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S. HRG. 106-485
HCFA REGIONAL OFFICES:INCONSISTENT, UNEVEN, UNFAIR
HEARINGBEFORE THE
SPECIAL COMMITTEE ON AGING'UNITED STATES SENATE
ONE HUNDRED SIXTH CONGRESS
FIRST SESSION
WASHINGTON, DC
NOVEMBER 4, 1999
Serial No. 106-19Printed for the use of the Special Committee
on- Agin
U.S. GOVERNMENT PRINTING OFFICE
62-902 ec WASHINGTON: 2000
For sale by the U.S. Government Printing OfficeSuperintendent of
Documents, Congressional Sales Office. Washington, DC 20402
ISBN 0-16-060607-1
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SPECIAL COMMITTEE ON AGING
CHARLES E. GRASSLEY, Iowa, ChairmanJAMES M. JEFFORDS, Vermont
JOHN B. BREAUX, LouisianaLARRY CRAIG, Idaho HARRY REID,
NevadaCONRAD BURNS, Montana HERB KOHL, WisconsinRICHARD SHELBY,
Alabama RUSSELL D. FEINGOLD, WisconsinRICK SANTORUM, Pennsylvania
RON WYDEN, OregonCHUCK HAGEL, Nebraska JACK REED, Rhode IslandSUSAN
COLLINS, Maine RICHARD H. BRYAN, NevadaMIKE ENZI, Wyoming EVAN
BAYH, IndianaTIM HUTCHINSON, Arkansas BLANCHE L. LINCOLN,
ArkansasJIM BUNNING, Kentucky
THEODORE L. TorMAN, Staff DirectorMICHELLE PREJEAN, Minority
Staff Director
(11)
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CONTENTS
PaOpening statement of Senator Charles E. Grassley
............................................. 1Statement of:.
Senator John Breaux .............................. 2Senator
Larry E. Craig.
............................................................
3Senator Ron Wyden ..................
......................................... 6Senator Jack Reed
............. ...............................................
7Senator Blanche Lincoln ...................
........................................ 7
Prepared statement of: .Senator Harry Reid ..............
............................................. 5Senator James
Jeffords .................
.......................................... 5
PANEL I
William J. Scanlon, Director, Health Financing and Public Health
Issues,U.S. General Accounting Office, Washington, DC
............................................. 8
Steve White, Raleigh, NC, on behalf of the Association of Health
FacilitySurvey Agencies
........................................................... 67
.Michoel Hash, Deputv Aeiinistrator, Health Care Financing
Administration,U.S. Department oHealth and Human Services,
Washington, DC ............... 79
APPENDIX
Steve White's responses to Senator Craig's Questions
..................... .................... 115
(III)
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HCFA REGIONAL OFFICES: INCONSISTENT,UNEVEN, UNFAIR
THURSDAY, NOVEMBER 4, 1999
U.S. SENATE,SPECIAL COMMrrTEE ON AGING,
Washington, DC.The committee met, pursuant to notice, at 10:02
a.m., in room
SD-562, Dirksen Senate Office Building, Hon. Charles E.
Grassley(chairman of the committee), presiding.
Present: Senators Grassley, Craig, Breaux, Wyden, Reed,
Bryan,and Lincoln.
OPENING STATEMENT OF SENATOR CHARLES GRASSLEY,CHADRMAN
The CHAIRmAN. While we are giving our opening statements, Iwill
ask the witnesses to come to the table so that even though wehave
not introduced you yet, you will be there and we can savesome time
for that.
I am glad to call the hearing to order. It is a pleasure to
welcomemy colleagues and most importantly our witnesses, who are
basicto every hearing, and those of you from the public at-large
who areattending this hearing, some of whom I know are very
regularattendees at our hearings.
For more than 2 years now, our committee has heard storiesfrom
residents and their family members about poor treatment innursing
homes. We in this committee, whether in this forum or inother
forums, have worked to change the system. We have had aseries of
hearings and forums to bring many of these issues to thepublic's
attention. We have secured millions of additional dollarsfor the
enforcement system. And in the final analysis as it dealswith
nursing homes, we simply wanted to put an end to
bedsores,malnutrition and dehydration.
The obvious question at this point is whether we have been
suc-cessful. Can we assure the American public and particularly
nurs-ing home residents and their families that there are better
condi-tions? Can we ease the anxiety of those who must place their
fam-ily members into nursing homes?
When it comes right down to answering that question, if we
aregoing to be candid, we have to say: Not really; not yet. In a
sense,think of our nursing home enforcement system as a diseased
tree.The Health Care Financing Administration has cut down
deadbranches, plucked off sickly leaves; the ailing tree trunk and
itsdiseased roots are still intact, and anything that grows from
the
(1)
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anemic base is tainted. So until we cut down the tree, we are
goingto get nothing but bitter fruit.
The ailing tree trunk is the weak use of enforcement tools
byHCFA. Eighteen months ago, the General Accounting Office
docu-mented this problem, and the Clinton administration pledged to
fixit. One specific fix was that the Federal Government should
cutofffunding to States that do a bad job of inspecting their
nursinghomes. Another fix was that the Federal Government should do
abetter job of monitoring State inspections of nursing homes.
Who is responsible for seeing to it that the States inspect
nursinghomes properly? Of course, it is the HCFA regional office
adminis-trators. And over the past year, the General Accounting
Office hastold us how poorly HCFA's regional offices have performed
in over-sight of Medicare contractors, of Medicaid school-based
programsand of Medicare+Choice programs. Now the GAO is telling us
theregional office problem spills over into State agency
evaluations.These evaluations are inconsistent, uneven, and unfair.
