IN THE HANDS OF STRANGERS: ARE NURSING 

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COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TENTH CONGRESS 

SECOND SESSION 

MAY 15, 2008 

Serial No. 110–116 

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IN THE HANDS OF STRANGERS: ARE NURSING 

HOME SAFEGUARDS WORKING? 

HEARING 

BEFORE THE

SUBCOMMITTEE ON OVERSIGHT AND 

INVESTIGATIONS 

OF THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TENTH CONGRESS 

SECOND SESSION 

MAY 15, 2008 

Serial No. 110–116 

( 

Printed for the use of the Committee on Energy and Commerce 

energycommerce.house.gov 

COMMITTEE ON ENERGY AND COMMERCE 

JOHN D. DINGELL, Michigan, Chairman 

HENRY A. WAXMAN, California 

EDWARD J. MARKEY, Massachusetts 

RICK BOUCHER, Virginia 

EDOLPHUS TOWNS, New York 

FRANK PALLONE, JR., New Jersey 

BART GORDON, Tennessee 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

BART STUPAK, Michigan 

ELIOT L. ENGEL, New York 

ALBERT R. WYNN, Maryland 

GENE GREEN, Texas 

DIANA DEGETTE, Colorado 

Vice Chairman 

LOIS CAPPS, California 

MICHAEL F. DOYLE, Pennsylvania 

JANE HARMAN, California 

TOM ALLEN, Maine 

JAN SCHAKOWSKY, Illinois 

HILDA L. SOLIS, California 

CHARLES A. GONZALEZ, Texas 

JAY INSLEE, Washington 

TAMMY BALDWIN, Wisconsin 

MIKE ROSS, Arkansas 

DARLENE HOOLEY, Oregon 

ANTHONY D. WEINER, New York 

JIM MATHESON, Utah 

G.K. BUTTERFIELD, North Carolina 

CHARLIE MELANCON, Louisiana 

JOHN BARROW, Georgia 

BARON P. HILL, Indiana 

JOE BARTON, Texas 

Ranking Member 

RALPH M. HALL, Texas 

FRED UPTON, Michigan 

CLIFF STEARNS, Florida 

NATHAN DEAL, Georgia 

ED WHITFIELD, Kentucky 

BARBARA CUBIN, Wyoming 

JOHN SHIMKUS, Illinois 

HEATHER WILSON, New Mexico 

JOHN B. SHADEGG, Arizona 

CHARLES W. ‘‘CHIP’’ PICKERING, 

Mississippi 

VITO FOSSELLA, New York 

STEVE BUYER, Indiana 

GEORGE RADANOVICH, California 

JOSEPH R. PITTS, Pennsylvania 

MARY BONO MACK, California 

GREG WALDEN, Oregon 

LEE TERRY, Nebraska 

MIKE FERGUSON, New Jersey 

MIKE ROGERS, Michigan 

SUE WILKINS MYRICK, North Carolina 

JOHN SULLIVAN, Oklahoma 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

PROFESSIONAL STAFF

DENNIS B. FITZGIBBONS, Chief of Staff 

GREGG A. ROTHSCHILD, Chief Counsel 

SHARON E. DAVIS, Chief Clerk 

DAVID L. CAVICKE, Minority Staff Director 

SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS

BART STUPAK, Michigan, Chairman 

DIANA DeGETTE, Colorado 

CHARLIE MELANCON, Louisiana 

Vice Chairman 

HENRY A. WAXMAN, California 

GENE GREEN, Texas 

MIKE DOYLE, Pennsylvania 

JAN SCHAKOWSKY, Illinois 

JAY INSLEE, Washington 

JOHN D. DINGELL, Michigan (ex officio) 

ED WHITFIELD, Kentucky 

Ranking Member 

GREG WALDEN, Oregon 

MIKE FERGUSON, New Jersey 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

JOE BARTON, Texas (ex officio) 

(II) 

(III) 

C O N T E N T S 

Page 

Hon. Bart Stupak, a Representative in Congress from the State of Michigan, 

opening statement ................................................................................................ 1 

Hon. John Shimkus, a Representative in Congress from the State of Illinois, 

opening statement ................................................................................................ 3 

Hon. John D. Dingell, a Representative in Congress from the State of Michigan, prepared statement ...................................................................................... 5 

Hon. Marsha Blackburn, a Representative in Congress from the State of 

Tennessee, opening statement ............................................................................ 7 

Hon. Gene Green, a Representative in Congress from the State of Texas, 

opening statement ................................................................................................ 8 

Prepared statement .......................................................................................... 9 

Hon. Michael C. Burgess, a Representative in Congress from the State of 

Texas, opening statement .................................................................................... 10 

Hon. Joe Barton, a Representative in Congress from the State of Texas, 

prepared statement .............................................................................................. 12 

Hon. Jan Schakowsky, a Representative in Congress from the State of Illinois, prepared statement ..................................................................................... 204 

WITNESSES

Lewis Morris, Chief Counsel to the Inspector General, Office of the Inspector 

General, U.S. Department of Health and Human Services .............................. 13 

Prepared statement .......................................................................................... 16 

Richard Blumenthal, Attorney General, State of Connecticut ............................. 32 

Prepared statement .......................................................................................... 35 

Susana Aceituno ...................................................................................................... 52 

Prepared statement .......................................................................................... 54 

Thomas DeBruin, president, Pennsylvania Service Employees International 

Union ..................................................................................................................... 86 

Prepared statement .......................................................................................... 88 

David Zimmerman, Ph.D., director, Center for Health Systems Research and 

Analysis, University of Wisconsin-Madison ....................................................... 93 

Prepared statement .......................................................................................... 95 

Andrew Kramer, M.D., head, professor of medicine, Division of Health Care 

Policy and Research, University of Colorado-Denver ........................................ 103 

Prepared statement .......................................................................................... 105 

Neil L. Pruitt, Jr., chairman and chief executive officer, UHS-Pruitt Corporation ........................................................................................................................ 121 

Prepared statement .......................................................................................... 124 

Mary Jane Koren, M.D., M.P.H., assistant vice president, The Commonwealth 

Fund ...................................................................................................................... 137 

Prepared statement .......................................................................................... 140 

Kerry Weems, Acting Administrator, Centers for Medicare and Medicaid 

Services, U.S. Department of Health and Human Services ............................. 183 

Prepared statement .......................................................................................... 185 

Answers to submitted questions ...................................................................... 210 

SUBMITTED MATERIAL

Presentation accompanying Dr. Koren’s testimony .............................................. 148 

Haven Nursing Facilities and Affiliated Entities Organizational Chart ............ 206 

Definitions of terms used in hearing ...................................................................... 208 

Chart entitled, ‘‘CMS Nursing Home Quality Milestones, 2007-2008’’ ............... 209 

Subcommittee exhibit binder .................................................................................. 223 

(1) 

IN THE HANDS OF STRANGERS: ARE 

NURSING HOME SAFEGUARDS WORKING? 

THURSDAY, MAY 15, 2008 

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS, COMMITTEE ON ENERGY AND COMMERCE, Washington, D.C. 

The subcommittee met, pursuant to call, at 10:03 a.m., in room 

2123 of the Rayburn House Office Building, Hon. Bart Stupak 

(chairman) presiding. 

Members present: Representatives Stupak, Green, Schakowsky, 

Dingell (ex officio), Shimkus, Whitfield, Walden, Murphy, Burgess, 

Blackburn, and Barton (ex officio). 

Staff present: Scott Schloegel, John Sopko, Kristine Blackwood, 

Michael Heaney, Voncille Hines, Kyle Chapman, Alan Slobodin, 

Peter Spencer, and Whitney Drew. 

Mr. STUPAK. This meeting will come to order. 

Today we have a hearing entitled ‘‘In the Hands of Strangers: 

Are Nursing Home Safeguards Working?’’ 

Each member will be recognized for an opening statement. I will 

begin. 

OPENING STATEMENT OF HON. BART STUPAK, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MICHIGAN 

Mr. STUPAK. This is National Nursing Home Week, which makes 

today’s hearing quite timely. Surprisingly, this subcommittee has 

not held an oversight hearing on nursing home care since 1977. 

The make-up of the nursing home industry and its clientele has 

radically changed over the past 31 years. 

The last significant change in nursing home regulations came 21 

years ago in the Nursing Home Reform Act, which was passed as 

part of the Omnibus Budget Reconciliation Act of 1987, or OBRA 

87. In that act, Congress established standards for quality of care 

and quality of life that nursing homes must meet in order to receive payment from Medicare and Medicaid. Now, 21 years later, 

we are examining whether these standards continue to provide an 

appropriate level of patient care and protect the residents of nursing homes. 

Some of our most frail, elderly, disabled citizens live in nursing 

homes either for a short time for rehabilitation or for long periods, 

when it becomes their final resting home. Many are completely dependent on others for everything from eating to bathing, turning 

them over in bed, and pain management. Government regulations 

require that a base level of care be provided to nursing home resiVerDate Nov 24 2008 12:40 Feb 01, 2010 Jkt 037690 PO 00000 Frm 00007 Fmt 6633 Sfmt 6633 C:\DOCUMENTS AND SETTINGS\CWELLS1\HEARINGS\110-116 SCOM1 PsN: JIMC
2 

dents, not only because this vulnerable population cannot speak for 

themselves but also because taxpayer-funded programs like Medicaid and Medicare pay for the vast majority of the care provided 

at nursing homes. 

The Centers for Medicare and Medicaid Services, CMS, enforces 

these minimum standards by contracting with each state to conduct annual inspections or surveys of nursing homes. If state surveyors identify a problem, called a deficiency, they can recommend 

various sanctions to CMS, ranging from civil monetary penalties to 

the rarely used ultimate sanction of termination from participation 

in the Medicare and Medicaid programs. CMS and state surveyors 

strive hard to look beyond a nursing home’s walls to see whether 

the fragile nursing home residents are receiving all the care they 

need. However, surveys often fail to identify serious problems that 

threaten residents. Moreover, when the surveyors do identify problems, the penalties imposed by CMS can be so weak that they fail 

to bring about sustainable improvement in the practices of the facilities. 

The day-to-day responsibility for the difficult task of care in 

nursing homes falls on dedicated and hardworking nurse aides, 

skilled nurse professional and industry owners and operators. We 

entrust our loved ones often only as a last resort to the hands of 

these strangers to care for our grandparents and parents. In most 

cases, these strangers become a second family for us and our loved 

one, and they care for our family member with the same love and 

attention as if he or she were part of their own family. These dedicated, devoted caregivers and many of the companies that employ 

and manage them deserve our profound thanks for their commitment and leadership in the daunting task of caring for an increasingly fragile and medically complex patient population. 

In the past few years, a wave of new owners and investors have 

begun purchasing nursing home chains, both small and large, successful and unsuccessful chains. These firms are private, unregulated, and new to the nursing home market. Many worry that the 

top priority for these new owners will be profits rather than providing for staffing and resources necessary to ensure top quality 

care for our loved ones. Frequently, they use complex corporate 

structures separating the nursing home real estate from the operating companies and putting multiple layers of limited liability 

partnerships between themselves and the day-to-day operations of 

the nursing home. 

The impact of these new owners on the quality of care and safety 

of nursing home residents is still unclear. Some companies reinvest 

their profits into the facilities and focus on quality of patient care. 

Others unfortunately skim off the profits to line the pockets of investors or plow the money into separate ventures that have nothing to do with nursing home care. What is certain, however, is that 

CMS and the States lack the tools to keep up with the rapid 

change in the industry, to know who actually owns the country’s 

nursing homes and who should be held accountable for residents in 

their care. 

When Congress passed the OBRA 87 safeguards, the typical 

nursing home was owned by a sole proprietor or family and not 

part of a chain. Now over 50 percent of nursing homes are part of 

3 

a chain and many of those are in the hands of private equity investors. Chain ownership has the potential to improve quality of care 

by allowing the sharing of resources and expertise across their facilities. At the same time, chains have the potential to hide common problems and obscure responsibility for inadequate care. The 

Centers for Medicare and Medicaid Services, CMS, needs to weigh 

these concerns to a greater degree in its enforcement. 

Today’s hearing will examine the challenges posed for the Federal, State, and local government, individual families, resident advocates and family members and the industry as the face of nursing home ownership rapidly changes. We will hear from witnesses 

reflecting a variety of perspectives including government leaders, 

academic experts, industry leaders, and organized labor representing nursing home workers, and the Centers for Medicare and 

Medicaid Services. We will also hear an example of a troubled 

nursing home chain in New England whose homes have been fined 

more than 45 times in the last 3 years for patient care problems 

that have had tragic results such as organ failure, amputation of 

limbs, paralysis, and death. The chain is now in bankruptcy and 

on the brink of sale to a private equity firm. Clearly, this example 

is the exception rather than the rule when it comes to nursing 

home care. Our goal here today is to be sure that these such examples become more and more rare or disappear altogether. 

I look forward to hearing from our witnesses today. We owe this 

hearing to the industry, nursing home staffs and the nursing home 

residents to ensure that Congress is doing all we can to see that 

Federal nursing home regulations are adequate. 

Mr. STUPAK. I would now like to now turn to my colleague, Mr. 

Shimkus, for his opening statement. 

Before I do so, we should take note of the fact that Mr. Shimkus 

retired last night after 32 years of service in the military in the 

Army as a ranger, and I want to thank him for his service to our 

country, and I really do enjoy having him as my ranking member 

and a friend, but thank you for your service to our country, John, 

and look forward to your opening statement. 

OPENING STATEMENT OF HON. JOHN SHIMKUS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS 

Mr. SHIMKUS. Thank you, Mr. Chairman. Thank you for coming 

last night, and the flashback was 1977. I was a freshman at West 

Point, so 31 years ago was the last time we had a hearing on this 

industry, and that is too long and so it is appropriate that we do 

this. 

Today’s hearing will expose the issues and practices surrounding 

the critical Federal safeguards for ensuring quality of care at nursing homes across the country. This bipartisan oversight examination is necessary to ensure these safeguards are up-to-date and effective. 

Today’s hearing topic is an intensely personal one for many people. Many Americans already or will have to entrust a mother, father or spouse— for me, grandparents—at certain times of their 

life at the most vulnerable to the care of a nursing home. In fact, 

my grandmother was a dementia patient and was in 10 years before she passed away, and I remember that well. When entrusting 

4 

our most vulnerable citizens, our loved ones, to the care of strangers, there is a fundamental need to know that they are in good 

hands. 

The nursing home industry is a complex and diverse industry extending to some 16,000 individual facilities, serving 3 million people per year. This industry has been rapidly changing over 2 decades, and the question is: how have these changes affected the 

quality of care? 

From the available evidence, improvements in nursing home 

quality have improved in some ways over the past 2 decades but 

more should be done to assure quality of care, quality of life, and 

the safety in nursing homes. We know there are chronic bad actors. 

The GAO reported last year, and we just have a new GAO report 

that we need to go over, just released, which we have not—I have 

not. So my comments really are directed to the previous one until 

staff reads it real quick, the new one. Despite positive efforts by 

the Centers for Medicare and Medicaid Services to improve quality 

of care, roughly 20 percent of nursing homes nationwide each year 

are cited for serious deficiencies, and a portion of these homes are 

chronically deficient. 

The GAO also reported shortcomings in the survey and standard 

enforcement system used to identify problem homes. Government 

and academic witnesses will testify today about the uneven quality 

of nursing home inspections and what that means for consumers 

and regulators. 

Witnesses will also testify knowledgably about what more might 

be done to improve the information supplied to regulators through 

a survey process and related industry oversight activities. Some developments to improve the quality of information look encouraging. 

New inspection approaches appear to take a more systematic look 

at nursing home quality. I look forward to learning how rapidly 

these can be implemented and how these measures can improve 

consumer ability to identify quality homes and information and 

knowledge is power, and I think when people are given a choice, 

if they have more information, the better. The problem is, in rural 

America, there are not a lot of choices. Chairman Stupak knows 

that from his area and I definitely know that in mine. 

I also look forward to discussing what Federal officials believe is 

necessary to strengthen Federal oversight in light of industry 

trends. There are 100,000 fewer beds today than 10 years ago and 

nearly 2,000 fewer facilities before bankruptcies, malpractice litigation pressures, and new models of caregiving transformed the industry, according to an HHS study. I have followed the continuing 

care debate about residential living, then assisted living and then 

long-term skilled nursing facility and all combined into one, which 

is, I think, a positive movement in the direction by the industry. 

Today, half the nursing homes are part of a chain, a rate that has 

declined from 10 years ago. Over this period there has been corporate restructuring and more focus on regional chains with some 

new corporate ownership arrangements, and we will hear this 

morning, it may be difficult to identify how those ultimately accountable for quality-of-care decisions are affecting care. More sunlight on these arrangements may make sense. 

5 

The Connecticut attorney general will testify about one troubled 

chain in Connecticut which continued to operate despite what has 

been reported as a history of poor care. I look forward to what he 

found were problems in Connecticut’s experience with this chain. 

Let me note too that Mrs. Aceituno, whose husband suffered while 

in the care of one of the chain’s homes, will tell us her story this 

morning. Please accept mine and my colleagues’ sympathies, and 

thank you for testifying. Your testimony is very important for us. 

I am pleased to learn of the vigorous enforcement HHS Inspector 

General’s Office and the Department of Justice have pursued in recent years—a positive story. In 2007 alone, the HHS IG’s Office 

helped to work 534 cases and the DOJ has already netted $16.6 

million in restitution and settlements and false claim act cases that 

mostly involve nursing homes. We have to ensure we are getting 

rid of bad actors and encouraging quality improvement, but as we 

discuss enforcement, we should also focus on what more can be 

done to identify and address problems before they result in quality 

care deficiencies. 

This brings me to the industry’s role in quality safeguards. On 

that subject, the buck stops with the industry, and so I am eager 

to learn what steps the industry is taking to set standards, to selfpolice, to improve quality, and improve quality not just at the margins among minimum standards but at all levels of performance. 

We need competition for quality. We can drive consumer decisions 

and improve care for all. 

I went over time, Mr. Chairman. Thank you very much, and I 

yield back. 

Mr. STUPAK. I thank the gentleman. 

Mr. Chairman Dingell of the full committee for an opening statement, sir. 

OPENING STATEMENT OF HON. JOHN D. DINGELL, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MICHIGAN 

Mr. DINGELL. Mr. Chairman, I thank you. I want to commend 

you for this hearing, which is a very important one. This is a hearing which is going to build on work done by this committee and 

this subcommittee over many years. 

Today we focus on the quality of nursing homes and how new 

types of ownership may affect this vital industry. As an original 

sponsor of the 1987 Nursing Home Reform Act, which originated in 

this committee as a result of hearings held in this subcommittee, 

I want this critical law to effectively support and protect those who 

must live in nursing homes, and again, Mr. Chairman, I commend 

you for holding this hearing today. There is much that needs to be 

done here with regard to this industry and with the laws affecting 

it because it has undergone radical changes since the 1987 law was 

enacted and there is real need to go into these matters. 

Nursing homes are an industry with which new investors and 

new financing structures unknown to us are beginning to impact 

significantly on how the healthcare is afforded to our senior citizens and others who are not able to any longer protect themselves 

without the assistance of this kind of help. This new dynamic 

raises serious questions about whether profits are being placed beVerDate Nov 24 2008 12:40 Feb 01, 2010 Jkt 037690 PO 00000 Frm 00011 Fmt 6633 Sfmt 6633 C:\DOCUMENTS AND SETTINGS\CWELLS1\HEARINGS\110-116 SCOM1 PsN: JIMC
6 

fore the needs of nursing home residents, and if so, what needs to 

be done by this committee and by the Congress since the law has 

not been reviewed for a number of years. 

I look forward to the testimony of Acting Administrator Weems 

of the Centers for Medicare and Medicaid Services and about what 

CMS needs in order to better oversee and improve the quality of 

nursing homes. I will note parenthetically that I am not very well 

satisfied with the behavior of that agency and with the judgments 

that they have been making about healthcare in this country. I am 

hopeful that this hearing will evoke greater cooperation from that 

agency and perhaps some manifestation of a better philosophy of 

government inside that agency. 

In some ways, the quality of care in our Nation’s nursing homes 

has improved over 20 years but it must be observed there is still 

a way to go. More than 20 years ago, Congress sought to establish 

minimum standards for care and quality of life for every nursing 

home resident. It is disturbing that a subset of today’s nursing 

homes appears to be unable to avoid harm to its residents. That 

is a curious repetition of events of 20, 30, and 40 years ago when 

fires, substandard housing conditions, poor treatment of patients in 

nursing homes, dangers to them and to their health because of improper care and inadequate staffing, were causing significant problems. This hearing is going to receive testimony from Federal, 

State and municipal authorities about the failure of some nursing 

homes to meet the basic standards and why they cannot be held 

accountable. 

Clearly, there is much to be said on both sides of this. There are 

things to be said on the side of the nursing homes if they are not 

being adequately and properly paid and properly treated by the 

government. It is also to be said that the government is not engaged in proper supervision or, very frankly, proper reporting to 

the Congress about the situation that exists in this particular industry. 

I want to express my thanks to Connecticut Attorney General 

Richard Blumenthal for being here. General, thank you for being 

with us. Mr. Blumenthal will testify about a New England nursing 

home chain with a troubled history of understaffing, poor care, and 

unpaid debts. I am sure that is replicated in other places. Also testifying today will be the inspector general for HHS, who will identify ways CMS can more effectively protect nursing home residents. 

This will be a matter of considerable concern and interest to the 

Committee. 

The day-to-day care for the frail, elderly and disabled is a difficult and, quite frankly, often thankless job. It is complicated by 

the inadequacy of payment by the Federal Government on these 

matters. It takes a special person to care for those who cannot care 

for themselves. No one knows this better than the 500,000 dedicated nursing home workers of the Service Employees International Union, SEIU, and the Nation owes them a great debt for 

their efforts, and I thank them myself, and for leading the fight for 

ensuring quality healthcare for every American, they are owed the 

thanks of all of us. 

I also applaud those industry leaders who have advocated higher 

standards. I particularly want to recognize my friend Bruce 

7 

Yarwood, president of the American Health Care Association, 

AHCA, as one of those leaders who has set the bar high through 

the ‘‘Advancing Excellence’’ campaign. 

Finally, I welcome Mrs. Aceituno, who will share the story about 

her husband’s experience in a facility that she trusted would keep 

him safe. Mr. Aceituno became paralyzed while a resident of this 

facility and is now confined to a wheelchair. This is of course not 

easy for Mrs. Aceituno, but we are grateful to her for putting a 

human face on what can happen when nursing home owners place 

profits before people in their care. 

Mr. Chairman, the proceeding of this committee is a very important one. The facts to be gleaned are extremely important. The information is going to enable us to look to see what action this committee and this Congress should take with regard to protecting not 

only the public interest but the inmates of the nursing homes. It 

also will help us understand what changes in the laws are needed, 

and I commend you for your leadership in this. 

