Nursing Homes: Despite Increased Oversight, Challenges Remain in Ensuring High-Quality Care and Resident Safety
Released: 2006-01-17T00:00:00

Letter

Background

Oversight of nursing homes is a shared federal-state responsibility. Based on statutory requirements, CMS defines standards that nursing homes must meet to participate in the Medicare and Medicaid programs and contracts with states to assess whether homes meet these standards through annual surveys and complaint investigations. A range of statutorily defined sanctions is available to CMS and the states to help ensure that homes maintain compliance with federal quality requirements. CMS also is responsible for monitoring the adequacy of state survey activities.

Standard Surveys and Complaint Investigations

Every nursing home receiving Medicare or Medicaid payment must undergo a standard survey not less than once every 15 months, and the statewide average interval for these surveys must not exceed 12 months. During a standard survey, separate teams of surveyors conduct a comprehensive assessment of federal quality-of-care and fire safety requirements. In contrast, complaint investigations generally focus on a specific allegation regarding resident care or safety.

The quality-of-care component of a survey focuses on determining whether (1) the care and services provided meet the assessed needs of the residents and (2) the home is providing adequate quality care, including preventing avoidable pressure sores, weight loss, and accidents. Nursing homes that participate in Medicare and Medicaid are required to periodically assess residents’ care needs in 17 areas, such as mood and behavior, physical functioning, and skin conditions, in order to develop an appropriate plan of care. Such resident assessment data are known as the minimum data set (MDS). To assess the care provided by a nursing home, surveyors select a sample of residents and (1) review data derived from the residents’ MDS assessments and medical records; (2) interview nursing home staff, residents, and family members; and (3) observe care provided to residents during the course of the survey. CMS establishes specific investigative protocols for state survey teams—generally consisting of RNs, social workers, dieticians, and other specialists—to use in conducting surveys. These procedural instructions are intended to make the on-site surveys thorough and consistent across states.

The fire safety component of a survey focuses on a home’s compliance with federal standards for health care facilities. The fire safety standards cover 18 categories ranging from building construction to furnishings. Examples of specific requirements include the use of fire- or smoke- resistant construction materials, the installation and testing of fire alarms and smoke detectors, and the development and routine testing of a fire emergency plan. Most states use fire safety specialists within the same department as the state survey agency to conduct fire safety inspections, but about one-third of states contract with their state fire marshal’s office.

Complaint investigations provide an opportunity for state surveyors to intervene promptly if problems arise between standard surveys. Complaints may be filed against a home by a resident, the resident’s family, or a nursing home employee either verbally, via a complaint hotline, or in writing. Surveyors generally follow state procedures when investigating complaints but must comply with certain federal guidelines and time frames. In cases involving resident abuse, such as pushing, slapping, beating, or otherwise assaulting a resident by individuals to whom their care has been entrusted, state survey agencies may notify state or local law enforcement agencies that can initiate criminal investigations. States must maintain a registry of qualified nurse aides, the primary caregivers in nursing homes, that includes any findings that an aide has been responsible for abuse, neglect, or theft of a resident’s property. The inclusion of such a finding constitutes a ban on nursing home employment.

Deficiencies identified during either standard surveys or complaint investigations are classified in 1 of 12 categories according to their scope (i.e., the number of residents potentially or actually affected) and their severity. An A-level deficiency is the least serious and is isolated in scope, while an L-level deficiency is the most serious and is considered to be widespread in the nursing home (see table 1). States are required to enter information about surveys and complaint investigations, including the scope and severity of deficiencies identified, in CMS’s OSCAR database.

Enforcement Policy

Ensuring that documented deficiencies are corrected is a shared federal- state responsibility. CMS imposes sanctions on homes with Medicare or dual Medicare and Medicaid certification on the basis of state referrals. CMS normally accepts a state’s recommendation for sanctions but can modify it. The scope and severity of a deficiency determine the applicable sanctions, which can involve, among other things, requiring training for staff providing care to residents, imposing money fines, denying the home Medicare and Medicaid payments for new admissions, and terminating the home from participation in these programs. States are responsible for enforcing standards in homes with Medicaid-only certification—about 14 percent of homes. They may use the federal sanctions or rely on their own state licensure authority and nursing home sanctions.

Oversight

CMS is responsible for overseeing each state survey agency’s performance in ensuring quality of care in nursing homes participating in Medicare or Medicaid. Its primary oversight tools are statutorily required federal monitoring surveys conducted annually in at least 5 percent of the state- surveyed Medicare and Medicaid nursing homes in each state and annual state performance reviews. Federal monitoring surveys can be either comparative or observational. A comparative survey involves a federal survey team conducting a complete, independent survey of a home within 2 months of the completion of a state’s survey in order to compare and contrast the findings. In an observational survey, one or more federal surveyors accompany a state survey team to a nursing home to observe the team’s performance. Roughly 81 percent of the approximately 800 federal monitoring surveys are observational. Performance reviews examine state survey agency compliance with seven standards: (1) timeliness of the survey, (2) documentation of survey results, (3) quality of state agency investigations and decision making, (4) timeliness of adverse action procedures, (5) budget analysis, (6) timeliness and quality of complaint investigations, and (7) timeliness and accuracy of data entry.

Available Data Show Significant Overall Decrease in Serious Quality Problems but Indicate Continued Inconsistency and Understatement in State Findings

CMS’s nursing home survey data show a significant decrease in serious quality problems in recent years, but other information indicates that this trend masks two important and continuing issues: inconsistency in how states conduct surveys and understatement of serious quality problems. OSCAR data continue to show wide interstate variability in the proportion of homes found to have serious deficiencies, suggesting inconsistency in states’ interpretation and application of federal regulations. We previously reported that confusion about the definition of actual harm contributed to inconsistency and understatement in state surveys. Moreover, although federal comparative surveys conducted from October 1998 through December 2004 showed a decline in the proportion of serious deficiencies that were not identified by state surveys, this overall trend masks a more recent increase from 2002 through 2004 in federally identified understatement of serious deficiencies. In five large states we examined with a significant decline in the proportion of homes found to have harmed residents, federal comparative surveys found that a significant proportion of state surveys had missed serious deficiencies, that is, state surveyors either failed to cite the deficiencies altogether or cited them at too low a level of scope and severity.

From January 1999 through January 2005, the proportion of nursing homes nationwide with actual harm or immediate jeopardy deficiencies declined from about 29 percent to about 16 percent. Figure 1 shows the proportion of homes nationwide with these deficiencies for four consecutive time periods from January 1999 through January 2005. During the 6-year time period, 41 states had a decline in serious deficiencies ranging from about 5 to about 36 percentage points (see app. II).

The nationwide data show a decline in nursing homes cited for serious deficiencies; however, the data obscure the continued significant interstate variation in the proportion of homes with serious deficiencies, which suggests inconsistency in how states conduct surveys. Table 2 shows that while 10 states identified serious deficiencies in less than 10 percent of the homes surveyed, 15 states found similar deficiencies in more than 20 percent of homes surveyed from July 2003 through January 2005. For example, during that period California identified actual harm and immediate jeopardy deficiencies in about 6 percent of the state’s nursing homes, while Connecticut found such deficiencies in approximately 54 percent of its facilities. Since January 1999, the proportion of homes with serious deficiencies had declined nearly 23 percentage points in California but increased by about 6 percentage points in Connecticut.

We discussed the decline in serious deficiencies in the five large states we examined with state survey agency officials and officials from the responsible CMS regional offices. Officials in four of the five states believed that there had been some improvement in nursing home quality. CMS regional office officials, however, were concerned about the magnitude of the decline in serious deficiencies in two states—Texas and California. The Texas state survey agency noted both some improvement in quality as well as a significant number of inexperienced surveyors who it believed were hesitant in citing actual harm. The San Francisco regional office and state survey agency officials acknowledged that confusion by state surveyors as to what constituted actual harm had contributed to the decline in California. The regional office staff discussed this issue with California survey agency officials and believed that training combined with the CMS inquiries might have contributed to a recent increase in actual harm deficiency citations.

The overall decline in the proportion of federal comparative surveys nationwide that noted serious deficiencies not identified by state surveyors across the three time periods we examined masks a reversal of this trend in the most recent time period analyzed, suggesting ongoing understatement of deficiencies. The time periods analyzed were October 1998 through May 2000, June 2000 through February 2002, and March 2002 through December 2004. From October 1998 through February 2002, the proportion of federal comparative surveys nationwide that noted serious deficiencies that were not identified by state surveyors declined from 34 percent to 22 percent (see fig. 2). However, federal surveys conducted from March 2002 through December 2004 that found serious deficiencies not identified by state surveyors increased from 22 percent to 28 percent. In addition, our work in the five states we examined demonstrates continued understatement by state surveyors of serious deficiencies that cause actual harm or immediate jeopardy.

