Nursing Homes: Efforts to Strengthen Federal Enforcement Have Not Deterred Some Homes from Repeatedly Harming Residents
Released: 2007-04-23T00:00:00

Letter

Background

Ensuring the quality and safety of nursing home care has been a focus of considerable congressional attention since 1998. Titles XVIII and XIX of the Social Security Act establish minimum requirements in statute that all nursing homes must meet to participate in the Medicare and Medicaid programs, respectively. With the Omnibus Budget Reconciliation Act of 1987 (OBRA 87), Congress focused the requirements on the quality of care actually provided by a home. To help ensure that homes maintained compliance with the new requirements, OBRA 87 also established the range of available sanctions, to include CMPs, DPNAs, and termination.

Ensuring Compliance with Federal Quality Requirements

CMS contracts with state survey agencies to assess whether homes meet federal quality requirements through routine inspections, known as standard surveys, and complaint investigations. The requirements are intended to ensure that residents receive the care needed to protect their health and safety, such as preventing avoidable pressure sores, weight loss, and accidents. While a standard survey involves a comprehensive assessment of federal quality requirements, a complaint investigation generally focuses on a specific allegation regarding resident care or safety; complaints can be lodged by a resident, family member, or nursing home employee. 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 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 2). When state surveyors identify and cite B-level or higher deficiencies, the home is required to prepare a plan of correction and, depending on the severity of the deficiency, surveyors conduct revisits to ensure that the home actually implemented its plan and corrected the deficiencies.

Homes with deficiencies at the A, B, or C levels are considered to be in substantial compliance with federal quality requirements, while homes with D-level or higher deficiencies are considered noncompliant. A noncompliance period begins when a survey finds noncompliance and ends when the home either achieves substantial compliance by correcting the deficiencies or when the home is terminated from Medicare and Medicaid. Since 1998, the deficiencies cited during standard surveys have been summarized on CMS’s Nursing Home Compare Web site, and CMS subsequently added data on the results of complaint investigations. These data are intended to help consumers select a nursing home that takes into account the quality of care provided to residents.

Range of Federal Sanctions

CMS and the states can use a variety of federal sanctions to help encourage compliance with quality requirements ranging from less severe sanctions, such as indicating the specific actions needed to address a deficiency and providing an implementation time frame, to those that can affect a home’s revenues and provide financial incentives to return to and maintain compliance (see table 3). Overall, two sanctions—CMPs and DPNAs—accounted for 80 percent of federal sanctions from fiscal years 2000 through 2005.

The majority of federal sanctions implemented from fiscal years 2000 through 2005—about 54 percent—were CMPs. CMPs may be either per day or per instance. CMS regulations specify a per day CMP range from $50 to $10,000 for each day a home is noncompliant—from $50 to $3,000 for nonimmediate jeopardy and $3,050 to $10,000 for immediate jeopardy. The overall amount of the fine increases the longer a home is out of compliance. For example, a home with a per day CMP of $5,000 that is out of compliance for 10 days would accrue a total penalty of $50,000. A per day CMP can be assessed retroactively, starting from the first day of noncompliance, even if that date is prior to the date of the survey that identified the deficiency.

Per instance CMPs range from $1,000 to $10,000 per episode of noncompliance. While multiple per instance CMPs can be imposed for deficiencies identified during a survey, the total amount cannot exceed $10,000. Per day and per instance CMPs cannot be imposed as a result of the same survey, but a per day CMP can be added when a deficiency is identified on a subsequent survey if a per instance CMP was the type of CMP initially imposed. Unlike other sanctions, CMPs require no notice period. However, if a home appeals the deficiency, by statute, payment of the CMP—whether received directly from the home or withheld from the home’s Medicare and Medicaid payments—is deferred until the appeal is resolved.

DPNAs made up about 26 percent of federal sanctions from fiscal years 2000 through 2005. A DPNA denies a home payments for new admissions until deficiencies are corrected. In contrast to CMPs, CMS regulations require that homes be provided a notice period of at least 15 days for other sanctions, including DPNAs; the notice period is shortened to 2 days in the case of immediate jeopardy. As a result, homes can avoid DPNAs if they are able to correct deficiencies during the notice period, which provides a de facto grace period. Unlike CMPs, DPNAs cannot be imposed retroactively, and payment denial is not deferred until appeals are resolved.

Although nursing homes can be terminated involuntarily from participation in Medicare and Medicaid, which can result in a home’s closure, termination is used infrequently. Terminations were less than 1 percent of total sanctions from fiscal years 2000 through 2005. Four of the seven types of sanctions described above were used less frequently than CMPs and DPNAs—directed plan of correction, state monitoring, directed in-service training, and temporary management—these sanctions accounted for about 19 percent of sanctions nationwide from 2000 through 2005.

Imposition of Sanctions

The statute permits and, in some cases, requires that DPNAs or termination be imposed for homes found out of compliance with federal quality requirements. Mandatory termination and DPNA are required, as follows: Termination—Termination is required by regulations under the statute if within 23 days of the end of a survey a home fails to correct immediate jeopardy deficiencies, or within 6 months of the end of a survey the home fails to correct nonimmediate jeopardy deficiencies.

DPNA—A DPNA is required by statute if within 3 months of the end of a survey a home fails to correct deficiencies and return to compliance or when a home’s last three standard surveys reveal substandard quality of care.

The statute also authorizes CMS to impose discretionary DPNAs and discretionary terminations in situations other than those specified above. Federal regulations further stipulate that such discretionary sanctions may be implemented as long as a facility is given the appropriate notice period. By regulation, the notice period for implementing both discretionary and mandatory DPNAs and terminations is 15 days; in cases of immediate jeopardy, however, the notice period is 2 days.

In imposing sanctions, CMS takes into account four factors: (1) the scope and severity of the deficiency, (2) a home’s prior compliance history, (3) desired corrective action and long-term compliance, and (4) the number and severity of all the home’s deficiencies. In general, the severity of the sanction increases with the severity of the deficiency. For example, for immediate jeopardy deficiencies (J, K, and L on CMS’s scope and severity grid) the regulations require that either or both temporary management or termination be imposed, and also permits use of CMPs of from $3,050 to $10,000 per day or $1,000 to $10,000 per instance of noncompliance. Similarly, for deficiencies at the actual harm level (G, H, and I on the scope and severity grid) the regulations require one or a combination of the following sanctions: temporary management, a DPNA, a per day CMP of $50 to $3,000, or a per instance CMP of $1,000 to $10,000 per instance of noncompliance. In addition to these required sanctions, other sanctions can be included; for example, depending on the severity of the deficiency and a home’s compliance history, it could have a combination of state monitoring, a DPNA, and a CMP. Finally, CMS is required to consider the immediacy of sanctions. The statute stipulates that sanctions should be designed to minimize the time between the identification of violations and the final imposition of the sanctions.

State and CMS Roles in Sanctioning Homes

Enforcement of nursing home quality-of-care requirements is a shared federal-state responsibility. In general, sanctions are (1) initially proposed by the state survey agency based on a cited deficiency, (2) reviewed and imposed by CMS regional offices, and (3) implemented—that is, put into effect—by the same CMS regional office, usually after a required notice period (see fig. 1). CMS regional offices typically accept state-proposed sanctions but can modify them. The regional office notifies the home by letter that a sanction is being imposed—that is, its intent to implement a sanction—and the date it will be implemented. State surveyors may make follow-up visits to the home to determine whether the deficiencies have been corrected. The CMS regional office implements the sanctions if the deficiencies are not corrected. Homes may appeal the cited deficiency and, if the appeal is successful, the severity of the sanction could be reduced or the sanction could be rescinded. Homes have several avenues of appeal, including informal dispute resolution at the state survey agency level or a hearing before an administrative law judge, as well as before the Department of Health and Human Services Departmental Appeals Board. Under CMS policy, homes automatically receive a 35 percent reduction in the amount of a CMP if they waive their right to appeal before the Departmental Appeals Board.

CMS Enforcement Initiatives

In response to our earlier recommendations, CMS undertook a number of initiatives intended to strengthen enforcement, many of which we reported on in 2005. For example, CMS (1) revised its revisits policy by requiring surveyors to return to nursing homes to verify that serious deficiencies had actually been corrected; (2) hired more staff to reduce the backlog of appeals at the Health and Human Services Departmental Appeals Boards, the entity that adjudicates nursing home appeals of deficiency citations; (3) began annual assessments of state survey activities, known as state performance reviews, which cover, among other things, the timeliness of sanction referrals from state survey agencies to CMS regional offices; and (4) revised its past noncompliance policy for citing and reporting serious deficiencies that were missed by state surveyors during earlier surveys of a home.

A key CMS enforcement initiative was the two-stage implementation of an immediate sanctions policy. In the first stage, effective September 1998, CMS required states to refer for immediate sanction homes found to have a pattern of harming or exposing residents to actual harm or potential death or serious injury (H-level or higher deficiencies on the agency’s scope and severity grid) on successive surveys. Effective January 2000, CMS expanded the policy, requiring referral of homes found to have harmed one or a small number of residents (G-level deficiencies) on successive routine surveys or intervening complaint investigations. After expansion of the immediate sanctions policy to include G-level deficiencies, it became known as the double G immediate sanctions policy.

