing home is cited with one or more deficiencies that constitute immediate 

jeopardy to resident health or safety, the law requires immediate action to remove the 

deficiencies through the use of federal temporary management or termination from Medicare 

and Medicaid.15 In addition, other sanctions may be imposed. CMS interprets the law’s 

requirement for “immediate” action to remove the jeopardy and correct the deficiencies by 

establishing the time frame of 23 calendar days from the date of the standard survey or 

12As of December 31, 2008, almost 91 percent of nursing homes were certified to participate in 

Medicare and Medicaid, about 5 percent were only certified to participate in Medicare, and about 

4 percent were only certified to participate in Medicaid. 

13CMS can also impose federal sanctions that the state has not recommended. Throughout this report, 

we refer to the imposition and implementation of a sanction as “use” of the sanction. 

14Overall, CMPs and DPNAs accounted for about 76 percent of federal sanctions imposed from fiscal 

years 2003 through 2008. Terminating a nursing home eliminates its eligibility to receive Medicare and 

Medicaid payments and can result in a home’s closure; termination accounted for less than 1 percent 

of federal sanctions imposed from fiscal years 2003 through 2008. 

1542 U.S.C. §§ 1395i-3(h), 1396r(h); see 42 C.F.R. § 488.408 (2008). In the absence of immediate 

jeopardy, temporary management, another sanction, or termination may also be used. 

5 GAO-10-37R Nursing Homes and Use of Temporary Management 
complaint investigation that cited the deficiency.16 In contrast, a nursing home has 6 months 

to return to substantial compliance for non-immediate-jeopardy level deficiencies. 

In lieu of a federal sanction, a state may (1) use an acceptable alternative that it has 

demonstrated to CMS is as effective in deterring noncompliance and correcting deficiencies 

and that CMS has approved, or (2) use its own sanctions under the state’s licensure 

authority.17 Examples of approved state alternative sanctions to federal temporary 

management or similar sanctions that states may use under their licensure authority include 

state temporary management, receivership, and trusteeship; the latter two sanctions are 

similar to temporary management but require court involvement.18

Federal Temporary Management

CMS regional offices use temporary management to achieve one of two objectives: (1) to 

correct deficiencies and return the home to substantial compliance with federal quality 

requirements, or (2) to oversee orderly closure of a nursing home and relocation of 

residents.19 The nursing home must voluntarily agree to relinquish control to the temporary 

manager and to pay his/her salary as well as pay for improvements to the home that the 

temporary manager deems necessary.20 However, if the home refuses to relinquish control to 

the temporary manager, the home will be terminated from Medicare and Medicaid within 

23 calendar days if the immediate jeopardy is not removed. A temporary manager has full 

authority to hire, terminate, or reassign staff; spend nursing home funds; alter nursing home 

procedures; and otherwise manage a home to achieve the objective.21 The CMS regional 

office selects the temporary manager based on state recommendations.22 CMS guid

recommends that states maintain a list of eligible temporary managers who meet certain 

criteria set by CMS—such as not having worked for the home in the past 2 years—and whose 

past performance, work experience, and education indicate that they are qualified to serve as 

temporary managers.

ance 

 

23 The state can request the temporary manager to periodically report on 

the actions taken to achieve compliance. Temporary management generally continues until a 

home is terminated from Medicare and Medicaid or achieves and demonstrates to the CMS 

16See 42 U.S.C. §§ 1395i-3(h)(2)(A), 1396r(h)(3); 42 C.F.R. § 488.410 (2008). 

17See 42 U.S.C. § 1396r(h)(2)(B)(ii); 42 C.F.R. § 488.406 (c). Homes must meet certain state-determined 

criteria for the state to impose a state alternative sanction. 

18Throughout this report, we refer to CMS-approved alternative sanctions or state licensure sanctions 

as state alternative sanctions. 

19See 42 U.S.C. §§ 1395i-3(h)(2)(B)(iii), 1396r(h)(3)(C)(iii). Through the State Operations Manual, CMS 

provides guidance based on the statutes to regional offices and states on the use of the federal 

temporary management sanction. 

20The temporary manager’s salary must be at least equivalent to the prevailing annual salary of nursing 

home administrators in the home’s area including the cost of benefits, prorated for the amount of time 

the temporary manager spends in the home. 

21When CMS appoints a state-recommended temporary manager and a home agrees, the temporary 

manager and the home negotiate the terms of temporary management—such as the temporary 

manager’s authorities, duties, and compensation. 

22In the case of a Medicaid-only nursing home, the state Medicaid agency selects the temporary 

manager. 

23CMS decided not to require that temporary managers be licensed nursing home administrators in 

order to expand the number of eligible candidates. 

6 GAO-10-37R Nursing Homes and Use of Temporary Management 
regional office and the state the capability of maintaining substantial compliance—no 

deficiencies higher than C level. 

CMS Efforts to Identify Nursing Homes with Poor Compliance Histories

CMS makes information on the compliance history of nursing homes available to the public 

through its Nursing Home Compare Web site. For every nursing home that participates in 

Medicare and Medicaid, the Web site provides information on deficiencies cited during 

standard surveys and any intervening complaint investigations. It also identifies those homes 

with poor compliance histories that have been designated Special Focus Facilities (SFF). 

Through the SFF Program, CMS monitors a limited number of such nursing homes; states are 

required to survey SFFs twice as frequently as other nursing homes.24

In addition, the Nursing Home Compare Web site provides a rating for each nursing home 

from one (much below average) to five (much above average) stars, known as the Five-Star 

Quality Rating System.25 CMS implemented this new rating system in December 2008. A 

nursing home’s overall quality rating is based on individual ratings for three separate 

components: (1) compliance history; (2) staffing levels; and (3) quality-of-care measures.26 A 

home’s compliance history—results from the last 3 years of a home’s standard surveys and 

complaint investigations—is the most important component in determining the overall 

quality rating.27

Federal Temporary Management Used for Homes with Histories of Noncompliance, 

and These Homes Generally Corrected Deficiencies in the Short Term, but Some 

Had Longer-Term Compliance Problems 

Based on responses from officials in the 10 states and seven CMS regional offices that used 

federal temporary management from fiscal years 2003 thorough 2008, the sanction was 

primarily used for homes with some combination of immediate jeopardy level deficiencies, 

histories of noncompliance, or continuing noncompliance despite the use of other sanctions. 