Because some serious deficiencies found by federal, but not state, surveyors may not have existed at the time of the state survey, CMS requires its regional offices to specifically identify on worksheets which deficiencies state surveyors had missed during the state survey. We analyzed CMS regional office worksheets for 73 comparative surveys in five large states—California, Florida, New York, Ohio, and Texas—with a significant decline in serious deficiencies from January 1999 through January 2005. Overall, 18 percent of these federal comparative surveys identified at least one serious deficiency missed by state surveyors, ranging from a low of 8 percent in Ohio to a high of 33 percent in Florida (see table 3). Table 3 also shows that in comparative surveys noting serious deficiencies that state surveyors missed, from one to seven serious deficiencies were missed. Federal surveyors’ findings of understatement of serious deficiencies are consistent with our own work. Our July 2003 report analyzed state surveys of homes with a history of harming residents but whose most current survey identified quality-of-care problems at below the level of harm; we concluded that about 40 percent of the 76 homes we analyzed had harmed residents, including instances of severe weight loss; multiple falls resulting in broken bones and other injuries; and serious, avoidable pressure sores. Similarly, our November 2004 report on Arkansas nursing home deaths found numerous instances of serious, understated quality-of-care problems.

Our prior reports identified five factors that we believe contribute to inconsistency and the understatement of deficiencies by state surveyors: (1) weaknesses in CMS’s survey methodology; (2) confusion about the definition of actual harm; (3) predictability of surveys, which allows homes to conceal problems if they so desire; (4) inadequate quality assurance processes at the state level to help detect understatement in the scope and severity of deficiencies; and (5) inexperienced state surveyors due to retention problems. CMS has initiatives under way to revise the survey methodology and address the confusion about what constitutes harm, and it has taken some steps to reduce survey predictability. However, CMS did not implement the recommendation in our July 2003 report to strengthen the ability of state quality assurance processes to detect understatement. While it agreed with the intent of our recommendation, CMS indicated that its state performance standards initiative already incorporated this concept. The status of these initiatives and state workforce issues are discussed in the following section.

CMS Has Addressed Many Shortcomings in Survey and Oversight Activities, but Work Continues on Some Key Initiatives

CMS has addressed many shortcomings in nursing home survey and oversight activities both in response to our recommendations and as a result of its own assessment of needed improvements, but it is still working on key initiatives that have not yet been implemented. Appendix I provides a complete listing of our previous recommendations and the implementation status of CMS initiatives taken in response. Examples of CMS’s initiatives to address shortcomings include (1) revising the survey methodology, (2) issuing states additional guidance to strengthen complaint investigations, (3) implementing immediate sanctions for homes cited for repeat serious violations, and (4) strengthening oversight by conducting assessments of state survey activities. CMS also has published information on its Web site about nursing home quality and has engaged independent quality organizations to work with nursing homes to improve quality. Despite CMS’s initiatives in four distinct areas—surveys, complaints, enforcement, and oversight—some initiatives either have not effectively targeted the problems we identified or have shortcomings that impair their effectiveness.

Surveys: Key Initiatives Are under Development, but Most Have Not Yet Been Implemented

Several CMS initiatives are intended to address shortcomings in the survey process, but most of these initiatives are in the developmental stage and have not yet been implemented. In addition, despite CMS’s efforts to make scheduling of surveys less predictable, many remain predictable. (See table 4).

In response to our 1998 recommendation to improve the rigor of the survey methodology to help ensure that surveyors do not miss significant care problems, CMS took some interim steps and launched a longer-term initiative. As interim steps, CMS instructed state survey agencies in 1999 to (1) increase the sample of residents reviewed during surveys and (2) review available quality indicator information on the care provided to a home’s residents before actually visiting the home. By using the quality indicators, which are essentially numeric warning signs of the prevalence of care problems, to select a preliminary sample of residents before the on-site review, surveyors are better prepared to target their surveys and to identify potential care problems. Surveyors augment the preliminary sample with additional resident cases once they arrive in the home.

For the longer term, CMS awarded a contract in 1998 to revise the methodology used to survey nursing homes, and the agency plans to pilot this new methodology in the fall 2005. Under development for 7 years, the proposed two-stage, data-driven Quality Indicator Survey (QIS) is intended to systematically target potential problems at nursing homes. Its expanded sample should help surveyors better assess the scope of any deficiencies identified. In stage 1, a large resident sample will be drawn and relevant data from on- and off-site sources will be analyzed to develop a set of quality-of-care indicators, which will be compared to national benchmarks. Stage 2 will systematically investigate potential quality-of- care concerns identified in stage 1. In June 2005, CMS selected five states to pilot test the new survey methodology. The QIS pilot test will begin during the fall 2005, with a final evaluation of the pilot due in the fall 2006. The evaluation will examine the QIS’s cost-effectiveness, focusing on the time and surveyor team size required under QIS compared to the current survey methodology, and on the QIS’s impact on deficiency citations. In developing the QIS, CMS has attempted to prevent increases in the time required to complete surveys. Depending on evaluation findings and any subsequent streamlining of the QIS, national implementation could begin in mid-2007.

Investigative Protocols

Since 2001, CMS has been developing surveyor investigative protocols to ensure greater rigor in on-site investigations of specific quality-of-care areas. We recommended in July 2003 that CMS finalize the development of these important protocols; however, CMS is still working on this initiative. In 2001, CMS hired a contractor to facilitate the convening of expert panels for the development and review of these protocols. In November 2004, more than 1 year later than scheduled, CMS implemented a protocol on pressure sores. Since then, CMS has implemented protocols in two other areas—incontinence and medical director qualifications and responsibilities. The protocols provide detailed interpretive guidelines and severity guidance. Protocols in seven more areas are under development, with an issuance target of fall 2005.

Definitions of Actual Harm and Immediate Jeopardy

To promote increased consistency among states in deficiency citations, a work group of CMS central office, regional office, and state survey agency staff was convened in early 2005 to clarify the definitions of actual harm and immediate jeopardy. Our July 2003 report noted that confusion about the definitions contributed to the understatement of serious deficiencies.

According to CMS, the 2005 draft revised definition of actual harm attempts to clarify the existing definition by eliminating confusing language and identifying indicators and examples of actual harm. The draft revised definition of immediate jeopardy is intended to provide additional guidance on documenting whether deficiencies are at the immediate jeopardy severity level, including criteria for identifying whether immediate jeopardy exists, and updates examples of immediate jeopardy. A CMS official indicated that the draft revised definition of immediate jeopardy stresses that action must be taken at once to prevent harm. As of August 2005, CMS had no target issuance date for the revised definitions.

Additional Survey Initiatives

CMS is implementing two additional survey initiatives—developing guidance to ensure surveyors are able to report concerns to CMS regional offices and studying surveyors’ use of photographic evidence.

To address anecdotal reports that surveyors are sometimes asked to overlook or downgrade survey findings, CMS has issued and is obtaining state comments on draft guidance to ensure that surveyors can cite survey findings without such inappropriate pressure. Currently, surveyors report concerns to the state survey agency. CMS officials indicated that the draft guidance tries to (1) establish a nonthreatening option for voicing concerns to CMS regional office staff without overburdening the regional offices with additional investigations and (2) give CMS a way to identify any patterns of problems. Implementation of this effort is anticipated in late 2005.

CMS also contracted for a study of the use of photographic evidence by surveyors to support survey findings. In our 2004 report on Arkansas nursing home deaths, we reported that photographs taken by coroners provided key evidence supporting neglect of nursing home residents and the existence of serious, avoidable care problems. The goal of CMS’s study is to identify issues and develop training materials related to surveyors’ use of photographic evidence. This study began in the summer 2005, with final training materials to be issued in the summer 2006.