Thank you, Mr. Chairman. 

Mr. STUPAK. Thank you, Mr. Dingell. 

Ms. Blackburn for an opening statement, please. 

OPENING STATEMENT OF HON. MARSHA BLACKBURN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF TENNESSEE 

Ms. BLACKBURN. Thank you, Mr. Chairman, and you all were 

talking about 1977 being the last benchmark. The last time we had 

a hearing, and I have a benchmark for that year of my own, my 

first child was born in 1977, and on Monday she gave birth to my 

first grandchild. So I hope that we have good nursing home care 

for people like me. But I do thank you for holding the hearing and 

for taking the time to review long-term quality care in our Nation’s 

nursing facilities. 

Whenever I talk about healthcare with my constituents, my top 

concern is preserving and enhancing access to quality care and 

doing it in an affordable manner. That is what our constituents 

want. And as our Nation’s population ages, more Americans are 

looking at options for elder care, and since my days in the Tennessee State Senate, I have had a record of supporting long-term 

care options for seniors, whether it is found in nursing homes, longterm care hospitals, or additional options that they want to have 

to meet their needs. 

I would also like to say, my district is home to Advocate, a provider of long-term care services for patients in nursing homes in 

eight States, primarily in the southeast, and I know this is a highly 

regulated industry and Advocate and many of their competitors 

have shown a commitment to transparency, and we appreciate that 

because we have learned a few things and I think one of those, Mr. 

Chairman, is that it is important that reported quality-related data 

be meaningful and useful, not only to consumers but to us as lawmakers and to care providers. I am looking forward to testimony 

from today’s witnesses regarding opportunities to revise and improve quality of care, quality of life, and staffing data collection 

when treating the elderly. Instead of placing additional regulation 

on the industry, it is prudent to improve the quality and nature of 

8 

information currently reported to the government and, I think also, 

Mr. Chairman, for us to establish a matrix whereby evaluated data 

provides insight into the outcomes that are provided for care. Bad 

actors are found in every single industry that there is, and I caution against holding the good actors responsible for poor performers. In addition, I am concerned about the public perception of 

some of the hearings that we have and how they can create public 

fear. I do appreciate an open and honest debate and warn against 

opening the doors to trial lawyers who may want to police the longterm care industry. 

As a baby boomer, as I said earlier, and now a grandmamma, I 

recognize that the Nation’s healthcare sector is evolving to meet 

the needs of an aging population. Everyone wants assurance that 

the elder care industry works to improve the quality of long-term 

care for the benefit of every American retiree today and in the 

years and decades ahead. 

I yield back. 

Mr. STUPAK. I thank the gentlewoman. 

The audience should note that there is another hearing going on 

upstairs in the Health Subcommittee so members will be bouncing 

back and forth throughout this hearing. 

Mr. Green for an opening statement, please. 

OPENING STATEMENT OF HON. GENE GREEN, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS 

Mr. GREEN. Thank you, Mr. Chairman, and thank you for holding this hearing, and like a lot of members, I am also on the Health 

Subcommittee and I am going to go up there in a few minutes, but 

I want to thank our witnesses for being here and thank you for 

calling this hearing. 

Like my colleague from Tennessee, for many years I was a State 

legislator in Texas, and nursing home regulation was something we 

dealt with every session, but since 1987, a more aggressive effort. 

It is interesting, though. I always thought it was regulated on the 

State level but since most of the Medicaid money is from the Federal Government, 60 percent typically, it was often difficult, because I know in Texas our Medicaid program is not as rich as some 

other States, but it is such a big part of our Medicaid dollar in 

Texas. 

The decision to take a loved one to a nursing home is a difficult 

decision, and I have not known anyone who would not rather have 

their family member remain independent or at home with them 

and not make that decision. In fact, I want to welcome Mrs. 

Aceituno because a number of years ago my wife and I had to make 

that same decision. Her mother was diagnosed in 1995 with Alzheimer’s, and we didn’t go to a nursing home but we kept her independent as long as we could but then to an Alzheimer’s center, 

which is like a nursing home but set up for Alzheimer’s patients. 

Ultimately she passed away in a nursing home but it was really 

hospice care because it used to be hospice was separate but now 

they are also part of nursing home facilities in Christmas of 2006, 

and a lot of people think elected officials, we don’t experience the 

same things everybody does, but we do. Our family went through 

that illness for 10 years, and I know members of Congress who are 

9 

on our full committee who are going through it right now with 

their families. So it is a difficult decision, and I am glad you are 

willing to come and testify. 

I have to admit, we had problems in Texas and Louisiana with 

hurricanes 3 years ago, and my mother-in-law was under hospice 

care, and when Rita was coming into, we thought Houston, but it 

ended up going to Beaumont just to the east, and we had had a 

terrible experience in Louisiana with nursing home patients not 

having evacuation procedures, and our office actually checked every 

one of ours, and while everybody was stuck on the freeway leaving 

Houston, I went to the one where my mother-in-law was at and 

was really proud that they had cots on the floor for the staff, they 

had brought in staff to make sure they would be there. We only 

lived 2 miles from them so I was going to go over there and be 

there anyway, but in that case, and it was a chain nursing home, 

was very well prepared to deal with the patients at that facility, 

and again she was part of the hospice facility on that. 

When we do have to make those decisions as families, people 

turn to nursing homes to give their loved ones the type of care they 

cannot provide. They entrust those nursing homes with their family members, and again, the squeaky wheel gets the oil whether 

you are here in government or in the private sector, and if you are 

there all the time, you keep on it, you will actually see because oftentimes the understaffing, I know the requirements by statute 

and by regulation but oftentimes it is difficult so families have to 

stay involved. But in the past, nursing homes were mainly momand-pop institutions and we have those in my district too, but 

times have changed and now we have the larger chain nursing 

homes in multiple States, and this corporate structure of nursing 

homes is sometimes a tangled web of finances that at times requires a forensic accountant to figure out who actually owns a specific nursing home. In instances where complaints have been made 

against the home where tragedies have resulted from abuse or mistreatment, it is often difficult for CMS to deal with this new system 

of nursing homes to levy fines or enforcement penalties, and that 

is what this hearing is about today. 

Mr. Chairman, I would like the remainder of my statement to be 

placed in the record so we can go forward with the hearing, but I 

appreciate your calling this hearing. 

[The prepared statement of Mr. Green follows:] 

STATEMENT OF HON. GENE GREEN

Mr. Chairman, I want to thank you for holding this hearing today on nursing 

home safeguards. 

The decision to take a loved one to a nursing home facility is often a difficult decision. I don’t know anyone who wouldn’t rather have their family member remain 

independent or at home with them. 

Sometimes the circumstances do not allow for families to have their loved ones 

stay with them. Oftentimes, individuals need a quality of care and around the clock 

monitoring that families cannot provide. 

When this happens, most people turn to nursing homes to give their loved ones 

the type of care they cannot provide. They entrust nursing homes with their family 

members, hoping they will receive quality care. 

In the past many nursing homes were mom and pop institutions, but times have 

changed and now most nursing homes are part of a larger chain of nursing homes, 

sometimes throughout multiple states. 

10 

Along with this new corporate structure of nursing homes has come a tangled web 

of finances that at times has required a forensic accountant to figure out just who 

owns a specific nursing home. 

In instances where complaints have been made against the home or tragedies 

have resulted from abuse or mistreatment, it is often difficult for CMS to deal with 

this new system of nursing homes to levy fines or enforce penalties. 

We have found that CMS sometimes does not know who owns a nursing home 

or even if one nursing home is part of a larger chain. Right now, CMS has a survey 

and enforcement system that was never designed to identify chain-wide or systematic problems. 

We cannot allow this to happen, and clearly a new enforcement system must be 

put into place that will give greater transparency to the system and we need a system that will allow CMS to know who the facility operator is. 

We need to know when we put our loved ones into a nursing home facility they 

will be safe and well taken care of. 

I am hopeful this hearing today will shed some light on the problems with nursing 

home safeguards nationwide and action congress can take to help give families a 

greater piece of mind and patients the protections they deserve. 

Thank you Mr. Chairman, I yield back my time. 

Mr. STUPAK. I thank the gentleman and look forward to his participation throughout the morning. 

Mr. Burgess for an opening statement. 

OPENING STATEMENT OF HON. MICHAEL C. BURGESS, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS 

Mr. BURGESS. Thank you, Mr. Chairman, and I too appreciate 

you holding this hearing. I note the chairman of the full committee 

said he was looking forward to hearing the testimony of Administrator Kerry Weems. I am as well. Unfortunately, we will have to 

wait until the end of this hearing to hear that testimony, and once 

again, we are in the awkward position of tying up the head of a 

large Federal agency for the better part of a day when we know 

they have other important things on their plate. You know this is 

an issue that bothers me and I do wish the committee would approach this with a little more sensitivity. 

Representative Blackburn talked about long-term care insurance, 

and I know that is not the purpose of this hearing today but I do 

also want to mention just a little bit about long-term care insurance. I was at the Alzheimer’s Association fundraiser last night, 

the banquet that they have, and it really is apparent to me that 

we are not as a body talking about long-term care insurance and 

the availability of long-term care insurance nearly enough with the 

American people that it even pops up on their radar screen. When 

I turned 50 years old, which was unfortunately some time ago, my 

mother, in fact, one of the last pieces of advice my mother gave to 

me was to consider buying long-term care insurance because she 

told me if you don’t buy it when you are 50, you won’t be able to 

afford it when you are 75 or 80, and truly that was good advice and 

I do want us to use our opportunities with the ability to inform the 

American people that the availability and the cost of long-term care 

insurance in midlife is an affordable option that people ought to 

consider. Yes, the Medicaid program will pick up the cost of your 

nursing home expense but at least in my home State of Texas, they 

are only obligated to place you within 500 miles of your home. That 

means for someone living in Louisville, Texas, as I do, they might 

be placed in a nursing home in Paris, Texas, and if you think— 

11 

Representative Blackburn is gone, but if you think it is hard to get 

your grandkids to visit you when you only live a few miles away, 

try living 500 miles away. So it is something that is important. I 

do want this committee to focus on that. 

There are so many issues involved in the topic at hand today. I 

am glad to see we are focusing on this issue. I do hope that the 

panel before us today will focus specifically on some issues related 

to transparency and the type of transparency that is needed in the 

industry. Perhaps the best information we can give consumers is 

information about not just the cost of the stay in the nursing home, 

and I would prefer that we call them residents of the nursing home 

rather than inmates, but cost as well as things like infection rates, 

things like the availability of occupational and physical therapy. 

The problem is, I am afraid this hearing is going to get bogged 

down in trying to figure out who owns what and who has done 

what to whom. 

I have always been a strong advocate of transparency in the 

medical and nursing community, and recently introduced a bill 

about greater transparency in health information technology in the 

health industry. H.R. 5885, for anyone keeping score at home, 

would allow hospitals and physicians’ offices to integrate information technology in a much more seamless manner than they are 

able to do currently, and this issue seems on point for this hearing 

today because it appears that a major problem of monitoring and 

enforcement and regulation of nursing homes is the lack of integrated information being supplied to people like Administrator 

Weems at the Center for Medicare and Medicaid Services. 

I still wonder if the larger problem lies not with a general lack 

of transparency but with the lack of consistent and uniform enforcement. So often we are seeing good nursing homes found deficient and given fines because of a regulator who was sent to their 

facility perhaps in a somewhat overzealous manner. Meanwhile, 

nursing homes that have a poor indicator of quality are given a 

seal of approval because the regulator sent to check up on them 

employed a much more laid-back approach. I am interested in 

learning about the effectiveness of the Quality Indicator Survey 

pilot program and how it can effectively work on a nationwide 

scale. 

And finally, I can’t help but notice the recent New York Times 

article that focused on this topic and noted the frustration of our 

friends on the trial bar, personal injury lawyers who are having a 

hard time figuring out whom to sue, and while I feel their pain, 

one of the problems that we are facing today, we are critical of 

large chains that have acquired a larger and larger ownership 

share of nursing homes but we have sued and regulated and underfunded the smaller owner of the nursing home just completely out 

of existence in the past 10 years, and while some of that fault perhaps lies at the State level, a good deal of that blame lies here on 

the doorstep of the United States House of Representatives, so I do 

hope that rather just simply focusing on whom to blame in this discussion today, we might be able to focus on a few solutions because 

after all, that is what the American people sent us here for. 

I will yield back the balance of my time, Mr. Chairman. 

Mr. STUPAK. I thank the gentleman. 

12 

I want to compliment Administrator Weems for being here and 

sitting through this. He was given the option, if he so chose, to 

have a staff person sit and take notes and come down when his 

panel appeared. To his credit, he stayed, and I appreciate him 

being here, especially since it has been 31 years since Congress has 

looked at this issue. I think there are things we can all learn from 

this hearing today. So I welcome his participation and his willingness to be with us at this hearing. 

Next I would turn to Mr. Barton for an opening statement, sir. 

Mr. BARTON. Mr. Chairman, I will put my opening statement formally in the record. I do want to say, though I think this is a very 

good hearing. We haven’t done oversight on the nursing home industry in a number of years and so I think you and Mr. Dingell 

are to be commended for doing this, and we will work with you in 

a bipartisan basis to uncover the facts, and if actions are necessary 

after we uncover the facts, to implement those actions, so we appreciate the hearing. 

[The prepared statement of Mr. Barton follows:] 

STATEMENT OF HON. JOE BARTON

Chairman Stupak and Ranking Member Shimkus, thank you for convening this 

important hearing. Good nursing home care is very important to the three million 

Americans who are receiving care this year in the 16,000 federally certified nursing 

homes. 

One measure of a society is how it cares for its elderly. Some of us here today 

aren’t too far from finding out directly, and many of us have aging parents or grandparents who already know. Over the past few decades, Americans have relied more 

and more upon skilled nursing facilities to care for those we love, usually in the 

most fragile and vulnerable moments of their lives. Nearly two-thirds of all nursing 

home care is paid by Federal, State and local taxpayers, and it cost them more than 

$78 billion in 2006. 

The challenges to maintaining quality care are great. And we must be vigilant to 

find ways to improve the safeguards we have established through legislation like 

the Nursing Home Reform Act that was part of what is known as OBRA 87. So this 

subcommittee’s oversight work is vital to fulfilling our congressional responsibility 

to protect the interests and lives of our elderly. 

The nursing home industry is complex and it changes rapidly. This industry has 

expanded to include national and regional chains, small groups, non-profits, and forprofits. There are even some mom-and-pop nursing homes. And there are facilities 

that specialize in certain types of care, such as rehab or helping people with Alzheimer’s disease. 

The industry has long suffered a mixed reputation. Most folks in the business are 

decent people who mean well and work hard every day to provide care to our loved 

ones, but some of the unhappy reputation is deserved. According to the GAO and 

to the inspector general of HHS, nursing home operations also give rise to bad players and scofflaws. 

Rules need to be vigorously enforced to rid the industry of its scofflaws and to 

deter anyone who would skimp on care in order to swell an illegitimate profit. A 

bright dose of sunshine into nursing home practices may be needed to expose offensive acts and discourage bad behavior. We will hear about transparency today. That 

is a good thing and I think it should be encouraged. More information helps families 

make good choices and helps regulators identify bad operators. 

But as we talk about safeguards, we should remember the law of unintended consequences so we do not hinder more than we help. I think we have to be wary of 

one-size-fits all solutions and the kind of rigid, made-in-Washington policies that 

never seem to work. 

It’s also important to recognize that this is not your grandfather’s nursing home 

industry. In recent years, some publicly owned chains have gone private, and others 

have been transformed by complex new ownership structures. I have questions 

about some of these operating arrangements, especially where the property is owned 

by one firm and the care is delivered by another. 

13 

There is not clear evidence yet that these changes are bad or good. Some may actually provide more focused resources that result in improved care. 

I believe that we need a strong and flexible regulatory system to ensure folks are 

meeting applicable standards, and that encourages accountability and quality innovation. 

I look forward to hearing from our witnesses today about systems for addressing 

quality and anticipating problems. These are areas where industry really can improve, and I hope we learn that they are ready to do so. 

# # # 

Mr. STUPAK. Thank you, Mr. Chairman. 

Ms. Schakowsky was here but she must have stepped out. She 

probably ran upstairs, because I know she is on the Health Subcommittee also. 

So let us conclude the opening statements by members and let 

us turn to our first panel of witnesses. On our first panel, we have 

Mr. Lewis Morris, the Chief Counsel to the Inspector General for 

the U.S. Department of Health and Human Services; the Hon. 

Richard Blumenthal, Attorney General for the State of Connecticut; 

Luis Navas-Migueloa, long-term care ombudsman for the city of 

Baltimore; and Ms. Susana Aceituno, the wife of the Connecticut 

man who broke his back and was paralyzed at the nursing home. 

So we welcome all of our witnesses. Thank you for being here. 

It is the policy of this subcommittee to take all testimony under 

oath. Please be advised that witnesses have the right under the 

Rules of the House to be advised by counsel during their testimony. 

Do any of our four witnesses wish to be advised by counsel during 

their testimony? The indication is no. Therefore, I am going to ask 

to please rise, raise your right hand, and to take the oath. 

[Witnesses sworn.] 

Mr. STUPAK. Let the record reflect that the witnesses replied in 

the affirmative. You are all under oath. 

I will begin opening statements. I am going to ask Mr. Morris to 

begin with the opening statements. We will go right down the line, 

5-minute opening statements. If you have a longer statement, we 

will insert it in the record. Mr. Morris, if you would begin, please. 

STATEMENT OF LEWIS MORRIS, CHIEF COUNSEL TO THE INSPECTOR GENERAL, OFFICE OF THE INSPECTOR GENERAL, 

U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES 

Mr. MORRIS. Good morning, Chairman Stupak and distinguished 

members of the Committee. My name is Lewis Morris. I am Chief 

Counsel in the Office of the Inspector General at the Department 

of Health and Human Services. 

As a result of congressional action and efforts by CMS and the 

nursing home industry, important steps have been taken to improve residents’ health and quality of life. Unfortunately, not all 

nursing homes consistently provide the level and amount of care 

that the residents require. In 2006, almost one in five nursing 

homes was cited for deficiencies that caused actual harm or placed 

residents in immediate jeopardy. 

OIG affirmatively addresses nursing home vulnerabilities in 

three ways: oversight, enforcement, and guidance. First, in our 

oversight role, OIG has conducted approximately 90 evaluations of 

14 

the nursing home program since major nursing home reforms of 2 

decades ago. One of our recommendations was the development of 

a national abuse registry for long-term care employees. We have 

found that without accurate and accessible background information, nursing homes may hire individuals who could place residents 

at considerable risk. 

In our enforcement role, OIG has investigated cases of egregiously substandard care in nursing homes and pursued criminal, 

civil, and administrative remedies against those who harm our 

beneficiaries. We have collaborated extensively with the Department of Justice and State Medicaid fraud control units to successfully prosecute nursing homes and caregivers for failing to provide 

basic levels of care including cases of residents suffering from preventable pressure sores, untreated broken bones, drug overdoses, 

and death. OIG has excluded from participation in Federal 

healthcare programs caregivers who have abused or neglected residents as well as nursing home administrators and operators for 

systemic failures. In these cases, we may not exclude the facilities 

providing bad care if we believe it is in the best interest of the residents. As an alternative, we negotiate corporate integrity agreements which establish comprehensive compliance programs and require appointment of an independent quality monitor. The monitor 

has extensive access to all aspects of the organization and makes 

recommendations to address underlying deficiencies. These compliance programs have been instrumental in improving the quality of 

care. 

As a third initiative, we promote compliance with our program 

requirements and greater awareness of quality-of-care issues. For 

example, we recently published a draft supplemental guidance that 

discusses the fraud and abuse risks that nursing homes should address when implementing a compliance program. OIG also is working to increase awareness by stakeholders of the importance of delivering quality of care. For example, we recently co-authored a 

Healthcare Board of Directors Resources Guide. Last year we met 

with nursing home representatives from across the country to explore how to better inform their boards about the quality of care 

provided in their facilities. Consumers should also have reliable, 

user-friendly data on nursing home quality to make informed 

choices for family members. 

OIG makes three recommendations we believe will contribute to 

improving the quality of care that residents receive in nursing 

homes. First, create a nationwide centralized database to improve 

screening of nursing home staff. That database could merge the 

OIG’s exclusion database, State nurse aide registries and disciplinary actions by licensure boards. We believe such a database would 

reduce the risk that potentially abusive caregivers will be employed 

to care for this vulnerable population. 

Second, direct CMS to create demonstration projects to establish 

mandatory compliance programs for nursing homes. Effective compliance programs can help reduce fraud and abuse, enhance operational functions, and improve the quality of healthcare services. 

And third, enhance the quality of data made available to the 

nursing home industry and to the public. CMS’s Nursing Home 

Compare Web site offers consumers and the nursing home industry 

15 

a good base of information on the quality of nursing homes. However, the Web site can be improved by adding data that provides 

a clearer and more comprehensive picture of the specific facility as 

well as the performance of the nursing home chain. 

Thank you for the opportunity to testify today, and that concludes my remarks. I look forward to your questions. 

[The prepared statement of Mr. Morris follows:] 

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Mr. STUPAK. Thank you, Mr. Morris. 

Mr. Attorney General, Mr. Blumenthal, your opening statement, 

please, sir. 

STATEMENT OF RICHARD BLUMENTHAL, ATTORNEY 

GENERAL, STATE OF CONNECTICUT 

Mr. BLUMENTHAL. Thank you, Mr. Chairman, and I want to join 

in thanking you for holding this hearing and members of the Committee for devoting their time and effort, and I want to also make 

the point, although it probably need not be made, that we are talking about a small number of nursing homes, still a minority in this 

industry which is composed of many hardworking, honest, caring 

owners and others, and I want to make the point particularly as 

to those others, the staff and caregivers who work in these nursing 

homes. They have been not only an extraordinary and profoundly 

important source of care for individuals in Connecticut who are in 

these homes but they have also provided my investigation with exceptionally important information. They are very, very important to 

our investigation, whether it is the nurses or the food preparers or 

the maintenance workers. They have given us firsthand knowledge 

about the problems at Haven Health Care and similar kinds of 

problems throughout our nursing home industry in Connecticut. 

