The Politics of Long-Term Care at the Federal Level and Implications for Quality (1998)

The federal regulation of nursing homes has always been a highly contentious issue, reflecting a tension between consumers' demand for public oversight and industry's interest in minimizing regulation. In Congress and at the federal regulatory agency, political considerations have played a large role in determining policy decisions. Since the enactment of the Medicare and Medicaid programs in the mid I960s, federal policy-makers have assumed a steadily increasing responsibility for overseeing nursing home quality, responding to periodic scandals about poor quality, reports on the inadequacies of state regulation, and the responsibility associated with the enormous amounts of federal money spent on institutional long-term-care services. In conflict with increased public oversight has been the intense lobbying of the powerful nursing home industry, which has generally sought to reduce regulation. While passage of the Nursing Home Reform Act in December 1987 marked a high point of federal responsibility for the quality of long-termcare institutions and a significant victory for consumers, recent retreats by the Health Care Financing Administration (HCFA) signal the power of industry lobbyists. For years, at the state and federal level, the nursing home industry and its lobbyists dominated the policy process. The initial success of resident advocates in forming a coalition around nursing home quality and successfully championing the passage of the I987 nursing home reforms seemed to usher in a new era of policy making in longterm care (Hawes, I987). However, as this paper demonstrates, the success of the industry during the administrative implementation of I987 congressional mandates demonstrates the industry's ability to exploit the political climate of deregulation and deficit reduction to further its long-standing interest in decreasing public oversight and enforcement. The postregulatory history also demonstrates the extent to which an administrative agency is more subject to industry pressure, and less accountable to the general public, as it implements federal legislation beyond the rule-making stage. HISTORY OF FEDERAL OVERSIGHT: CONGRESS Federal regulation of nursing homes is tied to federal payment for long-term care through the Medicare and Medicaid programs. The history of the Medicaid statute reveals an increasing federal presence and involvement in long-term care, culminating in the landmark I987 legislation. Although the Medicaid legislation enacted in I965 initially placed sole responsibility on states to ensure nursing home quality, by 1967, Congress had added detailed substantive requirements to state quality assurance programs. These amendments mandated medical review, record-keeping, an organized nursing service, policies and procedures for medical records and pharmaceuticals, and licensing of nursing home administrators, among other new requirements. The I972 amendments creating the intermediate level of care placed responsibility for establishing standards of care on the secretary of what was then the Department of Health, Education and Welfare and also authorized roo percent federal funding for state survey activities under Medicaid (Congressional Research Service, I992; Smith v. Heckler). The continuing failure of states to provide adequate oversight of nursing home quality, documented in public hearings, reports, and the media, led Congress to strengthen the federal role still further. In I980, Congress authorized the secretary to look behind (i.e., validate) and, if necessary, overrule states determinations of compliance with standards of care (Smith v. Heckler). This fifteen-year evolution of increasing federal involvement in nursing home standards and enforcement was abruptly reversed by the Reagan administration. On January 21, I98I, the first workday of its existence, Reagan's Department of Health and Human Services rescinded proposed rules issued late in the Carter administration that would have elevated the status of nursing home residents' rights in the federal regulatory system. …