Survey Predictability

In 1998, we reported that nursing homes could mask certain deficiencies if they chose to because of survey predictability. CMS responded by directing states to (1) avoid scheduling a home’s survey for the same month of the year as the home’s previous standard survey and (2) begin at least 10 percent of standard surveys outside the normal workday (either on weekends, early in the morning, or late in the evening). However, our current analysis showed that a significant proportion of state nursing home surveys remain predictable. We consider surveys to be predictable if they are conducted within 15 days of the anniversary of a home’s prior survey. From 2002 to 2005, the proportion of predictable surveys increased from 13 percent to 14.5 percent (see app. III). Overall, 29 states had an increase in survey predictability. As shown in table 5, as of July 2005, from 10 percent to over 50 percent of current nursing home surveys in 35 states were conducted within 15 days of the anniversary of a home’s last standard survey. CMS officials stated that avoiding surveys close to the 12-month anniversary of a home’s prior survey, while meeting the requirements that surveys occur not less than once every 15 months and maintaining a statewide average interval of 12 months, could require increased funding because more surveys would need to be accomplished within the first 9 months after a survey. However, CMS noted that states are not currently funded to conduct surveys within the first 9 months after the previous survey. CMS officials also told us that CMS had introduced the ASPEN Scheduling and Tracking (AST) module for its central and regional offices and the states in February 2004 as a tool to reduce survey predictability; however, state officials we spoke with about AST were unfamiliar with its survey predictability features.

Complaint Investigations: CMS Has Strengthened State Guidance and Oversight and Is Continuing to Address Problems Involving Allegations of Abuse

CMS has completed certain initiatives to ensure that quality problems found during complaint investigations are promptly addressed and has taken steps to address weaknesses in the notification and investigation of abuse in nursing homes. CMS is continuing work on (1) ensuring state compliance with federal nurse aide registry requirements and (2) assessing the effectiveness of conducting employee background checks. (See table 6).

CMS guidance issued since 1999 has helped to strengthen state procedures for investigating complaints. In 1999, we reported that complaints alleging that nursing home residents were being harmed were not being investigated for weeks or months in several states and recommended that CMS develop additional standards for the prompt investigation of serious complaints alleging situations that may harm residents but are categorized as less than immediate jeopardy. CMS promptly instructed states to investigate complaints alleging harm to a resident within 10 workdays of receiving the complaint and later specified that investigations of these complaints be conducted on-site at the nursing home. During 1999, CMS developed and issued guidance intended to help states identify complaints that allege harm to residents. Also in 1999, CMS hired a contractor to study and recommend improvements to state complaint practices. CMS used the findings of this study to develop more detailed guidance for states to help improve the effectiveness of complaint investigations. In 2004, CMS issued this guidance to states, which further clarified the 1999 instructions on identifying actual harm.

In March 2002, we recommended that CMS ensure that state survey agencies immediately notify local law enforcement agencies or Medicaid Fraud Control Units (MFCU) of allegations or confirmed complaints of abuse. In response, CMS issued a March 2002 letter to CMS regional offices and state survey agencies clarifying its policies on abuse reporting time frames, requirements for reporting to local law enforcement and/or the MFCU, displaying complaint telephone numbers, and citing abuse on surveys. CMS issued additional guidance in December 2004 clarifying nursing home reporting requirements and definitions for alleged violations, including mistreatment, neglect, abuse, injuries of unknown source, and misappropriation of resident property. CMS has not, however, implemented our March 2002 recommendation to accelerate the agency’s campaign to increase public awareness of nursing home abuse through the development and distribution of posters that are to be prominently displayed in nursing homes, and other materials.

Complaint Oversight

CMS has taken three important steps to improve its oversight of state complaint investigations, including allegations of abuse. First, it required in its annual state performance review, which was established in fiscal year 2001 and fully implemented in fiscal year 2002, that federal surveyors review a sample of complaints in each state to determine whether states properly categorize complaints (i.e., determine how quickly they should be investigated), investigate complaints within the time specified, and properly include the results of investigations in CMS’s database. Our March 1999 report on complaints had recommended that CMS strengthen its oversight in these areas. During its 2004 review of state performance, CMS identified 5 states that did not meet the standard for properly categorizing complaints and 13 states that did not conduct timely investigations of all complaints alleging immediate jeopardy to residents; however, 11 of the 13 states missed the requirement by a small margin. States failing state performance review standards are asked to submit a corrective action plan to CMS.

Second, in January 2004, CMS implemented a new national automated complaint tracking system, the ASPEN Complaints and Incidents Tracking System. Our March 1999 report on enforcement noted that the lack of a national complaint reporting system hindered CMS’s and states’ ability to adequately track the status of complaint investigations as well as CMS’s ability to maintain a full compliance history on each nursing home. To address these concerns, we recommended the development of a better management information system. One goal of CMS’s new management information system is to standardize reported complaints so that analysis can be conducted across all states. This system is intended to provide CMS with an effective tool for overseeing and managing state complaint investigations.

Third, in November 2004, CMS requested state survey agency directors to self-assess their states’ compliance with federal requirements for maintaining and operating nurse aide registries, to which states are required to report substantiated findings of abuse, neglect, or theft of nursing home residents’ property by nurse aides. CMS has not issued a formal report of findings from the state self-assessment, but CMS officials noted that as a result of resource constraints some states reported having difficulty maintaining compliance with certain federal requirements, such as (1) timely entry by state survey staff of information in nurse aide registries and (2) state notification to nursing homes employing nurse aides found guilty of abuse at another facility. In our March 2002 report, we recommended that CMS shorten the state survey agencies’ time frames for determining whether to include findings of abuse in the nurse aide registry. Annotations to nurse aide registries are made after final determinations that abuse occurred, which entail completion of the state’s investigation as well as adjudication of any appeals. Until the final determination, residents may continue to be exposed to aides who are allegedly abusive. CMS noted that while most of the time frames are defined in regulation, it can review the time frames when regulatory changes are considered. No changes to the regulations had been made as of August 2005.

As part of its third effort, CMS also is conducting a Background Check Pilot Program. Our March 2002 report recommended an assessment of state policies and practices for complying with federal requirements prohibiting employment of individuals convicted of abusing nursing home residents. The pilot program will test the effectiveness of state and national fingerprint-based background checks on employees of long-term care facilities, including nursing homes. Pilot programs in seven states— Alaska, Idaho, Illinois, Michigan, Nevada, New Mexico, and Wisconsin— will be phased in from fall 2005 through September 2007. An independent evaluation is planned.

Enforcement: CMS Has Strengthened the Potential Deterrent Effect of Sanctions and Has Other Initiatives Under Way

CMS significantly strengthened the potential deterrent effect of enforcement actions by requiring immediate sanctions for homes found to have a pattern of harming residents. Moreover, CMS continues to develop new policies and to clarify existing ones in order to strengthen enforcement activities and encourage nursing home compliance with federal requirements. (See table 7).

Responding to our July 1998 recommendation to eliminate grace periods for homes cited for repeat serious violations, CMS began a two-stage phase-in of a new enforcement policy. In the first stage, effective September 1998, CMS required states to refer for immediate sanction homes found to have a pattern of harming residents or of exposing them to actual harm or potential death or serious injury (H-level deficiencies and above on CMS’s scope and severity grid). Effective January 2000, CMS expanded this policy, requiring referral of homes found to have harmed one or a small number of residents (G-level deficiencies) on successive standard surveys. In response to our 2003 finding that states failed to refer a substantial number of homes that met the criteria for the immediate sanctions, CMS initiated oversight of state compliance with this policy. To conduct this oversight, CMS analyzed deficiency data for 2000 through 2003 to identify potential instances of homes that should have been but were not referred for immediate sanctions. In ongoing work, we are assessing the impact and implementation of the immediate sanctions policy.

Additional Enforcement Policy Issues

Based on recommendations in our July 1998 report and our March 1999 report on enforcement, CMS has addressed weaknesses in its policies in three areas: nursing homes’ correction of deficiencies, the nursing home appeals process, and the enforcement data tracking system.

CMS now requires on-site follow-up, referred to as a revisit, of homes with substandard quality of care or actual harm or higher-level deficiencies until the state verifies correction of each deficiency cited. Our 1998 report found that CMS’s policy of allowing nursing homes to self-report resumed compliance was sometimes inappropriately applied to homes with deficiencies in the immediate jeopardy category or that were found to have substandard quality of care. We recommended that CMS require that for homes with recurring serious violations, state surveyors substantiate resumed compliance by means of an on-site revisit. CMS also has issued additional guidance on the “reasonable assurance period” during which terminated homes must demonstrate that they have corrected the deficiencies that led to their terminations. This guidance provided additional examples of reasonable assurance decisions.