Connecticut’s very frustrating and frightening experience with 

Haven Health Care and it has been mentioned already, is symptomatic of a crisis that is really spreading across the Nation. It provides a clear clarion call for reform. Our present system of scrutiny 

is ineffective and inconsistent. It fails on two principal counts: information and enforcement. Mr. Morris has just made some very 

pertinent and significant recommendations as to how to improve 

the information availability and flow, and my testimony is about 

that area of concern but also about enforcement because my job as 

attorney general is to enforce the laws, and that is really how we 

became involved in the Haven Health Care problem. What it 

showed me very dramatically is that our current regulatory system 

is mired in a past era when nursing homes were owned by small, 

local companies or even individuals, and that regulatory system is 

simply inadequate, impotent to address the larger problems and 

challenges posed by mammoth, multi-State companies, not because 

they are big but because they employ an interlocking constellation 

of ownership, a maze of different corporate entities in different 

States that can be shielded from accountability, and so I have actually attached to my testimony the corporate organization chart of 

just one of these chains, Haven Health Care, which when it filed 

for bankruptcy filed individual actions for every one of the 44 entities. 

Mr. STUPAK. Can you put that on the screen so others can see 

it? 

Mr. BLUMENTHAL. It is attached to my testimony so anyone who 

wants it, we would be happy to make it available. 

Mr. STUPAK. Thank you. 

Mr. BLUMENTHAL. Haven Health Care is really a poster child for 

the perils of concentrated ownership and power because that consolidation of financial control enables the kind of self-dealing and 

self-aggrandizement for purposes unrelated to the care of patients 

33 

that occurred at Haven Health Care. To put it very simply, what 

we found was that the ownership and management of Haven 

Health Care was using its resources, either directly or as collateral 

for loans, to completely unrelated commercial enterprises, almost 

$9 million invested in a record company in Nashville, a purchase 

of a building there for $2.1 million, the purchase of a lakefront 

home in Connecticut in the town of Middlefield for close to half a 

million dollars, all at a time when Haven Health Care owed its 

vendors close to $13 million. When we talk about vendors, we are 

talking about companies and individuals who are essential to the 

quality of care at these facilities, 15 nursing homes in Connecticut, 

10 in other New England States, vendors such as pharmaceutical 

companies, equipment suppliers, even utilities that went unpaid so 

that in one of them, when heating oil ran out, the individuals in 

the home suffered from literally freezing cold and another where 

electricity almost was cut off by the power company. 

So the impact of fiscal mismanagement is very direct and real on 

patient care, and in fact, the Haven Health Care situation I think 

is symptomatic of exactly that phenomenon and the reason why I 

recommended very specific fiscal management, and scrutiny, methods of imposing it to our State legislature, which now are the basis 

of what I am recommending that the Federal Government ought to 

require of all States. I am not going to go through in detail what 

they are because they are in my testimony, and I know in the interests of time, some reserve is better than full explanation, but I 

just want to make the point that patient and resident quality of 

care are profoundly at risk but we are also taking about literally 

billions of taxpayer dollars. In the case of Haven Health Care, $130 

million in Medicare and Medicaid payments annually. In Connecticut, we are talking about $1.3 billion spent in taxpayer dollars 

on nursing homes, obviously billions nationwide. So we owe it to 

taxpayers, even if they have no direct family stake as many of the 

Congressmen who talked about their personal experience obviously 

do, as we at this table do, as many in the audience do, as citizens 

countless of them across the country have a direct stake in the 

quality of care through family members, but fiscal controls are a 

matter of governmental responsibility and how we spend these dollars. 

Let me just say finally that I strongly support the kind of information database that has been suggested by Mr. Morris and in addition I have proposed a strike force composed of Federal and State 

representatives that could not only monitor but take swift, strong 

action as well as conditions to be imposed on the States that would 

require State systems for monitoring fiscal mismanagement and integrity and as well prevent corporate bleeding of nursing home finances, require regulation of nursing home owners and management companies, establish minimum insurance requirements, a 

number of other conditions that by the end of this decade I think 

the Federal Government should impose on all States as a condition 

for governmental aid. 

Where we are now with Haven Health Care is that we have restored stability, we have assured patient care. The entire interlocking corporate structure is in bankruptcy court under the jurisdiction of the judge. We have a restructuring officer and a patient 

34 

care officer who have in effect taken over operation, and it will be 

shortly sold after an auction to a new owner. It has been a long 

and hard struggle but Haven Health care has been very far from 

a haven. It has been in effect a house of horrors for many of the 

families who entrusted their loved ones to its care. It has certainly 

been a fiscal nightmare and a quality-of-care conundrum for all of 

us who have sought to pick up the pieces and restore stability and 

integrity, and I want to thank our State agencies, the Department 

of Social Services, which has been integral to this effort, as well as 

Federal authorities, the Office of Inspector General has been a 

strong partner as has been the United States Attorney. 

Thank you. 

[The prepared statement of Mr. Blumenthal follows:] 

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Mr. SHIMKUS. Thank you. 

Mr. Navas-Migueloa of the Long-Term Care Ombudsman program for the city of Baltimore, please, your opening statement. 

STATEMENT OF LUIS NAVAS-MIGUELOA, LONG-TERM CARE 

OMBUDSMAN; COMMISSION ON AGING AND RETIREMENT 

EDUCATION, CITY OF BALTIMORE 

Mr. NAVAS-MIGUELOA. Good morning, distinguished members of 

the subcommittee, thank you for having me. It is actually quite an 

honor to be here. I am a long-term care ombudsman for Baltimore 

City. There are four of us in our office, and we advocate for the 

rights of residents in 31 nursing homes and over 300 assisted living facilities. 

I was asked to come here and testify before you and give you 

some examples of how we face difficulties when coming against 

nursing homes who are not very transparent in their ownership. In 

Baltimore City, I have experienced firsthand the difficulty in helping not only the residents but also the nursing homes in solving 

problems which affect the care of the residents. When I am asked 

whether I prefer the corporate nursing home or the privately 

owned nursing home, I can only answer with a question, and that 

is, what would you rather—where would you rather go have a nice 

dinner, a chain restaurant or a restaurant where the chef is the 

owner? We encounter problems such as mouse infestations. I have 

actually been meeting with residents in a room where a mouse has 

climbed up my leg. I have seen nursing homes where there is a 

total of four floors in the nursing home and three of them have no 

working showers for the residents. I have seen nursing homes just 

like the attorney general mentioned where the boiler had been broken for months during the winter and the nursing home administrator had to go and buy space heaters for the residents’ rooms, 

which are completely against COMAR regulations here in Maryland. 

The difficulty that we face is that from my experience, there is 

a lack of human touch in the corporate nursing homes for the most 

part. When I go to a nursing home that is privately owned and I 

go up to the administrator, who is my go-to person, and I say, we 

have a situation, can we fix it, more often than not, the problem 

has either been addressed or solved before I leave the doors of that 

nursing home. In the less transparent ownership nursing homes, 

the nursing home administrator takes the role of almost like a 

buffer. It seems to me like there is a shield where he is either hiding problems from whoever he answers to or there is a reluctance 

to do a larger effort, to make a larger effort to solve the problems. 

I have witnessed in one nursing home four nursing assistants 

smoking what appeared to be marijuana and the smoke was coming into one of the resident’s rooms where I was standing, and 

when I approached the administrator, at first he seemed very responsive and proactive about it, and after taking a minute to think, 

he said, why don’t you call me tomorrow and we will follow up. The 

next day I was completely shut down from any further information. 

This nursing home in particular is owned by one of those large 

companies based out of Louisiana, I believe, and those are the challenges that we face, the lack of human touch. You sometimes wonVerDate Nov 24 2008 12:40 Feb 01, 2010 Jkt 037690 PO 00000 Frm 00047 Fmt 6633 Sfmt 6633 C:\DOCUMENTS AND SETTINGS\CWELLS1\HEARINGS\110-116 SCOM1 PsN: JIMC
42 

der if the owners have actually seen the nursing home before, and 

I think that is a shame because they are dealing with people and 

these people need help and they are not there on vacation. They 

live there. I hope it would be better. 

Thank you. 

[The prepared statement of Mr. Navas-Migueloa follows:] 

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Mr. STUPAK. Thank you. 

Mrs. Aceituno, would you like to testify at this point in time? 

Ms. ACEITUNO. Yes. 

Mr. STUPAK. You are recognized then, if you would please. 

STATEMENT OF SUSANA ACEITUNO 

Ms. ACEITUNO. Good morning. My name is Susana Aceituno. I 

was born in Buenos Aires, Argentina, January 27, 1933. My husband, Oscar, was born on April 1, 1929, in Buenos Aires, Argentina. We met in 1950, and after courting for some time, we got 

married on January 27, 1955, in Buenos Aires. 

Oscar would always travel all over Europe and the States, so 

when we decided to leave Argentina because of personal circumstances, Oscar said we should move to the United States. In 

January 1966, we moved to the United States. We settled in Pleasantville, New York, with our three beautiful daughters: Laura, 8 

years old; Sandra, 5 years old; and Patricia, 2 months old; and 

$200 in our pocket. And after much working and saving, in 1975 

we were able to buy our home in White Plains, New York. 

Throughout his life, Oscar was an active man. He went to Air 

Force school in Cordoba for 2 years, and, as I say, he would travel. 

He loved to play the guitar and dance the tango. He was always 

doing something. We never had to call a carpenter or a plumber to 

do anything in the house. He would garden. His life was breathing, 

walking, and working. He would walk many miles. He loved to 

walk. He would read the newspaper every day. He was never sick, 

very healthy, and always there for me and my girls. My nickname 

for him was Tarzan. He was one of the most honest human beings 

that I have ever known. 

When he was 65 years old, he was first diagnosed with Alzheimer’s. One of the signs of this illness was that he began wandering from the house. I realized how great a danger he was in 

when we found him in the middle of the Bronx River Parkway 

walking. That is when we knew we could not keep him home. It 

was a heart-wrenching decision but one that we took responsibly. 

We began researching and touring several facilities. We had Oscar 

examined by our doctor and by visiting nurses. 

We went to Haven Health Care of Greenwich and met with the 

administrator. She specifically said to me, don’t worry, we will take 

care of him. Very secure. So in May 14, 2004, Oscar became a resident of Haven Health Care. We danced a tango for the other residents and they thought we were professional dancers. The same 

morning, Oscar wandered out of the building one time and went 

outside. That afternoon at my visit, I was told by the nurse that 

he refused to wear the wander guard bracelet and that he wandered but they told me not to worry because they will take care of 

him. 

For the next 2 weeks, I visited him every day with my daughters. 

We would eat together, we would walk outside, and we would take 

to other residents and staff. 

In the first 4 days that he was at Haven Health Care, Oscar was 

allowed to leave the facility 10 times. He was not allowed. He escaped from the facility. I was told that he continued to wander 

throughout the day and evening and removed his wander guard 

53 

bracelet at least five times. It seemed like he was being allowed to 

wander. I made arrangements to move Oscar to another facility 

across the street. But on May 18, 2004, on Oscar’s fourth day at 

Haven Health, I met with the administrator and she told me that 

Oscar was adjusting well to Haven Health and that we should let 

him stay there instead of transferring him. She said to give them 

another opportunity. 

From that meeting on May 18 to May 30, I was never told anything about Oscar wandering. On May 30, 2004, at about 7:30 p.m., 

he was seen having escaped the building along with another resident and he was returned to his room. Twenty minutes later, he 

could not be located. He was found outside the health center about 

a mile down the road, at the side of the road at the bottom of an 

embankment with his face covered in mud. He was then taken to 

a local hospital by ambulance. 

Unfortunately, the hospital did not take any X-rays of Oscar, for 

what reason, I don’t know. They sent him back to Haven Health 

Center. Oscar had a bruise on his spine from falling down the embankment. The bruise was from the inside and it got swollen and 

cut off all his nerves in his spine. The doctors say he is a quadriplegic. 

Oscar went into Haven Health Center as a strong and proud 

man. Since this happened, he doesn’t walk, doesn’t talk. He has to 

be fed because his hands don’t work and he has had to wear diapers. I look in his eyes but he doesn’t look at me. When the administrator at Haven Health came to the hospital to see Oscar, I said 

to her, ‘‘This is what you gave me back.’’ 

The Connecticut Department of Health investigated my husband’s care and found errors committed by Haven Health Care. 

They were fined $615 for not looking after Oscar, but because 

Haven Health Care said that would be a financial hardship for 

them, they sent the State a check for $1. 

I am happy to answer your questions and provide more information if you need it. I would like for what happened to us for something good to come out so that other people do not go through what 

we have gone through. Thank you very much. 

[The prepared statement of Mrs. Aceituno follows:] 

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Mr. STUPAK. Thank you, and thank you for your testimony. We 

know how difficult it was for you. 

We will begin with questions here. Mr. Morris, if I may, I will 

begin with you, a couple questions, if I may. Is it fair to say that 

information about who owns and controls a hospital is helpful to 

regulators at all levels in the government? 

Mr. MORRIS. Information about ownership is critical to both promoting compliance and our enforcement efforts. Our experience has 

been that when we are looking into substandard care provided by 

nursing homes, one of the enormous challenges we face is navigating through the corporate structure that is put up to deflect responsibility from those who have made resource decisions. I would 

suggest that while transparency is a critical part of improving care 

and supporting our enforcement efforts, it is a means to an end. 

The end is improving quality. And so we would submit that a compliance program which gets critical information up to decision makers, up to shareholders and those who actually are controlling the 

resources of a chain, is essential. Knowing who they are is critically 

important. Getting them that information so they can be held accountable if they don’t act on it is equally important. 

Mr. STUPAK. CMS has undertaken a program called PECOS, 

which should help to ensure ownership accountability. Has your 

agency looked at PECOS and its implementation and has it 

achieved its goals? 

Mr. MORRIS. We have not recently looked at PECOS as part of 

our evaluative effort. I believe one of the concerns that we have 

with PECOS is how many layers of accountability it captures, and 

we have seen in our investigations and some of the investigative 

journalism reports, there are so many layers between the individual facility with which CMS has its provider agreement and 

those who are really calling the shots, PECOS does not capture 

that number of different indirect owners. So it is part of the solution but it is not a comprehensive solution. 

Mr. STUPAK. Let me ask you this question. How do compliance 

programs work in conjunction with a voluntary industry standard? 

I know the nursing homes have been doing an ‘‘Advancing Excellence’’ campaign. How do you look at that with your compliance as 

a regulator? Do they complement each other? Can it help? Explain 

that a little bit. 

Mr. MORRIS. Certainly. They certainly can complement each 

other. The nursing home industry should be applauded for the 

steps it has taken to promote voluntary efforts to improve care. In 

our experience, a compliance program has as its cornerstone integrity, financial integrity, and integrity over clinical care. That is 

what makes a compliance program such a powerful tool. I would 

suggest the next step towards advancing care, is that you mandate 

certain components of a compliance program. You empower a compliance officer to, if you will, speak truth to power. You build in internal systems to get the root cause analysis. To come back to the 

transparency point, you empower the compliance officer to bring 

that information to those who actually make resource decisions. So 

while we applaud what the nursing home industry has done, we 

think much more can be done to promote quality through compliance programs. 

75 

Mr. STUPAK. Let me ask you—— 

Mr. MORRIS. We would suggest, for example, that a demonstration project mandating compliance programs would be a good start. 

Mr. STUPAK. Let me ask you, because you testified that the OIG 

is continuing its oversight of the use of antipsychotic drugs in nursing homes. Has your investigation—what has your investigation 

found? More use, less use? What have you found? And it is ongoing, 

I take it? 

Mr. MORRIS. That work is still ongoing so it would be premature 

for me to report on its results. We would be pleased to come back 

to you once that work is completed. 

Mr. STUPAK. Mr. Attorney General, you have recommended the 

creation of a national clearinghouse of nursing home information. 

Why isn’t the current information which CMS maintains on nursing homes adequate? 

Mr. BLUMENTHAL. Mr. Chairman, I think it is inadequate because of a number of factors, first of all, because it is incomplete 

in many respects, it fails to encompass or capture the real owners 

of nursing homes. The kind of labyrinthine maze of corporate structure that many of the chains now have prevents that database 

from being fully current or accurate. But equally important, there 

are issues about its availability to the States, the access that State 

regulators may have to it. For example, our Department of Public 

Health, our Department of Social Services may not have full, current information about citations, investigations, license denials, 

disciplinary proceedings, simply because it fails to capture all that 

data or make it available in a timely way to the States. So I think 

the States should be a partner in that kind of national clearinghouse rather than just a bystander. In the case of Haven Health 

Care, for example, numerous violations occurred, repeated in some 

of the nursing homes, 45 in the course of 3 years involving very severe issues of patient care. I am doubtful that any of those kinds 

of citations or incidents appeared in the database that exists now 

even though Haven Health Care was operating 10 nursing homes 

in other New England States. So I think that again coming back 

to the present perils of concentrated ownership and power, we need 

a different paradigm to deal with them in terms of information 

gathering and enforcement. 

Mr. STUPAK. Well, you are the top law enforcement agent in the 

State of Connecticut and you have been there longer than Haven 

has had ownership of these; was there no central base for you to 

go to as the chief law enforcement officer of Connecticut to look to 

as you began your investigation in Haven to say, gee, we have a 

problem here and this is the exception, not the rule for—how did 

you gather the information about the 45 violations over 3 years? 

Did you have to go back and hand-create that database? 

Mr. BLUMENTHAL. Well, we were aware of the problems that 

Haven Health Care, certainly the financial problems and some of 

the healthcare issues, and one of the recommendations that I have 

made is that fiscal problems and gross mismanagement be sufficient reason in effect to intervene and establish a receiver under 

State court proceedings. Present laws simply fail to give law enforcement the power it needs to prevent the recurrence of these 

problems. Fines and penalties are all too often simply regarded as 

76 

a cost of doing business, and very often, as happened in Haven 

Health Care and Ms. Aceituno’s case, the nursing home operator 

will make the case to regulators that a financial penalty will actually diminish the quality of healthcare because it diminishes the 

resources available for healthcare. And so my pitch to the committee basically is, we need stronger means of preventing gross 

mismanagement or self-dealing and bleeding of resources before it 

occurs because, as happened with Haven Health Care, we were 

aware of its problems back in 2006. We urged the Department of 

Social Services to seek a receiver. It had reasons for declining our 

recommendation. But we would have been probably better off with 

earlier intervention, a better standard, a better means of imposing 

control such as a receiver or joint Federal-State action. 

Mr. STUPAK. And Haven Health Care is the exception, not the 

rule of nursing homes, I think you said in your testimony. Is that 

the case? 

Mr. BLUMENTHAL. Well, it is an exception. You know, we have 

intervened and we have done in our State criminal prosecutions of 

fraud. We have also done receivers for other nursing homes. We 

just, as a matter of fact, established a receiver for a nursing home 

chain called Marathon, which has a number of homes both in Connecticut and Massachusetts, which then went to bankruptcy court, 

and very often the bankruptcy court structure itself can impose 

delay and confusion on the process. It took us literally months of 

a team of our lawyers, three or four of our lawyers, going to repeated bankruptcy court proceedings, working with creditors, secured creditors, a very complicated process but I think what we 

will find is that more and more these nursing homes will seek the 

refuge of bankruptcy court, as they are legally entitled to do, in 

order to avoid more effective State intervention unless this committee establishes some of the recommendations that are being 

made. 

Mr. STUPAK. Thank you, and I am over my time, and we will go 

for a second round of questions. 

Mr. Shimkus for questions, please. 

Mr. SHIMKUS. Thank you, Mr. Chairman. 

Mrs. Aceituno, thank you for sharing your story. You said you 

had shopped around for a nursing home for your husband, Oscar. 

In that searching, were there any signs that this particular nursing 

home—I mean, talk through that process. The whole issue is information, so were you concerned? Again, in rural America they may 

only have one choice and there may be—— 

Ms. ACEITUNO. No, I liked the nursing home because it was a 

small one like a home. So the big, big nursing home, I didn’t know 

too much about them. I guess I should have found something, you 

know, more important what happened in the nursing home. Today 

I open my eyes more because I know what is going on. But I liked 

the place because it was like home. It was close to my house too. 

I used to visit him every day together with my daughters. I never 

expected that to happen. 

Mr. SHIMKUS. CMS, and we hope they elaborate more. We are 

trying to get more information. There is a Web site. I think there 

is going to be a question about how much information is available, 

what is accessible for the consumers, what might be accessible in 

77 

addition to for local law enforcement or inspector generals or AGs 

of various States. 

Mr. Morris, can you talk about the Web site and information 

about maybe information that is available that is not available to 

everybody? 

Mr. MORRIS. I would be glad to, and I would also note that Dr. 

David Zimmerman will be appearing on the next panel, who has 

a great depth of expertise around the quality indicators and how 

they can be used effectively. The suggestions coming from the inspector general are aimed at putting the information that is available in context so that a consumer or an enforcement agency and, 

equally important, the industry itself can look at the information, 

see how a facility is doing relative to its peers so there is a context, 

so consumers can read the information and understand what the 

deficiencies mean in the context of overall care. And equally important, provide consumers and the industry with trending information so you know how this facility and the chain it is a part of has 

done over time. One of the things we have seen is that many facilities are what are called yo-yo facilities that come in and out of compliance. So if you happen to take a snapshot while they are in compliance, it may not tell you everything you need to know. 

Mr. SHIMKUS. And I think we have experienced that quite a bit, 

especially in the inspection regime based upon a pop inspection 

versus one that somehow they know is coming. There are preparatory actions. You know, we did that in the military when we 

knew our IG was coming around. And that is what we need to address too is this yo-yo effect. 

Mrs. Aceituno, you testified about the penalty and that the com- pany only had to pay $1. Based upon your experience, what should 

have happened to that nursing home? 

Ms. ACEITUNO. What should happen? 

Mr. SHIMKUS. Yes. I mean, they were fined $615. I think that my 

perspective would be, that is small, and then they only paid $1, 

which is even less. 

Ms. ACEITUNO. He was a $1 man. I think people should have 

more information about what they expect from the nursing home 

and what they require from the nursing home. And I really hope 

you can change the law and be a little more tough about this. I not 

only lost my husband but the father of my daughters, a grandfather. He was a great man. He was very, very happy to be an 

American. Nobody could say anything about America because he 

would turn around and say listen, the airport is open; if you don’t 

like America, go home. That was my husband. 

Mr. SHIMKUS. Yes, I wish I would have had a chance to meet 

him. I think I would have been proud to welcome him here. 

Mr. Blumenthal, in this briefing book there is a lot of different 

tabs and stuff and one talks about the Hartford Current doing a 

story on the nursing home in 2006. I guess the question—and you 

kind of raised it with the chairman, with all these signals being 

raised, what could you all have done more? Was there more that 

you could do just in the State with State rules and State laws? 

Mr. BLUMENTHAL. Even with existing State law, to be very blunt, 

we could have sought a receiver, that is, a State takeover through 

a State court action earlier than we did, and it is now a matter of 

78 

public record that my office recommended a State takeover earlier 

than was done, and our State Department of Social Services, which 

has the ultimate authority through its approval process to undertake that action, declined to adopt the recommendation. But the 

Hartford Current article has certainly performed an enormously 

important service in raising public awareness about these problems. 