CMS also took steps to improve its ability to manage and oversee the enforcement process. Our 1999 report described how CMS regions and states were using their own systems to track sanctions rather than CMS’s OSCAR database. Regional office systems ranged from manual, paper- based records to complex computer programs; none of the four states included in our 1999 report had tracking systems compatible with OSCAR or the regional office systems in use. Until it implemented a new enforcement data collection system, CMS used LTC, an interim enforcement tracking system developed and first used by its Chicago regional office. LTC was operational in all 10 regions by January 2000. CMS’s enforcement data collection system—AEM—replaced LTC and was implemented 4 years later, on October 4, 2004.

Recognizing the need to focus more attention on homes that historically provided poor care, CMS designed and launched a Special Focus Facility program in January 1999, instructing states to select 2 homes each for enhanced monitoring. Surveys were to be conducted at 6-month intervals rather than annually. In September 2000, CMS reported that semiannual surveys had been conducted at a little more than half of the original 110 facilities. In late 2004, CMS modified the program by (1) expanding its scope to include more homes, (2) revising the selection criteria for homes, and (3) strengthening sanctions for homes that did not improve within 18 months. In a relevant but unrelated initiative, CMS established a voluntary program to help nursing homes improve the quality of care provided to residents. In 2002, Medicare Quality Improvement Organizations (QIO) began working intensively on issues such as preventing pressure sores and pain management with 10 percent to 15 percent of nursing homes in each state. Responding to concerns that QIOs were not working with homes that needed the most help, CMS established a separate pilot program in 2004; QIOs worked for 12 months with 1 to 5 nursing homes with significant quality problems in 18 states to help them redesign their clinical practices. Unlike the Special Focus Facility program, the participation of homes in the pilot was voluntary. To distinguish it from the Special Focus Facility program, the pilot was known as the Collaborative Focus Facility program.

Number of Sanctions Has Decreased

Among the homes we reviewed in four states, the number of implemented sanctions and serious deficiencies declined across two time periods— fiscal years 2000 through 2002 and fiscal years 2003 through 2005. Federal data show similar declines for homes nationwide, a trend consistent with the decline in the proportion of homes cited for serious deficiencies that generally result in sanctions. Despite the decline in the number of serious deficiencies, the homes we reviewed generally were cited for more deficiencies that caused harm to residents than other homes in the four states. While the numbers of implemented CMPs and DPNAs at the homes we reviewed declined across the two time periods, the amount of CMPs paid increased. Not all imposed sanctions for these homes were implemented, however, which may reduce the deterrent effect of sanctions; in fact, we found that the implementation rate of certain sanctions, such as DPNAs, decreased. The deterrent effect of sanctions for the homes was further eroded because CMS generally imposed CMPs on the lower end of the allowable dollar range and did not exercise its authority to use discretionary DPNAs and terminations, allowing the homes more opportunities to escape sanctions prior to implementation.

Sanctions Have Declined Nationwide

Among all nursing homes nationwide, sanctions declined across the two time periods—fiscal years 2000 through 2002 and fiscal years 2003 through 2005. Implemented terminations declined the most across the two time periods (about 41 percent) and CMPs declined the least (about 12 percent), while the number of DPNAs declined by about 31 percent. In the same time periods, the average number of serious deficiencies per home declined by about 33 percent nationwide, from about 0.8 to about 0.5. These downward trends are also consistent with the nationwide decline in the proportion of homes with serious deficiencies—from about 28 percent in fiscal year 2000 to about 17 percent in fiscal year 2005 (see app. II). While the reported decline in serious deficiencies and the proportion of homes cited for such deficiencies may be due to improved quality, our earlier reports noted similar declines that masked (1) understatement of serious quality problems, and (2) inconsistency in how states conduct surveys. For example, our current analysis found that the proportion of homes cited for serious deficiencies ranged from a low of about 4 percent in Florida to a high of about 44 percent in Connecticut during fiscal year 2005. Across the four states we reviewed, the proportion of homes with serious deficiencies in fiscal year 2005 ranged from 8 percent in California to 23 percent in Michigan. As we previously reported, such disparities are more likely to reflect inconsistency in how states conduct surveys rather than actual differences in the quality of care provided by homes. In addition, in commenting on a draft of this report, CMS noted concerns about whether the immediate sanctions policy has had a negative effect on state citations of serious deficiencies.

Decline in Sanctions and Deficiencies for the Homes Reviewed Is Consistent with Nationwide Trends

The number of implemented sanctions at the homes we reviewed as well as the number of serious deficiencies cited in these homes declined across two time periods—fiscal years 2000 through 2002 and fiscal years 2003 through 2005—consistent with nationwide trends.

Deficiency trends. The average number of serious deficiencies per home we reviewed decreased from about 1.8 in fiscal years 2000 through 2002 to about 0.7 in fiscal years 2003 through 2005, about a 61 percent decline; this decline was consistent with the national trend. During both time periods, however, the homes we reviewed generally performed more poorly than other homes in their states, having, on average, more G-level or higher deficiencies and more double Gs. For example, the Texas homes we reviewed had on average 1.3 times as many G-level or higher deficiencies as all other homes in the state and the California homes we reviewed had on average 3 times as many as all other California nursing homes.

CMP trends. Due in part to the closure of some poorly performing homes and the citation of fewer serious deficiencies, the homes we reviewed had fewer CMPs in fiscal years 2003 through 2005 than in the prior 3 fiscal years, but the amount paid was higher (see table 4). Among the homes, the number of implemented CMPs declined by about 42 percent from the first to the second time period. Although the number of CMPs among the homes we reviewed decreased, the amount of CMPs paid in Michigan more than doubled between the two time periods, accounting for much of the increase in the amount of CMPs paid across the two time periods (see app. III). States’ preferences for either state or federal CMPs may in part affect their use. In Michigan, state officials are more likely to use federal CMPs and implement them in greater amounts than other states we reviewed. In contrast, the homes we reviewed in Pennsylvania had only one implemented CMP and paid no federal CMPs from fiscal years 2003 through 2005; however, during the same period, the Pennsylvania state survey agency implemented seven state CMPs and collected $12,050. A Pennsylvania state survey agency official said that the state prefers to use state sanctions because they can be implemented more quickly and are believed to be more effective than federal sanctions. The Texas state survey agency does not recommend more than one type of money penalty for the same deficiency and chooses among one of two state money penalties or a federal CMP.

DPNA trends. The number of DPNAs declined by 42 percent from fiscal years 2000 through 2002 to fiscal years 2003 through 2005 for the homes we reviewed. Overall, the duration of the DPNAs decreased by 12 percent from the first to the second time period. The duration of DPNAs among the Texas homes we reviewed decreased the most—from an average of 46 days in the first time period to an average of 26 days in the second time period. The duration of DPNAs among the Michigan and Pennsylvania homes also decreased (see app. III). In California, however, the DPNAs were in effect longer in the second time period—from an average of 39 days in fiscal years 2000 through 2002 to an average of 63 days in fiscal years 2003 through 2005. As a result, homes in California were out of compliance for longer periods of time.

Termination trends. Only two of the homes we reviewed closed involuntarily—that is, they were terminated for cause by CMS because of health and safety issues. One of the two homes has since been certified to participate in Medicare again. An additional nine other homes closed voluntarily, although four reopened at some point during fiscal years 2000 through 2005. However, a home’s voluntary closure may not accurately reflect the degree to which the home had quality problems, such as a history of harming residents, that put the home at risk of involuntary termination. The reasons for closure, as recorded by CMS, are general and do not always reflect that homes may have histories of harming residents and may have been at risk of involuntary termination.

Implementation Rate of Some Sanctions Has Declined for the Homes Reviewed

The implementation rate of DPNAs and terminations declined for the homes we reviewed, while the implementation rate of CMPs increased across three time periods (see fig. 2). Some sanctions are never implemented because CMS rescinds them if homes correct deficiencies before the implementation date, a situation we noted in our 1999 report. Thus, sanctions may be considered more of a threat than a real consequence of noncompliance.

We compared the implementation rates of CMPs, DPNAs, and terminations across three time periods: (1) July 1995 to October 1998, the time period covered in our March 1999 report; (2) fiscal years 2000 through 2002; and (3) fiscal years 2003 through 2005. From the first time period to the third, the implementation rate for DPNAs declined by about 20 percent and the implementation rate for terminations declined by about 97 percent. In contrast, across the same time periods, the overall implementation rate for CMPs increased from 32 percent in the first time period to 86 percent in the third time period, an almost threefold increase. The timing of this increase coincides with the January 2000 implementation of the immediate sanctions policy, suggesting that the increase may in part be related to the policy’s implementation.