Most homes under temporary management corrected deficiencies in the short term, but some 

homes continued to have compliance problems in the longer term. 

 

24The SFF Program focuses on 136 nursing homes in every state except Alaska; the number of SFFs per 

state ranges from 1 to 6 based on the number of homes in the state. See GAO, Nursing Homes: CMS’s 

Special Focus Facility Methodology Should Better Target the Most Poorly Performing Homes, Which 

Tended to Be Chain Affiliated and For Profit, GAO-09-689 (Washington, D.C.: Aug. 28, 2009). 

25A two-star rating means a home ranks “below average;” a three-star rating means “about average;” 

and a four-star rating means “above average.” 

26The second component of the five-star quality rating—staffing levels—is based on nursing homes’ 

reported total nursing hours per resident day and registered nurse hours per resident day. The third 

component is based on nursing home performance on 10 quality-of-care measures, such as the 

percentage of high-risk residents who have pressure sores. 

27In calculating the compliance history rating, the most recent survey findings are weighted more than 

the prior two surveys. The overall quality rating is capped in two circumstances. First, if a nursing 

home’s compliance history is one star, then the overall quality rating cannot exceed two stars. Second, 

nursing homes currently in the SFF program have their overall quality rating capped at three stars even 

if they have high ratings in individual components. 

7 GAO-10-37R Nursing Homes and Use of Temporary Management 
Federal Temporary Management Used for Homes with Immediate Jeopardy, Histories of 

Noncompliance, or When Other Sanctions Were Ineffective

State and CMS regional officials told us that for 13 of the 14 homes where the federal 

temporary management sanction was used from fiscal years 2003 through 2008 a combination 

of several factors such as immediate jeopardy level deficiencies, repeated noncompliance 

with federal quality requirements, or the failure of other sanctions to bring about compliance 

led them to use the sanction.28 In all but 3 of the 14 homes, immediate jeopardy as well as 

other deficiencies were identified on the survey or surveys that led officials to use the 

sanction.29 For example, a home in South Dakota had a history of noncompliance resulting in 

multiple federal sanctions, including a DPNA, which officials told us had been ineffective in 

deterring noncompliance. On one survey, the home was cited with two immediate jeopardy 

level deficiencies and placed under temporary management.30 Enclosure III summarizes the 

compliance history and the objectives and outcomes of the 14 homes in which federal 

temporary management was used during the period we studied. 

CMS compliance data on standard surveys and complaint investigations confirm that most of 

the 14 homes had histories of noncompliance prior to the imposition of temporary 

management.31 In analyzing the compliance history of the 14 homes, we found that they 

averaged 37 D–L level deficiencies in the year immediately prior to temporary management, 

far more than the nationwide average of about 8 D–L level deficiencies in fiscal year 2008.32

Furthermore, 12 of the 13 homes where survey data were available had between 1 and 20 

deficiencies at the actual harm level (G–I) over the 3 years prior to the survey that resulted in 

temporary management. Four of those homes also had at least 1 immediate jeopardy level 

deficiency (J–L) in that same time period. Although the 13th home did not have a history of 

actual harm or immediate jeopardy level deficiencies, the survey that led to temporary 

management identified 9 actual harm and 44 immediate jeopardy deficiencies (see enc. III). 

Four of the 14 homes were in CMS’s SFF program at the time they were placed under federal 

temporary management, indicating that CMS had previously identified the homes as having 

histories of noncompliance. 

In addition to instances of immediate jeopardy and a poor compliance history, state and CMS 

regional officials gave several reasons for using federal temporary management to bring the 

homes into compliance.33 Officials in four states told us they recommended that CMS use 

temporary management when they considered the home’s current administration to be 

 

28For the remaining home, officials told us that they used temporary management solely because of 

multiple immediate jeopardy deficiencies. CMS typically uses other federal sanctions before turning to 

temporary management. 

29The three homes where immediate jeopardy was not identified in the survey that led to temporary 

management were not subject to the 23-day termination time frame. 

30We previously reported that many homes frequently cycle in and out of compliance; see GAO, 

Nursing Homes: Efforts to Strengthen Federal Enforcement Have Not Deterred Some Homes from 

Repeatedly Harming Residents, GAO-07-241 (Washington, D.C.: Mar. 26, 2007). 

31The 14 nursing homes in which the sanction was used were located throughout the United States, 

mostly for-profit, and generally not part of a nursing home chain (see enc. II). 

32The average includes two homes with a high number of D–L deficiencies in comparison to the other 

homes. Excluding these two homes results in an average of 30 D–L deficiencies during the year prior 

to temporary management. 

33In 6 of the 14 homes, CMS or state officials told us they used other sanctions, such as a CMP, in 

addition to federal temporary management. 

8 GAO-10-37R Nursing Homes and Use of Temporary Management 
incapable of improving conditions. For example, one home had significant staff turnover, 

including at the management level, which led the state and CMS officials to question the 

home’s ability to correct deficiencies and maintain compliance without outside help. In 

another four homes, state officials told us they recommended temporary management in part 

because termination would have resulted in relocating residents a great distance due to the 

limited available nursing home space in the area or because specialized services were offered 

at only a limited number of homes in the state. 