Mr. SHIMKUS. Yes, and I appreciate—we are just trying to follow 

the facts to help us in the public policy arena, and raise education, 

even among public policy people in the executive branch so they do 

the job, and this is obviously one that could have been done better 

by a lot of people. 

Let me just raise, because this is a concern in Illinois right now, 

and first I will start with Mr. Blumenthal because I don’t know 

what the State FMAP is, which the FMAP is the percentage of reimbursement versus what we pay on Medicaid. Illinois is a 50/50 

State. Other States, their share is different, and I have a big beef 

about that, to begin with. But being a 50/50 State, there are two 

problems. One, and a lot of care in these facilities are Medicaid recipients, if we do not fund based upon a percentage, then what Illinois has to do is, we have to find the loopholes to game the system 

to try to bring more money in. So I don’t know what Connecticut’s 

is. That is the first question. The second question is, we have a 

particular problem in Illinois because the State is the payer. They 

get the money back. They get their portion back. But if they delay 

payment, in some cases right now in the State of Illinois for 4, 5, 

6 months, that really kills financially some of these facilities because then they are trying to—how do you run a business when 

you have this delay in payment? So do you know—I am not trying 

to put you on the spot. Do you know the State’s rate? 

Mr. BLUMENTHAL. If I may answer your question, we have, I believe, as well a 50/50 match. 

Mr. SHIMKUS. You know, there are some States that have 70/30? 

Mr. BLUMENTHAL. Right, and I think that observation, and I 

think it is a very pertinent one on your part, emphasizes the importance of our working together and recognizing the complexities 

of these issues. I have recommended, for example, in my testimony 

that a 10 percent change in beneficial ownership trigger additional 

monitoring or review. If that process had been in effect when Ray 

Termini, who came to be the owner, took over, it would have been 

found that he had no experience in this industry other than repairing the roofs on some of the facilities. It would have prompted 

stronger oversight and monitoring, which I believe is necessary, 

and you are absolutely right that suspending or withholding money 

may be problematic for some of these institutions, which is 

why—— 

Mr. SHIMKUS. Do you know the State’s time frame of payment? 

I will stop with that one, Mr. Chairman. Do you know how long 

it is that the State of Connecticut pays on the obligation for Medicaid for long-term care? 

Mr. BLUMENTHAL. How long it—— 

Mr. SHIMKUS. Well, again, I only know my State. We are probably 4 months behind. 

Mr. BLUMENTHAL. I feel a little insecure answering. I believe—— 

79 

Mr. SHIMKUS. That is fine. I am not trying to put you on the 

spot. I am just—— 

Mr. BLUMENTHAL. I believe we are current. 

Mr. SHIMKUS. It is a problem in this industry and throughout 

healthcare across the Nation when reimbursements are not made 

in a timely manner. I am indicting my own State because of my 

State’s failure. I just don’t know how prevalent it is in some of the 

other States. 

Thank you, Mr. Chairman. 

Mr. BLUMENTHAL. I don’t know what the experience in Illinois is 

but let me just make a very important point to you, that very often 

these institutions in financial trouble are advanced money, not suspended by advanced money, and I would wager that happens in a 

lot of other States as well and the critical decision that our agency 

would have to make is whether to advance more money, in other 

words, throw good money after bad, good money being for the care 

of patients, but possibly for exploitation as well. 

Mr. STUPAK. I thank the gentleman. 

Ms. Schakowsky for questions. Your opening will be made part 

of the record. I noted earlier you were here and you were bouncing 

back and forth between the Health Subcommittee, so we appreciate 

you being here. 

Ms. SCHAKOWSKY. Thank you so much, and I do apologize for not 

having been here for the testimony. I have looked at the testimony 

and my staff is here and I was able to get the end of Ms. Aceituno’s 

testimony, which was very, very moving. 

Mr. Morris, isn’t it the case that CMS currently has no centralized database from which State officials can easily find information 

about nursing home companies moving into their States? 

Mr. MORRIS. I couldn’t speak to that directly. I believe Acting Administrator Weems will be testifying later. There is data available 

through PECOS which identifies immediate owners of facilities. As 

we were discussing a couple of moments ago, the big difficulty is 

being able to follow that ownership upstream through multiple—— 

Ms. SCHAKOWSKY. Well, let me ask you this, then. I think we are 

going to hear later from CMS that they only have information on 

about 70 percent of nursing home providers in the country and 

they are going to tell us that it focuses on the quality of care nursing home residents receive without regard to ownership. What difference does it make whether CMS has complete information about 

corporate ownership of a nursing home chain? 

Mr. MORRIS. I think it makes a difference because the government should know who it is doing business with, and if the benefit 

of the bargain, the money we pay for services, is not being met, we 

should be able to go to those who have received our money through 

ownership interests and hidden shells and be able to have a conversation with them and hold them accountable if they don’t improve the care of the residents for whom we are charged with looking after. So I think it makes it a huge amount of difference. 

Ms. SCHAKOWSKY. So would everyone on the panel agree that 

that information should be part of the searchable database? Does 

anybody want to comment? No? OK. 

Let me ask Mr. Blumenthal, the owner of Haven Health Care, 

Ray Termini, borrowed against the equity value of the real estate 

80 

in his nursing home to finance really extravagant ventures such as 

the purchase of a recording studio in Nashville, Tennessee. Why do 

owners such as Mr. Termini attempt to separate the ownership and 

operators of a nursing home? What is the economic rationale? 

Mr. BLUMENTHAL. For permitting them to have ownership or for 

his doing what he did? 

Ms. SCHAKOWSKY. His doing what he did, really. 

Mr. BLUMENTHAL. Well, you are asking the wrong person for a 

defense here. 

Ms. SCHAKOWSKY. Well, let me ask you this. Is it a problem for 

an owner to use a nursing home’s equity to finance non-healthcarerelated ventures, in your view? 

Mr. BLUMENTHAL. And I apologize. I didn’t mean to be facetious. 

It is a very serious question, and for us, a very real one, and in 

fact, we are continuing our investigation. There has been public 

mention, I can’t comment on it, that Federal authorities may be involved as well, but the use of that money for unrelated purposes 

raises very serious and significant legal exposure for him, and in 

my view, there is simply no rationale for it. There is no excusable 

reason for resources to be taken from a nursing home enterprise, 

as we alleged he did, for a recording company or a private home 

or other unrelated ventures, whether extravagant or not, and risking the financial liability of the nursing home. 

Ms. SCHAKOWSKY. And then to claim that $651 or whatever it 

was is just too much for him to pay, I think that is a pretty insulting fine to begin with but to send $1 is absolutely despicable, in 

my view. 

Mr. BLUMENTHAL. And your question goes exactly—I think it is 

a very good illustration of the practical consequences of the separation of these different entities into different corporate structures so 

that they can be insulated from accountability, and I know that 

Ms. Aceituno’s attorneys are here today, they are seeking recovery, 

and by the way, others have sought recovery through malpractice 

actions, and one of my recommendations is that there be minimum 

insurance requirements so that people who are in this situation can 

hold accountable these—— 

Ms. SCHAKOWSKY. There are no minimum insurance requirements at all now? 

Mr. BLUMENTHAL. They differ from State to State and they are 

inadequate in most States. 

Ms. SCHAKOWSKY. Well, thank you for that suggestion. 

I want to ask Mr. Navas-Migueloa, you indicate in your testimony when nursing home ownership is transparent, it is easy for 

the ombudsman—and I really appreciate the work of ombudsmen, 

we have some in our community—to prompt improvement in a 

nursing home. How often do you find that non-transparency is a 

problem in the homes that you visit? 

Mr. NAVAS-MIGUELOA. Non-transparency? 

Ms. SCHAKOWSKY. Yes. 

Mr. NAVAS-MIGUELOA. I would say between a handful and a 

dozen nursing homes out of 31 are difficult to intertwine who runs 

it. In some nursing homes, you have a conglomerate, it is a mesh. 

You have an administrator, a CEO, a board of directors, some management company from out of state, et cetera, et cetera, et cetera. 

81 

Ms. SCHAKOWSKY. So if you encounter a non-transparent home, 

what steps does your office take to determine who the owner is? 

Mr. NAVAS-MIGUELOA. From our office ourselves, we do all the 

research we can do from calling the administrator to trying to decipher who owns the place. In some cases the administrator will actually look at you and say I am not quite sure, I think they are 

a company out of Chicago but we also have a CEO who may be 

able to help you, and it is quite frustrating and I understand that 

they are running a business, for better or worse, and I know that 

my role is in the trenches and I understand that there is bigger 

agencies involved and I hope that somebody knows. 

Ms. SCHAKOWSKY. Well, Mr. Chairman, may I ask a couple more 

questions? 

Mr. STUPAK. Yes, a few more. 

Ms. SCHAKOWSKY. Thank you. 

If you are dealing with a nursing home that had a record of poor 

performance in another State, would you have any way of finding 

out, and how would you do it now? 

Mr. NAVAS-MIGUELOA. Unless there was a warning, I wouldn’t 

know. 

Ms. SCHAKOWSKY. You wouldn’t know, and is there any way you 

could find out? 

Mr. NAVAS-MIGUELOA. I am not terribly sure. 

Ms. SCHAKOWSKY. What has your experience been with nursing 

homes that are purchased by companies that are based out of your 

State? Is there any difference in the quality of care that you have 

noticed? 

Mr. NAVAS-MIGUELOA. The quality of care, I guess that is a question that the residents should answer. I am not one to say that 

quality of care is better than this one. I guess it depends on what 

the resident expects is quality of care. 

Ms. SCHAKOWSKY. Well, you do have a standard, I hope, of—— 

Mr. NAVAS-MIGUELOA. Sure, but I am not going to put words in 

the residents’ mouths. 

Ms. SCHAKOWSKY. No, but I mean, do you find—well, this is an 

important issue. 

Mr. NAVAS-MIGUELOA. Sure, absolutely. 

Ms. SCHAKOWSKY. I mean, do you find more substandard care? 

Have you noticed any difference between those that are part of an 

outside of your State chain? 

Mr. NAVAS-MIGUELOA. Yes. 

Ms. SCHAKOWSKY. What kind of steps do you think that Federal 

regulators could take to most assist your work in dealing with nontransparent nursing homes? This is my last question. 

Mr. NAVAS-MIGUELOA. Allowing us to know who to go to, allowing us to know who the owners are so that if we have to go far and 

beyond the administrator who is our contact person, we know 

where to go, we know who to call, we know who to approach to 

solve a problem, like not having showers in the nursing home. 

Ms. SCHAKOWSKY. Let me just ask Mr. Blumenthal to answer 

that too. 

Mr. BLUMENTHAL. As you just heard, the information sharing is 

completely inadequate, and what I would like to see is that the 

Federal Government establish a clearinghouse, a database that is 

82 

freely accessible to regulators and perhaps even proactively warns 

State regulators about owners, operators, managers who have encountered problems. You know, we are not talking about rocket 

science, to use an overused term. It is a very simple concept that 

this information be freely available and that there be joint StateFederal enforcement and that the Federal Government absolutely 

require as a precondition for providing all those billions of dollars 

that you do, that the State do an adequate job of monitoring, that 

it require people, adequate numbers of inspectors and the kind of 

enforcers who will protect again the Haven Health Care kind of situation. Thank you. 

Mr. STUPAK. Mr. Whitfield for questions, please. If you run over, 

that is fine. We have five votes coming up but go ahead and get 

started. 

Mr. WHITFIELD. Mr. Chairman, thank you, and I certainly want 

to thank the panel for being with us today. 

Mr. Morris, I was just glancing at the New York Times coverage 

today of this hearing, and it says that there is widespread understatement of deficiencies in the nursing home business, and then 

you are quoted also as saying, ‘‘We found nursing home residents 

who are grossly dehydrated or malnourished. We found maggot infestations in wounds and dead flesh,’’ and so forth, and I was just 

wondering, Number one, in conducting this report or submitting 

this report, how many States did you go in and look at nursing 

homes in those States, and from your perspective, what portion of 

nursing homes do you feel are not meeting minimum standards in 

our country today? 

Mr. MORRIS. Let me try to answer the question this way. I believe the Times article you are referring to, today’s article, was actually talking about a report issued by the GAO today so we were 

not part of that evaluative effort. However, as part of our audits 

and evaluations, we look at facilities throughout the country, all 50 

States and use those to base our findings and recommendations. In 

the particular matters that you are addressing, we work very close 

with State and Federal law enforcement officials in every State. We 

work with the State Medicaid fraud control units. They are really 

on the front line of these enforcement efforts. So we bring all of 

that enforcement information as well as our evaluative work. 

To the question of how many facilities, how many chains are providing substandard care, we would note that the empirical evidence 

suggests about one in five is providing care that puts residents in 

harm’s way, either putting them in jeopardy or providing actual 

harm. We would also note that many of these facilities yo-yo in and 

out of compliance with program requirements so the magnitude of 

the problem when looked over a multi-year period is probably more 

dramatic than that. 

Mr. WHITFIELD. So you are saying that 20 percent of the nursing 

homes in the country are endangering the patients today in the 

care that they are providing? 

Mr. MORRIS. Based on the survey information coming out of both 

the State and Federal surveyors, yes. 

Mr. WHITFIELD. Now, when we talk about Federal standards, 

meeting Federal standards, what does that term actually mean? 

83 

Can you delineate some of the different types of standards that we 

are referring to? 

Mr. MORRIS. Well, the Centers for Medicare and Medicaid Services have conditions of participation which specify both patient care 

as well as life safety requirements that nursing homes are required 

to meet in order to participate in our program, and those are the 

standards from which we in the Federal Government and then our 

partners in the State use to evaluate whether a particular facility 

is in compliance. There is a State survey process by which each facility is subject to on average about 15 months of survey reviews 

and then the Federal surveyors go back and review some portion 

of that work to see whether the quality of those surveys is adequate and consistent. 

Mr. WHITFIELD. Now, I want to go back to this owners issue for 

just a minute. A nursing home is either meeting the requirements 

or it is not. It is either providing care at a certain standard or it 

is not. So why is the ownership aspect of it so important? 

Mr. MORRIS. The ownership aspect is important because care is 

delivered through a range of different mediums and the quality of 

care varies throughout the week and year. When we see systemic 

failures of care, it means something is wrong with how that nursing home is delivering care not to just one individual but across the 

board. When we in the enforcement community and the compliance 

improvement community want to have a conversation about how to 

improve care, we need to find who has got control of the resources. 

Our experience has been that when a facility is under the control 

of a large corporation which has put multiple layers of accountability between decision makers and the facility, resources are 

drained away from care so we need to be able to have transparency 

and accountability with those who actually make the resource decisions. As was alluded to in this panel, many times when we speak 

to the head of the facility, they don’t know who is in charge. They 

don’t know how to respond to an ombudsman’s concern or a State 

surveyor’s concern. It is always passed uphill. They may not know 

who has got control over those resources, and as I said, I think if 

we are pouring billions of dollars into this industry, we ought to 

know who we are giving that money to. 

Mr. WHITFIELD. One other question, Attorney General 

Blumenthal. As attorney general of Connecticut, do you have the 

authority yourself to close down a nursing home if it is providing 

substandard care? 

Mr. BLUMENTHAL. I do not alone. I can act only when the experts—I am not a healthcare expert, I am not a doc, I am not a 

trained medical person nor is anyone on my staff. I depend on the 

Department of Social Services to go through a proceeding and that 

happened in this instance eventually and we did go to court, but 

I cannot unilaterally do so, but I want to come back—I think you 

have asked an excellent question, why do we care about ownership? 

Well, if you take the case that you just heard about, Oscar 

Aceituno suffered huge harm and that facility should have been 

held accountable, and it was not because it said we don’t have resources. So they sent $1. If they had known who the owner was 

and been able to go after him and hold him accountable, he would 

not have been using those resources to buy a record company in 

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Tennessee or a house on the front of a lake. Now, that is an extreme example. The resources were there but the chain of command and control was so complex that it couldn’t be held accountable. 

Mr. WHITFIELD. Thank you, Mr. Chairman. 

Mr. STUPAK. Let me just briefly follow up on that, if I may, and 

if anyone wants to jump in, go ahead. We only have a few minutes. 

We are going to break for votes. Even though you may know who 

the owner is and they may be out of State and you can follow the 

money, that still doesn’t require or make certain that the nursing 

home is—that money is going into the nursing home. They have a 

right after they pay whatever they do, whatever money left over to 

use how they want. It doesn’t necessarily guarantee an improvement for those residents. So other than your surety bond or your 

insurance proposal, minimum insurance liability proposal, how do 

you get them to do the right thing in this case? Because we pay 

$78 billion a year in direct costs. That is not counting all the other 

parts of Medicare which are doled out to nursing homes for therapy 

and drugs and other things. 

Mr. BLUMENTHAL. Well, that question, which is an excellent one, 

goes to some of the other suggestions I have made. Information 

sharing would presumably alert a regulator in Illinois or Michigan 

or Vermont or New Hampshire about an individual in Connecticut 

who was betraying the public trust, and it is a trust. People are 

entrusted to the care of this institution, and if there were the kind 

of pattern of violations, citations, findings in Connecticut that were 

established there, it could be made available to others and eventually even in Connecticut, action could be taken against him. 

Mr. STUPAK. So that minimal insurance policy, the more violations you have, should you tie bar it to that and make sure insurance liability then go up? 

Mr. BLUMENTHAL. It could and should be raised, and if it applied 

uniformly across the country as a condition of Federal Medicare or 

Medicaid aid, it would be even more effective. But some of the proposals I have made have to do with greater cooperation among the 

States, which I think has to happen. 

Mr. STUPAK. Sure. Mr. Morris, did you want to say something 

quickly and then I am going to go to Mr. Shimkus for a question. 

Mr. MORRIS. Yes. Just to elaborate, that not only information 

sharing among States but actually information sharing with those 

in command and control. If we can establish that those who control 

the resources know of the substandard care being provided at the 

facility level, it increases accountability and may draw their attention to fixing those problems. 

Mr. STUPAK. So as our ombudsman, he is our first line of defense 

in a way? 

Mr. MORRIS. The ombudsman, but also going upstream in the 

corporation so you don’t get the defense of, ‘‘I had no idea what was 

going on; you can’t hold me personally accountable.’’ 

Mr. BLUMENTHAL. If I may—— 

Mr. SHIMKUS. We are really running out of time and I need to 

get this going. 

Mr. STUPAK. Go ahead. 

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Mr. SHIMKUS. We have got 4 minutes to get to the floor for the 

vote. Because Mr. Weems is going to testify on the last panel. He 

states in his testimony, ‘‘Nursing homes are required to submit updates to their existing provider enrollment when they have a 

change in information, such as ownership, which then populates 

the PECOS database. Using PECOS, CMS has the ability to better 

track ownership and changes in ownership.’’ Mr. Morris, do you 

want to respond to that? 

Mr. MORRIS. As I believe I said earlier, the challenge is getting 

to multiple tiers of ownership. My understanding is, PECOS actually only addresses direct—— 

Mr. SHIMKUS. Does CMS have the authority? The question is legislation, or do they have already have the authority to force this? 

Mr. MORRIS. I don’t know the answer to that. 

Mr. SHIMKUS. We need to find out that answer, Mr. Chairman. 

Mr. STUPAK. OK. Thanks. We are going to excuse this panel. We 

may follow up with other written questions because I know I want 

a couple more questions, and we have five votes, and we are going 

to recess until 12:30, and I don’t want to keep you here until 12:30 

for a few more quick questions. So we will dismiss this panel. We 

will recess. We will back at 12:30 for our second panel. 

Thank you all for being here. Mrs. Aceituno, thank you especially 

for your difficult testimony, and I thank each one of you for what 

you try to do to bring some enforcement to this industry. 

[Recess.] 

Mr. STUPAK. We are going to reconvene this hearing. I see our 

second panel. Is Mr. DeBruin here? Does anyone have any idea 

where he is at? I hate to go through and swear in the witnesses 

and have to do it again. Well, let us begin. 

On the second panel, we have Dr. David Zimmerman, who is the 

Director of the Center for Health Systems Research and Analysis 

at the University of Wisconsin-Madison; Dr. Andrew Kramer, who 

is Professor of Medicine and Head of Colorado Division of Health 

Care at the University of Colorado; Mr. Neil Pruitt, Jr., who is the 

Chairman and CEO of the UHS-Pruitt Corporation, a large nursing 

home chain headquartered in Georgia; and Dr. Mary Jane Koren, 

who is Chair of the American Healthcare Association’s Advancing 

Excellence campaign. And Mr. DeBruin, we will wait for you, who 

is a former nursing home worker and president of Pennsylvania 

Service Employees International Union. 

As you know, it is the policy of this subcommittee to take all testimony under oath. Please be advised that witnesses have the right 

under the Rules of the House to be represented by counsel. Do any 

of you wish to be represented by counsel during your testimony? 

Everyone seems to be shaking their heads no. I will take it as a 

no. Therefore, I am going to ask to please rise, raise your right 

hand, and take the oath. 

[Witnesses sworn.] 

Mr. STUPAK. Let the record reflect that each witness answered 

in the affirmative. Therefore, you are under oath as you give your 

opening statement. 

We will begin with you, Mr. DeBruin, for a 5-minute opening 

statement. If you have a longer statement, we will make it part of 

the record but we will go 5 minutes with your opening. If you 

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would begin, sir. Make sure that light is on and pull it fairly close 

so we can hear you. 

STATEMENT OF THOMAS DEBRUIN, PRESIDENT, PENNSYLVANIA SERVICE EMPLOYEES INTERNATIONAL UNION 

Mr. DEBRUIN. Chairman Stupak, Ranking Member Shimkus and 

honorable members of the subcommittee, I thank you for the opportunity to testify today. I am the president of SEIU Health Care 

Pennsylvania, and I am here today speaking on behalf of SEIU’s 

1.9 million members, including 150,000 nursing home workers. 

Nearly 35 years ago, I began my working life as a nursing assistant in a large public nursing home. Even today, I can remember 

my first day on the job, the challenge of providing quality, compassionate care and support for the frail, elderly residents entrusted 

to me. I have seen a great deal of progress since that time but I 

am here today out of a great concern about our ability to continue 

that progress. 

A new player has entered the nursing home world: private equity 

firms. SEIU is deeply concerned that the private equity business 

model, which seeks to make extreme profit, will operate at the expense of nursing home residents, their families, caregivers, and 

taxpayers. Buyout firms operate behind a veil of secrecy that allows them to conceal virtually all aspects of their business from 

regulators and affected stakeholders. 