CMS Did Not Take Advantage of the Full Range of Sanctions for the Homes Reviewed

Among the homes we reviewed, CMS did not use the full range of its sanctions authority, generally imposing CMPs on the lower end of the allowable range. In addition, CMS imposes DPNAs and involuntary terminations when they are mandatory, but generally not when they are discretionary. Homes subject to such mandatory sanctions have more opportunities to escape sanctions prior to implementation. The median per instance CMP implemented was $2,000 in fiscal years 2000 through 2002 and $1,750 in fiscal years 2003 through 2005, although the maximum per instance CMP can be as high as $10,000. The median per day CMP implemented for nonimmediate jeopardy deficiencies was $500 in fiscal years 2000 through 2002 and $350 in fiscal years 2003 through 2005, significantly below the maximum of $3,000 per day. In cases in which homes were cited for immediate jeopardy and the maximum potential per day CMP is $10,000, the median per day CMP implemented was $3,050 in fiscal years 2000 through 2002 and $5,050 in fiscal years 2003 through 2005. According to one CMS official, the agency generally hesitates to impose CMPs that are higher than $200 per day, in part because of concerns that higher per day CMPs could bankrupt some homes. But the same official noted that the CMPs being imposed are not enough to “make nursing homes take notice” or to deter them from deficient practices. Another CMS official stated that some homes consider CMPs a part of the “cost of doing business” or as having no more effect than a “slap on the wrist.” Table 5 provides examples of homes we reviewed with implemented CMPs that were at the low end of the allowable CMP range.

CMS is likely to impose DPNAs and terminations only when required to do so. However, CMS also has broad authority to impose DPNAs and terminations at its discretion, which can facilitate quicker implementation. Discretionary DPNAs and terminations can be implemented any time after a survey if the sanction is appropriate for the cited deficiencies and the required notice period is met. In contrast, the soonest that mandatory DPNAs and terminations for nonimmediate jeopardy can be implemented is 3 and 6 months, respectively, after the survey on which the deficiencies were cited. Despite the greater expediency of discretionary DPNAs, 64 percent of the DPNAs CMS imposed were mandatory for fiscal years 2000 through 2005 for the homes we reviewed. For example, CMS imposed a total of six DPNAs during fiscal years 2000 through 2003 on a Pennsylvania home with demonstrated compliance problems. Of those six DPNAs, the first five were mandatory DPNAs. Only the last DPNA— imposed after multiple years of repeated noncompliance at the G-level or higher—was a discretionary DPNA.

Moreover, CMS imposed significantly more mandatory terminations than discretionary terminations; in fiscal years 2000 through 2005, 118 mandatory and 5 discretionary terminations were imposed on the homes we reviewed. None of the mandatory terminations were implemented, but 2 discretionary terminations were implemented—one each in Michigan and Texas. An official from the Texas state survey agency said that the CMS regional office in Dallas prefers to impose mandatory terminations, unless there is cause to believe there will be no improvements in the care provided by the nursing home. Mandatory terminations give homes 6 months to correct deficiencies before being implemented, as opposed to discretionary terminations, which can be implemented more quickly.

Even when CMS imposes terminations, their deterrent effect is weakened because the agency sometimes extends the termination dates. For example, CMS extended the discretionary termination dates for up to 6 months for some of the Texas homes we reviewed if the nursing homes had lower-level deficiencies on subsequent surveys. The termination date imposed on one Texas nursing home we reviewed was extended three times in fiscal year 2001 from the original date of April 18 to June 26, then to July 26, and finally to September 26. The first extension occurred because the home corrected the deficiencies that caused immediate jeopardy cited during the first survey. Therefore, despite the fact that this home continued to be found out of compliance for deficiencies such as mistreatment or neglect of residents during subsequent surveys, CMS extended the termination date twice to give the home an additional opportunity to correct those deficiencies and achieve substantial compliance. The termination ultimately was rescinded because the home corrected the deficiencies, but the home was subsequently cited for eight G-level deficiencies such as inadequate treatment or prevention of pressure sores, employing convicted abusers, and poor accident supervision or prevention. In 2004, the home closed voluntarily.

Despite Changes in Federal Enforcement Policy, Many Homes Continued to Cycle In and Out of Compliance

Despite changes in federal enforcement policy, almost half of the homes we reviewed—homes with prior serious quality problems—continued to cycle in and out of compliance, continuing to harm residents. These homes corrected deficiencies only temporarily and, despite having sanctions implemented, were again found to be out of compliance during subsequent surveys. Our analysis also showed that in some cases the double Gs did not result in immediate sanctions as required, even though about 40 percent of the homes were cited for double Gs during fiscal years 2000 through 2005. In addition, the term “immediate sanctions policy” is misleading because the policy requires only that sanctions be imposed, that is, that homes be notified immediately of CMS’s intent to implement sanctions, not that sanctions must be implemented immediately. Furthermore, when a sanction is implemented for a double G citation, there is a lag time between when the double G occurs and the sanction’s effective date. CMS cited double Gs multiple times at several of the homes we reviewed, suggesting that immediate sanctions did not deter future noncompliance as intended. Terminations of homes is infrequent, in part because of concerns such as local access to other nursing facilities and the effect on residents if they are moved, and in part because CMS allows some problem homes to continue operating until the homes eventually close voluntarily.

Many Homes Cycled In and Out of Compliance, Continuing to Harm Residents

Consistent with our earlier work, our current analysis showed that sanctions appear to have induced homes to correct deficiencies only temporarily because surveyors found that many of the homes we reviewed with implemented sanctions were again out of compliance on subsequent surveys. Commenting on this phenomenon, state survey agency officials said that improvements resulting from sanctions might last about 6 months. From fiscal years 2000 through 2005, 31 of the 63 homes we reviewed (about 49 percent) cycled in and out of compliance more than once, harming residents, even after sanctions had been implemented, including 8 homes that did so seven times or more (see fig. 3).

Each of the 31 homes that cycled in and out of compliance more than once during the period we reviewed had at least one G-level or higher deficiency in at least one period of noncompliance; 19 had at least one G-level or higher deficiency in every noncompliance period. Table 6 shows the number and length of noncompliance periods for a Michigan home we reviewed that cycled in and out of compliance nine times from fiscal years 2000 through 2005; the home remained open as of November 2006. Appendix IV provides similar examples for homes in California, Pennsylvania, and Texas. Homes’ correction of deficiencies often was temporary, despite receiving sanctions. Thus, once the homes we reviewed corrected deficiencies, they maintained compliance for a median of 133 days and then cycled out of compliance again. Some homes cycled out of compliance more quickly—homes were again out of compliance in 30 days or less about 8 percent of the time and within 60 days about 28 percent of the time.

Relatively Few Homes Reviewed Were Cited for Double Gs

Despite the large number of G-level or higher deficiencies cited for the homes we reviewed, relatively few of these homes were cited for double Gs, and some double G citations did not result in sanctions. Over the 6-year period, 27 of the homes we reviewed had 69 double Gs. However, 47 of the homes had 444 G-level or higher deficiencies. We found no record that CMS imposed a sanction for 15 of the 69 double Gs, but the data did show that CMS implemented sanctions for the remaining double G cases.

Across the four states we reviewed, there was variation in the citation of G-level or higher deficiencies and the implementation of immediate sanctions. For example, from fiscal years 2000 through 2005, 35 percent of G-level or higher deficiencies and 52 percent of double Gs among the homes we reviewed were cited in Michigan, while 9 percent of the G-level or higher deficiencies and 4 percent of the double Gs were cited in homes in California. In California, complaints typically are investigated under state licensure authority and the findings generally are not recorded in the same manner as deficiencies cited under the federal process, which may contribute to lower double G citation rates in the state. Thus, California homes are not cited for a double G when the subsequent deficiency equivalent to a G-level or higher deficiency was found during a complaint investigation. Complaint surveys with G-level or higher deficiencies often lead to double Gs. One CMS official stated that if complaints against California nursing homes were investigated under the federal complaint investigation procedure, more double Gs would be cited in California. The California Department of Health Services conducted a pilot to test the use of the federal complaint procedure in select district offices, in part because of the low double G citation rate. As of November 2006, the department decided not to expand or complete a formal evaluation of the pilot; instead, the department is focusing on eliminating its backlog of complaints and initiating complaint investigations within required time frames.

Immediate Sanctions Often Not Immediate and Do Not Appear to Deter Noncompliance

Although referred to as the “immediate sanctions” policy, the term is misleading because (1) there is a lag between when the double G is cited and when the sanction is implemented, negating the sanction’s immediacy; (2) the policy only requires that sanctions be imposed immediately, which does not guarantee that the sanction will be implemented; and (3) homes may not actually pay a CMP, the most frequently implemented sanction, until years after citation of the double G because payment is suspended until after appeals have been adjudicated. Delays in implementing DPNAs and in collecting CMPs—which diminish their immediacy—coupled with their nominal amounts may undermine their deterrent effect.