CMS and the Department of Health and Human Services (HHS) requested and received funding and staffing increases for the HHS Departmental Appeals Board in fiscal years 1999 and 2000 to address our March 1999 finding that the growing backlog of appeals hampered the effectiveness of civil money penalties by delaying their collection. The Board is responsible for adjudicating the appeals. By August 2003, the backlog of appeals of civil money penalties had been significantly reduced.

CMS implemented the automated ASPEN Enforcement Manager on October 1, 2004, to facilitate tracking of enforcement actions. Prior to implementing this system, CMS had no centralized system for tracking or managing federal and state enforcement actions. The ASPEN Enforcement Manager is intended to provide real-time entry and tracking of enforcement actions, issue monitoring alerts, generate enforcement letters, and facilitate analysis of enforcement patterns. CMS expects that ASPEN Enforcement Manager data will enable states, CMS regional offices, and the CMS central office to more easily track and evaluate nursing home performance and compliance status as well as respond to emerging issues. In ongoing work, we are assessing whether data from the ASPEN Enforcement Manager can be used to analyze nursing homes’ deficiency and enforcement histories.

Special Focus Facility Program

In December 2004, CMS revised the method for selecting nursing homes for the Special Focus Facility Program to ensure that the most poorly performing homes were included in the program and to strengthen enforcement for those nursing homes with an ongoing pattern of substandard care. For this program, first initiated in January 1999, states were directed to select two nursing homes to be special focus facilities, conduct two standard surveys each year in the special focus facilities, and submit monthly status reports on the selected homes. The revised guidance directs states to select, from an expanded list of facilities, a minimum of up to six nursing homes, depending on the number of nursing homes in the state; the revised guidance gives states the option to select more than the minimum. States are also given the flexibility to remove from the list homes that have made significant improvements. Enforcement authority over special focus facilities has been strengthened so that while homes are in the Special Focus Facility Program, immediate sanctions must be imposed if homes fail to significantly improve performance from one survey to the next; termination from participation in Medicare and Medicaid is required for homes with no significant improvement in 18 months and three surveys.

Civil Money Penalties

In April 2004, CMS launched a Civil Money Penalty Improvement Project to improve its ability to track and collect civil money penalties in an effort to make them a more effective enforcement tool. CMS mapped out the current process for tracking and collecting civil money penalties to identify weaknesses and developed draft guidance with detailed policies and procedures for addressing areas identified as needing improvement, with a target release date of fall 2005. Also planned are enhancements to the Civil Money Penalty Tracking System, CMS’s information system for civil money penalties. The enhancements are intended to streamline the system, improve its reporting capabilities, and improve its compatibility with the enforcement monitoring system. The system’s changes are planned to occur through 2005 and 2006.

Also in 2004, CMS, in conjunction with various state survey agencies, began developing a civil money penalty grid—an optional guideline for use by states and CMS regional offices to help ensure greater consistency across states in the amounts of civil money penalties recommended. The grid is expected to provide ranges for minimum civil money penalties for deficiencies, while allowing for flexibility to adjust the penalties on the basis of factors such as the severity of an identified deficiency, the care areas in which deficiencies were cited, and past history of noncompliance. The target issuance date for a draft grid was August 2005.

Past Noncompliance Policy

In October 2005, CMS issued a revised past noncompliance policy that (1) clarifies how to address recently identified past deficiencies, (2) further defines “past noncompliance,” (3) eliminates the use of the term “egregious,” and (4) clarifies the methods for determining whether past noncompliance has been corrected. Past noncompliance occurs when a current survey reveals no deficiencies but determines that an egregious violation of federal standards occurred in the past and was not identified during an earlier survey. In November 2004, we reported that CMS’s past noncompliance policy was ambiguous. The policy did not define what constituted an egregious violation or relate egregious violations to its scope and severity grid. Moreover, the policy did not hold homes accountable for negligence associated with resident deaths unless current residents are experiencing the same quality-of-care problems and it obscures the nature of care problems. CMS’s revised policy responds to our recommendation and holds homes accountable for all past noncompliance resulting in harm to residents. We also recommended that past noncompliance citations identify the specific nature of the care problem in the OSCAR database and on the Nursing Home Compare Web site. In 2007, CMS plans to enhance the information on the Nursing Home Compare Web site to include the specific nature of the past noncompliance. According to CMS officials, the delay is related to the implementation of higher priority initiatives by the agency. Currently, the Web site only indicates whether there were instances of past noncompliance and does not identify the nature of the care deficiency.

Oversight: Intensity and Scope of Federal Efforts Has Increased Significantly, but Work Remains

CMS has significantly improved the intensity and scope of its oversight activities and has made significant improvements both in its data systems and in its analysis and use of the data it collects on survey activities. The effectiveness of several of these oversight initiatives, however, is uneven, and more work remains to be done. (See table 8).

In response to recommendations in our November 1999 and July 2004 reports, CMS has (1) significantly increased the number of federal comparative surveys both for quality of care and fire safety and (2) decreased the time between the end of the state survey and the start of the federal survey for quality-of-care comparative surveys, allowing CMS to better distinguish between serious problems missed by state surveyors and changes in a home that occurred after the state survey. We found earlier that CMS was making negligible use of comparative surveys, its most effective tool for assessing a state survey agency’s ability to identify serious quality-of-care and fire safety deficiencies in a nursing home, to fulfill its 5 percent monitoring mandate. Only 21 quality-of-care comparative surveys were conducted from November 1996 through October 1998. Our 2004 fire safety report found that CMS had conducted only 40 fire safety comparative surveys in fiscal year 2003, ranging from 4 in some states to none in others.

Since 2001, CMS has required its regional offices to complete at least two quality-of-care comparative surveys per state per year, but federal surveyors have been exceeding this minimum threshold. During the period March 1, 2002, through December 31, 2004, CMS completed 424 comparative surveys, about 140 per year. In addition, the average elapsed time between state and comparative surveys has decreased from 33 calendar days for the 64 comparative surveys we reviewed in 1999 to 26 calendar days for the 424 surveys completed through 2004.

CMS planned to further increase the number of comparative surveys by contracting in the fall of 2003 for 170 quality-of-care comparative surveys in addition to those conducted by federal surveyors. However, an increase in the number of quality-of-care comparative surveys is unlikely because of delays in contractor readiness and the addition of fire safety comparative surveys to the contract. CMS had expected to have a sufficient number of contract surveyors trained and available to start surveys by the winter of 2005, but it took longer than anticipated to train the new surveyors. In addition, CMS modified the contract to include fire safety comparative surveys. In fiscal year 2005, the contractor conducted 34 quality-of-care comparative surveys and 250 fire safety comparative surveys. Together, the contractor and CMS regional offices conducted a total of 859 fire safety comparative surveys in fiscal year 2005. CMS also is using the contract surveyors to augment federal survey teams. According to CMS, it will use contract funds carried over from earlier years to conduct quality-of-care comparative surveys during fiscal year 2006, and will only use fiscal year 2006 funds to conduct fire safety comparative surveys.

Smoke Detectors in Homes without Sprinklers

In response to a recommendation in our July 2004 report to strengthen fire safety standards, CMS published an interim final rule in March 2005 requiring nonsprinklered nursing homes to install battery-powered smoke detectors in resident rooms and common areas, including resident dining, activity, and meeting rooms. Previously, federal standards required smoke detectors in (1) corridors or resident rooms only in homes built after 1981 and (2) nonsprinklered resident rooms containing furniture brought from the resident’s home. We reported that the lack of smoke detectors in resident rooms may delay staff response and fire department notification, which in turn may increase the number of nursing home fire-related fatalities. CMS will begin surveying nursing homes’ compliance with the new requirement in May 2006.

Assessments of State Survey Activities

In October 2000, CMS regional offices began conducting on-site state performance reviews to assess compliance with federal standards. Previously, CMS permitted states to evaluate and report on their own performance against a number of standards, a technique that essentially allowed states to write their own report cards because CMS did not independently validate information provided by the states. In fiscal year 2005, CMS began to tie funding increases for state survey agencies to one of the seven performance standards—the timely conduct of standard surveys—time frames that are established in federal statute.