Others have testified today and at other congressional hearings 

about the tragedies that occur too often in nursing homes. These 

tragedies will only continue because Federal laws and regulations 

have failed to keep pace with the trends in nursing home ownership and financing, which are placing many homes in financial 

jeopardy while making it increasingly difficult to hold them accountable for patient care problems. The industry has moved towards increasingly complex corporate structures and highly leveraged buyouts. For example, last year, the Carlyle Group completed 

a $6.6 billion leveraged buyout of Manor Care. It remains unclear 

how Carlyle Manor Care will service such high debt without some 

effect on care. Plain common sense suggests that there is reason 

to be worried about cost-cutting pressure at a company that has 

just taken on almost $5.5 billion in new debt. Are we really to believe Carlyle’s investment plan for Manor Care is to drive a profitable company deeply into the red and not cut costs, of which staffing is one of the largest, to keep its investment profitable? 

There is a real concern that nursing homes involved in highly leveraged buyouts will cut staffing to pay off debt. This raises concern both about the safety of residents and about the value taxpayers are getting for Medicare and Medicaid dollars. 

In addition to the concern of inadequate staffing, there is a fundamental lack of transparency in the nursing home industry. Nursing homes today employ ownership structures that obscure who is 

actually responsible for decisions that impact the quality of care in 

the facility. Buyout firms set up layered entities. Sometimes there 

are hundreds of entities involved to run their nursing homes and 

avoid liability, often separating the real estate asset holdings from 

the operations. 

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Such diffuse structures become even more complex when employed by large chains, which may create multiple layers of corporate shields that stand between the ultimate parent company 

and the facility-level LLCs. Nursing home chains have used such 

structures in the past to frustrate efforts by regulators to hold parent companies accountable for the care provided in their facilities 

and to obscure transactions and self-dealing between related parties. CMS has previously testified that they do not know who owns 

all nursing homes in this country. This despite the fact that the 

nursing home industry receives $75 billion a year from Medicare 

and Medicaid. How can Congress accept this? 

Twenty years ago, it was at the urging of courageous reformers 

like Chairman Dingell and Pennsylvania’s Republican Senator, the 

late John Heinz, that Congress passed landmark nursing home reform legislation. The real question before you is whether Congress 

will show the political courage today to once again pass significant 

nursing home reform. In February, Senators Grassley and Kohl introduced the bipartisan bill S. 2641, the Nursing Home Transparency and Improvement Act, and Representatives Stark and 

Schakowsky have indicated that they will introduce similar legislation soon. 

Congress will likely pass a Medicare bill this year. The Senate 

is currently negotiating legislation which means there is an opportunity to attach S. 2641, a no-cost bill, and I invite the industry 

to work with us to pass S. 2641. We commend many in the industry who have recognized the need for greater transparency. However, the for-profit industry appears to be blocking this legislation. 

We stand ready to work with them, but if they choose to continue 

lobbying against this bill, then I urge Congress to stand up to the 

industry pressure and stand with the vulnerable seniors who count 

on their members of Congress to represent their interests. Hearings are not enough. Your constituents want to take real action and 

not simply talk about the problem. 

Taxpayers trust that Medicare and Medicaid dollars will go toward providing seniors with quality care they deserve and will not 

become profit at the expense of nursing home residents. Congress 

must exercise its oversight authority to ensure that Medicare and 

Medicaid dollars are spent as intended, to provide high-quality 

care. We must not fail to protect our seniors and we cannot allow 

the bad actors in the for-profit nursing home industry to continue 

to let our seniors down and block attempts to pass meaningful reform. With S. 2641 and the Stark-Schakowsky bill soon to be introduced, you have a great opportunity before you and we urge you 

to seize it. 

I thank you very much for inviting me here to testify. 

[The prepared statement of Mr. DeBruin follows:] 

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Mr. STUPAK. Thank you, Mr. DeBruin. 

Dr. Zimmerman, if you would, please, for your opening statement, sir. 

STATEMENT OF DAVID ZIMMERMAN, PH.D., DIRECTOR, CENTER FOR HEALTH SYSTEMS RESEARCH AND ANALYSIS, UNIVERSITY OF WISCONSIN-MADISON 

Dr. ZIMMERMAN. Good afternoon, Mr. Chairman. As a fellow 

UPR—that would be Dollar Bay, Michigan—I am especially 

pleased to be here this afternoon. My name is David Zimmerman. 

I am a professor of health systems engineering at the University 

of Wisconsin-Madison, and I am the director of the Center for 

Health Systems Research and analysis at UW Madison. I am also 

the president of the Long Term Care Institute, a nonprofit organization created to assist in the monitoring of quality of nursing 

home care in organizations with corporate integrity agreements 

with the Office of the Inspector General within the Department of 

Health and Human Services. 

As researchers and monitors, our clinicians and analysts have 

conducted visits to more than 1,000 nursing homes in the past 8 

years. We have observed or participated in more than 100 quality 

improvement meetings, including more than 30 such sessions at 

the corporate level of organizations. I have spoken to at least 15 

corporate boards or board committees and met with individual 

board members about quality of care issues. So we have been observing and analyzing the care of nursing home residents and the 

systems that govern this care from the bedside to the boardroom. 

What are some of the things we have learned from this rich field 

experience? One thing that is very clear from our experience is that 

there is tremendous variation in the quality of care by facility, by 

unit and area of care within a facility, by district and region and 

across nursing home corporations as a whole. Even the best performing organizations have pockets of mediocrity in performance, 

and even in the worst performing organizations, there are facilities 

that deliver good care. It is this inconsistency that represents one 

of the most difficult challenges to overcome, and yet it also represents a significant opportunity to take a systems approach to improving nursing home quality of care. 

Frankly, another thing that comes out loud and clear from our 

field experience is that there is an unarguable need for transparency in the provision of nursing home care. Others have spoken 

to this issue, and frankly, I am astonished that it still is even a 

subject of debate. 

What else have we learned? Well, we have some pretty solid preliminary evidence that monitoring has had a positive impact on improvement in regulatory outcomes, at least for the national and regional corporations that have been the subject of our work and our 

analysis. The initial findings are also quite positive in terms of the 

effect of monitoring on reducing excessive rates of resident functional and clinical impairment. In addition, we have substantial 

anecdotal evidence, including feedback from the providers themselves, that monitoring has had a productive impact on their quality assurance and quality improvement initiatives. 

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How does monitoring help? We believe the presence of monitors 

and monitoring activities has elevated the importance of the internal compliance function within the organization themselves and it 

is difficult to exaggerate the importance of this. Having a more important and a more prominent compliance function within the facility and the organization not only improves the quality of care but 

imbues the organization with an enhanced culture of quality by 

making compliance a more visible and integral part of the leadership and management of the organization. Our experience has been 

that this increased presence and visibility as well as the existence 

of a more direct line of communication between compliance and top 

leadership including the board can lead directly to improved care 

and it can help put quality of care on an equal footing with financial stewardship within the organization. 

Another advantage of the monitoring process is it can help to expand the quality assurance function beyond individual facilities to 

levels of organization that can more effectively make things happen 

to implement quality initiatives and help to sustain them throughout the organization. 

Another important contribution, and one which we stress greatly 

in all of our work, is the emphasis on systems of care and quality 

assurance at all levels of the organization. Probably the single most 

important insight from our monitoring work has been the importance of developing and sustaining effective systems of care which 

along with good policies and procedures can promote more consistent care across units, facilities, districts and regions of organizations. Too often we find that such consistency is lacking and it 

was through continuous interaction with the organization including 

at the top levels that this commitment to consistency and capability to bring about consistency was achieved. 

A critical corollary point is that implementing and sustaining 

good systems of care and quality assurance demands loyalty to 

what we have come to refer to as the V word, validation. Too many 

times we have found that those responsible for the oversight of 

quality in monitored organizations would accept without validation 

assurances of compliance with policy or that care protocols were 

being carried out as documented or reported yet validation did not 

confirm that this was true. When quality assurance efforts include 

validation, that what was said was happening was indeed happening consistently, then care improved markedly. Validation must 

be a fundamental part of any effective quality oversight function or 

any quality initiative that the industry or the regulatory community undertakes. This of course includes validation of staffing levels 

and staff competencies. 

So in conclusion, we believe that the internal compliance function 

is absolutely essential to meaningful quality improvement and 

quality assurance. It can work side by side with the regulatory 

community to bring about lasting quality of care for nursing home 

residents. 

Thank you. 

[The prepared statement of Mr. Zimmerman follows:] 

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Mr. STUPAK. Thank you, and everything is fine in Dollar Bay. 

Dr. Kramer, your opening, please, sir. 

STATEMENT OF ANDREW KRAMER, M.D., HEAD, PROFESSOR 

OF MEDICINE, DIVISION OF HEALTH CARE POLICY AND RESEARCH, UNIVERSITY OF COLORADO-DENVER 

Dr. KRAMER. Good afternoon, Mr. Chairman, Mr. Shimkus, members of the Committee. I am a physician and a professor of medicine and health policy, and about 10 years ago I was over at the 

Hart Building and gave testimony similar to this before the Senate 

Special Committee on Aging. Chairman Grassley asked me, how 

come the methods I use in research are not currently being used 

in the survey process, because I had testified about problems with 

subjectivity and inconsistency in the survey process. My response 

was that I didn’t know. And then in 1998 they began the QIS initiative, starting with a development contract. Dr. Zimmerman and 

I led the team on that early development of QIS. 

So 10 years later, where are we? Well, we still have very good 

nursing homes out there, we have not so good ones, and we have 

poor ones. And the problem is that today you still can’t tell from 

the information that is publicly reported or the information in the 

survey process which nursing homes fall in which categories. You 

can’t tell. You know, I can’t even tell from the information that is 

available. And that is a serious problem. We have enforcement 

problems because we don’t have a system that surveyors are confident about, which my team has shown in some recent case study 

work. And we don’t even have a national standard that is widely 

recognized, indicating what is quality for providers. But we are 

making some progress and we are making some progress in six 

States that have now implemented the Quality Indicator Survey. 

And I want to tell you a little bit about that progress we have 

made because I think it is very important for today’s discussion. 

CMS is moving toward a national rollout of QIS, but it is very, very 

slow. 

So the QIS, how is it different from the traditional survey? The 

QIS involves much larger samples of residents and facilities, people 

who are currently residing in the facility and recent admissions. 

And as somebody said earlier, in the QIS survey you talk to the 

residents. You talk to 40 of them. You ask them questions. You ask 

them, do you have choice about when you get up in the morning. 

You ask them whether they have oral pain. You find out about 

their nutrition. You ask them all sorts of questions. You make 

structured observations. You pull information from records. You 

pull weights out of charts. You ask them if they are on a weightloss program. There are 162 indicators that are used in the first 

2 days of QIS that cover the Code of Regulations. And that is what 

the QIS is based on: the regulations. 

There is another aspect of the process very exciting: the data. It 

is very structured and very data driven and so at the end you can 

audit what surveyors are doing with all that information. In June 

we are actually training the regional office oversight people to use 

that same information in their oversight process. 

So let us talk for a minute about what the impacts of QIS have 

been. First of all, the surveys. There have been over 700 surveys 

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that are QIS. There are over 200 surveyors trained in QIS. Of 

these the surveyors, 80-plus percent of them said they would never 

go back to the traditional process. Now, there are those that don’t 

like this imposed structure. Deficiencies—we are finding deficiencies that are in the Code of Regulations that were never identified before. These deficiencies are in dental health and oral pain, 

because surveyors ask people about oral pain. There are programs 

in a couple of the QIS states that are being led by the Provider associations, working with the State Dental Associations, to start providing oral healthcare inside nursing facilities. Hospitalization, 

quality of life, and choices are the kinds of problems cited in QIS. 

The culture change movement has embraced QIS because of the 

importance of these areas. 

There is another impact, consistency. When I first went to one 

of these QIS States, a group of providers came up to me and they 

said Dr. Kramer, we are getting a large increase in deficiencies in 

our district office. Guess what? This was a district office that had 

a long history of low deficiencies because the process was not consistent. 

There has been one more impact of QIS and that is on providers. 

Providers have started to embrace and use the tools of QIS for 

quality improvement. Some are proactive whereas others receive a 

bad QIS survey, and then they use the tools for quality improvement. 

And so the next question is, why has it taken 10 years to roll 

QIS out in six States? First of all, development. Development took 

many years. We had to build new systems under CMS contract to 

support QIS, so there was a great deal of development work. There 

was an evaluation that took twice as long as was expected, and 

that slowed things down. Secondly, everybody criticizes the survey 

process, but there is reluctance to change it. There is reluctance 

and we have worked together. At this stage there is a core group 

in CMS of about eight people that are very strong advocates of QIS, 

but it has taken some time. 

And then the final issue is budget. Thirteen States applied to be 

QIS states after the demonstration. One of them was chosen, Minnesota. For the other States, CMS did not have budget to roll it 

out. And that has been the biggest problem, the budget has been 

uncertain. The budget commitment has been uncertain. It would 

take $20 million, one time, to roll QIS out in every one of the other 

States over the next several years, and that is the one recommendation I have to make. 

Thank you. 

[The prepared statement of Dr. Kramer follows:] 

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Mr. STUPAK. Thank you. 

Mr. Pruitt, your opening, please. 

STATEMENT OF NEIL L. PRUITT, JR., CHAIRMAN AND CEO, 

UHS-PRUITT CORPORATION 

Mr. PRUITT. Thank you, Chairman Stupak, Ranking Member 

Shimkus and members of the committee. I am Neil Pruitt and I am 

chairman and CEO of UHS-Pruitt Corporation. I am grateful for 

the opportunity to be here on behalf of the American Health Care 

Association to offer perspective on the success and remaining challenges we face in ensuring quality nursing home care. 

For nearly 40 years, my family-owned company has been providing professional healthcare services throughout the Southeast. 

With nearly 8,000 employees, we touch the lives of more than 

18,000 individuals daily and we have a longstanding tradition of 

quality and a commitment to caring. I am proud of the advances 

our profession has made in delivering high-quality care, and we remain committed to sustaining these gains in the future when demand for care will dramatically increase. 

Data tracked by CMS clearly illustrates improvements in patients’ outcomes, increase in overall direct care staffing levels and 

significant decreases in quality of care survey deficiencies in our 

Nation’s skilled nursing facilities. Positive trends are also evidenced by initiatives including Quality First and the Advancing 

Excellence in America’s Nursing Homes campaign, which are having a significant impact on the quality of care provided. The Advancing Excellence campaign is a coordinated initiative among providers, caregivers, consumers, CMS and others that promotes quality and encourages best practices and evidence-based processes. 

This voluntary initiative is working and outcomes and processes 

are improving. We remain committed to building upon quality improvements for the future. 

Twenty-one years ago, passage of OBRA 87 brought forth significant changes in our approach to patient care. Today we are in danger of abandoning the original intent of OBRA 87 in favor of a regulatory system that defines quality in a context that is often measured by fines and violations rather than by quality of care, or quality of life as was originally intended. We believe that a reformed 

and effective survey process should embody three guiding principles. The survey should be fair, accurate and consistent; protect 

the health and safety of the residents; and should focus on areas 

requiring improvement in problem. We must revamp the system to 

ensure that quality of life is emphasized consistent with the intent 

of OBRA 87. 

We know the vast majority of nursing homes provide high-quality, compassionate care that patients and their families want and 

deserve. However, we recognize there is a very small fraction of facilities that do not meet these high standards of quality care. There 

should be incentives rather than current disincentives for new operators to take over troubled facilities and improve the care of the 

patients. 

UHS-Pruitt has a history of purchasing facilities that have had 

troubled survey records and turning them into top-tier performing 

nursing facilities. We have been successful in working with the regVerDate Nov 24 2008 12:40 Feb 01, 2010 Jkt 037690 PO 00000 Frm 00127 Fmt 6633 Sfmt 6633 C:\DOCUMENTS AND SETTINGS\CWELLS1\HEARINGS\110-116 SCOM1 PsN: JIMC
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ulatory agencies in Georgia, North Carolina, and South Carolina to 

improve the quality of care delivered to those that we serve. I am 

proud of our organization’s ability to improve underperforming facilities and make them a better place for our patients. 

However, these efforts do not come without risk or difficulties. 

Last year we purchased a facility in Monks Corner, South Carolina. 

This was a facility with the SFF designation, which needed significant investment to reform it into a better environment that embraces the constructs of culture change, implements advances including information technologies, and has increased staffing levels. 

Prior to our purchase, this facility had been issued a Medicare notice of termination and efforts were underway to relocate more 

than 130 patients. Further, the center was one of the first to enter 

into a settlement agreement with CMS. Upon transfer of ownership, this agreement was renamed a systems improvement agreement. I believe that this type of agreement is a model for government-provider collaboration to improve care in underperforming 

nursing centers. 

Before purchase, we presented a performance improvement plan 

to CMS and the South Carolina Department of Health and Environmental Control. Both the regulatory agencies offered valuable 

feedback on the past performance of the facility and the likely effectiveness of our plan to address past performance deficiencies. 

Our team holds periodic briefings with both agencies. These briefings are honest and open and are focused in achieving outcomes 

that will benefit patient care. While I am the first to admit the facility is still far from perfect, we are proud of our efforts and outcomes we have seen. This facility has had significant improvement 

and been publicly recognized by CMS regarding our intervention 

and success in improving this facility. It has been almost 8 months 

since we acquired the property. Over this time we have made considerable investment to improve the facility. However, we have still 

not been approved for Medicare certification and thus have not received any Medicare payments for the improved care and services 

we continue to provide. 

We know that encouraging the purchase of troubled facilities can 

help patient care but there remain significant barriers with the 

current change of ownership process. This must be recognized and 

changed. There are ways to improve the regulatory process and ensure the current safeguards are adequate and appropriate. One inherent flaw with the current survey process is that it is incredibly 

subjective by nature. This is because the review relies upon the individual interpretation. There is, however, one system that has 

been mentioned that shows promise in reducing the human interpretation and subjectivity: the Quality Indicator Survey. We applaud CMS’s latest attempt to minimize human variability. Although it is too early to draw conclusions on QIS, AHCA is cautiously optimistic that the process will help correct some of the inadequacies of the current system. 

While I have provided a more thorough list of recommendations 

for a smarter oversight system in my written statement, some 

ideas include Congress to establish a pilot program in a few States 

that would require funds collected through civil monetary penalties 

to be put back into the system to improve quality care. Congress 

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should create a national commission that includes all long-term 

care stakeholders to best determine what information would provide assistance to consumers and how it should be made available. 

Encourage the posting of more complete staffing data on Nursing 

Home Compare. We also urge Congress to pass the Long-Term 

Care Quality and Modernization Act of 2007. 

We are proud of the advances we have made in delivering highquality long-term care and we remain committed to sustaining 

these gains in the years and decades to come. 

I thank you for the opportunity to offer these comments and I 

look forward to answering your questions. 

[The prepared statement of Mr. Pruitt follows:] 

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Mr. STUPAK. Thank you, Mr. Pruitt. 

Dr. Koren, your opening statement, please. 

STATEMENT OF MARY JANE KOREN, M.D., M.P.H., ASSISTANT 

VICE PRESIDENT, THE COMMONWEALTH FUND 

Dr. KOREN. Thank you, Mr. Chairman, for inviting me to testify. 

I am Dr. Mary Jane Koren. I am a geriatrician and I am here to 

testify on my own behalf as an expert in this field. Besides having 

been a nursing home physician and having had a father in a nursing home, from 1987 to 1992 I was the director for survey and certification for New York State. I have also been privileged to be a 

member of the National Commission on Quality Long-Term Care, 

which was chaired by former Senator Bob Kerrey, and former 

House Speaker Newt Gingrich. 

Currently, I am an assistant vice president of the Commonwealth 

Fund, where I direct a program to improve nursing home quality, 

and I have the honor to be this year’s chair of the steering committee, which, if I may comment, is actually an independent coalition of stakeholder groups and is really not sponsored by any one 

given organization. 

This Advancing Excellence so far has over 43 percent of the nursing homes in the country as participants. I would like to thank you, 

Chairman Stupak and also Ranking Member Shimkus and every 

member of the committee for conducting these hearings today since 

recent events have brought to light important issues with the nursing home oversight system and how quality may be achieved in the 

Nation’s nursing homes. I would like to tell you about some of the 

positive changes that have been occurring and that continue to 

spread. 

I believe that survey and enforcement is a critically important 

undertaking because it really sets a floor of what we expect all 

nursing homes should be doing. I also think it should be easy to 

find out where the buck really stops when there are problems so 

that they can be fixed expeditiously and permanently. However, 

while I agree that our current survey system of oversight could and 

should be improved, I don’t think we should rely on the regulatory 

process to improve quality of care alone and we certainly shouldn’t 

ask our surveyors to become consultants to the industry. 

There are other ways government can help improve nursing 

homes. For example, Washington State has a quality assurance 

nurse program as a separate and distinct unit from its survey 

agency. In addition, a federally supported quality improvement organization program could be charged to help nursing homes come 

into compliance after survey and continue to work collaboratively 

with voluntary efforts such as happening now with two initiatives 

which I would like to tell you about briefly. 

The first is called Culture Change. It is a grassroots movement 

which began about 15 years ago when a number of people suddenly 

tapped into OBRA 87’s potential to promote resident-centered care 

and to really try to turn nursing homes into homes. Picture a nursing home where you can stay up to watch the end of the ballgame, 

you can get yourself a midnight snack and then you are helped to 

bed by somebody who actually knows you and all your little quirks. 

This is light years away from business as usual but it is something 

138 

that is happening more and more. It is applicable whether you stay 

in a nursing home for 5 days or whether you stay there for 500 

days. Findings from a recent national survey of nursing homes supported by the Commonwealth Fund showed that over half the facilities in the field say that they are either doing something to try 

to make themselves more resident-centered or that their leadership 

is committed to the principles of resident-centered care and that 

they will begin shortly. 

Likewise, the survey found that adopters are beginning to see a 

positive impact on their bottom line. The Quality Improvement Organization program’s 8th Scope of Work borrowed from the culture 

change movement to target things like how to retain staff and ways 

to help staff really get to know their residents and to test resident 

satisfaction. This boosted interest across the industry in residentcentered care. At the same time, CMS’s Office of Survey and Certification has been trying to ensure that the survey process itself 

not become a barrier to innovation. 

The other positive development is Advancing Excellence, which 

several of you here have mentioned today. This effort is less than 

2 years old. The campaign’s national steering committee which, as 

I said, I do chair, is made up of an unprecedented coalition of 30 

organizations including provider associations, health professionals, 

unions, consumer advocacy groups, and representatives from CMS. 

The collaborative spirit of the group itself deserves to be counted 

as one of its most noteworthy accomplishments. The campaign has 

been very successful so far. It has opened all nursing homes, not 

just those in the association. It also seeks support and participation 

from consumers and frontline staff. We are tracking the clinical 

goals and results already show that it is working. Participant 

homes are improving at a faster rate for the clinical goals than 

homes which have not yet joined. Forty-nine State-level networks 

have been established that are very efficient ways to get good ideas 

out there and provide technical assistance to homes. One call that 

we had, we have over 10 percent of the industry actually on that 

call to hear about evidence-based ways to improve performance in 

taking care of pressure ulcers. 