Immediate sanctions often are not immediate because there is a lag time between the identification of deficiencies during the survey and when a sanction (i.e., a CMP or DPNA) is actually implemented. CMS implemented about 68 percent of the DPNAs for double Gs among the homes we reviewed during fiscal years 2000 through 2005 more than 30 days after the survey (see app. V). In contrast, CMPs can go into effect as early as the first day the home was out of compliance, even if that date is prior to the survey date, because, unlike DPNAs, CMPs do not require a notice period. About 98 percent of CMPs imposed for double Gs took effect on or before the survey date. Figure 4 illustrates the lag time that can occur between the survey date and the implementation date of the sanction, especially with regard to DPNAs. For example, in fiscal years 2000 through 2005, 60 percent of the DPNAs in the homes we reviewed were implemented 31 to 60 days from the date of the survey citing deficiencies. In contrast, nearly all CMPs were implemented on or before the survey date.

While the immediate sanctions policy requires that sanctions be imposed immediately, it is silent on how quickly sanctions should be implemented. A sanction is considered imposed when a home is notified of CMS’s intent to implement a sanction—15 days from the date of the notice. If during the 15-day notice period the nursing home corrects the deficiencies, no sanction is implemented. Thus, even under the immediate sanctions policy, which is intended to eliminate grace periods for nursing homes repeatedly cited for deficiencies at the actual harm level or higher, nursing homes have a de facto grace period.

While CMPs can be implemented closer to the date of survey than DPNAs, the immediacy and the effect of CMPs may be diminished by (1) the significant time that can pass between the citation of deficiencies on a survey and the home’s payment of the CMP and (2) the low amounts imposed, as described earlier in this report. By statute, payment of CMPs is delayed until appeals are exhausted. For example, a Michigan home did not pay its CMP of $21,600 until more than 2 years after a February 2003 survey had cited a G-level deficiency. (See fig. 5.) The February G-level citation was a repeat deficiency: less than a month earlier, the home had received another G-level deficiency in the same quality of care area. The delay in collecting the fine in this case is consistent with a 2005 report from the Office of Inspector General of the Department of Health and Human Services that found that the collection of CMPs in appealed cases takes an average of 420 days—a 110 percent increase in time over nonappealed cases—and “consequently, nursing homes are insulated from the repercussions of enforcement by well over a year.”

Unlike the Social Security Act, the federal Surface Mining Control and Reclamation Act of 1977 provides for the collection of CMPs prior to exhaustion of administrative appeals. Under this statute, mining operators charged with civil money penalties have 30 days to either pay the penalty in full or forward the proposed amount for placement in an escrow account pending resolution of appeals. This provision, requiring escrow deposit of a proposed penalty assessment, has been upheld by three federal circuit courts of appeal, all citing the various procedural safeguards as helping to ensure sufficient due process to affected operators. For example, these courts cited the availability of an informal conference at which mining operators may present information relevant to an assessment of a penalty. It is unclear whether the informal dispute resolution process available to nursing homes would provide due process similar to that provided under the Federal Mining statute. Nonetheless, the Social Security Act would preclude a more expeditious collection of nursing home CMPs.

Despite the potentially negative consequences, CMS’s implementation of the immediate sanctions policy does not appear to deter homes from harming residents in the future. Two-thirds (18) of the 27 nursing homes cited for double Gs that subsequently had sanctions implemented went on to be cited again for one or more additional double Gs. (See fig. 6.)

Termination Used Infrequently

Nursing homes, even those that repeatedly harm residents, are infrequently terminated because of CMS’s concerns about access to other sources of nursing care and the impact of moving residents. Of the homes we reviewed, two were terminated involuntarily for cause. Another nine homes closed voluntarily, which is not a sanction because the homes chose to close. However, the actual reason for closure is not always clear; a home may close to avoid involuntary termination because of quality problems cited by state surveyors. Allowing a problem home to close voluntarily rather than terminating it may result in continuing harm to residents until the home decides to close. For example, two homes we reviewed in Pennsylvania and Texas closed voluntarily, but the histories of both homes show that they were repeatedly cited for harming residents from fiscal year 2000 through the time of their closures, over 4 years later in January 2004. The Pennsylvania home cycled in and out of compliance 4 times during the period we reviewed and had noncompliance periods lasting an average of 170 days. The Texas home cycled in and out of compliance 10 times during the period reviewed and had average noncompliance periods of 46 days. On average, both homes had about 6 G-level or higher deficiencies per year in areas such as inadequate treatment or prevention of pressure sores and resident abuse. The home in Pennsylvania had an average of 31 other deficiencies per year and the Texas home had an average of 27.

Four homes we reviewed had similar deficiency histories. Two closed voluntarily and two remained open as of November 2006 (see table 7). Although the homes that remained open met the deadline to correct deficiencies before the termination would have been implemented, a home’s ability to correct deficiencies in a specified period of time may not be the strongest criteria upon which to determine whether a home should remain open, because correcting deficiencies does not ensure that the home will improve residents’ quality of care and does not prevent the home from again falling out of compliance. For example, the California and Michigan homes in table 7 were still operating as of November 2006 but cycled in and out of compliance four and seven times, respectively.

According to CMS and state officials, factors that may prevent or delay termination of problem nursing homes include (1) concerns regarding lack of access to alternate local nursing facilities, (2) the potential for resident trauma as a result of transfer to another home, (3) the preference of residents’ families for homes located close by, and (4) pressure to keep homes open from families and other stakeholders. Our analysis of alternatives to the 4 poorly performing homes in table 7—those that closed voluntarily or are still open—showed that there were from 2 to 37 homes within 10 miles of these homes, and from 5 to 120 homes within 25 miles.

Complex Immediate Sanctions Policy and Data Limitations Hamper CMS Management of Enforcement

While the goal of enforcement is to help ensure nursing home compliance with federal quality requirements, CMS management of the process is hampered by the complexity of its immediate sanctions policy and by its fragmented and incomplete data systems. The agency’s immediate sanctions policy, intended to deter repeat noncompliance, fails to hold some homes accountable for repeatedly harming residents. In addition, although CMS has developed a new data system, the system’s components are not integrated and the national reporting capabilities are not complete, hampering the agency’s ability to track and monitor enforcement. Finally, CMS has taken some steps intended to improve enforcement of nursing home quality requirements, such as developing guidance to help ensure greater consistency across states in CMP amounts, revising its Special Focus Facility program, and commissioning two studies to examine the effectiveness of nursing home enforcement. It is not clear, however, the extent to which—or when—these initiatives will address the enforcement weaknesses we found.

Immediate Sanctions Policy Is Complex and Fails to Hold Some Homes Accountable

The double G immediate sanctions policy is complex and fails to hold some homes accountable. In 2003, we reported that the early implementation of the policy was flawed. We found that between January 2000 and March 2002 over 700 cases that should have been referred for immediate sanctions were not because (1) the policy was misunderstood by some states and regional offices, (2) states lacked adequate systems for identifying deficiencies that triggered an immediate sanction, and (3) actions of two of the four states were at variance with CMS policy. CMS developed an on-line reporting tool for use by survey agency and regional office staff to automate the identification of double Gs. CMS also offered training sessions and issued additional guidance to state survey agencies and regional offices. While the on-line reporting tool and training were useful, they did not address the underlying complexity of the policy. For example, CMS staff told us that in developing the tool they had initially misinterpreted the double G immediate sanctions policy. As a result, the tool produced many false positives: that is, it identified deficiencies as triggering an immediate sanction that in fact did not occur. Moreover, a December 2005 report by the Office of the Inspector General of the Department of Health and Human Services also reported that state survey agency staff continued to have difficulty identifying double G cases.

Furthermore, our analysis of CMS’s application of the policy to the homes we reviewed demonstrated that the policy’s complex rules allowed homes to escape immediate sanctions even if they repeatedly harmed residents; these rules include (1) the requirement for an intervening period of compliance, (2) the clearing effect of standard surveys, and (3) the lack of differentiation between single and multiple instances of harm. Such rules may in part explain why the homes we reviewed only had 69 instances of immediate sanctions over a 6-year period, despite being cited 444 times for deficiencies that harmed residents.

Intervening period of compliance. G-level or higher deficiencies only count toward a double G immediate sanction if the home has an intervening period of compliance between the two G-level or higher deficiencies. In order to receive an immediate sanction, a home has to achieve substantial compliance between the pair of surveys on which the G-level or higher deficiencies are cited. As a result of this rule, homes that do not correct deficiencies do not receive immediate sanctions, while homes that do correct deficiencies do receive immediate sanctions. CMS officials stated that the intent of the policy as written was to give nursing homes a chance to correct deficiencies and achieve a period of compliance. Without this provision, CMS officials believe that homes could get caught in endless double G cycles.

The following example illustrates how the policy allows nursing homes to escape immediate sanctions if they do not correct deficiencies and have ongoing noncompliance periods.