They donot tell the truth about how a State survey program works or
doesnot work.
Today the General Accounting Office tells us that HCFA hasnever
terminated a contract with a State inspection agency andthat it has
reduced the State inspection funding only once.
Part of the reason for these minimal sanctions is HCFA's lack
ofan adequate way of knowing whether States are fulfilling their
du-ties or not. Obviously, a punishment must fit the crime, and if
theregional offices cannot evaluate the States, HCFA cannot
punishthem for failures.
Today I hope we will hear how HCFA plans to address
theseproblems. I hope to hear about a swift and sound plan of
correction.Like many Americans, I do not understand why the
greatest Na-tion on the face of the Earth cannot make sure that
nursing homesare cleaned up once and for all.
Our first witness is Dr. William Scanlon, Director of the
HealthFinancing and Public Health Issues area of the U.S. General
Ac-counting Office. He has directed the GAO's analysis of
nursinghomes at our committee's request.
Our second witness is Steve White, chief of licensure and
certifi-cation in North Carolina. He represents the Association of
HealthFacility Survey Agencies in his capacity as that
organization's im-mediate past president.
We also welcome Mr. Michael Hash, Deputy Administrator ofHCFA,
who will be our final panelist. I want to thank Mr. Hashfor being
here today. Members of this committee were quite dis-turbed in
March when HCFA did not attend our hearing to hearwhat citizens had
to say about the inadequacies of HCFA's com-plaint investigation
process. So we do appreciate your presence aspart of this panel and
look forward to HCFA's participation in thecommittee's future
events.
Senator Breaux.
STATEMENT OF SENATOR JOHN BREAUXSenator BREAUX. Thank you very
much, Mr. Chairman.I think you have adequately described what we
are attempting
to do this morning and what we want to hear from GAO and
from
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our State representatives, as well as from HCFA. Having HCFA,the
Government representatives, testify last is not intended toslight
the Federal agency. I remember when I was in the Houseand chaired a
committee back in the old days when Democratswere in charge, I used
to always ask the administrative witnessesto come to the hearings
and appear last so they could hear the tes-timony presented by
others and have the opportunity to completelyrespond. I thought
that that worked very well, and I am sure itwill this morning as
well.
I think that as this committee has continued to supervise
theMedicare program and look at Medicaid and how the money isbeing
spent, it becomes clearer and clearer to me that it is goingto be
really necessary to bring about wholesale and true reform ofthe
Medicare program. It has just gotten so complicated, and thisis one
example of why it almost becomes physically impossible tocoordinate
an agency of this size and do it very well.
Medicare has 135,000 pages of regulations, about three timesmore
than the Internal Revenue Code, and we all know how com-plicated
that is. So what we are finding in all of these areas, Ithink, is a
very large bureaucracy, which we have created, whichis attempting
to do the job that Congress has said it has to do butfinding some
real serious problems in being able to achieve thatgoal. And I
think that what we have here is an example of tlha,and structural
reform may not be what we need to do in order tomake it run more
efficiently and effectively for the people whom itis designed to
serve.
I look forward to the witnesses' presentations.Thank you, Mr.
Chairman.The CHAIRMAN. Thank you.I will call on Senator Craig and
then Senator Wyden and then
Senator Reed.
STATEMENT OF SENATOR LARRY CRAIG
Senator CRAIG. Mr. Chairman, thank you very much for holdingthis
hearing this morning.
It is also fun to join with the ranking member, Senator
Breaux,who is now the star of the seniors tennis circuit.
Senator BREAUX. I am just a senior.Senator CRAIG. Just a senior.
Well, I think that any time anyone
gets his name in a national newspaper for some kind of
athleticprowess, that is stardom.
Anyway, Mr. Chairman, I do want to thank you for holding
thishearing to search out what appear to be discrepancies between
theHealth Care Financing Administration's regional offices and
theirapplication of those policies.
I would also like to thank each of our witnesses for taking
thetime to be before this committee this morning to testify.
Like probably everyone else, I support effective efforts to
overseeand improve the quality of care of our elderly and what they
arereceiving through our nursing homes. However, I am a bit
con-cerned about HCFA's implementation of nursing home
initiatives,particularly the evaluation of State agency performance
and pen-alties associated with HCFA's enforcement of survey
activities.
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After speaking with several folks in my home State of Idaho
inpreparation for this hearing, including the executive director of
theIdaho Health Care Association which represents 78 of the
87skilled nursing facilities, I am concerned that the survey
process isinconsistent and is being enforced differently amongst
the variousHCFA regions and States. According to OSCAR data, Idaho,
Or-egon, and Washington, all in Region 10, are consistently worse
interms of survey statistics than the rest of the Nation. I must
tellyou, Mr. Chairman, that I do not have a trained eye, but I
visitfive, six, seven, nursing homes a year in my State concerned
aboutquality of health care delivery, and I must tell you that what
I see,at least from a layman's point of view, appears to be quality
carebeing delivered.
The chief of the Bureau of Facility Standards in Idaho
repeatedlytells me that he would be glad to hold any of our
facilities in Idahoup against any facility in any other State; yet
Idaho's survey num-bers would suggest that Idaho's skilled nursing
facilities are amongthe worst in the Nation.
I understand that HCFA has several different types of surveysin
place, including the Federal monitoring survey, the
comparativesurvey, and the observational surveys. But if the
central office doesnot require consistent standards of the
evaluations from region toregion or State to State, I question the
credibility of these efforts.