In addition, I would like to conclude my remarks by observing 

that there are a number of steps Congress could take that would 

really support current voluntary efforts while at the same time improving transparency and the regulatory process. They include the 

CMS Web site, Nursing Home Compare, include information on 

multiple staffing characteristics and the rate of consistent assignment, and also perhaps whether or not a nursing home is participating in Advancing Excellence. Also, CMS should be charged with 

developing payment methods that would reward nursing homes 

participating in the campaign or achieving results on adopting resident-centered care practices. Also, CMS should be encouraged to 

continue to make long-term commitments to supporting Advancing 

Excellence and similar efforts at quality improvement. Perhaps 

also we should direct CMS to fund and conduct a demonstration to 

pilot other ways to provide technical assistance that could be linked 

to the survey process but not be provided by the survey agency. 

And lastly, that CMS be directed to continue to vigorously pursue 

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its work on using resident input to improve the assessment, the 

care planning and the survey processes. 

Thank you. 

[The prepared statement of Dr. Koren follows:] 

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Mr. STUPAK. Thank you. Thank you all for your testimony. We 

will begin questions. 

Dr. Kramer, I understand you are one of the authors of the report commissioned by CMS titled ‘‘Improving Nursing Home Enforcement’’ and that report was completed about March of 2007? 

Dr. KRAMER. Correct, yes. 

Mr. STUPAK. And it has not been made public yet by CMS? 

Dr. KRAMER. I understand that, yes. 

Mr. STUPAK. Do you know any reason why it would not be made 

public? 

Dr. KRAMER. I actually do not know the reason why it is not public. 

Mr. STUPAK. In this report, it shows that the survey system as 

it is currently administered significantly underestimates the deficiencies present in most nursing homes. In fact, there is a GAO report out that basically echoed those findings. The report shows only 

about a quarter of the deficiencies practiced are detected by the 

surveyors. Why is that? 

Dr. KRAMER. Well, that report was based on going to nursing facilities and using the methods that are used in the Quality Indicator Survey concurrently with surveys. This was done in 26 facilities, and one of the things that was very evident is that without 

the structure of something like a Quality Indicator Survey, the surveyors are faced with this morass of regulations that they are trying to interpret. They have interpretative guidance to do this, but 

there is no structure to follow. And in the end, the documentation 

that comes out of it is not strong enough for them to trust. The QIS 

approach that was used in these case studies is a much more methodical, replicable process. 

Mr. STUPAK. You have QIS and then you have other, the current 

way they do the surveys. I take it the current way of doing the surveys, as I have heard from Mr. Pruitt, Dr. Koren and others, that 

it is basically more subjective than the QIS? 

Dr. KRAMER. Yes, that is what the case studies showed and that 

is what—— 

Mr. STUPAK. Is that the inconsistency then in enforcement depending on the—— 

Dr. KRAMER. Well, the enforcement is at the end. But enforcement actually can get watered down if you don’t have really clear 

evidence of the problem and good documentation. And the problem 

is that in the traditional survey process they invest a lot of resources in but because that structure is not there, they don’t always get all the information that is needed. 

Mr. STUPAK. On the QIS, again, that CMS commission and evaluation, that was completed in December—do you know of any reason why that has not been released? 

Dr. KRAMER. I don’t know why that is not released. 

Mr. STUPAK. Are there any independent conducted surveys that 

document the superiority of the QIS over the current survey system? 

Dr. KRAMER. Independent—like what are you—— 

Mr. STUPAK. Well, other than the one that you were commissioned to do to complete the survey for CMS, is there anything else 

that has taken the same factors of the Quality Indicator Survey, 

170 

the QIS, and to show that it works better than the current system 

we have? 

Dr. KRAMER. OK, so the evidence we have—the case studies are 

one example. We went in and used QIS methods and then the surveyors used the traditional process, and there were pretty dramatic 

differences in the problems identified. The other evidence is what 

you hear from the surveyors. They all say it is more consistent, 

more objective. That is why the States are lining up to do it. And 

what is very interesting is that there is another group that is starting to support it and that is the provider community because they 

also find it more objective. Even though there are more deficiencies 

in QIS and in different areas and in some new areas, there is support there among providers. 

Mr. STUPAK. Dr. Koren mentioned the Advancing Excellence program that nursing homes are voluntary doing. Are you familiar 

with that program? 

Dr. KRAMER. I am familiar with that program. 

Mr. STUPAK. How does that relate to the QIS? 

Dr. KRAMER. At this stage, because QIS is not rolled out nationally, it is not integrated with that Advancing Excellence activity. 

Mr. STUPAK. Could it be integrated? 

Dr. KRAMER. It could be fully integrated and broaden that initiative so that you could target the full range of the Code of Federal 

Regulations instead of more narrowly targeted areas. 

Mr. STUPAK. You mentioned $20 million to get the other States 

into it. Were those the States that were first selected as the pilot 

States or are you talking about nationwide? 

Dr. KRAMER. We could do it nationally for $20 million. The pilot 

States are in it. There are three more being rolled out this year. 

With $20 million, it could be rolled out to every State in the country. 

Mr. STUPAK. Dr. Zimmerman, you mentioned your group had 

looked at 1,000 nursing homes. Is it fair to say that CMS’s regulatory framework is not equipped to address the contemporary 

challenges posed by chain ownerships that we heard about in the 

earlier panel? 

Dr. ZIMMERMAN. Well, I think that the regulatory process as it 

currently exists is to some extent limited by the fact that the contracting agencies that actually carry out the surveys are the State 

survey agencies, they are State agencies, and to my knowledge, 

there has been very little thus far. Now, I am not privy to a lot 

of the information within CMS so I would defer to Administrator 

Weems on this, but to my knowledge, there hasn’t been a lot of activity that enables survey agencies to cross State lines, and so if 

you have a corporation that has facilities across a variety of States 

or regions, it is somewhat difficult within that regulatory community to be able to do this. So that is one issue. The other issue is 

that I think that the internal compliance function within corporations as well as looking at the systems of care is something that 

the regulatory process right now is not that equipped to do. That 

is not to say that there is not a prominent role for it but I think 

it has limitations in terms of looking at systemic changes that can 

be brought about. 

171 

Mr. STUPAK. As we look at these private equity firms, and I 

think in my opening I said more than 50 percent of the nursing 

homes now are owned by private equity firms, I got the distinct impression in listening to the earlier panel that while the nursing 

home administrator who would be there when the surveys are 

going on would like to do the right thing but who do they turn to 

to get the resources to do it or to make those policy decisions? In 

your surveys, did you see that when you did a nursing home that 

was locally or privately owned as opposed to those that are part of 

a chain in a private equity firm? 

Dr. ZIMMERMAN. Well, we certainly saw the phenomenon of facility leadership wanting to engage in more resources. This phenomenon was not universal but we saw quite a bit of it. I don’t— 

I am not prepared to say that that was systematically different between private equity firms and other organizations, Number one, 

and Number two, it is also true that in some cases, the reversed 

phenomenon took place, which is that there were district and regional folks within a corporation that wanted to engage in quality 

initiatives and there was some resistance. So this is a complicated 

problem. 

Mr. STUPAK. I have one last question and then I will turn to Mr. 

Shimkus. Dr. Kramer, you said $20 million for full funding the national rollout of the QIS. You also said industry is now supporting 

the QIS. Has there been any discussion about maybe having industry help provide some of that $20 million to roll out the program? 

Dr. KRAMER. I haven’t been privy to those discussions but—— 

Mr. STUPAK. I thought I would throw it out there. 

Dr. KRAMER. That is an interesting—— 

Mr. STUPAK. How about you, Mr. Pruitt? Do you think industry 

should provide some of that $20 million? 

Mr. PRUITT. I am not aware of any discussions within our association to offer to help defray the cost. 

Mr. STUPAK. Do you think it is a good idea? 

Mr. PRUITT. I believe that we need to address our current funding issues before we spend our resources on rolling out that initiative. 

Mr. STUPAK. Dr. Koren, do you want to say anything on that? 

Dr. KOREN. No. 

Mr. STUPAK. OK. Mr. Shimkus for questions. 

Mr. SHIMKUS. Thank you, Mr. Chairman. The $20 million, in the 

numbers that we deal here in Washington, it didn’t seem like an 

awful lot of dollars. It is interesting how we do it and how it gets 

applied. This is a very good hearing and I appreciate all the testimony. 

Mr. Pruitt, you operate in three States. Is that correct? 

Mr. PRUITT. Four States. 

Mr. SHIMKUS. Four States. Do you know—the question I had 

asked earlier on the—you may not see it because you just see the 

reimbursement from the State on Medicaid services, but do you 

know the individual States’ FMAP from the four States that you 

service? 

Mr. PRUITT. I have a general idea but I would be afraid to quote 

those FMAP statistics to you. I can get that for you at a later date. 

172 

Mr. SHIMKUS. It would just be interesting in your service area 

whether you have one 50/50 State, one 60/40, one—I really dislike 

this FMAP, and when we talk about the reimbursement for services and care, it is just—if you can get funded, it might help people 

do cost shifting. But I also observed, I think all of us who have had 

loved ones have observed the change in care and the continuum of 

care, as I mentioned before, and I think the continuum of care 

probably can help. Those who are moving to this continuum of care 

are probably more—I shouldn’t just be generalizing but it is our 

own experiences as Members of Congress, we go into nursing facilities, we visit all these different aspects, and then—but the newer 

ones—what I want to focus on is the debate now is this QIS and 

what the industry is doing on its own, and there was a percentage 

of 43 percent, Dr. Koren mentioned 43 percent participants. The 

debate is, how do you get the 57 percent to get to 100 percent and 

do you do it regulatory? And then the debate is, if you have the 

information, then how do you follow up the ladder? If it is voluntary, then where is the ability of government to step in? So why 

don’t you answer that question? I think I want to go to Mr. 

DeBruin for hopefully a segue into it after I get—how do we get 

the other 57 percent to be involved? 

Mr. PRUITT. The Advancing Excellence campaign has been a tremendous success, and as was mentioned earlier, it is 2 years old. 

During that time, we have seen participation dramatically increase. 

From my own organization’s experience, all of our facilities participate in Advancing Excellence. The American Health Care Association has publicly stated that it encourages all members to participate in the campaign. One of the ongoing industry efforts is, we are 

collecting quality statistics about our members and where there are 

deficiencies in practices, we are offering resources to help them improve. 

Mr. SHIMKUS. Before I go to Mr. DeBruin, Mr. Zimmerman, how 

does this program affect the internal compliance issues that you’ve 

discussed or does it not? Is there a connection? Have we got three 

different things going in different directions? 

Dr. ZIMMERMAN. Well, I don’t think they are completely independent at all. I think that the Advancing Excellence campaign is 

really an initiative, a quality improvement initiative that has taken 

on aggregating importance throughout the industry and I think 

that is very important. It can be very complementary to internal 

compliance functions. Frankly, internal compliance is just good 

management and so if you are engaged in good management, you 

are going to look for quality improvement programs as well. I 

would suggest that what we need to do, as any good manager 

would do, is to make sure that we validate that what we are being 

told in terms of some of the outcomes, in terms of some of the processes is happening as we are told it is happening, and I am not 

suggesting that we need to do that because we don’t automatically 

believe somebody but it is just good oversight and management to 

make sure that we validate these quality improvement efforts. So 

I think they can be very complementary. 

Mr. SHIMKUS. And what is the number of nursing homes that are 

involved in internal compliance issues? 

173 

Dr. ZIMMERMAN. Well, I am aware—I am not sure I have this 

correct but I think that with respect to the corporate integrity 

agreements, there probably are anywhere from 1,000 nursing 

homes to 1,200 nursing homes that have been part of corporate integrity agreements with the Office of the Inspector General. The 

OIG also has corporate compliance agreements with probably another 1,000, I would bet, but at any rate—so that would represent 

a little over 10 percent of the industry. 

Mr. SHIMKUS. The mandatory versus voluntary, what about voluntary? 

Dr. ZIMMERMAN. I am not actually that familiar with the voluntary ones because we don’t get involved as outside monitors in 

this process, so I would have to defer to actually Mr. Morris, who 

was on the previous panel. 

Mr. SHIMKUS. Mr. Pruitt, do you have a compliance program? 

Mr. PRUITT. We have a voluntary—well, before our purchase of 

the Monks Corner facility, we were not required to have a compliance program. Once we purchased that facility, they wanted us to 

maintain the quality of care compliance program. That was 8 

months ago. Prior to—since 2002, we have had a voluntary compliance program that is extremely effective within our organization. 

We have used it to improve quality and ensure that we are in compliance with all Federal laws and regulations. 

Mr. SHIMKUS. How does that help you? I mean, you said it helps 

you. How? 

Mr. PRUITT. We have a corporate compliance officer, who is also 

trained in Six Sigma. She has a staff that analyzes our data. When 

there are issues, we identify them internally and disclose them 

when necessary to government authorities. This, by being 

proactive, we are able to catch problems before they become a large 

event in our corporation. 

Mr. SHIMKUS. Thank you, and I have been meaning to get to Mr. 

DeBruin. The first panel dealt with Connecticut and the sad state 

of affairs, so what I am trying to do is connect the dots and I am 

trying to say OK, we need to have information. We have got Dr. 

Kramer’s system that sounds like it is pretty good. We have got industry working on its own. The State still has a major role to play 

with licensing and the attorney general, and we saw in the Connecticut issue, that there was a problem identified and there was 

a couple steps that had failed within the States. My issue is, how 

much—if we are going to re-look at this, we also have to look at 

the ability of the States to carry their share of the load as far as 

laws on the books to help us in this process and segue more of this 

information into that arena. Would you agree? 

Mr. DEBRUIN. Absolutely I agree. I think States obviously play 

a major role, I think. I agree that voluntary programs are very important. In fact, the Advancing Excellence program is a program 

that we as a union are very involved in and support and I think 

that the questions you are asking go right to the heart of the issue 

here, which is there are many of the providers—most of the providers that our union represents are very good providers that do 

volunteer and do very good work to comply. The problem is with 

those who don’t and that, as Mr. Morris testified earlier, based on 

recent surveys and information that is available, if 20 percent of 

174 

the nursing homes in this country are actually putting nursing 

home residents at risk by not being involved in these voluntary 

programs and not complying, that is—of 1.5 million residents in 

nursing homes, that is 300,000 people, and that is really, I think 

what regulation is needed for, is to hold those providers accountable. 

Mr. SHIMKUS. And again, I will just end up by saying because of 

the way the industry has changed in rural small town America, 

there are still probably in the model of care from 20, 25 years ago 

where they haven’t done this expansion or capital because the 

numbers are there not to, and it is going to be interesting to see 

how we segue because they are needed. That is why I am so hot 

on the FMAP, and I will end on that. 

Mr. STUPAK. Mr. Walden for questions, please. 

Mr. WALDEN. Yes. Thank you very much, Mr. Chairman. I want 

to take issue with my colleague from Illinois, who suggests that we 

are all headed toward the nursing home. I have no plans to run 

for the United States Senate. 

I want to touch on a couple of issues from a serious standpoint 

now, because I have actually spent more time in the nursing home 

in the last year than I would have liked. My brother was nearly 

killed in a motorcycle accident in August. My mother-in-law actually just passed away this morning. And so there are some real-life 

issues I think many of us deal with and have questions with and 

some of them, frankly, are the stupid regulations that are on the 

books today, and I wish I could have been here for the earlier part 

of the panel but I wasn’t able to. In my brother’s case, he is now 

fortunately mostly recovered. He went into a veterans’ nursing 

home, which was terrific except that there is a regulation that says 

you can’t put up the little bar there on the side of the bed because 

it is considered a restraint. So you know what they did? They lowered the bed as far as they could to the floor and put a plastic mat 

out with a sensor so when he would roll out of the bed, he would 

roll onto a mat, because there is a regulation or a law that says 

oh, no, you can’t restrain somebody like that. I mean, that is pretty 

darned stupid out there, and I just wonder, we all talk in these 

terms of quality assurance and yada, yada, yada. I want to get to 

the real-life problems that you all are dealing with and that we as 

family members deal with. And then I read about, the issue here 

is the State inspectors apparently aren’t doing their jobs, and I am 

wondering, do we need a new law or do we just need to bring the 

States up short and say do your job, do the inspection, report back. 

The other issue, and I know this came up in earlier discussion 

about access to ownership. I was a licensee of the Federal Communications Commission for more than 20 years. We had to file annual ownership reports and I believe those were available on the 

Internet. How hard is this with today’s technology to do that? And 

if there is a change in ownership, you are required to file or you 

don’t get paid. It is real simple. And so it just strikes me, there are 

some of these things that don’t make a lot of sense, and I have seen 

really good treatment and I have seen some real bonehead mistakes. My mother-in-law was gluten intolerant, allergic to wheat. 

Two mornings in the same week they tried to feed her Cream of 

Wheat for breakfast. They ground up pills that were time-release 

175 

because she was having trouble swallowing. We ended up hiring 

private care to be in the room to make sure those things didn’t 

happen. 

So, I mean, I have seen all sides on this industry. I have also 

seen when my mother was in her final years, a decade or more ago, 

that the staff was so burdened with the paperwork requirements 

of the government that they didn’t have time to do the care they 

were trained to do. And so I don’t want to see us go to the point 

where we just add a whole new layer of rules and regulations, 

some of which, as I have said, don’t make any sense to me as a 

layperson here. I talked to a nursing home administrator who manages some homes that deal specifically with those who have mental 

deficiencies and they are required under the rules in this particular 

State, not my own, that all those people have access to anything 

anybody else has access to, and he said, that means if we have 

drain cleaner, they can get access to it and we can’t lock it up. I 

mean, it just makes no—there are some commonsense things here. 

We cannot micromanage. We have to have responsible people and 

then we have to have quality assurance programs that enshrine 

that commonsense piece. 

Can any of you explain to me why we would have a rule on the 

books that says if somebody is rolling out of bed repeatedly, you 

can’t have one of those bars you put up like you do if you have a 

baby? Dr. Kramer? 

Dr. KRAMER. Why don’t I talk about it? 

Mr. WALDEN. And who is doing something about it? 

Dr. KRAMER. So here is the dilemma. There is a code of regulations. 

Mr. WALDEN. Oh, I know. 

Dr. KRAMER. And that code of regulations are quite nonspecific, 

and the issue with physical restraints is, there are cases where 

somebody is truly at risk and there is no other way but some form 

of a system for helping them preventing falls. But there are all 

sorts of ways of doing that, and the trick is, how do you apply these 

regulations in individual cases. And that is why you need a structured process. You mentioned that you don’t think the surveyors 

are doing their job. 

Mr. WALDEN. No, I am just saying what is in the press reports 

here and—— 

Dr. KRAMER. Well, the thing about the surveyors is, I don’t think 

in the current process they have the tools always to do the jobs and 

help them work through the decision process in order to apply 

those many regulations. Those regulations make a lot of sense in 

many, many cases and you just have to figure out how to apply 

those regulations to individual cases. 

Mr. WALDEN. Somewhere, though, we have lost common sense 

and there has to be a threat of the person running the operation 

that says if I do anything, I am going to get sued or I am going 

to get fined. Tell me then why they couldn’t put, or I was going to 

go put the bar up on the bed. I mean, every hospital bed has one 

of those. 

Dr. KRAMER. That actually doesn’t have the impact that everybody thinks it is going to have in terms of prevention because there 

176 

is some danger associated at times with those bars. People can 

get—— 

Mr. WALDEN. I could give you two pages to tell you how many 

times he rolled out on the floor. 

Dr. KRAMER. Well, that is a problem. He shouldn’t be rolling out 

of bed. 

Dr. ZIMMERMAN. Actually, let me supplement what Dr. Kramer 

says. 

Mr. WALDEN. He wasn’t injured. They had a nice pad and a little 

device that went off every time he rolled out. 

Dr. ZIMMERMAN. Our monitors have seen at least 50 cases in 

which people have strangled themselves in side rails. They have 

seen cases in which people have climbed over the side rails because 

they were in danger of falling, and they could get over the side 

rails just as easily as they could fall without the side rails. So that 

is the reason for the—— 

Mr. WALDEN. You can’t redesign side rails? We have done cribs, 

redesigned those. 

Dr. ZIMMERMAN. That is exactly right. There are ways to design 

restraints that would keep somebody from falling out of bed without having it be side rails, some of which can kill people. So I think 

that is what Dr. Kramer is saying. There is common sense that 

needs to be provided, and the application of a rule which is blind 

to the context in which it is being applied is agreed to be bad. 

Mr. WALDEN. That is the issue. 

Dr. ZIMMERMAN. And yet there are ways in which we can do this 

without having to put somebody in the kind of jeopardy that we 

have just discussed. So yes, there is a solution to your problem. 

Dr. KRAMER. And every one of those things have a risk—— 

Mr. WALDEN. Of course they do. 

Dr. KRAMER [continuing]. Associated with them and so the application of all these regulations has to be done with care, and side 

rails turns out to be a reasonable regulation. The issue is to approach it and make sure that people aren’t falling out of bed. There 

are other ways to approach that kind of issue and—— 

Mr. WALDEN. Mr. Pruitt? 

Mr. PRUITT. If I can answer from a provider’s perspective, AHCA 

has encouraged the creation of a commission to examine issues 

such as that. The restraints is a quality measure that we do measure on a periodic basis but all of the quality measures need to be 

examined. For instance, high-risk pressure ulcers is one of the Advancing Excellence initiatives that is publicly tracked. What is an 

issue with this indicator is that you don’t count the indicator on the 

initial assessment, so if I met a patient with a high-risk pressure 

ulcer on day 5 when I do my initial assessment, that doesn’t count 

against me. But if I haven’t healed that pressure ulcer by the 14- 

day assessment, it goes on my record as a deficient practice if you 

measure that in terms of quality indicators. AHCA believes we 

need to examine quality measures and come up with a smarter way 

of looking at the measurements of quality. 

Mr. WALDEN. Anybody else? 

Thank you, Mr. Chairman. 

Mr. STUPAK. Thank you. 

177 

Let us go another round with this panel here. It is a good panel. 

We have had some good discussions. 

Mr. Pruitt, if I was going to go into the nursing home business 

and we have these private equity firms moving in there, if you take 

a nursing home, how much should I be able to expect on return on 

my investment? Is there a rule of thumb that you look at? 

Mr. PRUITT. There is no real rule of thumb. I can only speak to 

how we look at a facility when we look at purchasing one. We look 

at the long-term value that it can create, and a lot of it has to do 

with our social mission as well as how we feel that will fit into our 

model of care, which also involves community services. So we look 

at a center-by-center basis. We plug in the staffing levels that we 

would provide, which typically is more than the seller provided, 

and we look at our ability to operate that center and achieve the 

type of care we want to achieve. 