In a 9-month time period, a Pennsylvania home had seven surveys, each with at least one G-level deficiency (a total of 19 G-level deficiencies). However, double G immediate sanctions were triggered by only two pairs of surveys because the home had failed to correct some deficiencies before the next survey that again found actual harm. Figure 7 illustrates how some pairs of surveys with G-level deficiencies do not count as a double G because of the intervening period of compliance rule. For example, both the March and April surveys cited G-level deficiencies. However, the pair of surveys did not result in a double G, which would have triggered immediate sanctions because the home did not correct the G-level deficiency cited on the March survey before the next G-level deficiency was cited in April. Following the April survey, the home corrected the deficiencies, resulting in a period of compliance. In July, another survey found a new G-level deficiency. Because of the intervening period of compliance, the March and July surveys resulted in a double G, for which immediate sanctions would have been warranted.

Clearing effect of standard surveys. Under the double G immediate sanctions policy, a standard survey without a G-level or higher deficiency “clears the home’s record” for the purposes of determining whether a double G occurred. As a result of this rule, surveys with G-level or higher deficiencies that occurred before the standard survey without a G-level or higher deficiency are not considered in determining whether a double G should be cited and an immediate sanction should be imposed. CMS officials believe that it is appropriate for standard surveys without G-level or higher deficiencies to clear the home’s record for double G purposes because standard surveys are comprehensive and occur regularly. Yet, we have previously reported that weaknesses in the survey process result in surveyors’ missing serious deficiencies on standard surveys. Moreover, variability among states in the citation of serious deficiencies suggests that some states may not be citing deficiencies at the appropriate scope and severity (see app. II). For example, according to California officials, the guidance the state received from the CMS regional office created confusion as to what constituted actual harm, and this confusion contributed to the decline in citations of serious deficiencies in California. The regional office clarified its guidance in late 2004.

The following example illustrates how a standard survey without G-level or higher deficiencies affects double G determinations and how having uncorrected deficiencies can prevent a home from receiving an immediate sanction.

In approximately a 12-month period, a Michigan home had five surveys, four of which had one G-level deficiency. However, the G-level deficiencies triggered double G immediate sanctions only once instead of three times because in one instance a standard survey cited no G-level deficiencies and in the other there was no intervening period of compliance. Figure 8 illustrates how some pairs of surveys with G-level deficiencies do not count as double Gs because of the clearing effect of standard surveys. For example, state surveyors found a G-level deficiency during a January 2000 complaint survey. However, on the home’s standard survey a month later (February 2000), no G-level or higher deficiencies were found by surveyors. As a result, when surveyors found another G-level deficiency on a complaint survey several months later (November 2000), the G-level deficiency on the home’s January survey was not considered, and no immediate sanctions were triggered. The pair of surveys in January 2000 and November 2000 did not trigger immediate sanctions because, in effect, the February 2000 standard survey cleared the home’s record.

Multiple instances of harm. Multiple G-level or higher deficiencies identified on a survey that results in an immediate sanction are sometimes treated the same, in terms of enforcement, as a single instance of harm or immediate jeopardy cited on a survey. We examined the sanctions imposed for a single versus multiple instances of harm and found that the sanctions can be quite similar, despite the significant differences in the number of deficiencies. The following example involves two surveys of a Michigan home with a history of repeated noncompliance. On a survey with only 1 G-level deficiency, CMS implemented a $350 per day CMP and a discretionary DPNA. On a different survey with 33 D-level or higher deficiencies and 6 G-level or higher deficiencies, CMS implemented a $200 per day CMP and a discretionary DPNA. We found similar examples among other homes we reviewed.

We discussed our concerns with CMS about how the double G immediate sanctions policy allows some homes to avoid immediate sanctions. CMS officials stated that regardless of the policy, state and regional office officials retain the discretion to impose immediate sanctions even when not required by the policy. However, based on a discussion with CMS officials, we believe that, instead of imposing sanctions of appropriate severity, state and regional office officials may impose weaker sanctions for problem homes that have escaped immediate sanctions because of the complexities of the policy. CMS agreed that this could happen.

CMS Oversight Continues to Be Hampered by Data Limitations

Fragmented data systems and incomplete national reporting capabilities continue to hamper CMS’s ability to track and monitor enforcement. In March 1999, we reported that CMS lacked a system for effectively integrating enforcement data nationwide and that the lack of such a system weakened oversight. Since 1999, CMS has made progress in developing an enforcement data collection system called the ASPEN Enforcement Manager (AEM). However, while AEM collects valuable data from the states and regions, it is not fully integrated with other CMS systems used to track nursing home survey and enforcement activities. For example, when regional and state survey officials want to evaluate complaint and enforcement data, they must access one system for complaint data and then access another system, AEM, for enforcement data. Because there is no direct interface between the two systems, CMS and states must rely on fragmented data systems for tracking and monitoring enforcement. Furthermore, CMS officials told us that the agency does not have a concrete plan to use the enforcement data to improve monitoring and oversight but that some national enforcement reports are under development.

From 2000 to 2004, CMS tracked sanctions with LTC, a data system developed in the Chicago region that became operational in all 10 CMS regions in 2000. LTC was a relatively simple system designed to collect sanctions data, automatically generate sanction imposition letters, and automatically calculate the 35 percent reduction in CMPs for homes that waive the right to appeal deficiencies. LTC was not always useful for enforcement oversight because it was sometimes incomplete. Data entry into the LTC system was optional, and many regional and state surveyors continued to rely on their own, state-specific tracking systems. Moreover, during the time LTC was in use, states and regions were expected to continue updating the enforcement component of OSCAR, which duplicated some of the information in LTC. This required separate manual data entry into both LTC and OSCAR. We were told by regional office officials that sometimes only one of the files would be updated. Furthermore, LTC had no internal quality control checks for ensuring all fields were completed or that the data were accurate; in its design of LTC, CMS chose flexibility in modifying the data to accommodate special circumstances over a more rigid field edits system that would have controlled the data more tightly.

Since October 1, 2004, CMS has used AEM to collect state and regional data on sanctions and improve communications between state survey agencies and CMS regional offices. Specifically, AEM was designed to provide real-time entry and tracking of sanctions, issue monitoring alerts, generate enforcement letters, and facilitate analysis of enforcement patterns. CMS expects that the data collected in AEM will enable states, CMS regional offices, and the CMS central office to more easily track and evaluate sanctions against nursing homes as well as respond to emerging issues. Developed by CMS’s central office primarily for use by states and regions, AEM is one module of a broader data collection system called ASPEN. There are a number of other modules under the ASPEN umbrella, including the ASPEN Complaints/Incidents Tracking System (ACTS) module. The ASPEN modules—and other data systems related to enforcement such as the financial management system for tracking CMP collections—are fragmented and lack automated interfaces with each other. As a result, enforcement officials must pull discrete bits of data from the various systems and manually combine the data to develop a full enforcement picture. For example, if regional office officials want to review a home’s complaint history, they must access ACTS to print a report on complaints, access AEM to print a report on corresponding sanctions, manually compare the two reports, and then access the CMP tracking system to determine whether a corresponding CMP was paid. Each step adds to staff workload.

AEM collects potentially useful enforcement data from the states and regions, but, as described, CMS has not integrated AEM with the other data collection systems (e.g., ACTS); furthermore, the agency has not defined a plan for using the AEM data to inform the tracking and monitoring of enforcement through national enforcement reports. In a December 2004 CMS report, the agency stated that AEM “will permit meaningful comparisons of like measures and will serve as a primary tool on which to base policy decisions, new initiatives and strategies for improving care to our Nation’s nursing home population.” While CMS is developing a few draft national enforcement reports, it has not developed a concrete plan and timeline for producing a full set of reports that use the AEM data to help in assessing the effectiveness of sanctions and its enforcement policies. In addition, while the full complement of enforcement data recorded by the states and regional offices in AEM is now being uploaded to CMS’s national system, CMS does not intend to upload any historical data. Efforts to track and monitor enforcement would be greatly enhanced by reports that contain the historical data; for example, with historical data the agency could generate reports that provide a longitudinal perspective of a home’s compliance history, compare trends across states and regions, and, overall, help evaluate the effectiveness of sanctions and policies. Finally, like LTC, AEM has quality control weaknesses. While AEM has some automatic quality control mechanisms to ensure that the data entered are complete and in a valid format, there are no systematic quality control mechanisms to ensure that the data entered are accurate. For example, while the system automatically requires the entry of valid survey dates, CMS does not conduct periodic data audits to check that the survey dates are correct.

CMS officials told us they will continue to develop and implement enhancements to AEM to expand its capabilities over the next several years. However, until CMS develops a plan for integrating the fragmented systems and for using AEM data—along with other data the agency collects—efficient and effective tracking and monitoring of enforcement will continue to be hampered and, as a result, CMS will have difficulty assessing the effectiveness of sanctions and its enforcement policies.

Other CMS Initiatives to Improve Enforcement

In addition to its efforts to implement a new data system for managing enforcement, CMS has taken other steps to improve its enforcement of nursing home quality requirements. For example, the agency has developed guidance to help ensure greater consistency across states in CMP amounts imposed, revised its Special Focus Facility program, and commissioned two studies to examine the effectiveness of nursing home enforcement.