State officials told us that they did not recommend temporary management in instances of 

immediate jeopardy when they determined that the nursing home could correct the 

immediate jeopardy on its own.34 For example, in many cases a home’s management 

demonstrated that it could resolve the deficiencies and did so quickly. In some cases, states 

recommended the use of other federal sanctions such as CMPs to encourage the home to 

correct the deficiencies, or otherwise monitored the home.35 Thus, two states recommended 

a home for the SFF program and others used directed plans of correction requiring homes to

hire independent consultants to address conditions that resulted in the citation of 

deficiencies.36

While Most Homes under Temporary Management Corrected Deficiencies in the Short Term, 

Some Were Unable to Maintain Compliance in the Longer Term

According to CMS regional office and state officials, federal temporary management was 

successful in achieving its intended objective in the short term in 13 of the 14 homes.37 First, 

in 11 of the 14 homes, federal temporary management was used with the objective of 

correcting deficiencies that caused the home to be noncompliant with federal quality 

requirements; in 10 of these 11 homes, temporary management was successful in achieving 

this objective. The home that failed to return to substantial compliance was terminated from 

Medicare and Medicaid, and closed. Second, in 2 of the 14 homes, the sanction was used to 

oversee the orderly closure of and relocation of residents from homes that the state and CMS 

had determined could not oversee orderly closure on their own; both homes were closed 

successfully. Finally, in the remaining home, the objective changed from bringing the home 

into substantial compliance to overseeing orderly closure of the home when the temporary 

manager determined that the home was not financially viable; the sanction was successful in 

achieving the latter objective (see enc. III).38

 

34States cited about 3,900 nursing homes with immediate jeopardy level deficiencies from fiscal years 

2003 through 2008; temporary management was used 14 times and termination 163 times in those 

years. 

35States also have the option of using a state alternative to temporary management or other state 

sanctions if the home has not met state licensing requirements. 

36According to PDQ, directed plans of correction were used 1,429 times in fiscal years 2003 through 

2008. 

37In most homes for which information was available, the temporary manager was an individual 

employed by a management company. In one case, a company hired as the temporary manager 

installed a team that included a licensed nursing home administrator, a medical director, and a director 

of nursing, among others, to manage the home. 

38The duration of temporary management ranged from less than a month to about 16 months and 

averaged about 6 months, with generally shorter durations for homes where temporary management 

oversaw closure of the home. Generally, temporary management ended when either the home was 

determined to be in substantial compliance or the home closed. 

9 GAO-10-37R Nursing Homes and Use of Temporary Management 
In addition to assisting homes with returning to substantial compliance, state officials told us 

that the temporary managers also brought about changes to improve the quality of care in the 

nursing homes and to ensure the homes were capable of maintaining substantial compliance. 

For example, at four homes the temporary manager was required to conduct an initial 

assessment of the home and develop initiatives to maintain compliance with federal quality 

requirements.39 Other examples of actions taken by the temporary managers included 

instituting training for nursing home staff, filling staff positions, implementing resident care 

plans, updating the homes’ policies and procedures, purchasing and implementing billing 

software updates, and identifying needed building improvements. Specifically, the temporary 

manager in one home identified that the cooling system needed to be replaced to ensure 

resident safety. Some CMS regional office and state officials told us that the temporary 

managers periodically reported on their activities and progress throughout the duration of 

temporary management. 

Based on responses from officials in the 10 states and seven CMS regional offices that used 

federal temporary management from fiscal years 2003 through 2008 to questions about the 

use of the sanction, we identified several factors that influenced the successful use of the 

sanction.40

• Coordination and communication. In part because the sanction’s use required a considerable 

investment of time and resources, coordination and frequent communication between the 

temporary manager, state, and CMS regional office were important to the sanction’s success. 

• Cooperation of nursing home owner. Lack of cooperation from the owner in providing the 

temporary manager complete control of expenditures, personnel, and policies at the home 

impeded the success of the temporary manager. At the one home that temporary 

management was unable to return to substantial compliance, officials told us that the owner 

did not grant the temporary manager enough control and was not committed to improving 

the quality of care. In this case, the home was terminated from Medicare and Medicaid and 

closed. 

• Available funding for temporary management. The home’s ability to pay for temporary 

management or the availability of other funding sources was important to the successful use 

of the sanction. In all but two homes, the home funded temporary management; in one home, 

funding was provided by state CMP funds and, in the other, the home’s creditor provided the 

home with funding to pay for the temporary manager. The temporary manager’s monthly 

compensation ranged from less than $15,000 to $60,000 for the six homes where officials 

were able to provide us with cost information. In addition, officials noted that changes 

implemented by the temporary manager, such as building improvements, advanced billing 

software, or hiring of staff, were costly for the home. For example, in one home, the objective 

of temporary management changed to overseeing closure of the home after the temporary 

manager determined that the home did not have enough funding to pay for changes required 

to return the home to compliance. 

 

39CMS regional office or state officials were only able to provide the agreement between the home and 

the temporary manager for these four homes. 

40Officials from three states did not provide us with information regarding factors that influenced the 

ability of temporary management to achieve its objective in part because of the amount of time that 

had passed since the sanction was used. 

10 GAO-10-37R Nursing Homes and Use of Temporary Management 
Although most homes corrected deficiencies in the short term, some homes continued to 

have compliance problems in the longer term. Nine of the 10 homes that returned to 

substantial compliance while under temporary management were still participating in the 

Medicare and Medicaid programs as of August 2009.41 However, state and CMS regional 

officials told us that 5 homes continued to have problems after the conclusion of temporary 

management. For example, 1 of the 5 homes was selected to participate in the SFF Program, 

and for another home the state used its own temporary management sanction within 2 years 

after the conclusion of federal temporary management. 