How is HCFA able to accurately assess the State agencies'
per-formance without good comparative data-something as simple
asthe number of hours spent on any particular survey or the ratio
ofState supervisors to one Federal supervisor may differ from
regionto region.
Again, I would like to thank you, Mr. Chairman, and our panelof
witnesses today. I believe that consistency among the
differentregions and States is critical to maintaining, or in this
case to im-proving, our health care delivery system.
Thank you.[The prepared statement of Senator Craig along with
prepared
statements of Senator Reid and Jeffords follows:]
PREPARED STATEMENT OF SENATOR CRAIG
I'd like to thank the Chairman for holding this hearing today on
the discrepancybetween the Health Care Financing Administration's
THFA's) regional offices andtheir application of HCFA's policies. I
would also like to thank each of the witnessesfor taking the time
to appear before the committee to testify.
Like probably everyone else here, I support effective efforts to
oversee and im-prove the quality of care our elderly are receiving
in the Nation's nursing homes.However, I am a bit concerned about
HCFA's implementation of nursing home ini-tiatives, particularly
the evaluation of state agency performance and penalties
asso-ciated with HCFA's enforcement of survey activities.
After speaking with several folks in my home State of Idaho,
including the execu-tive director of the Idaho Health Care
Association, which represents 78 of Idaho's87 skilled nursing
facilities, I am concerned that the survey process in
inconsistentand is being enforced differently among the various
HCFA Regions and States. Ac-cording to OSCAR data, Idaho, Oregon
and Washington (all from Region 10) areconsistently worse, in terms
of survey statistics, than the rest of the nation. How-ever, the
Chef of the Bureau of Facility Standards in Idaho repeatedly says
thathe would gladly hold any facility in Idaho up against any
facility in any other state.Yet, Idaho's survey numbers would
suggest that Idaho's Skilled Nursig Facilitiesare among the worst
in the Nation.
I understand that HCFA has several different types of surveys in
place, includingthe Federal monitoring survey, the comparative
survey, and the observational sur-
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veys. But if the central office does not require consistent
standards of the evalua-tions from region to region or state to
state, I question the credibility of these ef-forts. How is HCFA
able to accurately assess the state agency's performance
withoutgood comparative data? Something as simple as the number of
hours spent on anyparticular survey or the ratio of state surveyors
to one federal surveyor may differfrom region to region.
Again I would lke to thank the Chairman and our panel of
witnesses here today.I believe that consistency among the different
regions and states is crucial to main-taining, or in this case
improving, our healthcare system.
Thank you.
PREPARED STATEMENT OF SENATOR HARRY REID
Good morning Mr. Chairman, members of the Committee, and guests.
I ampleased that the Committee is continuing to examine the issues
surrounding thequality of care provided to nursing home residents
across the countries.
As a member of this Committee, I have participated in a number
of hearings thathave highlighted the poor quality of care and other
problems that exist in manynursing homes. It is hard to forget the
disturbing testimony we have heard fromthe families, nurses,
doctors, and nursing home aides who witnessed nursing homeabuse and
neglect first-hand. An important lesson we have learned from these
hear-ings is that there are significant weaknesses in the Federal
and State programscharged with ensuring quality of care for nursing
home residents.
As part of the Administration's strategy to ensure that all
nursing home residentsare treated with dignity and compassion, the
Health Care Financing Administration(HCFA) has implemented a new
Federal monitoring system to oversee the statemonitoring of nursing
home quality of care. I am pleased that we are taking a closerlook
at the impiementatiou of this particular bieuse a Stat, nsil-lance
and enforcement system is crucial to ensuring the health and
wel-being ofthe nursing home residents in our states.
While I am pleased that HCFA is committed to improving
enforcement in stateswith weak inspection systems, I am concerned
that HCFA is not ap plying its over-sight methods consistently
across all of its regions. In my home State of Nevada,there is
concern that our facilities are evaluated according to much
stricter stand-ards than nursing homes across the country. While I
cannot emphasize enough theimportance of a credible and rigorous
survey process, it is also important that thesurvey process is fair
and consistent across the country. I understand that the GAOreport
addresses this issue, and I look forward to hearing from HCFA today
to learnwhat steps it is taking to improve this situation.
As the largest single payer of nursing home care, the Federal
Government ischarged with ensuring that our oldest, most vulnerable
population receives quaJitycare, and that our standards are
strictly enforced. If we turn a blind eye to the sen-ous lack of
enforcement of nursing home standards in this country, we are no
betterthan the facilities that condone negligent and abusive
practices in their nursinghomes. I hope that today's hearing will
help HCFA to id~entify, some of the troublespots in this part of
the nursing home initiative so it may continue its efforts toensure
that nursing homes meet quality standard.
PREPARED STATEMENT OF SENATOR JEFFORDS
I applaud the Chair for convening today's hearing on another
part of the storyimportant to our national effort to deliver
quality nursing home care to frail anddisabled adults. The Chair's
strong leadership has been critical in provi the con-sistent, even,
and fair examination of what needs improving to actualize the
prom-ises of the 1987 Federal Nursing Home Reform Act, commonly
known as OBRA '87.
The Chair is not alone in his concern for quality nursing home
care delivered byan effective regulatory system. In a recent survey
conducted by Vermont's Depart-ment of Aging and Disabilities, 60
percent of Vermonters have concerns that a nurs-ing home stay is in
their future. Like all Vermonters, I want and need the Stateand
Federal Goverments to maximize the health, safety, welfare, and
rights protec-tions called for in State and Federal standards.