Mr. STUPAK. The private equity firms, Carlyle, and I think Mr. 

DeBruin mentioned they got a $5.5 billion return they have to 

make up. When you buy a number of centers, as you said, there 

has to be some kind of expected return on it, otherwise you 

wouldn’t do it, and especially private equity firms who are in the 

business of making money. So I am just a little bothered with that. 

Let me ask this question. The Advancing Excellence, does it cost 

more to implement it or is it commonsense things you should be 

doing and you make up for deficiencies elsewhere within the home 

and you eliminate those deficiencies so in the long run it is profitable? 

Mr. PRUITT. What Advancing Excellence has allowed us to do is 

concentrate our resources and moving certain indicators. In my 

opinion, it does not cost more to implement the initiative. In fact, 

it saved money on the back end. If we can identify problems and 

as an industry share best practices, we are more than likely to decrease the cost of care. If we can prevent a wound, it is going to 

be cheaper than if we have to treat a wound, and I believe Advancing Excellence encourages us to do what is right in the first place. 

Mr. STUPAK. Well, then, Dr. Koren, why wouldn’t more centers 

come into your Advancing Excellence? We are at 43 percent. I 

think Mr. Shimkus said what about the other 57 percent. How do 

we get them there? 

Dr. KOREN. Well, remember, we have only been doing this now 

for less than 2 years, and it is a voluntary effort and I don’t think 

you will ever get 100 percent of people to volunteer for something 

like this. But what we are hoping to do is, we are hoping to reach 

out to people and start to show the advantages of improvement. As 

Mr. Pruitt said, one of the things, one of our targets is trying to 

increase staff retention. The cost to a nursing home of high staff 

turnover is profound, and here is a way that you can both improve 

quality and save costs, and we are trying to show those kinds of 

things so that we have people come into the campaign and kind of 

join it. We are going to continue it. We are looking to use our local 

area network to continue to recruit. 

Mr. STUPAK. So basically your quality program here, your Advancing Excellence, while there can be some beneficial, as Mr. Pruitt said, it is easier to prevent the wound, the open wound as opposed to treat it. That is the incentive, right, better quality care? 

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Maybe you can cut down your costs. But there is nothing mandatory, there is no enforcement. If I am in it, I am participating and 

I think this is just too much a hassle and I drop out, there is no 

mechanism or no punishment for doing that, is there? 

Dr. KOREN. No, this a completely voluntary campaign, and so it 

has that limitation as well as that advantage. 

Mr. STUPAK. All right. Let me ask this question. It came up in 

the last panel, besides ownership, one of the things that they were 

talking about was a database, and Mrs. Aceituno, who testified 

about her husband there, she felt like she didn’t get enough information about the quality of care that was provided by that center 

that her husband was at and she said if there is one thing she 

wanted to see was a more comprehensive report or patient information before you put your loved one in a nursing home or a center. 

Any problem with that, like identifying who the owners are, what 

are your rights before you enter into a center? Do either Mr. Pruitt, 

Dr. Koren or anyone else want to comment on that? 

Dr. KOREN. I think that one of the big problems, first of all, as 

we know, the nursing home compare site just has a very limited 

amount of information and a lot more could be put on there in 

order to help people make the decision. But I think we should also 

realize the discharge planners, and most people who end up in 

nursing homes come from a hospital, don’t tell people to go look at 

it. So one of the things we have got to do is work collaboratively 

with the hospital side to ensure that people know where to go to 

get information. 

Mr. STUPAK. How about online information? We are suggesting 

that be done in our Food and Drug bill that we are moving on so 

someone—you would know where to go to have that information as 

to the ownership, what is its quality assurance or Advancing Excellence, if they are a member of that program or not. Just trying to 

get more information online, would that be appropriate? 

Dr. KOREN. I think it would be critical. I had to choose a nursing 

home for my father, and while I was able to go to Nursing Home 

Compare because I knew about it although the discharge planner 

didn’t tell me about it, it provided enough information that I knew 

what nursing homes were in his area and I could start to narrow 

my search. But it certainly didn’t provide enough information to be 

able to go and say I know this one is a good one and this one isn’t. 

Mr. STUPAK. So you would have no objection to an online program or some universal database nationwide? 

Dr. KOREN. No. 

Mr. STUPAK. Mr. Pruitt? 

Dr. ZIMMERMAN. Mr. Chairman, one other point about this is 

that—— 

Mr. STUPAK. Sure, and then I will go to Mr. Pruitt. Go ahead, 

Mr. Zimmerman—Dr. Zimmerman. I am sorry. 

Dr. ZIMMERMAN. The issue—two other points about the Nursing 

Home Compare and that information. First of all, we actually were 

engaged in a project that was funded by the Commonwealth Fund 

to engage folks in using some of this information, using the data 

on the quality indicators and the deficiencies, et cetera. It turned 

out that one of the most difficult groups to engage in this process 

was hospital discharge planners, and it is not clear even to this day 

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why it was somewhat difficult to get them to be engaged but I 

think in fact they probably had a lot of other things to do and felt 

that they might have had sufficient information. So we have to 

make sure that those professionals who are responsible for the reference to nursing homes are going to be using this information. 

Secondly, I think one of the opportunities we are really missing 

in this information is that it is not just the selection of the nursing 

home that means that you can use this information, because as 

several of you have mentioned and several panel members, frankly, 

the selection of a nursing home is very limited. It is extremely limited in rural areas. There just aren’t that many options, and you 

have a very traumatic situation. What I am talking about is using 

this information after the selection to make sure that you can monitor how well the nursing home is taking care of your mother, 

which I think would suggest a somewhat different way of putting 

the information together. 

Mr. STUPAK. Mr. Pruitt, you had wanted to say something? 

Mr. PRUITT. I would mention on the transparency aspect of our 

industry, many corporations including myself and including those 

that are involved in private equity do release voluntary quality reports that report on our indicators, many of which are the same as 

the Advancing Excellence campaign. The American Health Care 

Association supports transparency but I urge the Committee to be 

careful that we don’t restrict capital in our profession, in our industry. We are serving our patients and our residents in outdated 

buildings, many of which were built in the 1960s and 1970s. If we 

disclose all relationships, we may discourage banks which lend our 

corporation money and have really no say-so in our operations from 

investing in our industry. 

Mr. STUPAK. I think what we are trying to say is, we need to 

know who do you go to, and not have to discover which shell the 

pea is under. You know, if your number of entities limited liability 

corporations, fine. Someone is in charge of making decisions about 

that facility; who is it. That is who we need to know so the ombudsmen can do their job without having to go to litigation. Mr. Kramer? 

Dr. KRAMER. I would just like to say that I concur with the notion of transparency and that there ought to be much more information available to residents and to discharge planners and people 

making these decisions. One of the things I think we need to keep 

working on is the breadth of that information, and again, I come 

back to QIS because of the breadth. It covers quality-of-life issues 

and a full range of the regulatory areas. It turns out that a lot of 

times the issues that are most important to residents are things 

like self-determination, somebody waking you up at 5 in the morning versus getting up, things that Dr. Koren talked about. That information is not very available, and there are some very important 

things that we need to make available and I think we can do that 

with a much broader array of information than we currently provide people. 

Mr. STUPAK. We ask for transparency from the ownership and 

from the nursing homes but we still need transparency from CMS 

on the Kramer report and the QIS report, and we are still waiting 

on that. 

180 

Dr. KRAMER. I mistakenly did not comment about the QIS evaluation report and I should just tell you something about it since 

I do know about it. One of the reasons it hasn’t been released is 

that it is inconclusive. It took a long time to do. They actually only 

went on 10 QIS surveys, and in their own words, they qualify these 

findings by noting, ‘‘the comparisons between QIS and standard 

surveys were limited by sample size, thus the data we provide are 

best used for survey improvement purposes rather than to inform 

decisions about what type of process.’’ So they ended up with a very 

modest study that wasn’t actually conclusive and didn’t really address the consistency issue. So I know there is a lot that needs to 

be done to put that in context and say how CMS is going to address 

the concerns here but move forward. And they all recommended to 

move forward with QIS and so that is why CMS has moved forward. 

Mr. STUPAK. Mr. Shimkus. 

Mr. SHIMKUS. Thank you, Mr. Chairman. I don’t really have a lot 

more but I do want to follow up. You may not have the answer, 

but it is my understanding that hospitals provide more information. The irony behind this is that hospitals have to provide more 

information. Then you have the discharge planner who is not really 

requiring or helping in sending someone to a facility. We all know 

the recidivism aspect. I don’t know if that is the right word. But 

if you go to a place where the care is not great, you could be 

bounced back to the hospital. So the whole aspect of—you would 

hope, if you are concerned about the patients and the wellness that 

the discharge planner would want to encourage care to a proper 

provider. Maybe there is concerns about—I don’t know. Why 

wouldn’t they—Dr. Zimmerman, it looks like you want to respond. 

Dr. ZIMMERMAN. Well, I am not sure why they would not want 

to know. I think that there hasn’t been a really organized way of 

providing the information, et cetera, but frankly, the transition of 

care between settings is, to put it bluntly, one of the scariest aspects of our care problem now with the elderly. It is abysmally bad 

in terms of the transfer of information from the acute care setting 

to just about any other setting, whether it is home care, whether 

it is skilled nursing facilities, whether it is a hospice, whether it 

is a long-term acute care hospital, et cetera. In my testimony, I 

said the following, which I can repeat very quickly if you will permit me. If we are truly to accomplish the goal of giving our elderly 

citizens the care they so richly deserve, then we need to expand our 

focus to include the other care provider settings that feed into 

skilled nursing facilities. In particular, this must include greater 

scrutiny of acute care hospitals whose discharge practices have 

placed enormous pressures on skilled nursing facilities because 

sometimes they will discharge folks before they are ready to be discharged and sometimes the hospital itself is inadequately prepared 

to provide the complex care needed by elderly patients. We have 

some hospitals that have a program called an ACE program, Acute 

Care for the Elderly. About 40 hospitals around the country have 

this program. But often they don’t, and frankly, that is not their 

business. That is not, as we say in economics, their comparative 

advantage. And so I think we have to be very careful to make sure 

that this setting transfer is handled more carefully than it is now. 

181 

Mr. SHIMKUS. I appreciate those comments. It is kind of scary 

and it is scary for families too as they are trying to move people 

through the process. In some hospitals in southern Illinois, because 

of the way just regular healthcare has changed from inpatient to 

outpatient, they have beds and they have segued into skilled nursing facilities. So I imagine in that facility where you have limited 

choices, I would think and I will go check with my local providers, 

that is not a big a problem because you are just going from really 

one wing of the hospital to another. But I just want to—I will make 

a comment on the—I would think if I was a provider and I had my 

own quality assurance program or the Advancing Excellence issue, 

that is something I would be advertising and throwing information 

out, as Dr. Zimmerman said. I mean, it is an aspect of where you 

can get a competitive advantage as people are looking for quality 

care. 

This whole resident-centered care, which we all know is—we all 

want to be individuals. We want individuals in education planning. 

We don’t want to be segmented into groups. That has got to cost 

a little more, doesn’t it? 

Dr. KOREN. What we are finding, at least what we found from 

the survey that we just conducted, was that in fact there seems to 

be a positive effect on the bottom line. It might be a program that 

costs before it saves, but ultimately as you start to empower staff, 

as you start to make them in charge of their own residents and 

make it a better job, you have lower turnover, you have happier 

residents, you have higher occupancy rates, you have fewer lawsuits, you are not being dinged on surveys. I mean, there are huge 

advantages to really individualizing the care and taking care of 

those people, and it is really trying to get people to understand 

that, that not only is it a good way to do business but it is the right 

way to do business. 

Dr. KRAMER. And I would concur with her. You know, the problem is not a cost issue to start doing resident-centered and culture 

change care. The issue has more to do with the focus of our whole 

regulatory system and our whole quality-of-care system. Quality of 

life has not been part of that focus for a long time, and the amount 

of reliance on what residents and families tell surveyors has not 

really been the focus. And it is starting to become the focus and 

it needs to be the focus of the regulatory process and the quality 

improvement process. 

Mr. PRUITT. I would say as a provider, there are aspects of resident-centered care which absolutely do not cost more. It is instead 

a way of changing how you operate a building. For instance, traditionally, nursing homes in many of our state regulations require 

higher staffing on the first shift. Well, many of our patients don’t 

wish to be bathed or have their activities of daily living performed 

on the first shift. They may have done that traditionally at night. 

So as an operator, as we have more consistent staffing across all 

shifts, it is a reallocation of resources and it becomes more outcome 

driven, more customer satisfaction driven than necessarily regulatory driven. 

Mr. SHIMKUS. I thank you very much. 

182 

Mr. Chairman, since I have no more questions for this panel, I 

don’t want to segue into the high cost of energy for healthcare delivery. That is a debate for another time. 

Mr. STUPAK. I am always willing to have that debate with you. 

Residents at Pine Crest Medical Care Facility, which you probably know in the Powers area, has opened a couple of these residences and I was there 2 weeks ago as they cut the ribbon and all 

this, and it was really interesting that these were probably some 

of the most severely injured people but they were so excited and 

they did one a year earlier so this would be their second one, and 

I asked about the cost and the initial cost to build the building 

with special features. There is a cost there, but in the long run, 

happier, staff is happier and the quality of life that you speak of 

was much greater. So I think there are a lot of good things happening. 

Let me ask you one question if I can. How often does a hospital 

person call and say we are discharging such and such who just had 

major surgery, can you handle them or what would you recommend? Do you have that much interaction with a hospital on a 

discharge or is it just the family heard about you and showed up 

with their loved one? 

Mr. PRUITT. We have tremendous interaction with the acute care 

setting. The discharge planners in the hospital routinely contact 

nursing facilities to understand their capabilities of caring for patients. They will then find several options for the family. They will 

inform the family of their choices. We know from our satisfaction 

surveys that we conduct that our family members visit several facilities before ultimately deciding on ours so from our corporation 

standpoint, and I believe I can say from the industry as a whole, 

there is tremendous interaction with acute care settings. 

Mr. STUPAK. Let me thank this panel. It has been most interesting, and thank you very much for your input into this problem 

that it has been 31 years since this subcommittee has visited it. We 

will keep on it, I can guarantee you. I think we all have some personal experiences we can relate to and we appreciate what you do 

and helping us understand it. Thank you. 

As I call up our witness on the third panel, we have Mr. Kerry 

Weems, who is the acting administrator at the Centers for Medicare and Medicaid Services, CMS, as we call it, within the Department of Health and Human Services, and we appreciate the fact 

that you stayed with us all day today and have been interacting 

as we had a chance to say hello out in the hall. It is the policy of 

this subcommittee to take all testimony under oath. Please be advised that witnesses have the right under the Rules of the House 

to be advised by counsel during their testimony. Do you wish to be 

advised by counsel during your testimony, Mr. Weems? 

Mr. WEEMS. No, sir. 

Mr. STUPAK. OK. Then I will ask you to please rise, raise your 

right hand and take the oath. 

[Witness sworn.] 

Mr. STUPAK. Thank you, sir. Let the record reflect that the witness replied in the affirmative. He is now under oath. We will 

begin with your opening statement, and again, 5-minute opening 

statement. A lengthier statement can be submitted for the record. 

183 

Mr. Weems. 

STATEMENT OF KERRY WEEMS, ACTING ADMINISTRATOR, 

CENTERS FOR MEDICARE AND MEDICAID SERVICES, U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES 

Mr. WEEMS. Thank you very much, Mr. Chairman. Good afternoon. Mr. Shimkus, good afternoon. Congratulations on your decision to retire, which I guess we—— 

Mr. SHIMKUS. Yes, from the Army Reserves. My wife called and 

said no, you are not leaving. 

Mr. WEEMS. Congratulations on your service there. 

Thank you for inviting me to testify today. Roughly 11⁄2 million 

Americans reside in the Nation’s 16,000 nursing homes on any 

given day. More than 3 million rely on the services provided by a 

nursing home at some point during the year. Those individuals, 

their families and friends must be able to count on nursing homes 

to provide reliable care of consistently high quality. 

Charged with overseeing the Medicare and Medicaid programs, 

whose enrolled populations comprise the vast majority of home 

residents, CMS takes nursing home quality very seriously. Our efforts are broad including initiatives to enhance consumer awareness, transparency, as well as vigorous survey enforcement processes focused on safety and quality. 

Consistent with statutory requirements, we conduct onsite reviews of every nursing home in the country at least once every 15 

months, once a year on average. Surveys focus on the quality of 

care experienced by facility residents regardless of who owns the 

facilities. Our focus on actual outcomes ensures that Medicare’s 

quality assurance system does not depend on particular ownership 

of a facility. We do continuously seek to improve the effectiveness 

of both the survey process and the enforcement of quality care requirements. An example of such continuous improvement is our 

Special Focus Facilities initiative, which addresses the issue of 

nursing homes that persist in providing poor quality. This relatively new initiative is just one of many efforts underway at CMS 

to further improve nursing home quality. 

I have brought a chart with me today that includes a set of commitments I made last November before a Senate panel, and it has 

been updated to show progress to date. Beginning with the green 

checks, those represent actions completed. CMS participation in 

leadership and Advancing Excellence in Nursing Homes campaign 

continues. On November 29, 2007, we posed on our Web site the 

Nursing Home Compare, the names of the Special Focus Facilities, 

a major step forward in greater transparency toward nursing home 

quality. We expanded the Quality Indicator Survey pilot in February to include a sixth State, and we are looking forward to more 

promising results. Last month CMS cosponsored a well-attended 

national symposium on nursing home culture change. 

Now, moving to the work in front of us, which represents actions 

in progress, I believe we are nearly ready to be able to roll out a 

demonstration project focusing on value-based purchasing for nursing homes, which would test payment incentives to improve quality. We are also working on a final evaluation of a 3-year pilot to 

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tive new hires in nursing homes. Target release of this final report 

is this summer. In June, we expect to publish results from an ongoing campaign to reduce the incidence of pressure ulcers in nursing 

homes and to reduce the use of restraints. In July we hope to publish new guidance to surveyors on nutrition in nursing homes, the 

latest of an ongoing CMS effort to improve the consistency and effectiveness of the survey process. 

In August, our new contract with the quality improvement organizations will take effect. We plan to build into that contract an 

ambitious, unprecedented 3-year agenda for QIOs to work on nursing homes that have poor quality including those in the Special 

Focus Facilities. Also in August, we plan to release a final regulation on fire protection safety requiring all nursing homes to be fully 

sprinkled by a phase-in period. 

In September we hope to issue a report describing the methods 

for improving the accuracy of staffing information available for 

posting on the Nursing Home Compare site. 

Finally, as I have stated previously, we would envision supporting legislation to permit the collection and escrow deposit of 

civil monetary penalties as soon as the penalties are imposed. 

In closing, I would like to again stress that regardless of setting 

or ownership, quality health and long-term care for Medicare and 

Medicaid beneficiaries is of utmost importance to CMS. 

I would be happy to answer your questions. Thank you for the 

opportunity to appear today. 

[The prepared statement of Mr. Weems follows:] 

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Mr. STUPAK. Well, thank you, and thank you again for being 

with us. 

Let me ask you, and I sort of ended the last panel with it, and 

I think you heard Attorney General Blumenthal’s call for a national database to which State officials would have access showing 

problem nursing home chains and facilities. What is wrong with 

that idea? Doesn’t CMS have an obligation to protect those vulnerable patients in these homes? And why can’t CMS take the lead on 

sharing that type of information that would be readily available to 

everybody? 

Mr. WEEMS. Much of that information is available now so, for instance, if you go to the Nursing Home Compare Web site, the last 

three surveys taken are available—a summary of the last three 

surveys taken are available on the nursing home—— 

Mr. STUPAK. So for every nursing home, that is available? Is that 

what you are saying? 

Mr. WEEMS. For every nursing home, the last three—a summary 

of the last three surveys are available on the Web site. 

Mr. STUPAK. So what are there, 7,000 nursing homes or so? 

Mr. WEEMS. Sixteen thousand, four hundred. 

Mr. STUPAK. Sixteen thousand. I am sorry. So you have 45, almost 52,000 summaries out there? 

Mr. WEEMS. Yes. 

Mr. STUPAK. Then why in the PECOS system—that is your Provider Enrollment and Chain Ownership System, currently only has 

70 percent of the nursing home ownership information database? 

Even if the Medicare provider discloses everything requested on 

your enrollment forms, in PECOS, we are still missing 30 percent 

as to ownership and other identifiable features that would help 

people to know more about that nursing home. 

Mr. WEEMS. And that is a good question. First of all, I think the 

thing that we need to understand, the CMS PECOS initiative isn’t 

just for nursing homes. It is for all providers and so we enroll them 

at—all providers except one particular type. We enroll them at a 

particular pace. That pace is about 250,000 to 300,000 a year and 

so the 70 percent figure represents the progress that we have made 

enrolling a very, very large number of providers into the system. 

Mr. STUPAK. Well, they tell me that the ownership issue, and I 

am focusing a little bit on that because that is what we have sort 

of been talking about on the first panel, is really not linked to the 

CMS Web site, to the Nursing Home Compare Web site. 

Mr. WEEMS. Right. 

Mr. STUPAK. So you almost have to go two different places to 

even try to find it. 

Mr. WEEMS. Yes, and one of the things that we focused on for 

Nursing Home Compare are indicators that we believe that would 

be useful in selecting a nursing home, so some of the quality indicators, things like that. We are collecting the ownership information as a matter of—as a data field in PECOS and in fact we will 

collect it down to fractional ownership of 5 percent. I think the 

question that we all confront is, how meaningful is that information in selecting a nursing home, to put it on Nursing Home Compare? It may have other meaning. 

197 

Mr. STUPAK. Right, but it wasn’t just for a private family to select a nursing home. It is also for the ombudsmen, so when you 

have these corporate layers of corporate responsibility, who does he 

go to? The facility manager wants to do the right thing but they 

don’t have the power so who do you go to, and even the attorney 

general indicated he had trouble. And I think Mr. Walden said in 

this modern era, data is available it seems like sort of piecemeal 

here. We need a central location. We sort of need to link the ownership database to a quality database into one database so if we are 

looking for quality, if we are looking for the family, if you are looking for who is in charge to put a little pressure to clean up a matter at a facility or the state attorney general has to do something 

like Connecticut had to do, there is one place we can go. 

Mr. WEEMS. Let me begin by agreeing with that but then let us 

step back and think about how we make that information useful. 

Is our goal to populate PECOS 100 percent? Having done that, it 

is also our goal then to link that to the quality data that we have. 

Let me tell you that yes, we do have that as a goal. That will have 

some use. Let us separate that use, however, from what is on Nursing Home Compare. Nursing Home Compare, we want to make 

sure that we have information that is usable in selecting a nursing 

home. So I am not sure that integrating those two databases 

achieves the kind of objective that you have in mind. I think we 

have different purposes for different databases. 