Our analysis of CMS deficiency data found that four of the nine homes still participating in 

Medicare and Medicaid as of August 2009 had been cited with at least one immediate 

jeopardy level (J–L) deficiency since temporary management was used.42 In addition, four of 

the nine homes where temporary management concluded at least 2 years prior to August 

2009 had one or two stars (much below or below average) in CMS’s Five-Star Quality Rating 

System.43 Three homes had either three or four stars (about average or above average) (see 

enc. III).44

Officials Identified Obstacles to the Sanction’s Use and Suggested Lists of Qualified 

Temporary Managers and Additional Information to Address Them 

Officials from the 46 states and seven CMS regional offices that provided us with information 

identified three key obstacles to the use of federal temporary management and suggested 

ways to address some of the obstacles. 

Officials Identified Three Key Obstacles to the Sanction—Time Constraints, Lack of Qualified 

Temporary Managers, and Inadequate Funding

The three obstacles most frequently identified by state and CMS regional officials to using 

federal temporary management were time constraints, lack of qualified temporary managers, 

and inadequate funding (see table 2). 

 

41The 10th home closed less than 2 years after the conclusion of temporary management. 

42This includes three of the five homes that state and CMS regional officials identified as having 

continued problems after the conclusion of temporary management. 

43For one of the homes with a one-star rating, the results from complaint investigations that occurred 

while temporary management was in place were included in CMS’s calculation of the rating. 

44We did not report the rating for two of the nine homes because the results from at least two surveys 

that occurred prior to temporary management or while temporary management was in place were 

included in CMS’s calculations of these ratings. 

11 GAO-10-37R Nursing Homes and Use of Temporary Management 
Table 2: Most Frequently Identified Obstacles to Using the Federal Temporary Management Sanction 

Obstacle 

Number of 

states that 

identified this 

obstacle 

Number of CMS 

regional offices that 

identified this 

obstacle

Not enough time to find a temporary manager and remove 

immediate jeopardy within 23 days 24 5

Lack of qualified or experienced temporary managers 23 4

Home lacks adequate funding to pay for temporary manager 20 5

Use state alternative sanction 15 1

Prefer to allow home to come into compliance on its own 12 0

Uncertainty about when to use the sanction or what to expect from 

temporary manager 12 0

Source: GAO. 

Note: Data are responses to GAO questions from officials from 46 states and seven CMS regional offices. 

• Time constraints: Within 23 days (1) officials must identify and place a temporary manager in 

a home and (2) the temporary manager must remove the immediate jeopardy or the home 

will be terminated from participation in Medicare and Medicaid. Officials from 24 states and 

five CMS regional offices indicated that this time frame is short and therefore makes it 

difficult to pursue temporary management. For example, officials from a regional office told 

us of a case where state officials recommended using federal temporary management, but it 

was already day 19 on the termination timeline and the state did not have a list of potential 

temporary managers, so the CMS officials determined the sanction was not feasible. 

• Lack of qualified temporary managers: Officials from 23 states and four CMS regional offices 

identified a lack of qualified or experienced temporary managers as an obstacle to the use of 

the sanction. Although CMS guidance recommends that states maintain a list of eligible 

temporary managers, officials from 25 states told us they do not, which could impede their 

ability to identify qualified temporary managers when use of the sanction may be appropriate. 

Officials from 21 states reported that they do maintain such a list, but only 11 had updated 

their list within the last 2 years. A few state officials also indicated that qualified candidates 

may not be willing to accept a temporary manager position because, for example, they are 

otherwise employed or do not want the liability associated with managing a poorly 

performing home. 

• Inadequate funding: Officials from 20 states and five CMS regional offices reported that 

homes’ lack of adequate funding to pay for temporary management can be an obstacle to 

using the sanction. For one of the homes where federal temporary management was used 

from fiscal years 2003 through 2008, the temporary manager was paid from CMP funds 

because the home did not have sufficient funding; however, officials from this state noted 

there are not enough CMP funds to pay for more frequent use of temporary management.45

 

45By law, states receive funds from CMPs collected from Medicaid-only nursing homes, as well as the 

Medicaid portion of homes that participate in both Medicare and Medicaid. These funds must be 

applied to the protection of the health or property of residents of homes that the state or CMS finds 

deficient, such as payment for the costs of relocation of residents to other homes or operation of a 

home pending correction of deficiencies or closure. See 42 U.S.C § 1396r(h)(2)(A)(ii). There is no 

requirement in the Social Security Act that the Medicare portion of CMP funds be used for a specific 

purpose; the funds are deposited as miscellaneous receipts into the U.S. Treasury. 

12 GAO-10-37R Nursing Homes and Use of Temporary Management 
State and CMS regional officials also identified other obstacles to the use of federal 

temporary management such as employing other sanctions to achieve compliance instead of 

federal temporary management; having previously unsuccessful experiences with temporary 

management; and investing significant time and resources to use the sanction. 

As shown in table 2, officials from 15 states indicated that they used their state alternative 

sanctions—state authority to use temporary management, receivership, or trusteeship. 

Overall, however, state officials’ responses indicated that the substitution of a state 

alternative for the federal sanction is limited. Specifically, officials from 17 of 32 states with 

state alternative sanctions to federal temporary management did not use their alternatives 

from fiscal years 2003 through 2008, and officials from 13 states reported not having such 

alternative sanctions.46 Officials from only 2 states—California and Texas—reported using 

the alternatives an average of more than three times a year during the 6-year period.

47

Officials from five states indicated that both the federal temporary management sanction and 

their state alternative sanctions were used from fiscal years 2003 through 2008, suggesting 

that the federal sanction might be appropriate in certain situations while the state 

alternatives might work better in others. For example, a Texas official told us that when 

using the alternative sanction the state can (1) act more quickly because it does not have to 

coordinate with the nursing home, and (2) use state funds to pay for the sanction. In contrast 

to the federal sanction, a nursing home may not refuse the Texas alternative sanction. In the 

one case in which Texas used the federal temporary management sanction during the period 

we studied, officials reported that they were unable to use the preferred state alternative 

because the home did not meet criteria required to obtain a court order to appoint a trustee 

to oversee the home. 