To ensure greater consistency in CMP amounts proposed by states and imposed by regions, CMS, in conjunction with state survey agencies, developed a grid that provides guidance for states and regions. The CMP grid lists ranges for minimum CMP amounts while allowing for flexibility to adjust the penalties on the basis of factors such as the deficiency’s scope and severity, the care areas where the deficiency was cited, and a home’s past history of noncompliance. In August 2006, CMS completed the regional office pilot of its CMP grid. The results of the pilot, which are currently being analyzed, will be used to determine how the grid should be used by states; its use would be optional to provide states flexibility to tailor sanctions to specific circumstances.

CMS revised its Special Focus Facility program, an initiative intended to increase the oversight of homes with a history of providing poor care. We had previously reported that the program was worthwhile but that its narrow scope excluded many homes that provide poor care. Moreover, according to CMS, the goal of two surveys per home per year was never achieved because of the relatively low priority assigned to the program and the lack of state survey agency resources. In December 2004, CMS announced three changes in the operation of the program. First, CMS expanded the scope of the program from about 100 homes nationwide to about 135 homes by making the number of Special Focus Facilities in each state proportional to the number of nursing homes. Second, CMS revised the method for selecting nursing homes by reviewing 3 years’ rather than 1 year’s worth of deficiency data. This change was intended to ensure that the homes in the program had a history of noncompliance rather than a single episode of noncompliance. Third, CMS strengthened its enforcement for Special Focus Facilities by requiring immediate sanctions for homes that failed to significantly improve their performance from one survey to the next and by requiring termination for homes with no significant improvement after three surveys over an 18-month period. Despite these changes, however, many homes that could benefit from enhanced oversight and enforcement are still excluded from the program. As noted earlier, few of the homes we reviewed were or are part of CMS’s Special Focus Facilities program. In 2005, only 2 were designated Special Focus Facilities and in 2006, the number increased to 4. Of the 8 homes that cycled in and out of compliance seven or more times (see fig. 3), 6 are still open but only 1 is now a Special Focus Facility. Although CMS now requires QIOs to work with poorly performing nursing homes, this initiative also only targets a small number of homes—as few as 1 to 3 facilities in each state.

To enhance its understanding of and ability to improve the enforcement process, CMS has funded two studies that will examine the steps that lead to sanctions as well as the impact of enforcement on homes’ quality-of- care processes.

Qualitative Enforcement Case Studies. This study, which began in the spring of 2003 and is scheduled to be completed in early 2007, required research nurses to visit 25 nursing homes in four states to evaluate how the survey and enforcement processes are carried out and assess the extent to which the enforcement process results in changes in nursing staff behavior and improved compliance with federal requirements.

Impact of Sanctions on Quality. The objective of this study is to test the effects of sanctions on facility behavior and resident outcomes. Researchers will identify and compare a group of nursing homes that had both deficiencies and sanctions to a group of nursing homes that had similar levels of deficiencies but no sanctions. A year later, researchers will review the nursing home’s subsequent survey to determine whether the sanctions resulted in any significant changes in the quality of care delivered. The study began in the fall of 2004 and the first report is scheduled to be completed by mid-2007.

Although CMS has taken several steps to improve its enforcement of nursing home requirements, its Nursing Home Compare Web site does not include information on sanctions. Thus, CMS does not indicate what sanctions have been implemented against nursing homes, nor does it identify homes that have received immediate sanctions for repeatedly harming residents.

As noted throughout this report, we found variation among the states we reviewed in areas such as the number and amount of CMPs implemented and the proportion of homes with double Gs. In general, these differences reflect the state survey agencies’ views on the effectiveness of certain sanctions and differences in state enforcement policies. For example, Pennsylvania state officials prefer state rather than federal sanctions because they believe the former are more effective, have a greater deterrent effect on providers, and are easier and quicker to impose. Pennsylvania requires homes to pay a state CMP prior to appeal, even if the home appeals the deficiency. In contrast, homes need not pay a federal CMP until after an appeal is resolved. Pennsylvania rarely implemented federal CMPs on the 14 state homes whose compliance history we reviewed, preferring to use state sanctions instead. In Michigan, state officials are more likely to use federal CMPs and implement them in greater amounts than other states we reviewed. Texas state officials often use state rather than federal sanctions for G-level or higher deficiencies, in part because they cannot propose a federal CMP if they impose a state sanction and because the total state money penalty that may be imposed may be higher than federal CMPs. California had fewer sanctions than Michigan. California typically investigates complaints under its state licensure authority, which may partly explain why California has fewer reported deficiencies and federal sanctions. We believe it is important for CMS to explore the differences in state enforcement approaches and policies so that it can both identify problem areas and identify best practices that could be disseminated nationwide.

Conclusions

Although CMS has taken steps to strengthen the nursing home enforcement process, our review of 63 homes in four states with a history of quality problems identified design weaknesses as well as flaws in the way sanctions are implemented that diminish their full deterrent effect. Some of these homes repeatedly harmed residents over a 6-year period and yet remain in the Medicare and Medicaid programs. Until these systemic weaknesses are addressed, the effectiveness of sanctions in encouraging homes to return to and maintain compliance will remain questionable and the safety and security of vulnerable residents will remain at risk.

CMS’s immediate sanctions policy fails to hold homes with a long history of harming residents accountable for the poor care provided. The policy’s complexity, such as the requirement for an intervening period of compliance, prevents its use for the very homes it was designed to address—those with systemic quality problems. Furthermore, the immediate sanctions label is misleading because sanctions are not, in fact, immediate. The notice period required by CMS regulations for sanctions such as DPNAs and terminations provides homes with a de facto grace period during which they can correct deficiencies to avoid an immediate sanction. Moreover, in one state we reviewed, the immediate sanctions policy does not fully identify all homes with repeat serious deficiencies because most complaint deficiencies, which can often trigger a double G, were being cited under state licensure authority, not federal. Consequently, some problem homes in the state were not identified by the policy and thus were able to avoid double G immediate sanctions.

Although CMPs and DPNAs were the most frequently used sanctions nationwide and for the homes we reviewed, their effectiveness was undermined by a number of weaknesses. The CMPs levied against the homes we reviewed were often nominal, significantly less than the maximum amounts Congress provided for in statute. To strengthen CMPs, CMS has been developing a CMP grid since 2004 to guide states and regional offices in determining appropriate CMP amounts, and CMS regional offices piloted the grid in 2006. However, its implementation is expected to be optional for states, once again contributing to interstate variation. Despite the nominal amounts, CMPs, unlike DPNAs, do not require a notice period and may be imposed retroactively before the date of the survey. However, these advantages are countered by the fact that, under the Social Security Act, payment by homes of federally imposed CMPs is deferred if they appeal their deficiencies, a process that can take years, diminishing the immediacy of the sanction and further undermining the sanction’s deterrent effect. While there is precedent under the federal surface mining statute, which permits the collection of CMPs before exhaustion of appeals, it is unclear if the informal dispute resolution process available to nursing homes provides the same type of procedural safeguards that courts have pointed to in upholding the mining statute provision. Some states choose to use their own authority to impose state fines, which can sometimes be implemented faster than is possible under federal law. Although CMS has the authority to implement discretionary DPNAs after a 15-day notice period for the homes we reviewed, it did not generally do so. It imposes mandatory DPNAs when criteria are met, which provide homes a 3-month de facto grace period to correct deficiencies. Because many homes we reviewed returned to compliance within 3 months—though often only temporarily—the DPNAs frequently were rescinded.

Termination—the most powerful enforcement tool—was used infrequently nationwide and for the homes we reviewed because of states’ and CMS’s concerns about potential access to care and resident transfer trauma. However, we found that some poorly performing homes are located in areas with several other nearby nursing homes. Even though some homes we reviewed cycled in and out of compliance numerous times while continuing to harm residents, CMS allowed them to determine for themselves whether and when to leave the Medicare and Medicaid programs. Even when terminations were imposed, their deterrent effect was undermined by extending some termination dates to give the homes more time to correct deficiencies. CMS’s earlier termination of such troubled homes could have cut short the cycle of poor care. CMS’s revamped Special Focus Facility program would provide for termination of poorly performing homes within 18 months if they fail to show significant improvement in the quality of care provided to residents. Despite the expansion of the program from about 100 to about 135 homes, the number of Special Focus Facilities is inadequate because, as our work has demonstrated, the program still fails to include many homes with a history of repeatedly harming residents.

Although CMS has made progress in establishing a database to help it track and monitor the nursing home enforcement process, the development of AEM is not yet complete. AEM is not integrated with other important databases to help ensure that CMS has a comprehensive picture of a home’s deficiency history, and CMS has not developed a concrete plan for using national enforcement reports—built off of AEM data—to help evaluate the effectiveness of sanctions and its enforcement polices. Having longitudinal enforcement data available for homes would enable CMS to pursue increasing the severity of sanctions for homes that repeatedly harm residents. Furthermore, CMS has not developed a system of quality checks to ensure the accuracy and integrity of AEM data.