Today, we learned from the General Accounting Office, the Health
Care FinancingAdministration (HCFA), and the Association of State
Licensing and Survey Agenciesthat much needs to be done. HCFA's
current data and oversight systems do notallow the Agency a
reasonable ability either to monitor or to evaluate the actionsof
their own regional offices or of their contracted State agencies
which conductthousands of inspections. While the real-life outcome
of such lapses in Government
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oversight may be buried in jargon like the 'FOSS" survey, the
Federal Government'sresponsibility is to keep promises of quality
health care which were made to the vet-erans of World War H and
their children.
I take very seriously the responsibilities of Government to
protect our citizens liv-ing in the Nation's 17,000 nursing homes.
It is vitally important that Governmentbe able to detect and remedy
poor long-term care services with highly qualified,trained State
and Federal inspectors carrying out tested national protocols.
I call upon all the witnesses at today's hearing and upon the
advocates and pro-viders who serve nursing home residents to work
constructively to gather and evalu-ate all the data necessary to
evaluate the quality of nursing home care. And it isequally
important that advocates, providers, and governmental agencies work
hard-er to assure that the care and services provided in all
long-term care facilities honorour families, friends, and
communities. We and they desire nothing less.
The CHAIRMAN. Thank you. I think you also ought to be ap-plauded
for visiting as many nursing homes as you do as well.
Senator Wyden.
STATEMENT OF SENATOR RON WYDENSenator WYDEN. Thank you, Mr.
Chairman.I too appreciate your holding this hearing. Back when I
was di-
rector of the Gray Panthers at home in Oregon, I was the
publicmember on the Board of Nursing Home Examiners, and we had
alot of these problems then. It is very clear, as the GAO reports
tous today, that the problems are getting worse.
Nursing home surveys are now a crazy quilt of inconsistent
prac-tices with respect to the number of surveyors involved and the
timethat is spent on these surveys. To me, the message the GAO
hasfurnished the committee today is that there are no practical
toolsfor measuring the quality of nursing home care in this
country.That is what we have got to address, and one area that I am
par-ticularly interested in examining, Mr. Chairman-and I am
verypleased that you and Senator Breaux deal with all of these
matterson a bipartisan basis-is trying to put in place a system
that al-lows us to devote a special focus on those facilities that
are causingthe bulk of the problems.
It is very clear-and this is frankly true in any field, whether
itis law or accounting or the U.S. Congress or any other
institution-that you have a fraction of the people in the
institutions that youhave to devote special attention to. I would
hope that we could lookat creating what amounts to a watch list for
facilities that, on anongoing basis, are showing that they are not
complying with thequality standards that we need. If you have a
watch list so thatyou can focus on the 5 percent or whatever the
number is and en-sure that they get the rigorous kind of treatment
that is necessaryto monitor for quality care, it seems to me you
send a message allthrough the field that you are going to do what
is necessary to pro-mote good quality, and at the same time, you
are not going to sayto the majority of facilities-and Senator Craig
is absolutely right,there are a lot of facilities that give good
care; we see them in theWest-we ought to create a system that
allows us to put the focusof our resources in terms of monitoring
and enforcement on thosefacilities that are clearly not performing
in terms of quality. I hopethat in the days ahead, we can talk in
this committee about theidea of creating a watch list so that on an
ongoing basis, those fa-cilities that are not performing get
special scrutiny, and there is an
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effort to make sure that they are in compliance, and also use
theprivilege to offer care with reimbursement from the
Government.
So I look forward to working with the committee and to
hearingfrom our witnesses.
The CHAIRMAN. Thank you, Senator Wyden.Senator Reed.
STATEMENT OF SENATOR JACK REED
Senator REED. Thank you, Mr. Chairman, and I thank you verymuch
for holding this hearing. I think it is very important to tryto
assess the relationship between the HCFA central office and
theregional offices.
I have heard many of the same complaints that my colleagueshave
heard about the unfair application of standards, the vari-ations
between States and regions, the fact that within the indus-try,
there are certain standards applied in one place that are ap-plied
differently in other places. We all believe in standards andthe
need for them, but we equally believe that these standardsshould be
as uniform as possible, as fair as possible, and as effec-tive and
efficient as possible.
I believe that this hearing and the gentlemen who are here
withus today can help us better understand what is going on and
betterensure that we nave uniform a-d effective standards for the
nurs-ing home industry.
I thank you, Mr. Chairman.The CHAIRMAN. Thank you, Senator
Reed.Now, Senator Lincoln.
STATEMENT OF SENATOR BLANCHE L. LINCOLN
Senator LINcoLN. Thank you, Mr. Chairman, and as always,
weappreciate your leadership and Senator Breaux' leadership on
thisissue.
We would like to welcome you gentlemen to our committee. I
be-lieve that today, we are building on several other hearings
thatthis committee has held to assess the ability of HCFA to
monitorand improve the quality of care in nursing homes as part of
theNursing Home Initiative.
I am very interested in hearing from our witnesses about
howHCFA's central office coordinates with its regional offices in
over-seeing State surveys and applying penalties to States that do
notcomply with Federal regulations.
I do not think that the purpose of this hearing is to point
fingersor to criticize; rather, I think my colleagues and I hope to
identifythe barriers within HCFA that prevent coordination and
oversightat the regional and State levels, hopefully, encouraging
the righthand to speak to the left hand and know what each other
aredoing.
We also need to know what obstacles State survey agencies facein
order to conduct surveillance and enforcement activities. Theonly
way we can help in solving those problems is to understandwhat it
is that you are faced with.