Officials Identified Lists of Qualified Temporary Managers and Additional Information on the 

Sanction’s Use as Ways to Address Obstacles

State and CMS regional officials identified ways to address some obstacles and facilitate the 

use of the federal temporary management sanction. First, to address the lack of qualified or 

experienced candidates to serve as temporary managers, officials from 9 states and three 

CMS regional offices suggested that CMS or states could develop a list of candidates that 

could be available when temporary management was an appropriate sanction. Second, 

officials from 12 states reported being uncertain about when to use the sanction or what to 

expect from a temporary manager, or both. To address this uncertainty, officials from 7 

states and two CMS regional offices suggested that CMS could provide more specific 

information regarding when or how to use it effectively. Officials from 1 state specifically 

noted that before considering the use of the sanction in their state they would find it helpful 

to have information from CMS on best practices so that they would know how the sanction 

has worked in other instances. 

 

46An official from one state did not indicate whether the state had an alternative sanction to federal 

temporary management. According to the state’s administrative code, the state had the authority to 

impose temporary management in nursing homes that participate in Medicaid; however, we do not 

know if the state used this sanction from fiscal years 2003 through 2008. 

47In addition, officials from Connecticut reported using the state alternative sanction several times a 

year. 

13 GAO-10-37R Nursing Homes and Use of Temporary Management 
In addition, officials from 4 states and two CMS regional offices suggested that alternative or 

additional funding sources for temporary management could facilitate the sanction’s use. 

Officials from 2 states and one CMS regional office also suggested that CMS could establish 

an approach to help ensure the longer-term compliance of homes where temporary 

management was used, such as allowing the temporary manager to continue for some time 

after a home returns to substantial compliance or implementing an automatic reactivation of 

temporary management if the home does not maintain substantial compliance over the 2 

years following the sanction. Although officials from 24 states and five CMS regional offices 

identified the short 23-day time frame to remove immediate jeopardy as an obstacle to the 

use of federal temporary management, officials from only 1 state and one CMS regional office 

recommended extending the time frame, which could lengthen the period of time residents 

are exposed to the risk of death or serious injury. 

Conclusions 

Infrequent use of federal temporary management appears to be the result of (1) the 

availability of other sanctions, such as CMPs, that states and regional offices deem more 

appropriate in certain situations, and (2) state and regional office determinations that many 

homes can address immediate jeopardy deficiencies without the assistance of a temporary 

manager. Nonetheless, officials identified several obstacles that may prevent the use of 

temporary management when appropriate or factors that influence the sanction’s success 

when it is used. Although officials identified the short 23-day termination time frame as an 

obstacle to using federal temporary management, extending the time frame could result in 

nursing homes taking more time to abate immediate jeopardy deficiencies, thereby placing 

nursing home residents at risk for longer periods. 

Other obstacles that officials identified may be more easily addressed, such as a lack of 

qualified temporary managers and insufficient information illustrating best practices, 

including when or how to use temporary management. Though addressing these obstacles 

could increase use of the sanction when appropriate or its short-term effectiveness, the 

longer-term effectiveness of the sanction is difficult to assess because 5 of the 9 homes that 

underwent temporary management and remained open have not been able to consistently 

maintain compliance. Such longer-term compliance problems suggest the need for enhanced 

oversight. 

Recommendations for Executive Action 

To address obstacles to the use of the federal temporary management sanction, we 

recommend that the Administrator of CMS work with states to implement the following two 

actions: 

• Create and maintain a list or lists of qualified temporary managers on either a regional or 

national basis. 

• Develop additional information that identifies best practices for states and regional offices, 

including when and how to use the sanction, the essential qualifications for temporary 

managers, and alternative funding sources available for temporary management, such as 

CMP funds. 

14 GAO-10-37R Nursing Homes and Use of Temporary Management 
To help ensure the longer-term compliance of nursing homes that have successfully returned 

to substantial compliance under temporary management, we recommend that the 

Administrator of CMS develop guidance for states to enhance their oversight of such homes, 

such as implementing reactivation of temporary management if the home does not maintain 

substantial compliance over the 2 years following the conclusion of the sanction. 

Agency and Other External Comments and Our Evaluation 

We provided a draft of this report to the Department of Health and Human Services and 

AHFSA for comment.48 In its written comments, CMS said that our study added value to the 

important public policy discussions regarding the use of temporary management, an 

important tool that states can recommend and CMS can impose in situations of immediate 

jeopardy. While CMS endorsed the spirit of our recommendations, the agency indicated that 

it did not plan to implement all of them. Specifically, CMS agreed with one recommendation, 

indicated that it would explore alternatives to a second recommendation, and noted that it 

did not plan to implement the third recommendation. CMS’s comments are reproduced in 

enclosure IV. We also received written comments from AHFSA, which agreed with one 

recommendation but did not comment on whether it agreed with the other two. CMS and 

AHFSA also provided additional information, which we summarize below. 

CMS agreed with our recommendation to develop additional information that identifies best 

practices for states and regional offices to assist in their use of temporary management. 

AHFSA agreed that there was a need for CMS to provide clearer information to states 

regarding the process involved with using temporary management; additionally, AHFSA 

commented that one state suggested CMS should develop performance measures or 

benchmarks for nursing homes that, if not met, would require the use of a temporary 

manager. 

CMS indicated that it intended to broaden the scope of our recommendation to develop 

guidance for states to enhance the agency’s longer-term oversight of nursing homes that have 

successfully returned to substantial compliance under temporary management. Specifically, 

CMS stated it would establish a state-federal workgroup to examine the full array of potential 

sanctions together, rather than just focusing on temporary management. While our 

recommendation was limited to the scope of our study—specifically, the use of temporary 

management—we believe that the agency’s actions have the potential to fulfill the intent of 

our recommendation if they result in an enhanced focus on ensuring that nursing homes 

remain in compliance. 