Nevertheless, in our current analysis of the standard that is intended to measure the supportability of survey findings, we found that three key issues we identified in July 2003 still exist. First, distinctions in state performance were hard to identify because, while some states have consistently met the standard for documentation of deficiencies, federal comparative surveys completed during essentially the same time frame found that surveyors in these states frequently missed serious deficiencies. Second, CMS regional offices were inconsistent in conducting state performance reviews. For fiscal year 2004, five states nationwide did not meet this standard, but three of the five states were in one CMS region. Third, the standard for assessing the supportability of deficiencies is composed of 11 elements that mix major and minor issues. Although CMS has simplified the standard for assessing the supportability of deficiencies, we believe that many of the elements reviewed remain essentially administrative in nature rather than substantive. Of the elements that make up the standard, only 2 assess the appropriateness of the cited scope and severity; the remaining elements assess such issues as how the deficiency is written, including avoiding the use of the passive voice. We do not believe that this standard is sufficiently focused on identifying understatement.

CMS did not implement our July 2003 recommendation that it require states to review a sample of deficiencies cited at or below the level of actual harm in order to detect understatement because, according to CMS, the state performance review of the supportability of deficiencies already accomplished this objective. In discussing our current findings regarding the standard intended to measure the supportability of survey findings, CMS officials agreed that (1) measuring the quality of state surveys, one goal of reviewing the supportability of deficiencies, was particularly challenging because there is no one agreed-upon way to measure quality; and (2) some standards are complex, contributing to consistency problems.

In developing this report, we also noted two additional problems with the state performance reviews that were not previously reported. First, in its fiscal year 2004 review, CMS began combining state performance review results across the different provider types, such as nursing homes and home health agencies, for which states have oversight responsibility. For example, CMS calculates one overall state score on the supportability of deficiencies across provider types, rather than issuing provider-specific scores. One CMS region suggested that because nursing homes are generally surveyed by a unique pool of surveyors, combining results in this manner limits the usefulness of the feedback to state survey agencies. Second, CMS provides feedback to states regarding their performance each year, but it does not publicly report the results. Doing so would appear to be consistent with CMS’s stated philosophy of sharing information with the public to help improve nursing home quality.

Data Systems and Analysis

CMS has pursued important upgrades in the system used to track the results of state survey activities and has increased its analysis of OSCAR and other data to improve oversight by CMS central and regional offices and state survey agencies. Examples include the following: In 2000, CMS began to produce 19 periodic reports to monitor both state and regional office performance. Some reports, such as survey timeliness, are used during state performance reviews, while others are intended to help identify problems or inconsistencies in state survey activities and the need for intervention. In 2001, 2002, and 2005 CMS published a “Nursing Home Data Compendium,” which includes detailed tables and figures on nursing homes, resident demographics, resident clinical characteristics, and survey results. In 2004, CMS commissioned a series of “White Papers” on topics ranging from enforcement to resource issues. The goal was to stimulate discussion among key stakeholders and generate ideas for “next steps” to help mitigate problems. The reports, authored by CMS and state survey agency staff, relied on data analysis from OSCAR and other CMS databases. In 2004, CMS prepared an internal study on enforcement trends since the imposition of the immediate sanctions policy using data from the Enforcement Tracking System. In 2005, CMS unveiled a Web site for use by regional offices and state survey agencies that generates a series of standard reports through a software program called Providing Data Quickly; this software permits easier access to the data contained in OSCAR. One such report identifies homes that have repeatedly harmed residents and meet the criteria for imposition of immediate sanctions.

CMS indicated that it is continuing to make progress in redesigning the OSCAR system. In our March 1999 report on enforcement, we recommended that the agency develop an improved management information system that would help it to track the status and history of deficiencies, integrate the results of complaint investigations, and monitor enforcement actions. Although the target implementation date for the redesigned system has slipped from 2005 to 2008, depending on competing priorities and available funding, CMS has implemented two key components of the redesigned system—a complaint tracking system and a system to track the status of enforcement actions. Both systems are intended to provide CMS with critical management capabilities that it previously lacked.

Sharing Data with the Public

Using market forces to help drive quality improvement is an important CMS objective behind sharing data with the public on nursing home quality. Since CMS launched Nursing Home Compare in 1998, the agency has progressively expanded the information available on this Web site. In addition to data on the deficiencies identified during standard surveys, the Web site now includes data on the results of complaint investigations, information on nursing home staffing levels, and quality indicators, such as the percentage of residents with pressure sores. However, CMS continues to address ongoing problems with the accuracy and reliability of the underlying data, such as the MDS, quality indicators, and nurse staffing levels.

In February 2002, we concluded that CMS efforts to ensure the accuracy of the underlying MDS data used to calculate the quality indicators (1) relied too much on off- site review activities by its contractor and (2) anticipated on-site reviews in only 10 percent of its data accuracy assessments, representing fewer than 200 of the nation’s nursing homes. CMS did not concur with our recommendation that it reorient its review program to complement ongoing state MDS accuracy efforts as a more effective and efficient way to ensure MDS data accuracy. CMS commented that its efforts already provided adequate oversight of state activities and complemented state efforts. In April 2005, CMS ended work under its data assessment and verification contract because of cost concerns, but signed a new contract in September 2005 that focuses on on-site reviews of MDS accuracy. According to CMS officials, the on-site reviews were more effective in identifying discrepancies because the reviewers were able to find more information on-site that conflicted with the nursing homes’ assessments.

In November 2002, CMS began reporting on its Web site quality indicator data for each nursing home nationwide that participates in Medicare and Medicaid, even though our October 2002 report concluded that such reporting was premature given serious questions about the sufficiency of CMS efforts to validate the quality indicators and improve the accuracy of the underlying data. CMS disagreed with our recommendation to postpone its scheduled November 2002 public reporting of the data until these problems were addressed. Since 2002, however, CMS has taken steps to address the questions we raised about the validity of quality indicators. For example, CMS dropped certain quality indicators that it found were not sufficiently reliable for public reporting, such as the facility-adjusted profile prevalence of pressure sores. In addition, CMS worked with the National Quality Forum to address measurement problems with the pressure sore quality indicator by developing separate indicators for short- and long-term nursing home residents; these new indicators were added to the Web site in January 2004. A weight loss quality indicator also was developed and added to the Web site in November 2004. Our October 2002 report had noted the potential for consumer confusion in interpreting and using quality indicator data. CMS conducted consumer testing of new language and displays on Nursing Home Compare during the summer of 2004.

Although nursing home staffing data have been available on the Nursing Home Compare Web site since June 2000, a CMS official told us that the agency has been aware of problems with these self-reported data since the late 1990s. This official stressed that, despite problems, they were the only available data on nursing home staffing. Examples of erroneously reported data include facilities with no nurse staffing hours or hours equal to thousands of residents per day. In addition, the staffing data do not address important issues such as turnover or retention. As a temporary fix, CMS developed edits that examine staffing ratios to determine whether any facility falls above or below certain thresholds and, effective July 2005, temporarily excluded the questionable staffing data from Nursing Home Compare until they can be corrected or confirmed. To address this issue, CMS is considering a proposal for a new system that relies on nursing home payroll data. If approved, such a system could take 3 to 4 years to implement because of the need to solicit and consider public comment and to develop software to transmit the staffing data.

Quality Improvement Organizations

CMS’s initiative to include quality indicator data on its Nursing Home Compare Web site also established a new role for Quality Improvement Organizations (QIO) with regard to nursing homes. From 2002 through 2005, QIOs worked intensively with at least 10 percent of nursing homes in each state to improve quality. Although we have not evaluated QIO nursing home quality improvement activities, CMS’s preliminary analyses indicate that the QIO program has helped to reduce the use of daily physical restraints, increased management and treatment of pain, and reduced the incidence of delirium among post-acute-care residents. However, less progress has been made in decreasing the prevalence of pressure sores, according to CMS’s analyses. In August 2004, the QIO and state survey agency in 18 states launched a new pilot program. Working together, they identified from one to five nursing homes per state that had significant quality problems. The QIO then worked with these homes to help them redesign their clinical practices. According to CMS, the results of this pilot indicated that these historically “troubled” nursing homes had dramatically improved their clinical quality and decreased their quality-of- care survey deficiencies. In 2005, the QIOs’ role with nursing homes was extended for an additional 3 years, and QIOs will continue to focus on statewide improvement in four areas—pressure sores, physical restraints, pain management, and depression. In addition, QIOs will help nursing homes set individual targets for quality improvement, implement and document process-related clinical care, and assist in the development of a more resident-focused care model. QIO expenditures on nursing home quality improvement for the period of August 2002 through July 2008 are expected to total about $216 million.

