The Omnibus Budget Reconciliation Act of 1987 (OBRA 87) introduced major reforms in the federal regulation of nursing homes that responded to growing concerns about the quality of care that residents received. Among other things, these reforms revised care requirements that facilities must meet to participate in the Medicare or Medicaid programs, modified the survey process for certifying a home’s compliance with federal standards, and introduced additional sanctions and decertification procedures for homes that fail to meet federal standards. The federal responsibility for overseeing nursing facilities belongs to HCFA, an agency of the Department of Health and Human Services (HHS). Among other tasks, HCFA defines federal requirements for nursing home participation in Medicare and Medicaid and imposes sanctions against homes failing to meet these requirements. The law requires HCFA to contract with state agencies to survey nursing homes participating in Medicare and Medicaid. In California, DHS performs nursing home oversight, and its authority is specifically defined in state and federal laws and regulations. As part of this role, DHS (1) licenses nursing homes to do business in California; (2) certifies to the federal government, by conducting reviews of nursing homes, that the homes are eligible for Medicare and Medicaid payment; and (3) investigates complaints about care provided in the licensed homes. To assess nursing home compliance with federal and state laws and regulations, DHS relies on two types of reviews—the standard survey and the complaint investigation. The standard survey, which must be conducted no less than once every 15 months at each home, entails a team of state surveyors spending several days on site conducting a broad review of care and services with regard to meeting the assessed needs of the residents. The complaint investigation entails conducting a targeted review with regard to a specific complaint filed against a home. California state law mandates that a complaint must be investigated within 2 to 10 days, depending on the seriousness of the infraction being alleged. HCFA requires that any complaint involving immediate jeopardy to a resident’s health or safety be investigated within 48 hours. The state and HCFA each has its own enforcement system for classifying deficiencies that determines which remedies, sanctions, or other actions should be taken against a noncompliant home. During standard surveys, California’s DHS typically cites deficiencies using HCFA’s classification and sanctioning scheme; for complaint investigations, it generally uses the state’s classification and penalty scheme, which allows the imposition of penalties and other actions under state enforcement criteria. Table 1 shows HCFA’s classification of deficiencies and their accompanying levels of severity and compliance status. HCFA guidance also classifies deficiencies by their scope, or extent, as follows: (1) isolated, defined as affecting a limited number of residents; (2) pattern, defined as affecting more than a limited number of residents; and (3) widespread, defined as affecting all or almost all residents. HCFA guidance on citing a deficiency’s scope as “widespread” states that “‘the universe’ is the entire facility,” not just those who, by their condition, would have been affected by the deficiency cited. The example provided explains that if a facility was deficient in appropriately treating all of a facility’s tube-fed residents—but the number of tube-fed residents was less than the facility’s total number of residents—surveyors must cite the deficiency’s scope as “pattern” and not widespread. Whether a deficiency is judged by surveyors to be isolated, a pattern, or widespread has implications for enforcement. For example, under HCFA regulations, a home is to be cited for “substandard quality of care” when it has certain deficiencies exceeding a particular severity and scope level. Receiving a substandard rating is significant because, depending on a home’s past performance, such a rating can prompt stronger enforcement actions than are typically taken under HCFA policy. The deficiencies that can warrant a substandard rating involve federal requirements related to quality of care, quality of life, and resident behavior and facility practices. Any of these types of deficiencies involving immediate jeopardy to resident health and safety results in a substandard rating. In addition, these types of deficiencies lead to a substandard rating if they are of the following severity and scope combinations: a pattern of or widespread actual harm that is not immediate jeopardy; or a widespread potential for more than minimal harm that is not immediate jeopardy, with no actual harm. The work of our expert nurses indicates that some of California’s nursing home residents who died in 1993 received unacceptable care that, in certain cases, endangered their health and safety. We also found evidence that serious care problems exist today in California nursing homes. Data from standard and complaint surveys indicate that nearly a third of California’s nursing homes experience serious care problems. We examined medical records of residents who died in 1993 from such causes as malnutrition, dehydration, pressure sores, and urinary tract infections with sepsis (the presence of bacteria and toxins in the blood or tissue). Their deaths were alleged to have been caused by unacceptable nursing home care. The 3,113 cases of alleged unacceptable care were