The ultimate goal of all of our efforts is to ensure that our
sen-iors are safe and well-cared for in our skilled nursing
facilities. AsChairman Grassley said in a previous hearing on
nursing home
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oversight, over 90 percent of all nursing homes are doing a fine
job.It is that 5 to 9 percent of the bad apples that we really want
toweed out, and I think that is what this hearing is about.
In closing, this is not just a HCFA problem. It is not just a
Statesurvey agency problem. I think we all must work together to
im-prove the present oversight system. And based on today's
testimonyand questions, I think we can all make recommendations for
im-provement and work together to find those solutions. Our
seniorscertainly deserve nothing less in this country.
Thank you, Mr. Chairman, for your leadership. We appreciate
itand look forward to the testimony.
The CHAIRMAN. And I thank so many of my colleagues for turn-ing
out for this hearing, and not just for this hearing, but most ofthe
time, we have very good attendance, and as Chairman, I
reallyappreciate that, but more importantly, I think it shows the
concernof Members of the Senate about the conditions in nursing
homesand our desire to do something about it.
I have already introduced the witnesses, so we will start with
Dr.Scanlon, then Mr. White, and then Administrator Hash,
please.STATEMENT OF WILLIAM J. SCANLON, DIRECTOR, HEALTH FI-
NANCING AND PUBLIC HEALTH ISSUES, U.S. GENERAL AC-COUNTING
OFFICE, WASHINGTON, DCMr. SCANLON. Thank you very much, Mr.
Chairman and Mem-
bers of the Committee. I am very happy to be here today to
discussHCFA's regional offices and their ability to oversee the
State agen-cies that the Federal Government contracts with to
ensure thatnursing homes comply with Federal quality standards.
Today we are releasing a report that we prepared at your
requestthat evaluates HCFA's programs for the oversight of these
agen-cies.
The hearings that this committee has had, as you indicated,
Mr.Chairman, over the past 24 months have highlighted both the
dis-turbingly frequent instances of unacceptably poor care that
manynursing home residents receive, as well as weaknesses in the
Fed-eral and State programs to detect, correct, and prevent such
care.
This attention has helped to generate a renewed commitment
byHCFA, including a broad range of about 30 initiatives that it
hasundertaken, as well as actions by many States to improve
theirprograms to ensure that nursing homes meet quality
standards.
This summer, we testified that the initial implementation ofsome
of HCFA's initiatives has been uneven across the country,and
successful implementation will require continued commitmenton the
part of the Congress, HCFA and the States.
In the report being released today, we found that HCFA's
mecha-nisms for assessing State agency survey performance are
limited intheir scope and effectiveness are and not being applied
consistentlyacross each of HCFA's 10 regional offices. As a result,
HCFA doesnot have sufficient and consistent data to evaluate State
agenciesor to measure the success of its other initiatives to
assure nursinghome quality.
Presently, there is a wide range in the frequency with
whichStates identify serious deficiencies in nursing home care, as
Sen-ator Craig has indicated. HCFA cannot be certain, however,
wheth-
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er States with lower rates of deficiencies have better-quality
homesor are just failing to identify deficiencies that harm nursing
homeresidents.
In our view, this uncertainty results in part because HCFAmakes
negligible use of independent inspections, known as com-parative
surveys, that could provide information on whether
Statesappropriately cite deficiencies. HCFA only conducted between
oneand three comparative surveys per State over the last year.
Never-theless, more than two-thirds of these surveys found
deficienciesthat were more serious than those found by the State
surveyorsthat typically had been in the home one or 2 months
earlier.
Rather than making extensive use of comparative surveys,
HCFAinstead conducts 90 percent of its surveys as observational
surveysin which regional office surveyors accompany and observe
Statesurveyors as they conduct all or a portion of a nursing home
sur-vey. Observational surveys may help HCFA- identify State
agencytraining needs, but several problems inhibit their ability to
providea clear and accurate picture of State survey performance.
Perhapsmost importantly, HCFA's presence during the survey may
makeState surveyors more attentive to their tasks than they would
beif they were not being observed. It is a well-established fact
thatindividuals are very likely to improve their performance or
behav-ior when they are aware they are being sttudied.
To assure that State agencies are fulfilling other aspects of
theirquality assurance activities, HCFA relies on State-operated
qualityimprovement programs, largely based on self-reported
performancemeasures. As an oversight program, its effectiveness is
limited be-cause HCFA does not validate the information included in
theState self-assessments. As a result, HCFA has no assurances
thatStates identify or correct all serious problems. For example,
in ourprior work, we found that some States were not promptly
reviewingcomplaints filed against nursing homes, but had not
identified thisproblem to HOFA as required by the quality
improvement program.
These limitations of HCFA's oversight mechanisms are com-pounded
by inconsistencies in how the mechanisms are applied bythe 10
regional offices. For example, the regions vary in how theyselect
which nursing home surveys to review and the sample ofresidents in
those reviews. Regions also commit differing amountsof time to
observational surveys, ranging on average from 27 to 71hours per
survey, raising questions about whether the level of ef-fort in
some regions is sufficient. Our testimony this summer
alsohighlighted that regions varied widely in how they monitored
Stateimplementation of HCFA's nursing home initiatives.
You asked us, Mr. Chairman, to examine whether or not
HCFA'sorganizational structure may play a role in this
inconsistencyacross regions, and your staff has prepared a chart of
HCFA's orga-nizational structure, on my left. I would note that
HCFA relies onits 122 surveyors in the 10 regional offices to carry
out the over-sight responsibilities that I have been discussing.