CMS’s Nursing Home Compare Web site has been modified a number of times to add important quality information about nursing homes. While CMS now summarizes the results from both standard surveys and complaint investigations, the Web site contains no information about sanctions implemented against nursing homes, nor does it identify homes that have received immediate sanctions for repeatedly harming residents. Such information could be valuable to consumers who use the Web site to help choose a home for family members or friends.

Recommendations for Executive Action

To address weaknesses that undermine the effectiveness of the immediate sanctions policy, we recommend that the Administrator of CMS reassess and revise the policy to ensure that it accomplishes the following three objectives: (1) reduce the lag time between citation of a double G and the implementation of a sanction, (2) prevent nursing homes that repeatedly harm residents or place them in immediate jeopardy from escaping sanctions, and (3) hold states accountable for reporting in federal data systems serious deficiencies identified during complaint investigations so that all complaint findings are considered in determining when immediate sanctions are warranted.

To strengthen the deterrent effect of available sanctions and to ensure that sanctions are used to their fullest potential, we recommend that the Administrator of CMS take the following three actions: Ensure the consistency of CMPs by issuing guidance such as the standardized CMP grid piloted during 2006.

Increase use of discretionary DPNAs to help ensure the speedier implementation of appropriate sanctions.

Strengthen the criteria for terminating homes with a history of serious, repeated noncompliance by limiting the extension of termination dates, increasing the use of discretionary terminations, and exploring alternative thresholds for termination, such as the cumulative duration of noncompliance.

To collect CMPs more expeditiously, which could increase their deterrent effect, we recommend that the Administrator of CMS develop an administrative process under which CMPs would be paid—or Medicare and Medicaid payments in equivalent amounts would be withheld—prior to exhaustion of appeals and seek legislation for the implementation of this process, as appropriate. Payments could be refunded with interest if the deficiencies are modified or overturned at appeal.

To strengthen sanctions for homes with a history of noncompliance, such as a large number of deficiencies or a large number of actual harm and immediate jeopardy deficiencies, we recommend that the Administrator of CMS consider further expanding the Special Focus Facility program with its enhanced enforcement requirements to include all homes that meet a threshold, established by CMS, to qualify as poorly performing homes.

To improve the effectiveness of its new enforcement data system, we recommend that the Administrator of CMS take the following three actions: Develop the enforcement-related data systems’ abilities to interface with each other in order to improve the tracking and monitoring of enforcement, such as by developing an automatic interface between systems such as AEM and ACTS.

Expedite the development of national enforcement reports, including longitudinal and trend reports designed to evaluate the effectiveness of sanctions and enforcement policies, and a concrete plan for using the reports.

Develop and institute a system of quality checks to ensure the accuracy and integrity of AEM data, such as periodic data audits conducted as part of CMS’s annual state performance reviews.

To improve public information available to consumers that helps them assess the quality of nursing home care, we recommend that the Administrator of CMS expand CMS’s Nursing Home Compare Web site to include implemented sanctions, such as the amount of CMPs and the duration of DPNAs, and homes subjected to immediate sanctions.

Agency and State Comments and Our Evaluation

We obtained written comments on our draft report from CMS and three of the four states in which the homes we studied were located—California, Michigan, and Texas. We also received e-mail comments from the Director of the Division of Nursing Care Facilities in Pennsylvania. CMS’s comments are reproduced in appendix VI. California’s, Michigan’s and Texas’s comments are reproduced in appendixes VII, VIII, and IX, respectively. CMS generally concurred with our 12 recommendations in six areas intended to strengthen the enforcement process but did not always specify how it would implement the recommendations. In addition, CMS noted that implementation of 3 of our recommendations raised resource issues and that others required additional research. California concurred with our conclusions and recommendations, while Michigan and Pennsylvania indicated appreciation or general agreement. However, most state comments, including Texas’s, were technical in nature. Our evaluation responds to CMS and state comments in the six areas covered by our recommendations.

Addressing weaknesses in the double G immediate sanctions policy. CMS agreed that homes that repeatedly harm residents should not escape immediate sanctions and stated that it would remove the limitation on applying an additional sanction when a home failed to correct a deficiency that gave rise to a prior sanction. CMS also agreed to reduce the lag time between citation and implementation of a double G immediate sanction by limiting the prospective effective date for DPNAs to no more than 30 to 60 days. Reducing the lag time as much as possible is critical because it provides homes with a de facto grace period in which to correct deficiencies and avoid sanctions. Michigan commented about the need to increase the immediacy of DPNAs, noting that even the 15-day notice period associated with discretionary DPNAs was outdated now that homes are notified electronically and delivery can be verified. Currently, CMS has an incomplete picture of serious deficiencies cited against homes that could result in immediate sanctions because California investigates many nursing home complaints under state licensure authority. CMS agreed to collect additional information on complaints for which data are not reported in federal data systems. We believe that CMS’s commitment to do this will help better identify and deal with consistently poorly performing homes. CMS commented that the Social Security Act does not provide authority for CMS to require states to report enforcement actions taken under state-only authority if federal resources are not used for the complaint investigation; however, to the extent that federal funds are used for complaint investigations, our findings and recommendations remain valid. Michigan concurred that CMS needs the complete compliance history of a facility to assess its overall performance.

CMS acknowledged that the complexity of its immediate sanctions policy may be an inherent limitation and indicated that it intends to either strengthen the policy or replace it with a policy that achieves similar goals through alternative methods. CMS noted that it is concerned about whether the immediate sanctions policy has negatively affected the rates of state deficiency citations and may ultimately be ineffective with the most problematic facilities. We believe the policy has merit but that its complex requirements have prevented many homes from receiving immediate sanctions.

Strengthening the deterrent effect of sanctions. CMS agreed to issue a CMP analytic tool, or grid, and to provide states with further guidance on discretionary DPNAs and terminations. The CMP grid is a tool to help ensure national consistency in CMPs and to assist CMS regional offices in monitoring enforcement actions. Texas commented that it had been using the grid since June 2006 and found it to be very helpful. Michigan noted that it had independently developed and implemented a CMP grid in 2000 but expressed disappointment that CMS had not mandated state use of the agency’s grid. In addition, Michigan supported the need for additional CMS guidance on the use of discretionary termination. Such guidance, it commented, was necessary to ensure a consistent national approach. In response to our recommendation to increase the use of discretionary terminations, CMS stated that it will continue its research to design proposals that yield a more effective combination of robust enforcement actions but that do not penalize vulnerable residents. While we encourage CMS’s commitment to further research to improve the effectiveness of enforcement actions, we believe that CMS must also be committed to protecting residents from actual harm in poorly performing facilities— including terminating homes from the Medicare or Medicaid programs— when other steps fail to ensure the quality of resident care.

Collecting CMPs more expeditiously. CMS agreed to seek legislative authority to collect CMPs prior to the exhaustion of appeals, which could increase their deterrent effect. California commented that it supported this recommendation.

Expanding the Special Focus Facility program. CMS agreed with the concept of expanding the program to include all homes that meet a threshold to qualify as poorly performing homes, but said it lacks the resources needed for this expansion because of decreases in its budget and increases in both the number of providers and quality assurance responsibilities for state and federal surveyors. CMS stated that it envisioned expansion of the program if Congress fully funds the President’s proposed fiscal year 2008 budget for survey and certification activities. CMS specified other initiatives it will implement to improve the Special Focus Facility program.

Improving the effectiveness of enforcement data. CMS agreed to develop and implement a system of quality checks to ensure the accuracy of its data systems, including AEM. While the agency agreed to study the feasibility of linking the separate data systems used for enforcement and to develop other national standard enforcement reports, CMS indicated that available resources may limit its ability to take further action on these issues. CMS has already invested significant resources in developing potentially powerful data systems intended to improve the tracking and monitoring of enforcement, and we believe the agency should place a priority on ensuring that these systems operate effectively.

Improving information available to consumers. Rather than agreeing to report all implemented sanctions on its Nursing Home Compare Web site, CMS proposed reporting implemented sanctions only for poorly performing homes that meet an undefined threshold. CMS’s response was therefore not fully responsive to our recommendation. By only reporting sanctions for homes that meet a certain threshold—eight or more sanctions in a 3-year period, in an example provided by CMS—consumers might incorrectly assume that other homes have received no sanctions. Furthermore, CMS’s plan to post such limited sanctions data in an accessible location on its Web site is vague. We believe that consumers must be able to easily link deficiency and sanctions data.

CMS and three of the four states also provided technical comments, which we incorporated as appropriate.

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 to the Administrator of the Centers for Medicare & Medicaid Services and appropriate congressional committees. We will also make copies available to others upon request. In addition, the report will be 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 X.