Coordination and Dissemination of Best Practices

CMS has taken certain actions to maximize the experience and resources of state survey agencies as well as the CMS central and regional offices to improve nursing home oversight. Specifically, in 2004, CMS convened an internal Long-Term Care Task Force and charged it with providing guidance on and coordinating long-term care efforts within CMS and included representation across the agency’s divisions and the regional offices. Also in 2004, CMS began an effort to collect and disseminate nursing home survey and certification best practices developed by professional associations, universities, and federal agencies. Through the best practices effort, CMS plans to share successful strategies used by states and regional offices in a broad range of issues affecting survey and certification of nursing homes, such as surveyor recruitment and complaint intake. A contractor will identify, research, and document best practices, which CMS plans to post on its Web site. One of the issues the best practices effort will address is surveyor recruitment initiatives underway in states. As of August 2005, these best practices had not been published on the CMS Web site.

Resource and Workload Issues Pose Key Challenges to Further Improving Nursing Home Quality and Safety

CMS, states, and nursing homes face a number of key challenges in their efforts to further improve nursing home quality and safety, including (1) the cost of retrofitting older nursing homes with automatic sprinklers, a potentially costly requirement that has a demonstrated ability to prevent deaths in the event of a fire; (2) continuing problems in hiring and retaining qualified surveyors, a factor that states indicated can contribute to variability in the citation of serious deficiencies; and (3) an increasing federal and state survey workload due to increased oversight, the identification over time of additional initiatives, and growth in the number of Medicare and Medicaid providers that must be surveyed, including expected growth in nursing homes. The increased workload has created competition for both staff and financial resources and required the establishment of priorities, which may have contributed to delays in developing and implementing several key quality initiatives, such as the implementation of a more rigorous survey methodology.

Cost Could Delay Retrofitting of Older Nursing Homes with Sprinklers

Although the substantial loss of life in two 2003 nursing home fires could have been reduced or eliminated by the presence of properly functioning automatic sprinkler systems, cost has been an impediment to CMS’s requiring them for all homes nationwide. Newly constructed homes must incorporate sprinkler systems; however, older homes constructed with noncombustible materials that have a certain minimum ability to resist fire are not required to install sprinklers. We previously reported that cost has been a barrier to requiring sprinklers for all older nursing homes. In July 2005, the National Fire Protection Association (NFPA) voted to require retrofitting of older homes with sprinklers, a requirement that will become a part of the 2006 edition of the NFPA code. Anticipating this action, CMS indicated that it has been developing a notice of proposed rule making, the first step in adopting the NFPA requirement for all homes that serve Medicare and Medicaid beneficiaries. A CMS official stated that the agency plans to issue the notice in March 2006 and after reviewing public comments, it will publish a final version of the rule and stipulate an effective date for homes to come into compliance.

One issue that remains unresolved is how much time older homes will be given to install sprinklers. As we reported in 2004, industry officials believe that a transition period must be considered for homes to come into compliance and to determine how to pay for the cost of installing sprinklers. Rather than proposing a phase-in period, the proposed rule will request input on how much time homes should be given to come into compliance with the requirement. According to CMS, a longer phase-in period could help alleviate concerns about the cost of retrofitting homes with sprinklers. Based on our recommendation, CMS collected data on the sprinkler status of homes nationwide and found that about 21 percent of nursing homes are unsprinklered or partially sprinklered. Although CMS has not completed its cost analysis, the agency believes that the costs associated with the retrofit will be less than the industry’s $1 billion estimate.

States Continue to Have Problems in Hiring and Retaining Surveyors

The hiring and retention of surveyors, particularly RNs, remains a major, frequently discussed issue among state survey agency directors, according to an AHFSA official, the association that represents state survey agency directors. In July 2003, we reported that the limited experience level of state surveyors because of a high turnover rate was a contributing factor to (1) variability in citing actual harm or higher-level deficiencies and (2) understatement of such deficiencies. In more than half of the 42 states that responded to our inquiry, from 30 percent to more than 50 percent of surveyors had 2 years’ experience or less, as of July 2002. Twenty-five states responded to our request for updated information on surveyor workforce issues as of July 2005.

Of 23 states that provided data in both 2002 and 2005, 13 reported an improvement in 2005 (i.e., a decline in the proportion of inexperienced surveyors); 9 indicated that the situation had worsened (e.g., an increase in the proportion of inexperienced surveyors); and 1 state reported no change (see app. IV). As of July 2005, however, 20 percent or more of surveyors in 20 of the 25 states had 2 years’ experience or less (see table 9). Surveyor vacancy rates in the 25 states ranged from about 3 percent in Tennessee to 31 percent in Alabama and Florida; overall, 15 states had double-digit vacancy rates. Officials in 18 states believed that inexperienced surveyors contributed to interstate variability in the citation of serious deficiencies. One state survey agency indicated that staff attrition resulted in a workforce of less experienced surveyors who demonstrated a hesitance to cite actual harm and contributed to understatement. State survey agency officials in several states, however, suggested that the problem for less-experienced surveyors was not identifying harm but rather investigating and documenting the circumstances that led to the harm, including facility culpability, a skill that surveyors develop as they gain more experience.

Because state survey agency salaries are rarely competitive with the private sector, state survey agencies told us that it is difficult to retain surveyors and to fill vacancies. RNs, a major component of states’ surveyor workforce, are in high demand and short supply, according to AHFSA. Furthermore, 9 states responding to our July 2005 inquiry indicated that state civil service requirements can make it more difficult to fill vacancies. Several of the 9 states characterized the hiring process as either cumbersome or time-consuming, or both, and 1 state noted that the process takes close to 9 months. Two states reported that they had to select candidates to interview from a certified list. One of the states indicated that the certified list often contained unqualified applicants, while the other state noted that some of the applicants were not the “best fit.” Of the 25 states, 21 indicated that they had implemented initiatives to help retain surveyors. The most popular retention strategies were to increase starting salaries and to implement flexible surveyor work schedules. For example, New York instituted a locality pay differential for New York City. While 5 of the 25 states indicated that they had a state- imposed hiring freeze, 1 state reported that budget pressures prevented it from taking steps to improve retention rates. A continuing problem cited by AHFSA is that federal funds are distributed late in the fiscal year, which does not tie into state budget cycles for approving additional positions. This problem may be particularly acute in the 5 states that reported having a hiring freeze.

Workload Issues and Competing Priorities Pose Challenges for CMS and States

CMS and states have experienced increased survey workloads due to the greater intensity of nursing home oversight, the increasing number of initiatives, and growth in the number of Medicare and Medicaid providers requiring oversight. This workload growth required the prioritization of initiatives that, in some cases, has resulted in implementation delays for some key initiatives. The consensus-building process necessary to bring initiatives to fruition also has contributed to some delays. The initiatives likely will continue to compete for priority with other CMS programs, posing a challenge for efforts to further improve nursing home quality and safety.

Increased Workload Has Contributed to Delays

Greater nursing home oversight has increased demand on both CMS and state survey agency resources, causing delays for some key initiatives. CMS’s increased workload is evident in the labor-intensive state performance reviews. Since their introduction in October 2000, the reviews have been gradually expanded from nursing homes to several other Medicare and Medicaid providers, such as home health agencies and hospitals. CMS also has significantly increased the number of federal quality-of-care and fire safety comparative surveys. Such surveys are more labor-intensive than the alternative type of federal monitoring surveys, known as observational surveys, because they require an entire federal survey team rather than a smaller number of federal surveyors. The agency also has committed considerable resources to developing new data systems for complaints and enforcement actions while simultaneously increasing its use of available data to further improve federal and state oversight. Despite the increased workload, CMS implemented survey staff reductions of 5 percent in regional offices and 3 percent in its central office in January 2004. As of August 2005, these staff reductions have remained in effect.

As state survey agency workloads grew with the implementation of the initiatives, they also experienced resource pressures. States are now required to conduct on-site revisits to ensure serious deficiencies have been corrected, investigate complaints alleging actual harm on-site and do so more promptly, and initiate off-hour standard surveys. Thus, surveyors’ presence in nursing homes has increased and surveyors’ work hours have effectively been expanded to weekends, evenings, and early mornings. The requirement to impose immediate sanctions on homes that repeatedly harm residents also has had a workload impact because in the past a grace period allowed homes to correct deficiencies before the sanctions went into effect. The imposition of immediate sanctions requires states to track, which some states do manually, the homes that must be referred for immediate sanctions and requires CMS and states to act to impose recommended sanctions that in the past would have been rescinded because the homes could have corrected the deficiencies during a grace period. While states’ budget pressures appear to be easing, many state survey agencies reported hiring freezes, staff vacancies, or high turnover as of July 2002 when all of these initiatives had already been fully implemented.