While HCFA'sCenter for Medicaid and State Operations is the central
office divi-sion responsible for developing guidance to the regions
and theStates, the regional office staff is responsible for nursing
homeoversight, and they are not directly accountable to the
Center.Rather, they report to a regional administrator who, through
the
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four consortia of regions, reports directly to the HCFA
Adminis-trator.
Setting appropriate priorities, providing guidance on policies,
andassuring effective implementation involves extensive
coordinationand cooperation between the Center and the regions.
Such an ar-rangement can work, but it relies on there being
excellent coordina-tion and cooperation between the Center and each
region as wellas a commonality of purpose. When disagreements arise
that can-not be settled informally, they can only be resolved at
the level ofthe HCFA Administrator.
Apart from the issues related to whether HCFA identifies
inad-equate State agency performance is the question of what HCFA
cando to correct poor performance. HCFA currently does not have
anadequate array of effective remedies or sanctions to ensure
correc-tion. Generally, HCFA provides training to surveyors or
surveyteams, or requires that States submit a plan of correction.
If theseremedies fail, HCFA has two sanctions available-reducing
aState's survey and certification funding, or terminating its
surveycontract. Because of the extreme nature of both, it would be
rareto invoke either. Indeed, HCFA has only reduced State funding
onone occasion and has never terminated a State contract.
Further-more, HCFA's current oversight structure does not
effectively pro-vide the evidence on State performance that the
agency would needto justify applying such sanctions.
Let me conclude by noting that in our view, assuring that
theState survey agencies are fulfilling their responsibilities is
essen-tial if the efforts that this Committee has triggered to
eliminate thetoo frequent instances of poor nursing home care are
to succeed.Measuring State agency performance is a key first step
in knowingwhere to concentrate assistance and influence to improve
perform-ance. Significantly increasing the use of comparative
surveys wouldhelp to provide the information needed to direct such
efforts.
Consistency among the regions in the oversight of State
agenciesis important in order to further facilitate the targeting
of efforts toimprove performance. Consistency among the regions is
also essen-tial, as we discussed in June, for the implementation of
the fullarray of initiatives that HCFA has undertaken. The promise
ofthose initiatives will not be realized if they are not fully
deployedin all States.
Finally, while recognizing the difficulty of the task, we would
en-courage HCFA to continue to work to develop additional
remediesor sanctions for State agencies whose performance is not
adequateto protect their residents from poor nursing home care.
Mr. Chairman, this concludes my statement. I would be happyto
answer any questions that you or members of the Committeemay
have.
The CHAnMN. Thank you very much.[The prepared statement of Mr.
Scanlon follows:]
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11
United States General Accounting Office
TestimonyBefore the Special Committee on Aging, U.S. Senate
For Release on DeliveryExpected at 10:00 am.Thursday, November
4, 1999 NURSING HOMES
HCFA ShouldStrengthen Its Oversightof State Agencies toBetter
Ensure QualityCareStatement of Wiaiam j. hcanion, DirectorHealth
FInancing and Pubhc Health IssuesHealth, Education, and Human
Services Division
£ GAOA .111t * b lob *P wGAO/r-HEIIHS-OO27
GAO
-
12
,Nlr. Chairman and Members of the Committee:
We appreciate the opportunity to participate in the Committee's
hearing focusing onHCFA's regional offices and their ability to
oversee state agencies they contract with toensure that nursing
homes comply with federal quality standards. Today, I will
discussour study of HCFA's implementation of two of its nursing
home initiatives: onerequiring enhanced federal review of state
agencies' survey process. and the otheraddressing remedies and
sanctions to be applied when inadequate state performance
isidentified.
The 1.6 million elderly and disabled residents of the nation's
more than 17,000 nursinghomes are among the sickest and most
vulnerable populations in the nation, often needingextensive
assistance with basic activities of daily living such as dressing,
grooming,feeding, and using the bathroom. In 1999, these nursing
homes are expected to receivenearly $39 billion in federal payments
from the Medicare and Medicaid programs. Tohelp ensure that they
provide proper care to their residents, state agencies, under
contractwith the federal government, perform detailed inspections
at each of the homes. Thepurpose of these state agency surveys is
to ensure that nursing homes comply with federalquality standards
and that inadequate resident care is identified and conrected.
HCFA, inturn, is statutorily required to make sure that each state
agency has an effective surveyprocess in place.
The series of hearings this Committee has held over the past 15
months has highlightedboth the disturbingly high frequency of
unacceptably poor care that many nursing homeresidents receive as
well as weaknesses in federal and state programs charged
withensuring quality care. This has helped to generate a renewed
commitment by HCFA andmany states to improve their programs to
ensure that nursing homes meet qualitystandards, including a broad
range of about 30 initiatives that HCFA has undertaken tostrengthen
federal standards, oversight, and enforcement for nursing homes. In
reportsissued at the Committee's request since July 1998, we have
documented the severity ofcare problems nationwide and inadequacies
in the survey and enforcement process thattoo often leave these
problems unidentified or uncorrected, and have maderecommendations
to strengthen HCFA's oversight of nursing homes.' This summer,
wetestified that the initial implementation of some of HCFA's
initiatives has been unevenamong the states and will require
continued commitment by the Congress, HCFA, andthe states.2
The focus of today's hearing is HCFA regional offices' oversight
of state agencies thatperform the surveys of nursing homes,
addressing issues fundamental to ensuring thathomes meet federal
care standards protecting residents and that the states adhere to
thenew, stronger federal policies resulting from HCFA's nursing
home initiatives. The
IA list of related GAO products is at the end of this
statement.