CMS commented that it did not plan to implement our recommendation that it work with 

states to create and maintain a list or lists of qualified temporary managers on either a 

regional or national basis, but the agency stated that it would form a state-federal workgroup 

to explore this recommendation. Both CMS and AHFSA noted that maintaining such a list 

posed challenges for several reasons, including the resources required to develop and 

maintain such a list and differences in state professional licensure laws. Moreover, CMS 

commented that the creation of the infrastructure to maintain and administer a list of 

temporary managers presumed that this sanction was both superior to other sanctions and 

would be used extensively. Our draft report states that many state and regional officials told 

 

48AHFSA represents survey agencies from all 51 states. During the course of our work, we collected 

information from 47 states. AHFSA agreed to provide us with consolidated comments on our draft 

report on behalf of all states. 

15 GAO-10-37R Nursing Homes and Use of Temporary Management 
us that the lack of potential temporary managers was an obstacle to using the sanction. 

Because of the availability of other sanctions that states and regional offices deem more 

appropriate based on the circumstances and because of the short 23-day time frame to abate 

immediate jeopardy deficiencies, the availability of a list of temporary managers may not 

result in significantly greater use of the sanction. Lack of an up-to-date list, however, is 

clearly an obstacle to the sanction’s use when it may be appropriate, an obstacle that is 

compounded by the short 23-day time frame. As a result, we maintain that the full potential of 

what CMS characterizes as an important tool will not be fully realized without the 

development and maintenance of such lists. 

AHFSA commented that state laws may vary regarding state authority and procedures 

involving temporary management. During the course of our study, we asked states whether 

they had an alternative sanction to federal temporary management and whether they used 

this alternative from fiscal years 2003 through 2008; we did not review specific state 

authorities or state procedures for implementing temporary management. AHFSA also noted 

that one state suggested that CMS conduct a study of the effectiveness of each available 

federal sanction in ensuring long-term compliance. As noted in our draft report and in CMS’s 

comments, the states and regional offices often use other sanctions in addition to temporary 

management, such as CMPs and DPNAs. As a result, we believe that it would be difficult to 

isolate the effectiveness of individual sanctions in ensuring nursing homes’ compliance with 

federal quality requirements. 

-– – – – – 

As agreed with your offices, unless you publicly announce the contents of this report earlier, 

we plan no further distribution until 30 days after its issue date. At that time, we will send 

copies to the Administrator of CMS and appropriate congressional committees. The report 

will also be available at no charge on GAO’s Web site at http://www.gao.gov. If you or your 

staff have any questions regarding this report, please contact me at (202) 512-7114 or 

dickenj@gao.gov. Contact points for our Offices of Congressional Relations and Public 

Affairs may be found on the last page of this report. Walter Ochinko, Assistant Director; 

Rebecca Abela; Kaycee M. Glavich; and Elizabeth T. Morrison were major contributors to this 

report. 

John E. Dicken 

Director, Health Care 

Enclosures – 4 

16 GAO-10-37R Nursing Homes and Use of Temporary Management 
17 GAO-10-37R Nursing Homes and Use of Temporary Management 

List of Requesters 

The Honorable Herb Kohl 

Chairman 

Special Committee on Aging 

United States Senate 

The Honorable Charles E. Grassley 

Ranking Member 

Committee on Finance 

United States Senate 

The Honorable Henry A. Waxman 

Chairman 

Committee on Energy and Commerce 

House of Representatives 

The Honorable Pete Stark 

Chairman 

Subcommittee on Health 

Committee on Ways and Means 

House of Representatives 

The Honorable Jan Schakowsky 

House of Representatives 
Enclosure I 

18 GAO-10-37R Nursing Homes and Use of Temporary Management 

 

Six Nursing Homes Changed Ownership during or after Temporary Management, but 

Did Not Necessarily Improve; Obstacles to Such Changes May Be Difficult for CMS 

to Influence 

State officials reported that 6 of the 14 nursing homes that underwent federal temporary 

management from fiscal years 2003 through 2008 changed ownership either close to the time 

of or after the sanction’s use.49 Specifically, a change in ownership occurred during or shortly 

after use of temporary management in 4 of the 6 homes (see enc. III). In all 4 homes, the 

temporary manager returned the home to substantial compliance and oversaw transition of 

the change in ownership or remained in place after the change in ownership occurred. At the 

remaining 2 homes, state officials told us a change in ownership occurred several months or 

years after the conclusion of temporary management. In 1 of these 2 homes, state officials 

told us that the home sought a change in ownership during temporary management, but was 

unable to find a buyer due to an asking price that was higher than potential buyers were 

willing to pay. The owner sold the home after the state license was revoked and the home 

reopened under new ownership. 

State officials told us that if a nursing home’s owner is unwilling to correct or is incapable of 

correcting immediate jeopardy or other serious deficiencies, a change in ownership may help 

return a home to compliance and avoid termination. However, a new owner does not 

necessarily guarantee improvement in the home. Three of the six homes under temporary 

management from fiscal years 2003 through 2008 that underwent a change in ownership 

continued to have longer-term compliance problems. Specifically, one of the homes was 

selected to participate in the Special Focus Facility (SFF) program around the time of the 

change in ownership, and each of the three homes had one or two stars (much below or 

below average) in the Centers for Medicare & Medicaid’s (CMS) Five-Star Quality Rating 

System as of August 2009.50

State officials primarily identified two obstacles to changing a nursing home’s ownership 

once temporary management has been used, both of which would be difficult for CMS to 

influence. First, officials noted that when a home subject to temporary management is not 

financially viable, it is not attractive to potential purchasers. Although this obstacle may be 

difficult for CMS to address, officials from one state that used the federal temporary 

management sanction noted that they forced the owner of a home with a high asking price 

49A change in a nursing home’s ownership can occur at any time, including when federal temporary 

management is in place or when a nursing home is on track to being terminated. When a change in 

ownership occurs, the new owner has two alternatives. The new owner can take over the existing 

provider agreement and be subject to all the terms and conditions under which the existing agreement 

was issued, including (1) meeting the time frames for correcting deficiencies; (2) assuming 

responsibility for any sanctions associated with those deficiencies, with two exceptions—the new 

owner is not (a) subject to the loss of the right to train nurses aides if the nursing home was under 

a 2-year restriction from the Nurse Aide Training and Competency Evaluation Programs, and 

(b) responsible for money owed to the federal government due to a determination that the previous 

owner is personally guilty of fraud; and (3) complying with applicable health and safety requirements. 