distributed across nearly three-fourths of California’s nursing homes in 1993. However, to avoid selecting isolated instances of such deaths, our cases were drawn from about 5 percent of California’s homes that had at least five of the allegedly avoidable deaths. Our review suggests that 34 residents—more than half of the 62 cases reviewed—received unacceptable care. Our expert nurses concluded that, in some of these cases, unacceptable care endangered residents’ health and safety. Care problems included dramatic, unplanned weight loss, failure to properly treat pressure sores, and failure to manage pain. The examples in figure 1 illustrate the nature of the care problems we identified. In other cases we reviewed from 1993, the care documented in the medical record was acceptable. For example, when nursing home staff recognized that a resident was having difficulty swallowing food, they changed her diet to pureed food and placed the resident in a restorative feeding program, where she received additional help in eating. Although the resident later refused all food and liquid and eventually died of dehydration, our expert reviewers concluded that the nursing home staff provided acceptable care during the resident’s 4-month stay in the home. The cause of death listed on her death certificate might raise questions about the care she received, but only medical record review could determine whether the care was acceptable. DHS surveyors identified a substantial number of homes with serious care problems through their annual standard surveys of nursing homes and through ad hoc complaint investigations. Through examining the most recent two surveys from homes that had at least two standard surveys conducted between July 1995 and February 1998, and that may have had complaint investigations in 1996 or 1997, we found that surveyors cited 407 homes—nearly a third of the 1,370 homes included in our analysis—for serious violations classified under the federal deficiency categories, the state’s categories, or both. These homes were cited for violations that caused death, seriously jeopardized residents’ health and safety, or were considered by state surveyors to have constituted substandard care. Figure 2 shows the distribution of the nursing homes included in our analysis by the seriousness of the federal and state violations cited. Caused Death or Serious Harm (407 Homes) Caused Less Serious Harm (449 Homes) The four wedges in figure 2 correspond to federal deficiency categories shown in table 1 and include comparable-level deficiencies cited using the state’s separate classification scheme, as follows: “Caused death or serious harm” represents any federal deficiency that surveyors classified as constituting immediate jeopardy or substandard care and California deficiencies of improper care leading to death, imminent danger or probability of death, intentional falsification of medical records, or material omission in medical records. “Caused less serious harm” represents federal violations constituting actual harm but not immediate jeopardy or substandard care and California violations that have a direct or immediate relationship to the health, safety, or security of a resident. “More than minimal deficiencies” represents federal violations that could cause more than minimal harm to residents if not corrected. “Minimal or no deficiencies” represents either no violations or federal violations that could have resulted in minimal harm to residents if not corrected. Figure 3 shows the distribution of types of deficiencies in the category called “caused death or serious harm” and gives examples of each type. The category “improper care leading to death” does not include all residents who died in homes cited for violations related to residents’ care, because the category “life-threatening harm” can also include such violations and associated deaths. We also found examples of poor care that were ranked by state surveyors as causing less serious harm under the federal and state classification systems. For example, the cases described in figure 4 were not classified in the group of “most serious” violations. Deficiencies classified as “potential for more than minimal harm”—corresponding to the “more than minimal deficiencies” category in figure 2—can also include problems more serious than their classification implies, as figure 5 shows. Homes with deficiencies classified as having “potential for minimal harm”—corresponding to the “minimal or no deficiencies” category in figure 2—are considered by HCFA to be in substantial compliance, as shown in table 1. However, figure 6 shows examples of deficiencies that California surveyors classified in this category in which the harm could be considered by some to be greater than minimal. The deficiencies that state surveyors identified and documented very likely capture part but not the full extent of care problems in California’s homes, for several reasons. Some homes can mask problems because they are able to predict the timing of annual reviews or because medical records sometimes contain inaccurate information that overstates the care provided, given the resident’s observed condition. In addition, state surveyors can miss identifying deficiencies because of limitations on the methods used in the annual review—methods established in HCFA guidance on conducting surveys—to identify potential areas of unacceptable care. The extent of care problems is likely to be masked because of the predictability of homes’ standard surveys.