The number of initiatives that CMS has implemented on its own has grown, further increasing its workload. For example, CMS added quality indicator data to its Nursing Home Compare Web site and has involved QIOs in helping nursing homes to improve quality of care. In addition, CMS created a task force to develop guidance intended to improve consistency across states in the imposition of civil money penalties.

The number of nursing home initiatives simultaneously under development or being implemented as well as other CMS responsibilities, such as preparing to implement the new Medicare prescription drug benefit in January 2006, have necessitated the establishment of priorities and led to delays and queues. CMS assigned some initiatives, such as the development and public reporting of quality indicators, a high priority and implemented them swiftly despite issues related to their validity and the quality of the underlying data—problems that CMS is still working to address. In contrast, the revision of the survey process has encountered delays because of funding shortfalls and has been in process for 7 years. For example, initial testing of the new methodology in 2002 and 2003 was limited, even though CMS had already invested $4.7 million in its development from initiation in 1999 through September 2003. A pilot test of the new methodology is scheduled to begin in the fall 2005; depending on the results of the testing, implementation could begin in mid-2007. Although CMS attaches a high priority to enhancing the information available to the public on nursing home quality and safety, adding information on past noncompliance and the fire safety status of nursing homes are in a queue behind the programming required to implement higher-priority projects. There is also a regulatory queue, with other, higher-priority regulations ahead of the notice of proposed rule making to require retrofitting of nursing homes with automatic sprinklers.

Delays in implementing the nursing home initiatives are also attributable to CMS’s need to be responsive to stakeholder input. Appropriately, CMS seeks input from various stakeholders such as states, regional offices, the nursing home industry, and resident advocates. For example, CMS sought input from experts in developing investigative protocols for surveyors. Due to this lengthy consultative process, combined with the prolonged delays stemming from internal disagreement over the structure of the process during the initial stages, CMS has only implemented two investigative protocols since 2001. Likewise, implementation of the ASPEN Complaint Tracking System was delayed because during the system’s pilot test, several states indicated their belief that their existing systems were superior and opposed the idea of either abandoning these systems or maintaining separate systems.

Number of Providers Subject to Surveys Is Growing

Both the overall growth in providers and the anticipated growth in nursing homes pose additional workload challenges for CMS and states. In addition to nursing homes, CMS and states are responsible for surveys of other Medicare and Medicaid providers, such as home health agencies and hospitals. The number of these providers grew from 39,651 in October 2000 to 45,375 in January 2005, approximately 14 percent. While the number of nursing homes has decreased slightly during the same period, from 17,012 to 16,146, the rate of decline has slowed; and as the baby boom generation ages, increasing the number of elderly needing long-term care services, the number of nursing homes is expected to grow to meet the demand. In 2000, 35.1 million people were aged 65 or older. This number is expected to grow to about 54.7 million by 2020.

Nursing home survey activities consume the majority of state survey budgets and resources. Nursing homes make up about 31 percent of Medicare and Medicaid providers, but account for 73 percent of the federal budget for oversight of such providers. The funding for nursing home surveys is disproportionate because the time frames for standard nursing home surveys are statutory. For those survey requirements not in statute, CMS determines the survey time frames; these surveys are therefore a lower priority. Even among nursing home survey activities, however, annual standard surveys are considered a higher priority than complaint surveys or initial surveys for which the statute does not dictate specific time frames. CMS and state survey agency officials recognize that CMS may have shifted its focus and resources to nursing homes at the expense of adequate oversight of other providers serving Medicare and Medicaid beneficiaries, and some states contend that the focus on nursing home standard surveys has hampered their ability to investigate nursing home complaints within mandated time frames. For example, according to a California state survey agency official, California law mandates that all nursing home resident complaints, not just complaints alleging actual harm, be investigated within 10 days. Likewise, an official from the Pennsylvania state survey agency stated that in Pennsylvania, all complaints must be investigated within 48 hours. California survey agency officials have told us that a complaint alleging a care problem deserves a higher priority than a standard survey, which may or may not identify deficiencies.

Key Nursing Home Initiatives Continue to Compete for Priority

According to CMS officials, key nursing home initiatives continue to compete for priority with other CMS projects. Examples of nursing home initiatives that have been affected include revision and testing of the new survey methodology, continued development of the investigative protocols that surveyors use to investigate care problems, and an increase in the number of quality-of-care comparative surveys.

Revised survey methodology. CMS officials have indicated that nationwide implementation of the revised survey methodology could be affected if its use requires additional survey time or a greater number of surveyors to conduct each survey. The pilot test of the new methodology, scheduled for 2005 and 2006, includes an examination of steps to streamline the revised process, if necessary. Cost considerations limited the pilot of the new methodology to fewer states than the 20 that volunteered.

Investigative protocols for quality-of-care problems. Only three sets of investigative protocols had been implemented as of November 2005, and it is unclear whether the contractor’s assessment of the protocols’ effectiveness can be completed before the contract ends in 2006. Furthermore, unless the contract for the investigative protocols is re-bid, CMS expects to return to the traditional revision process even though agency staff believe that the expert panel process used under the contract produced a high-quality product.

Federal comparative surveys. CMS hired a contractor in 2003 to further increase the number of federal quality-of-care comparative surveys, but dropped funding for quality-of-care comparative surveys from the fiscal year 2006 contract. The agency reallocated the funds to help state survey agencies meet the increased survey workload resulting from growth in the number of other Medicare providers.

Concluding Observations

CMS has focused considerable attention since 1998 on addressing weaknesses in state and federal oversight activities in order to better care for and protect nursing home residents. The agency has implemented many important improvements in the areas of surveys, complaints, enforcement, and oversight, such as taking steps to address survey predictability, issuing additional guidance to ensure timely on-site investigations of complaints alleging harm to residents, implementing an immediate sanctions policy to eliminate grace periods for homes cited for repeat serious violations, and strengthening oversight by conducting assessments of state survey activities. However, some key activities are still in process. For example, CMS’s effort to revise the survey methodology has been underway for 7 years. Given the pivotal role played by surveys in helping to ensure that nursing home residents receive high- quality care, the development and implementation of a more rigorous survey methodology is one of the most important contributions CMS can make to addressing oversight weaknesses. Certain other initiatives, such as sharing data with the public in an effort to use market forces to drive quality improvement, also remain in process. Since launching Nursing Home Compare in 1998, CMS has been aware of accuracy and reliability issues with the underlying data and began changing its approach to data integrity in 2005. The agency is working to address issues concerning data on nursing home staffing that compelled it to temporarily exclude questionable data from its Web site in July 2005 until its accuracy can be verified. Because consumers use these data to make decisions about nursing home care, ensuring the accuracy, reliability, and timeliness of nursing home quality data is critical. Even with CMS’s increased efforts to improve nursing home quality, the agency’s continued attention and commitment to these efforts is essential in order to maintain and build upon the momentum of its accomplishments to date.

Agency and State Comments and Our Evaluation

We provided CMS a draft of this report for review. CMS generally concurred with our findings, noting that progress has been made in many areas such as surveys and complaint investigations, oversight activities, and citation of serious deficiencies, but that challenges remain. (CMS’s comments are reproduced in app. V.) CMS also provided technical comments, which we included in the report as appropriate. We also provided the five states we contacted an opportunity to review the portion of the draft focused on trends in nursing home quality. California, Florida, Ohio, New York, and Texas provided written comments. California’s comments focused on clarifying its experience seeking CMS guidance on the definition of actual harm, but did not state whether it agreed with our findings. Ohio commented that our report’s findings related to continued inconsistency and understatement of serious deficiencies by state surveyors did not apply to its state survey agency. New York stated that including a more detailed description of states’ efforts to improve nursing home quality would provide a more balanced view of the reasons for the decline in serious deficiencies. Florida and Texas generally concurred, but Texas did not provide specific comments. CMS and states’ specific comments focused primarily on four issues: understatement of serious deficiencies, the definition of actual harm, data availability, and challenges to conducting nursing home survey and oversight activities.

CMS commented that it remains concerned about the possible understatement or omission of serious deficiencies, but that it did not believe that understatement caused the decline in serious nursing home deficiencies or that understatement was worsening. CMS noted its efforts to work with states that fail to improve their ability to identify deficiencies such as withholding funding increases until corrective action plans are developed. Florida, New York, and Ohio similarly commented that efforts such as their states’ quality improvement initiatives, regulatory changes to improve nursing home operations, and engagement of the provider community have contributed to the decline.