Alternatively, the new owner can apply to participate in Medicare as a new provider and enter into a 

new provider agreement, which requires enrolling as any other new applicant and undergoing an initial 

certification survey. 

50A fourth home had four stars (above average) in the Five-Star Quality Rating System as of August 

2009. For the two remaining homes that underwent changes in ownership, we did not report the fivestar ratings because the results from at least two surveys that occurred prior to temporary 

management or while temporary management was in place were included in the calculations of these 

ratings. 
Enclosure I 

19 GAO-10-37R Nursing Homes and Use of Temporary Management 

that was unable to find a purchaser to lower the price and ultimately a change in ownership 

occurred. The second obstacle identified—not enough time to find a new owner who can 

return the home to compliance before termination—is similar to an obstacle that officials 

cited to imposing federal temporary management. Extending the termination time frame to 

address this obstacle could lengthen the period of time residents are exposed to the risk of 

death or serious injury. 
Enclosure II 

20 GAO-10-37R Nursing Homes and Use of Temporary Management 

Information on Nursing Homes in Which Federal Temporary Management Was Used, 

Fiscal Years 2003 through 2008 

Nursing 

home Statea

Number of 

certified bedsb

Ownership type 

Dates of 

temporary 

management 

Part of a nursing 

home chainc

1 California 62 For-profit 9/2004–1/2005 Yes 

2 Colorado 180 Government 12/2003–3/2004 No 

3 Colorado 33 For-profit 9/2007–10/2007 No 

4 Colorado 120 For-profit 3/2008–6/2008 No 

5 Connecticut 130 For-profit 2/2004–12/2004 No 

6 Connecticut 330 For-profit 5/2005–4/2006dNo 

7 Maine 50 For-profit 8/2006–12/2007 No 

8e Michigan 62 For-profit 4/2005–4/2005 Yesf

9 Michigan 142 For-profit 6/2007–7/2007 Yesf

10 New Jersey 180 Nonprofit 10/2002–gNo 

11 South Dakota 108 For-profit 10/2005–2/2006 No 

12 Tennessee 122 For-profit 4/2008–1/2009 No 

13 Texas 210 For-profit 2/2006–1/2007 Yes 

14 Vermont 56 Nonprofit 4/2004–10/2004 No 

Source: Centers for Medicare & Medicaid Services’ (CMS) On-line Survey, Certification, and Reporting and Providing Data Quickly systems, and state and CMS regional 

officials. 

a

These states are located in the Atlanta, Boston, Chicago, Dallas, Denver, New York, and San Francisco CMS regions. 

b

As of most recent survey. For homes that have closed, this is the survey prior to closure. 

c

Indicates whether home was part of a nursing home chain at the time temporary management was used. Nursing home chains 

have two or more homes under one owner. 

d

Estimate of duration of temporary management based on responses from state officials. 

e

The nursing home only participated in Medicaid, and the state Medicaid agency used the sanction. 

f

These nursing homes had the same owner. 

g

Data on duration of temporary management were not available. 
Enclosure III 

21 GAO-10-37R Nursing Homes and Use of Temporary Management 

Nursing Home Compliance History and the Objectives and Outcomes of the Use of 

Federal Temporary Management, Fiscal Years 2003 through 2008 

3-year survey history

Survey(s) that led to temporary management

In Special Focus Facility program

Objective changed

Close home

Return home to compliance 

X

SFF

Prior to temporary

management

Temporary 

managementa

Post-temporary 

management

Actual harm

(G-I)

Potential harm

(D-F)

Immediate 

jeopardy

(J-L)

Compliance history Objective Outcome b

(number of deficiencies cited)

Other

events

Five-star 

quality ratingc Otherevents

1

(CA) X

Imposed Sept. 2004 for 

5 months; home closed 

Jan. 2005. 0 0 2

64 2 0

2

(CO) 

Imposed Dec. 2003

for 2.5 months.

(4 stars) 8 4 1

N/A N/A N/Ad

4

(CO) X

Imposed Mar. 2008 for 

3 months; home closed 

June 2008. 0 0 1

114 18 2

5

(CT) 

Imposed Feb. 2004 for 10.5 

months; change in ownership 

occurred Dec. 2004. (4 stars) 16 18 9

36 0 10

6

(CT) 

Imposed May 2005 

SFF for 10.5 months.

(3 stars) 7 4 0

76 20 0

7

(ME) SFF 

Imposed Aug. 2006 for 16 

months; change in ownership 

occurred Dec. 2006.

(Not includede) 18 4 1

62 10 1

Nursing

home

3

(CO) 

Imposed Sept. 2007 

for 1 month. 4 0 1

32 1 6 Home closed

 Apr. 2009.

9

(MI) X X

Imposed June 2007 for

1 month; home closed 

July 2007. 19 1 5

43 4 0

8

(MI) SFF X X

Imposed Apr. 2005 for 

0.5 months; home closed 

Apr. 2005. 16 4 0

41 5 4

State listings

continued on

next page.
Enclosure III 

22 GAO-10-37R Nursing Homes and Use of Temporary Management 

Sources: GAO analysis of CMS OSCAR system, PDQ, Nursing Home Compare, and CMS regional office and state officials.