Appendix I: Scope and Methodology

This appendix provides a more detailed description of our scope and methodology and generally follows the order that findings appear in the report. We analyzed the fiscal years 2000 through 2005 enforcement and deficiency history for a total of 63 of the 74 nursing homes in four states— California, Michigan, Pennsylvania, and Texas—whose compliance history informed the conclusions of our March 1999 report. These homes had a history of providing poor quality care to residents prior to 1999. We excluded 11 of the original 74 homes from our analysis because they either closed before fiscal year 2000 or closed within 6 months of the beginning of fiscal year 2000 and had few or no deficiencies or sanctions. Some of the remaining 63 homes participated in the Medicare and Medicaid programs for only a portion of fiscal years 2000 through 2005 because they either closed permanently or closed temporarily and were subsequently reinstated. For these homes, we set a criterion that required that the home participate for at least 6 months of the fiscal year in order for its enforcement data in that fiscal year to be included in our analysis. Table 8 shows the distribution of homes across the four states in our 1999 report, the distribution of those homes for this report, and the number of providers participating for at least 6 months by fiscal year. Although the table shows some year-to-year fluctuation in the number of providers, the changes do not significantly influence our findings. While the focus of our analysis was the compliance history of these 63 homes, we also analyzed general trends in (1) implemented sanctions nationwide for the same 6-year period and (2) the proportion of homes in each state cited for serious deficiencies—that is, those at the actual harm or immediate jeopardy level.

CMS deficiency data. To determine the number, scope, and severity of deficiencies cited for the 63 homes, we analyzed OSCAR (On-Line Survey, Certification, and Reporting system) deficiency data resulting from standard surveys and complaint investigations. We also used OSCAR data on deficiencies identified during standard surveys to analyze state trends in the proportion of nursing homes cited for actual harm or immediate jeopardy during fiscal years 2000 through 2005. Because a home may be surveyed more than once a year, we counted a home only once if it was cited for actual harm or immediate jeopardy on more than one survey during the year. CMS officials generally recognize OSCAR data to be reliable. We have used OSCAR data in our prior work to examine nursing home quality.

CMS enforcement data and reliability issues. Because CMS used multiple data systems during the 6-year period we reviewed and because of data reliability issues, such as incomplete or inaccurate data, we used several sources to validate and analyze the enforcement history of the 63 homes. Based on discussions with CMS regional staff who were responsible for inputting the data, our primary data source for homes in California, Michigan, and Pennsylvania for the period fiscal years 2000 through 2004 was the Long Term Care Enforcement Tracking System (LTC). Because CMS’s Dallas regional office expressed concern about reliability of LTC data in the region, we relied primarily on regional office and state enforcement case files for the Texas homes we reviewed. CMS phased out use of LTC at the end of fiscal year 2004 and began using Aspen Enforcement Manager (AEM) to track sanctions. We obtained data for fiscal year 2005 sanctions from the limited AEM data stored in the OSCAR enforcement file. To clarify data from LTC or AEM and to perform some basic data checks, we relied on regional office and state enforcement case files and made adjustments as appropriate. We discussed the reliability of LTC and AEM enforcement data with CMS and state survey agency officials. CMS informed us that the data generally were reliable. We determined that the data were sufficiently reliable to assess broad trends in implemented sanctions nationwide, and to analyze sanctions among the 63 homes we reviewed because we could conduct checks of the homes’ enforcement data using CMS regional office and state case files. Because we could not conduct such checks of the data in all 50 states and the District of Columbia, we did not analyze trends across the individual states.

Trends in sanctions. Based on our assessment of data reliability, we determined that we could assess broad trends in implemented sanctions nationwide, but because we could not conduct checks of the data in all 50 states and the District of Columbia, we did not analyze trends across the states. For the homes we reviewed, using data from LTC, AEM, and regional office and state enforcement case files as described above, we analyzed the number of civil money penalties (CMP), denial of payments for new admissions (DPNA), and terminations implemented over two 3-year time periods—fiscal years 2000 through 2002 and fiscal years 2003 through 2005. We aggregated sanctions into fiscal years on the basis of their implementation dates. To determine the duration of DPNAs across the two time periods, we calculated the difference between the effective dates and the end of the DPNAs. To determine the amount of CMPs paid, we used the CMP Tracking System (CMPTS), a CMS financial management system, and aggregated CMPs into fiscal years according to the year in which they were implemented. Based on discussions with CMS officials we determined that data in CMPTS are generally reliable. They also stated that the system is the primary system used by CMS for the collection of CMPs and is the only source for CMP payment data used by CMS. We matched CMP data in LTC and CMPTS based on their collection number. For fiscal year 2005, we relied on regional enforcement files for the amount of paid CMPs.

Implementation rate of sanctions. We determined the implementation rate of sanctions imposed for the homes we reviewed in fiscal years 2000 through 2005. The percentage of implemented sanctions was calculated by dividing the number of implemented sanctions by the total number of imposed sanctions. The total number of imposed sanctions included those that were implemented, not implemented, and were pending. We used data from our March 1999 report on imposed and implemented sanctions for the period July 1995 through October 1998.

Range of sanctions. CMS enforcement data allowed us to differentiate between per day and per instance CMPs and mandatory and discretionary DPNAs and terminations. We counted the number of sanctions by type and aggregated the number by fiscal year based on the date of implementation. The data provided the value of per day and per instance CMPs, which were used to calculate the median values of CMPs across the two time periods—fiscal years 2000 through 2002 and 2003 through 2005.

Cycling in and out of compliance. We analyzed the enforcement data from LTC, AEM, and CMS regional office and state records to determine if the 63 homes we reviewed cycled in and out of compliance from fiscal years 2000 through 2005. To determine the number of times homes cycled in and out of compliance, we counted the number of noncompliance cycles recorded for the 63 homes. A noncompliance cycle begins on the date of the survey finding noncompliance and ends when the home has achieved substantial compliance by correcting deficiencies. For noncompliance cycles for which sanctions were implemented, we examined survey dates, the date substantial compliance was achieved, and the sanctions that were implemented as a result of the deficiencies cited. To determine how quickly homes were again noncompliant, we calculated the difference between the date of the first survey of the subsequent noncompliance cycle and the substantial compliance date of the preceding noncompliance cycle. To quantify the number of noncompliance cycles during which actual harm occurred, we assessed whether homes were cited for G-level or higher deficiencies on the surveys within the noncompliance cycle.

Immediate sanctions policy. We identified instances in which the 63 homes we reviewed were cited for repeatedly harming residents to determine if immediate sanctions were imposed and their effect on deterring subsequent noncompliance. To identify sanctions imposed as a result of the immediate sanctions policy, we first identified homes that qualified for immediate sanctions using CMS’s Providing Data Quickly (PDQ) system which prepares a variety of reports using survey and certification data. CMS officials indicate that the data in Providing Data Quickly are generally recognized as reliable. We then matched the survey date in Providing Data Quickly with the survey date in the enforcement data to identify the noncompliance cycle during which qualifying deficiencies were cited. This step enabled us to identify the sanctions imposed. We reviewed each case individually to verify that the sanction was the result of actual harm or higher-level deficiencies that denied the home an opportunity-to-correct period or simply resulted from another survey in the same noncompliance cycle. We also compared the date of survey with the imposition and effective dates of sanctions to assess how much time passed between identification of the deficiency that led to the immediate sanction and the imposition and implementation of the sanction. During the course of our work, we also discussed the rationale behind the specific formulation of the immediate sanctions policy with CMS officials.

Appendix II: Percentage of Nursing Homes Cited for Actual Harm or Immediate Jeopardy, by State, Fiscal Years 2000-2005

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 fiscal years 2000 through 2005 (see table 9). 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. If a home was cited for a G-level or higher deficiency on more than one survey during the fiscal year, we only counted it once.

Appendix III: Federal Sanctions for Nursing Homes Reviewed, by State, Fiscal Years 2000-2005

Table 10 provides the number of CMPs, DPNAs, and terminations implemented in the nursing homes we reviewed, by state for fiscal years 2000-2002 and fiscal years 2003-2005. It also provides the total amount of CMPs paid and the total duration of DPNAs implemented during the two time periods. The total amount of CMPs payable in the fiscal years may differ from what was paid.

Appendix IV: Examples of Homes Reviewed That Frequently Cycled In and Out of Compliance

This appendix provides additional examples of the compliance history of homes we reviewed that frequently cycled in and out of compliance (see table 6). The table also includes examples of the nature of the deficiencies cited in each noncompliance period. The three homes in table 11 were cited for serious deficiencies—those at the actual harm or immediate jeopardy level—and corrected these deficiencies only temporarily, despite receiving sanctions; on subsequent surveys, they were again found to be out of compliance, sometimes for the same deficiencies. A noncompliance period begins on the first day a survey finds noncompliance and ends when a home both corrects the deficiencies and achieves substantial compliance or the home is terminated from Medicare and Medicaid. Only federal sanctions that were imposed and implemented are included in the table.

Appendix V: Number of Days between Survey and Implementation Date of DPNA for Homes Reviewed, Fiscal Years 2000-2005

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

Appendix VII: Comments from the California Department of Health Services

Appendix VIII: Comments from the Michigan Department of Community Health

Appendix IX: Comments from the Texas Department of Aging and Disability Services

Appendix X: GAO Contact and Staff Acknowledgments

Acknowledgments

Related GAO Products

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

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.