2Nursine Homes: HCFA Initiatives to Improve Care Are Under Way
but Will Require
Continued Commitment (GAO/T-HEHS-99-155, June 30, 1999).
GAOrr-HEHS4XO-27
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13
information we are presenting here discusses HCFA's progress in
implementing two
important initiatives to improve its state oversight. In a
report we are releasing today. we
provide more detailed information.3
In brief. we found that HCFA's mechanisms for assessing state
agency survey
performance are limited in their scope and effectiveness and are
not being applied
consistently across each of HCFA's 10 regional offices. As a
result. HCFA does not
have sufficient, consistent, and reliable data to evaluate state
agencies or to measure the
success of its other nursing home initiatives. Given the wide
range in the frequencies
with which states identify serious deficiencies, HCFA cannot be
certain whether states
with lower rates of deficiencies have better quality homes or
are failing to identify
deficiencies that harm nursing home residents.
This uncertainty results, in part, because HCFA makes negligible
use of independent
inspections. known as comparative surveys, that could surface
information about whether
states appropriately cite deficiencies. Generally, only one to
two comparative surveys per
state were conducted in the more than 17,000 nursing homes over
the last year.
Nevertheless, two-thirds of these surveys found deficiencies
that were more serious than
those found by state surveyors during their reviews conducted
typically I or 2 months
earlier. About 90 percent of the inspections HCFA conducts
nationwide are, instead,
observational surveys. These surveys, in which HCFA surveyors
accompany state surveyteams, are useful in helping HCFA to provide
training to state surveyors, but are limited
as a method for evaluating state agencies' performance. HCFA's
presence during these
surveys is likely to make state surveyors more attentive to
their survey tasks than they
would be if they were not being observed-the Hawthorne effect.
Beyond these surveys,
HCFA also relies on a quality improvement program that is qIrg-
y hb on sasses' self-reported performance measures, which do not
accurately or completely reflect problemsin the state's
performance.
These limitations in HCFA's oversight methods are compounded by
inconsistencies in
how the methods are applied by its regions. For example, the
regions vary in how they
select nursing home surveys to review and how they choose
samples of residents to
review. Regions also commit differing amounts of time to conduct
observational
surveys, ranging on average from 27 to 71 hours, which raises
questions about whether
the level of effort some regions dedicate to observational
surveys is sufficient to
thoroughly review state surveyors' performance.
Furthermore, for state agencies whose performance has been found
inadequate, HCFA
has not developed a sufficient array of alternatives to
encourage agencies to correct
serious deficiencies in their processes. Our report includes
several recommendations to
assist the HCFA Administrator in improving the rigor,
consistency, and effectiveness of
HCFA's programs to oversee state agencies responsible for
certifying that nursing homes
meet federal standards for participation in Medicare and
Medicaid.
3See Nursing Home Care: Enhanced HCFA Oversisht of State
Programs Would Better
Ensure Quality (GAO/HEHS4-0-6, Nov. 4, 1999).
GAOtr-HEHS40-272
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14
BACKGROUND
On the basis of statutory requirements, HCFA defines standards
that nursing homes mustmeet to participate in the Medicare and
Medicaid programs and contracts with states tocertify that homes
meet these standards through annual inspections and other types
ofreviews. including complaint investigations. The annual
inspection, which must beconducted no less than every 15 months at
each home, entails a team of state surveyorsspending several days
on-site conducting a broad review to determine whether care
andservices meet the assessed needs of residents. HCFA has
established specific protocolsfor state surveyors to use in
conducting these comprehensive reviews.
HCFA is statutorily required to establish an oversight program
for evaluating theadequacy and effectiveness of each state's
nursing home survey process, relying on its122 surveyors in 10
regional offices to carry out these oversight responsibilities.
WhileHCFA's Center for Medicaid and State Operations is the central
HCFA divisionresponsible for developing guidance to states
embodying national polices related tonursing home oversight and
enforcement, the regional officials who oversee the statesurvey
agencies are not formally subordinated to this Center. Rather, they
report to aRegional Administrator. The 10 regions are further
organized into 4 regional consortia,and both the regional consortia
heads and the Director of the Center for Medicaid andState
Operations report directly to HCFA's Administrator.4 In addition to
developingoverall policy guidance, the Center's staff carry out
their day-to-day role of coordinatingregional office oversight of
the states through numerous less formal interactions withregional
officials, including meetings and conference calls between managers
and stafffrom the Center and the regions. If a disagreement between
the Center and a regionaloffice cannot be informally settled at a
lower level, it can only be resolved at the level ofthe HCFA
Administrator.
The Omnibus Budget Reconciliation Act of 1987 requires HCFA's
surveyors to conductfederal monitoring surveys in at least 5
percent of the nursing homes in each state eachyear within 2 months
of the state's completion of its survey. HCFA uses a mix of
twotypes of on-site reviews to fulfill this 5-percent mandate: (I)
comparative surveys, inwhich a team of federal surveyors conducts a
complete, independent survey of a nursinghome after the state has
finished its survey and compares the state's survey results withits
own, and (2) observational surveys, in which federal surveyors
accompany andobserve the state surveyors as they perform a variety
of survey tasks, give state surveyorsverbal feedback, and later
provide a written rating of the state surveyors' performance
tostate managers. HCFA introduced revisions in its federal
monitoring program in October1998 that require a minimum of I to 3
comparative surveys in each state each year andthat also developed
a standard set of procedures all regions are expected to follow
in
'The regional consortia play an important role in administering
HCFA policies in otherHCFA functions, such as oversight of the Peer
Review Organization program andMedicare+Choice plans. In these
areas, most functions have been consolidated into oneof the two or
three regional offices in the consortium. However, each of the 10
regionaloffices carries out the full range of functions relating to
oversight of state agencies'implementation of HCFA's guidance
relating to nursing homes.