CMS suggested that including the results of observational surveys in our analysis of the percentage of federal surveys that found serious deficiencies missed by states would show that the percentage remained relatively constant from 2002 to 2004 rather than increasing. As we noted in our 1999 report, however, comparative surveys are more effective than observational surveys in identifying serious deficiencies missed by state surveyors because they are the only oversight tool that provides an independent federal survey where results can be compared to those of the state. Observational surveys can serve as an effective training tool for state surveyors but, in our view, they do not accurately represent typical state surveyor performance due to the likelihood that state surveyors modify their performance when they are aware that they are being observed by federal surveyors.

Florida and Ohio noted that in addition to comparative surveys, CMS conducted many observational surveys during the time period studied. Ohio disagreed that our analysis of federal comparative surveys suggests that nursing home surveyors in Ohio missed serious deficiencies, citing its combined performance ratings for observational and comparative surveys. New York commented that federal comparative surveys often do not include the same resident sample used in the state survey and that only looking at comparative surveys provides a narrow analysis of state survey quality. New York suggested a more detailed analysis of comparative survey data and consideration of state performance review results. We note that, in 2002, CMS directed federal surveyors to include at least 50 percent of the residents included in the state survey sample. We also acknowledge that CMS is conducting state performance reviews as part of its oversight of state survey activities, but note that the reviews have shortcomings as described in our July 2003 report. Florida noted that our analysis of federal comparative surveys that identified missed serious deficiencies is based on limited data. We acknowledge that our analysis is based on a small number of surveys, but note that it includes the full universe of comparative surveys conducted from March 2002 through December 2004 in the five states we reviewed.

The range of comments from states reinforces the need for CMS to clarify the definition of actual harm, as it plans to do. California noted that while some of its state surveyors were confused about the definition of actual harm, after discussions with CMS from 1998 through 2004, the survey agency and CMS are now in agreement on the definition of actual harm. New York stated that confusion about the definition of actual harm has been reduced. Ohio noted that its state surveyors are not confused by the definition of actual harm, but that states have not received clear and specific guidance from CMS. Florida agreed that clearer guidance would be useful.

CMS indicated that it is taking steps to improve the reliability and accuracy of publicly reported data by identifying suspect data and posting more detailed information about past noncompliance. As we state in our report, we believe that consumers should have timely and accurate data to inform their decisions regarding nursing home care.

CMS commented that the workload issues described in this report present challenges beyond those we have previously reported. CMS stated that continued constraint of resources could “likely cause some erosion of the gains already made” in the survey and oversight activities to date. To address the challenges it faces, CMS plans to increase efforts to improve productivity, determine the cost and value of policies, focus state performance standards on substantive issues, prioritize survey activities, coordinate with stakeholders, address increasing fuel costs, and enhance emergency preparedness. California, Florida, New York, and Ohio reiterated the staffing challenges they have experienced and the steps they have taken to address them, some of which are described in this report. Despite these efforts, California indicated that its staffing challenges have negatively impacted the investigative process. While we recognize the challenges CMS and states face, we continue to believe that maintaining the momentum developed over the last several years on key CMS initiatives, such as the development of the revised survey methodology (i.e., Quality Indicator Survey), is critical to addressing nursing home survey and oversight weaknesses.

As arranged with your office, unless you publicly announce its contents earlier, we plan no further distribution of this report until 30 days after its issue date. At that time, we will send copies of this report to the Administrator of the Centers for Medicare & Medicaid Services and appropriate congressional committees. We also will make copies available at no charge on the GAO Web site at http://www.gao.gov.

If you or your staff have any questions about this report, please contact me at (202) 512-7118 or allenk@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who made major contributions to this report are listed in appendix VI.

Appendix I: Prior GAO Recommendations, Related CMS Initiatives, and Implementation Status

Table 10 summarizes our recommendations from 14 reports on nursing home quality and safety, issued from July 1998 through November 2004; CMS’s actions to address weaknesses we identified; and the implementation status of CMS’s initiatives. The recommendations are grouped into four categories—surveys, complaints, enforcement, and oversight. If a report contained recommendations related to more than one category, the report appears more than once in the table. For each report, the first two numbers identify the year in which the report was issued. For example, HEHS-98-202 was released in 1998. The Related GAO Products section at the end of this report contains the full citation for each report. Of our 36 recommendations, CMS has fully implemented 13, implemented only parts of 3, is taking steps to implement 13, and declined to implement 7.

Appendix II: Percentage of Nursing Homes Cited for Actual Harm or Immediate Jeopardy during Standard Surveys

In order to identify trends in the proportion of nursing homes cited with actual harm or immediate jeopardy deficiencies, we analyzed data from CMS’s OSCAR database for four time periods: (1) January 1, 1999, through July 10, 2000; (2) July 11, 2000, through January 31, 2002; (3) February 1, 2002, through July 10, 2003; and (4) July 11, 2003, through January 31, 2005. Because surveys are conducted at least every 15 months (with a required 12-month statewide average), it is possible that a home was surveyed twice in any time period. To avoid double counting of homes, we included only homes’ most recent survey from each time period.

Appendix III: Percentage of Homes Surveyed Within 15 Days of the 1-Year Anniversary of Prior Survey

In order to determine the predictability of nursing home surveys, we analyzed data from CMS’s OSCAR database for a home’s current survey as of April 9, 2002, and as of July 8, 2005 (see table 12). We considered surveys to be predictable if homes were surveyed within 15 days of the 1-year anniversary of their prior survey.

Appendix IV: Percentage of State Nursing Home Surveyors with 2-Years’ Experience or Less, 2002 and 2005

Appendix IV: Percentage of State Nursing Home Surveyors with 2-Years’ Experience or Less, 2002 and 2005 This state did not respond to our 2002 questions about surveyor experience.

Appendix V: Comments from the Centers for Medicare & Medicaid Services

Appendix VI: GAO Contact and Staff Acknowledgments

Acknowledgments

In addition to the contact named above, Walter Ochinko, Assistant Director; Jack Brennan; Joanne Jee; Elizabeth T. Morrison; and Christal Stone made key contributions to this report.

Related GAO Products

Nursing Home Deaths: Arkansas Coroner Referrals Confirm Weaknesses in State and Federal Oversight of Quality of Care. GAO-05-78. Washington, D.C.: November 12, 2004.

Nursing Home Fire Safety: Recent Fires Highlight Weaknesses in Federal Standards and Oversight. GAO-04-660. Washington D.C.: July 16, 2004.

Nursing Home Quality: Prevalence of Serious Problems, While Declining, Reinforces Importance of Enhanced Oversight. GAO-03-561. Washington, D.C.: July 15, 2003.

Nursing Homes: Public Reporting of Quality Indicators Has Merit, but National Implementation Is Premature. GAO-03-187. Washington, D.C.: October 31, 2002.

Nursing Homes: Quality of Care More Related to Staffing than Spending. GAO-02-431R. Washington, D.C.: June 13, 2002.

Nursing Homes: More Can Be Done to Protect Residents from Abuse. GAO-02-312. Washington, D.C.: March 1, 2002.

Nursing Homes: Federal Efforts to Monitor Resident Assessment Data Should Complement State Activities. GAO-02-279. Washington, D.C.: February 15, 2002.

Nursing Homes: Sustained Efforts Are Essential to Realize Potential of the Quality Initiatives. GAO/HEHS-00-197. Washington, D.C.: September 28, 2000.

Nursing Home Care: Enhanced HCFA Oversight of State Programs Would Better Ensure Quality. GAO/HEHS-00-6. Washington, D.C.: November 4, 1999.

Nursing Home Oversight: Industry Examples Do Not Demonstrate That Regulatory Actions Were Unreasonable. GAO/HEHS-99-154R. Washington, D.C.: August 13, 1999.

Nursing Homes: Proposal to Enhance Oversight of Poorly Performing Homes Has Merit. GAO/HEHS-99-157. Washington, D.C.: June 30, 1999.

Nursing Homes: Complaint Investigation Processes Often Inadequate to Protect Residents. GAO/HEHS-99-80. Washington, D.C.: March 22, 1999.

Nursing Homes: Additional Steps Needed to Strengthen Enforcement of Federal Quality Standards. GAO/HEHS-99-46. Washington, D.C.: March 18, 1999.

California Nursing Homes: Care Problems Persist Despite Federal and State Oversight. GAO/HEHS-98-202. Washington, D.C.: July 27, 1998.