3-year survey history

Survey(s) that led to temporary management

In Special Focus Facility program

Objective changed

Close home

Return home to compliance 

X

SFF

10

(NJ) 

Imposed Oct. 2002.f Change in ownership 

2005; placed in SFF 

Jan. 2005. (2 stars) 9 0 3

25 1 0

11

(SD) SFF 

Change in ownership 

Dec. 2006.

Imposed Oct. 2005 

for 4.5 months.

(2 stars) 30 16 2

29 10 0

12

(TN) 

Imposed Apr. 2008 for 

9 months; ended with change 

in ownership Jan. 2009.

(Not includede) 22 9 44

29 0 0

13

(TX) 

Imposed Feb. 2006 for 10.5 

months; ended with change 

in ownership Jan. 2007. (1 starh) 2g 3 0

64 9 0

14

(VT) 

Imposed Apr. 2004 

for 6 months.

State temporary 

management 

imposed Jan. 2006. (2 stars) 0i 9 5

21 2 0

Prior to temporary

management

Temporary 

managementa

Post-temporary 

management

Actual

harm

(G-I)

Potential

harm

(D-F)

Immediate 

jeopardy

(J-L)

Compliance history Objective Outcome b

(number of deficiencies cited)

Other

events

Five-star 

quality ratingc Otherevents

Nursing

home

State listings

continued from

previous page.

a

Outcome of temporary management is in the short term. 

b

Three-year compliance history does not include the survey or surveys that led to temporary management. 

c

In December 2008, the Centers for Medicare & Medicaid Services (CMS) began publishing the results from its Five-Star 

Quality Rating System to help consumers compare nursing homes. Every nursing home in the United States is rated—primarily 

based on the home’s compliance history—with one (much below average), two (below average), three (about average), four 

(above average), or five (much above average) stars. Ratings presented in the figure are as of August 2009; if a nursing home 

closed prior to that date or the rating included at least two surveys that occurred during temporary management, it does not 

have a rating. 

d

Compliance history data prior to imposition of temporary management are not available for 1 of the 14 homes—home number 

2—because temporary management was used during the same year the home began participating in Medicare and Medicaid. 

e

We did not report the rating for this home because the results from at least two surveys that occurred prior to temporary 

management or while temporary management was in place were included in the calculation of this rating. 

f

Data on duration of temporary management were not available. 

g

Includes two surveys conducted immediately prior to temporary management. State officials told us they used these surveys 

as the basis for recommending temporary management. 

h

CMS’s calculation of this home’s rating included results from complaint investigations that occurred while temporary 

management was in place. 

i

Includes two surveys conducted immediately prior to temporary management because they were conducted within 4 days of 

each other and both led to imposition of temporary management. 
Enclosure IV 

23 GAO-10-37R Nursing Homes and Use of Temporary Management 

Comments from the Centers for Medicare & Medicaid Services 
Enclosure IV 

24 GAO-10-37R Nursing Homes and Use of Temporary Management 
Enclosure IV 

25 GAO-10-37R Nursing Homes and Use of Temporary Management 
Enclosure IV 

26 GAO-10-37R Nursing Homes and Use of Temporary Management 
Enclosure IV 

27 GAO-10-37R Nursing Homes and Use of Temporary Management 
28 GAO-10-37R Nursing Homes and Use of Temporary Management 

Related GAO Products 

Nursing Homes: CMS’s Special Focus Facility Methodology Should Better Target the Most 

Poorly Performing Homes, Which Tended to Be Chain Affiliated and For-Profit. 

GAO-09-689. Washington, D.C.: August 28, 2009. 

Medicare and Medicaid Participating Facilities: CMS Needs to Reexamine Its Approach 

for Funding State Oversight of Health Care Facilities. GAO-09-64. Washington, D.C.: 

February 13, 2009. 

Nursing Homes: Federal Monitoring Surveys Demonstrate Continued Understatement of 

Serious Care Problems and CMS Oversight Weaknesses. GAO-08-517. Washington, D.C.: 

May 9, 2008. 

Nursing Home Reform: Continued Attention Is Needed to Improve Quality of Care in 

Small but Significant Share of Homes. GAO-07-794T. Washington, D.C.: May 2, 2007. 

Nursing Homes: Efforts to Strengthen Federal Enforcement Have Not Deterred Some 

Homes from Repeatedly Harming Residents. GAO-07-241. Washington, D.C.: March 26, 2007. 

Nursing Homes: Despite Increased Oversight, Challenges Remain in Ensuring HighQuality Care and Resident Safety. GAO-06-117. Washington, D.C.: December 28, 2005. 

Nursing Home Quality: Prevalence of Serious Problems, While Declining, Reinforces 

Importance of Enhanced Oversight. GAO-03-561. Washington, D.C.: July 15, 2003. 

Nursing Homes: Quality of Care More Related to Staffing than Spending. GAO-02-431R. 

Washington, D.C.: June 13, 2002. 

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

Initiatives. GAO/HEHS-00-197. Washington, D.C.: September 28, 2000. 

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

Quality. GAO/HEHS-00-6. Washington, D.C.: November 4, 1999. 

Nursing Homes: Proposal to Enhance Oversight of Poorly Performing Homes Has Merit. 

GAO/HEHS-99-157. Washington, D.C.: June 30, 1999. 

Nursing Homes: Additional Steps Needed to Strengthen Enforcement of Federal Quality 

Standards. GAO/HEHS-99-46. Washington, D.C.: March 18, 1999. 

California Nursing Homes: Care Problems Persist Despite Federal and State Oversight. 

GAO/HEHS-98-202. Washington, D.C.: July 27, 1998. 

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