Mr. STUPAK. Well, I guess that is the only place we can go to 

really look to see where the bad actors in this field are. I think the 

testimony has shown on the other panels, it is a small number, but 

unfortunately, a small number when they do are bad actors, it 

hurts, has tragic results. Let me ask you this. CMS Special Focus 

Facilities program appears to be a promising way to deal with 

nursing homes that have a record of actually harming or jeopardizing patients. GAO has repeatedly reported that about 20 percent 

of nursing homes have serious problems and cycle in and out of 

compliance, and with the figure you had, over 16,000 before, that 

would be about 3,200 facilities nationwide moving in and out of 

compliance yet only a couple hundred of facilities are in the SFF 

program. Why wouldn’t that program be expanded to try to get at 

this total 20 percent? 

Mr. WEEMS. We would like to expand the program. The program 

right now has about 134, 135 facilities in it. It is a program that 

is resource-intensive. It requires surveying at twice the normal 

rate. Within the resources that we have, it is something that we 

would look to expand. 

Mr. STUPAK. Let me ask this since I asked Dr. Kramer and I 

would like to have your response on it. Dr. Kramer’s group at the 

University of Colorado, the report commonly referred to as the Kramer report, which was completed March of last year, 2007, and it 

was approved by the project officer, so why hasn’t CMS released 

that report? 

Mr. WEEMS. You heard Dr. Kramer say that it wasn’t a particular conclusive report. 

Mr. STUPAK. I thought that was the Quality Indicator Survey, 

the QIS. 

Mr. WEEMS. You are right. 

198 

Mr. STUPAK. The Kramer report has been done for a long time. 

Mr. WEEMS. Right. Both of those reports we have. We are reviewing. One of the things we like to do when we have a report and 

when we release it is to have an action plan associated with it. I 

would like to have both of those reports out and available this summer. Rather than just releasing a report, let us have an action 

plan. Let us see what we are going to do about it. 

Mr. STUPAK. Well, I don’t disagree necessarily with that but does 

it take 15 months to develop an action plan? That is how long the 

Kramer report has been done. QIS, I understand, that has been 5 

months but I don’t think it would take 15, 16 months, 17 months 

to put forth an action plan. 

Mr. WEEMS. It takes a while to go through a report, review it 

and produce those things. 

Mr. STUPAK. Let me ask you this. The nursing home industry 

presented a strong case here, and I would get from their testimony, 

I would take away that voluntary quality initiatives can take the 

place of regulation. At least that is what I heard them say. But information about whether a chain or a facility has achieved voluntary benchmarks is not public unless the company chooses to 

make the information public. Do you believe that this type of system can or should replace the current regulatory system or QIS 

system? 

Mr. WEEMS. I think it is something that is worth looking at in 

a very serious way. I think going through the research, being able 

to see if in fact it makes a difference, and I think it is important 

to separate the regulatory system from the enforcement system. I 

would be loathe to suggest that we need to loosen up the enforcement system. Perhaps we can take another look at the regulatory 

system. We are doing that, seeing the cultural change, more person-centric care that we are looking at. That can make a difference. 

We need to proceed carefully down that path, maybe lift off some 

of the regulations, keep the enforcement regimen in place. 

Mr. STUPAK. Thank you. 

Mr. Shimkus. 

Mr. SHIMKUS. Thank you for your testimony, and you kind of 

really highlighted the challenge that a lot of us are trying to get 

our hands around, which is the regulatory or enforcement, and we 

keep bringing it up. There is a State responsibility here too. There 

is licensing and there is what they have to do to be involved with 

it. In my opening statement, I quoted the fact that we have been 

successful to some extent in unfortunately recovering millions of 

dollars in penalties for noncompliance. Our hook in this debate is 

because we are big payers. Isn’t that right? 

Mr. WEEMS. Correct. 

Mr. SHIMKUS. And we are big payers because of the Medicare 

and the Medicaid. 

Mr. WEEMS. Yes. 

Mr. SHIMKUS. So a lot of this debate is trying to follow, you 

know, the money to the ultimate ownership for quality care and 

really, is finding out the ownership—I can see how it is beneficial 

but is it the end-all to improving quality care? 

Mr. WEEMS. Let me tell you how we think about and our thinking about ownership now. Currently CMS’s relationship is with the 

199 

owner of the provider agreement so whoever has that provider 

agreement is the entity with which we have the relationship. So 

what would chain ownership or some other ownership tell us? 

Looking, for instance, at the case the Committee had in front of it 

this morning, so if you see a couple of homes in a chain beginning 

to fail, what does that tell you? And that is the thing we need to 

work on. So it is 2 of 20 then that would require an intervention 

or is that just statistical chance as opposed to a corporate strategy? 

Is it four, is it six? Those are the kinds of things that we need to 

investigate with understanding ownership, distinguishing the difference between does it matter or how it matters and when to intervene. 

Mr. SHIMKUS. Kind of following up on the same question, in your 

testimony on page 8, you say that Medicare’s quality assurance 

system does not depend on any theory of ownership. 

Mr. WEEMS. That is correct. Our relationship is with the facility 

itself and the holder of the provider agreement in that facility 

so—— 

Mr. SHIMKUS. You are saying because of this holder of the provider agreement, but I guess part of the debate is, the holder of the 

provider agreement may not be the final owner. And so that is the 

disconnect that we are trying to clear up. 

I think, Mr. Chairman, I am kind of out of questions, so I will 

yield back to you for a while. 

Mr. STUPAK. Well, fine, jump in if you want. 

Let me just follow up, just talking about ownership there. 

Doesn’t it follow then that irresponsible nursing home owners can 

have a negative effect on the quality of their facilities? If we take 

a look at what happened at the quality of care at the Haven Health 

Care chain, didn’t it make a difference who owned the chain for the 

quality of care? Why should owners be allowed to hide behind a 

complex web of limited liability partnerships and not knowing who 

they are? 

Mr. WEEMS. And they shouldn’t. That is why our system will 

capture ownership down to the fractional level of 5 percent. 

Mr. STUPAK. But see, that is why I want the data at one place 

whether it is police, attorney generals or whatever, enforcement, 

regulators, they got one place to go along with the family so you 

can see what is happening at all aspects of it. 

You know, when you said chain ownership, that they have two 

or three or four facilities going bad, where do you draw the line? 

Where do you step in? Is it really the number of facilities? Isn’t it 

more the seriousness of the deficiency which would say when you 

step in? 

Mr. WEEMS. It would be both. I would say that we don’t have the 

research now to be able to separate, as we would say, the signal 

from the noise, and it is a very serious question and one that we 

should look at because there are varieties of chains, varieties of 

types of ownership, and varieties of numbers of facilities in a chain 

and varieties of size in a chain. Each one of those could be a variable in what could be a very complex equation. We want to proceed 

but we are just not in a position now to be able to say, is it 2 in 

100 of this particular type of what. 

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Mr. STUPAK. OK. I will give you that as far as the ownership 

issue but where we should be going, the value of these surveys, the 

information gleaned there from, I think has sort of fallen on deaf 

ears at the CMS. Nineteen ninety-eight was the last time GAO did 

a study and they just released another one today, and I know you 

probably didn’t have time to take a look at it. 

Mr. WEEMS. We commented on it. 

Mr. STUPAK. Yes, but if you take what happened in 1998 and you 

go back to look what happened today, today’s report from the GAO 

really shows there are very serious problems with the current nursing home survey system so we are not getting at the deficiencies. 

I realize, like you said, you might not have had a chance to read 

it all but they are similar to those of the University of Colorado 

study which you have had for about 17 months and haven’t released and to the OIG, Mr. Morris, who testified, and again the 

1998. So I look at the 1998, I look at the one today. I had a chance 

to read it between votes, take a look at a couple things. It is almost 

the same. You put that with the Kramer report, as I call it, or the 

Kramer study from Dr. Kramer of the University of Colorado, OIG, 

and it seems like we are seeing the same thing: very serious problems with the current system of nursing home survey system so 

today that survey has failed to identify serious deficiency 25 percent or more of the time. Even more troubling, in all but five 

States, surveyors missed deficiencies at the lowest level of compliance, and the lowest level of compliance, undetected care problems 

at this level are a concern because they could become more serious 

if nursing homes are not required to take corrective action. So how 

will CMS remedy this situation? 

Mr. WEEMS. Stepping back from that, first of all, one of the first 

things that we would like to happen is, let us make sure the survey 

gets done so that if you look at the record of CMS from 2000 to 

today, 2000, 4 percent of surveys weren’t being done. We are down 

to about four-tenths of 1 percent aren’t being done. So as a first 

step, at least the surveys themselves are being done. 

Mr. STUPAK. Sure, but surveys have to have quality. They have 

to be quality surveys. I can go and give you every survey you want 

and I can follow up on the phone and if it doesn’t affect even a 

minor deficiency, which have a tendency to grow into majors. Go 

ahead. 

Mr. WEEMS. Secondly, working through that, we need to make 

sure that we educate the surveyors, and we have new guidance to 

surveyors to improve their accuracy on items like pressure ulcers, 

incontinence, quality assurance, making sure that they are getting 

the medications they need. We are educating the surveyors to make 

sure that that happens. Thirdly is the Quality Indicator Survey. 

That will produce greater consistency across surveys. You can see 

that we are undertaking that effort. We will be in eight States this 

year and continuing to expand that effort. That will give us more 

substantial consistency across State surveys. 

Mr. STUPAK. Sure, and Dr. Kramer said that 80 percent of the 

people who participated in the Quality Indicator Survey were 

happy with it. They thought it was much more concrete and it gave 

them more because if you go back to the GAO report, the one that 

was released today, GAO found the reasons for surveyors not idenVerDate Nov 24 2008 12:40 Feb 01, 2010 Jkt 037690 PO 00000 Frm 00206 Fmt 6633 Sfmt 6633 C:\DOCUMENTS AND SETTINGS\CWELLS1\HEARINGS\110-116 SCOM1 PsN: JIMC
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tifying problems is that they lack, A, investigative skills, and B, the 

ability to integrate and analyze the information they collected to 

make an appropriate deficiency determination. So QIS has to get 

out there and the Kramer report has to get out there. So in the 

meantime, since you are going to do an action plan, what does 

CMS do to train these surveyors who are taking these surveys if 

we are missing all this? What are we doing? You said only a few 

States are using QIS so how current is CMS going to help surveyors using the current system or should we start switching over 

to QIS right now? 

Mr. WEEMS. Well, we move QIS at a pace according to the budgetary resources that we have, but what we are doing is continuing 

to educate surveyors to produce a more consistent result until those 

States come into the QIS program. 

Mr. STUPAK. Well, then, the QIS, is it a budgetary problem? I 

think Dr. Kramer said it would be $20 million. The healthcare 

folks, American Health Care Association, were a little reluctant to 

say they would put in their private money to help implement that 

$20 million to get it throughout but is $20 million really the issue? 

I think even Mr. Shimkus said the numbers we deal with, $20 million doesn’t seem too far of a stretch when you are talking about 

1.8, 1.5 million people in nursing homes. 

Mr. WEEMS. If I could adjust your question slightly, it would be, 

is the budget a rate-limiting factor, and I would say if you said 

today, Mr. Weems, we are going to give you $20 million and we expect to have this implemented in a year, I would resist that for the 

reason that you roll something out nationally, let us proceed carefully. We have learned a lot from these eight States as we go along. 

We can pick up the pace but this isn’t a matter of going nationwide 

right away. 

Mr. STUPAK. But at the same time, if we say Mr. Weems, here 

is your $20 million, you contract with States to do the surveys, 

don’t you? And therefore, the States would be getting it. You would 

have the resources then to do adequate surveying and do the training necessary. I guess I wouldn’t be thinking that $20 million 

would just go right to CMS and stay there but would go to the 

States because you contract out to do the surveys and then you follow up either by telephone or a couple weeks later the Federal surveyors go in there, right? 

Mr. WEEMS. Sure. 

Mr. STUPAK. So it wouldn’t be that much of a burden then to— 

you already have a system in place, but I guess the part that really 

bothers us, $20 million but we want to make sure the $20 million 

is going to surveyors who are doing a QIS and it is being done accurately and they have the training to do it so we can get accurate 

data and then it is going into one central location so we can all find 

it. 

Mr. WEEMS. And to make sure that we are doing QIS properly. 

As I said, we are learning as we go. I really would want to think 

carefully about doing 32 States, you know. 

Mr. STUPAK. Well, if you have had QIS since last December, in 

your budget then, did you ask for money to help train people to implement QIS? 

202 

Mr. WEEMS. We do have budgetary resources in our budget request for QIS. It is a rate of two or three States a year but—— 

Mr. STUPAK. That is all, right? Two or three States? 

Mr. WEEMS. Right. But having raised that, for the last 4 years 

in a row, CMS has not even achieved the President’s budget level 

for survey and certification and that is the budget that comes out 

of. 

Mr. STUPAK. Mr. Shimkus? 

Mr. SHIMKUS. Just a brief one. I just want to change kind of the 

focus to this issue that you deal with Special Focus Facilities, and 

we got 134 such entities in the program. My perception is, there 

is a time lag when they are identified, then you finally say let us 

bring in all these people to fix this if it becomes Special Focus First 

of all, is that a wrong observation, and if it is not, why don’t we 

just go after the root cause right when we have identified them in 

this Special Focus arena? 

Mr. WEEMS. When Special Focus Facilities are selected, they are 

selected off of candidate lists that the States give us. These are 

chronically underperforming facilities. Once they enter the Special 

Focus Facility designation, they are then surveyed at twice the rate 

that a normal facility is, and given how they perform on those—— 

Mr. SHIMKUS. OK. But the issue is, why not send in—why don’t 

you just try to identify the root cause then? I mean, they are already identified as problematic. Why not just say let us go in and 

special investigative—yeah, I was going to say a SWAT team evaluation. 

Mr. WEEMS. When we have done root cause analyses and we 

have worked with facilities to do that before, it can be quite expensive. 

Mr. SHIMKUS. OK. And I think we would—so you think by upping the investigations, you move them into compliance. You have 

the experience. I don’t. You move them into compliance by saying 

OK, we are going to come around and if you don’t, then we are 

going to bring in all these people to try to find the root cause. 

Mr. WEEMS. They are going to be on either a path of improvement where they will graduate or they have shown some improvement but they will still stay in the Special Focus Facility program 

and continued to be surveyed every 6 months or they will be on a 

path to termination. That is what it means to be in that designation. We have also taken the step of putting the Special Focus Facility designation on the Nursing Home Compare Web site. If you 

go to the Nursing Home Compare Web site, you can see that that 

home is on the Special Focus Facilities. You can also see what the 

most recent update is, whether or not they are on a path to improvement or whether they are on the road to termination. 

Mr. SHIMKUS. And my final question is, in the 2008 Action Plan 

for Nursing Home Quality, CMS cites expansion of the collaborative focus facility project. What is this project and what homes 

does it cover? 

Mr. WEEMS. In the most recent scope of work for the Quality Improvement Organizations, we have designated special facilities with 

specific problems for the Quality Improvement Organizations to 

work with those facilities to produce specific quality outcomes in 

those facilities. 

203 

Mr. SHIMKUS. And this kind of wraps up around the initial question: Why not use these Quality Improvement Organizations more 

extensively? Is it cost? 

Mr. WEEMS. You know, Quality Improvement Organizations have 

wide missions, including the PPS hospitals for which we gave them 

specific quality improvement assignments this year as well, so they 

have a very broad mission that extends just beyond nursing homes. 

Mr. SHIMKUS. That is all I have, Mr. Chairman. 

Mr. STUPAK. Well, thanks. Let me just summarize, and if I may, 

with this question. We have an ownership issue. We have deficiency. We have the GAO report again coming out today saying we 

are not doing very well at surveys, it is still deficient. OIG says the 

same thing. We talked about $20 million. If we got 1.7 million people in nursing homes or centers, that is about $10 per person. I 

don’t think that would be a hurdle we should overcome because the 

problem is, as I see it, and it has been a while since this committee 

has done oversight in this area, but still, when you listen to Mrs. 

Aceituno about what happened to her husband, there are reports 

of death, you have people with wounds with maggots in dead flesh, 

I just see the Kramer report which sort of outlines, sort of like a 

blueprint for enforcement to improvement the survey system and 

it is 15, 17 months, nothing is happening. While we are not doing 

anything or rolling that out because you don’t have an action plan, 

I think the Kramer report sort of gives you the action plan because 

we have people suffering and we want to get this taken care of, and 

the industry as a whole looks pretty good from what I am hearing 

today, but there is that 20 percent that is repeat in and out of deficiencies, and I think we need to do a quicker job of taking care of 

it, and if it is $20 million, I am sure when you present it to people 

that it is 10 bucks, maybe even the private nursing homes will kick 

in to get this thing resolved. 

I think we have to have more action as opposed to inaction and 

maybe Congress shares some of that responsibility. Like I said, it 

has been 31 years since this committee looked at it, so I plan on 

staying on top of it. We will have another hearing, I know, we are 

already talking about to follow this up so we would hope you will 

take this Quality Indicator Survey, the Kramer report, get your action plans done, let us get it implemented and let us get a database 

we can draw from. I think that is a fair assessment of where we 

have been today. 

Any comments on that, Mr. Weems? 

Mr. WEEMS. I thank you for your comments. The way that I 

would characterize, first of all, what I have learned today, is that 

improvement is multi-factorial. The chief counsel to the Inspector 

General I think made an interesting suggestion about maybe doing 

a demonstration project that really reaches to the far reaches of 

ownership. Let us see if that makes a difference. I think we need 

to look—one of the things that we haven’t spent time talking about 

today are financial incentives in nursing homes. I think we need 

to move to the ability to pay for quality. Right now, under Medicare, we pay under a prospective payment system. Our payment 

system is quality neutral. It doesn’t make a difference. We need to 

change that. We need to change that in the Medicaid world. We 

need more consistency among the surveys. We need all of those 

204 

things, Mr. Chairman, so I agree with you, we shouldn’t concentrate on a few things. We make progress only by moving on 

many fronts. 

Mr. STUPAK. Well, moving on many fronts, and it is not just you 

but some of the frustrations I see is, like I said, the 1998 report, 

the OIG report, we got another one out today, it seems like this has 

repeated itself for the last 10 years and I am sure it is before that 

too. Money tied just to quality, what I am concerned about is people who do the work, those dedicated workers who work day in, day 

out to take care of our loved ones, who we entrust to them, these 

workers, a lot of times they don’t see that money. Many of these 

jobs are minimum wage-paying jobs in certain States. I would look 

at or I would suggest that if you are going to target a State for a 

demonstration project, we should be able to put more than one 

State as a demonstration project, Number one. But if we do, why 

don’t we do a demonstration project on a bad chain? We know they 

are out there. Maybe we have an opportunity now with our Carlyle 

Group buying out the Manor, which always had a good reputation, 

maybe that is a demonstration project we could do to make sure 

the quality stays up or improve underneath the Carlyle Group because there is a concern, as we heard today, that it is a $5.5 billion 

investment, they are going to have to recoup their investment. So 

if you tie money to quality, hype the reports on quality so we reap 

more money to pay down that $5.5 billion debt, but in reality, because we don’t have strong surveys or accurate surveys who aren’t 

catching deficiencies, patient care is leaving or going down, not up. 

We appreciate you being here. We appreciate the interaction we 

have had with you and we look forward to working with you, and 

we would like to see the Kramer report and the QIS rolled out 

sooner. If it’s a matter of resources, I think this committee on both 

sides would like to see the resources because you have heard every 

one of us have been affected by a family member or someone who 

is at these centers or nursing home facilities and we want to make 

sure that they have the quality care that we all think they know 

and deserve. Thank you. 

That concludes all questioning. I want to thank all of our witnesses for coming today and for their testimony. I ask unanimous 

consent that the hearing record will remain open for 30 days for 

additional questions for the record. Without objection, the record 

will remain open. 

I ask unanimous consent that the contents of our document binder be entered into the record. Without objection, the documents will 

be entered into the record. 

That concludes our hearing. Without objection, the meeting of 

the subcommittee is adjourned. 

[Whereupon, at 2:38 p.m., the subcommittee was adjourned.] 

[Material submitted for inclusion in the record follows:] 

STATEMENT OF HON. JAN SCHAKOWSKY

Thank you very much, Mr. Chairman. I want to also welcome our witnesses and 

thank each of them for being here today. 

Mr. Chairman, it has been far too long—over 20 years in fact—since we as a Congress turned a speculative eye towards the nursing home industry. But now, just 

as we did prior to passing OBRA ’87, we must recognize the changing tides in this 

205 

industry and act to ensure the health and safety of all residents who entrust their 

health and their lives to nursing homes. 

Though some progress has been made in improving quality since OBRA ’87, many 

of the same concerns we had back then stubbornly persist in communities all across 

this country and in fact, new and very serious concerns have come to light over the 

past few years. 

Between 1985 and 1990, I served as the Director of the Illinois State Council of 

Senior Citizens, and in that role I fought for better prescription drug prices and benefits for seniors as well as financial protection for seniors and their families. I also 

became keenly aware of the myriad of abuses inflicted upon far too many of our 

family members and friends who live in nursing homes. 

I am sure that we will hear in greater detail how and why those abuses occur 

from some of our witnesses, so I want to specifically mention my concerns about the 

changing structure and changing face of the nursing home industry over the past 

few years. Not only has the number of national chains increased to a point where 

over half of nursing homes are part of a chain, but a new player has entered the 

ownership scene: large private equity firms. 

According to a New York Times article published in September of 2007, these private groups have agreed to buy 6 of the Nation’s 10 largest nursing home chains 

in recent years. Research from the same article found that at 60% of homes bought 

by large private equity firms from 2000–2006, managers cut the number of clinical 

registered nurses—in some cases, by so much that they were below the level required by law. 

This is a serious indicator of the decline in care at these facilities, and unfortunately, staffing is just one area that has suffered under this new regime of private 

investment company ownership. The use of physical restraints, poor nutrition, and 

neglect are just some of problems found at higher rates in private equity facilities 

than publicly-owned or nonprofit facilities. 

But the fact is, we need more information from all nursing home facilities. Though 

there are some that provide quality care, there are others that most certainly don’t. 

That’s why I am working with my colleague on the Ways and Means Committee, 

Chairman Stark, on companion legislation to the bipartisan proposal in the Senate 

that I think will greatly improve oversight of the industry. By increasing transparency and accountability across the board, but also specifically of ownership structures, I believe this legislation will mark a new turn in ensuring quality care for 

nursing home residents. 

Mr. Chairman, I look forward to working with you and our colleagues on the Committee on this legislation in the future, and I thank you for giving this Subcommittee the opportunity to take a closer look at these very important, very troubling issues. 

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