3 GAOfr-HEHS4X-O27
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15
conducting an observational survey. In addition to the
comparative and observationalsurveys, HCFA has other sources of
information available for evaluating state agencyperformance,
including a quality improvement program that requires state
agencies toestablish performance measures and develop action plans
addressing deficiencies in thestate's survey process.
If HCFA determines that a state agency's survey performance is
inadequate, it canimpose appropriate remedies or sanctions against
the state agency. Among severalremedies and sanctions HCFA can use
currently are requiring the state to submit a writtenplan of
correction explaining how it plans to eliminate the identified
deficiencies.reducing federal funds for state survey and
certification activities, and ultimately.terminating HCFA's
contract with the state.
To assess HCFA's oversight activities, we obtained data about
federal monitoringsurveys and other oversight efforts from HCFA and
each of its 10 regions, interviewedofficials at HCFA headquarters
and 3 of its regions, and met with state surveyors fromfour states
(Florida, Missouri, Tennessee, and Washington).
HCFA MAKES NEGLIGIBLE USE OF COMPARATIVE SURVEYS TO ASSESSSTATE
AGENCIES' PERFORMANCE
An effective HCFA program for assessing state agencies'
performance in certifying thatnursing homes meet federal standards
for quality care is especially important givenconcerns that some
state agencies miss serious care problems. Our work in
Californiafound that surveyors missed some problems that affect the
health and safety of residents.In addition. HCFA data show
significant variations in the extent to which Csate
surv.eyrnsidentify serious deficiencies. For example, state survey
agencies in Washington, Idaho,North Dakota, and Kansas identified
serious deficiencies resulting in harm to residents inmore than
half their surveys-more than 4 times the rate of serious
deficiencies found bysurvey agencies in Maine, Colorado, Tennessee,
and Oklahoma. With such a range,HCFA needs to know to what extent
such data accurately portray the quality of careprovided or the
adequacy of state performance in the survey process.
However, HCFA makes negligible use of comparative
surveys-independent re-surveysof homes-which are its most effective
technique for determining whether state surveyorsmiss deficiencies.
HCFA requires that only I or 2 of these surveys be completed
eachyear in most of the states. Yet, more than two-thirds of the 64
comparative surveysHCFA conducted between October 1998 and August
1999 identified more seriousdeficiencies than the state
identified.
For example, in one of its comparative surveys, surveyors from
HCFA's Kansas Cityregion found 24 deficiencies in a Missouri
nursing home that state surveyors did notidentify during their
survey conducted about 6 weeks earlier. One of these
deficienciesidentified six residents whose nutritional status was
not being adequately assessed by thenursing home, resulting in
significant weight loss in several cases. One resident lost
19percent of his weight between June and October 1998. His weight
at the time of HCFA's
GAOTr-HEHS4I0-27
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.16
survey was 93 pounds. which HCFA indicated was significantly
below the resident'sminimally acceptable body weight of 108 pounds.
Fewer than 4 months after hisadmission to the nursing home. this
resident also had developed two moderately severepressure sores,
which the home was inappropriately treating with a cream
themanufacturer stated was not intended to heal pressure sores but
rather to prevent irritationto the skin. According to HCFA
surveyors, these deficiencies affecting multiple residentsshould
have been evident at the time of the state's survey, but the state
surveyors did notcite them.
Because of the time that typically elapses between a state's
survey and HCFA'scomparative survey, HCFA often cannot be certain
whether HCFA-identified deficienciesare the result of poor state
agency performance, such as state surveyors' failure toidentify
deficiencies, or to changed conditions in the nursing home
following the statesurvey. Typically, these surveys occur I month
after the state completes its survey butsometimes occur as much as
2 months later. In August 1999. HCFA instructed itsregions to start
comparative surveys within 2 to 4 weeks.after the state's survey,
but eventhis delay could result in problems comparing results.
State and federal surveyors told usthat comparative surveys are
more effective and reliable in assessing state performance ifthey
start immediately after the state has completed its survey, even as
soon as the dayafter the state's exit from the home.
Rather than making more extensive use of comparative surveys,
HCFA instead conducts90 percent of its surveys as "observational"
surveys, in which its regional surveyorsaccompany and observe state
surveyors as they conduct all or a portion of their survey.These
observational surveys may help HCFA to identify state agency
training needs, butseveral problems inhibit their ability to give a
clear and accurate picture of a state'ssurvey capability. Perhaps
most importantly, HCFA's presence may make statesurveyors more
attentive to their survey tasks than they would be if they were not
beingobserved. This is an example of the Hawthorse effect, in which
individuals tend toimprove their performance when they are aware
they are being studied. As a result,observational surveys do not
necessarily provide a valid assessment of typical statesurveyor
performance.
Another HCFA oversight mechanism, which predates HCFA's recent
nursing homeinitiatives, also has significant shortcomings. Under
the State Agency QualityImprovement Program, each state does a
yearly self-assessment and informs HCFA as towhether it is in
compliance with seven survey requirements, such as
investigatingcomplaints effectively. As an oversight program, its
effectiveness is limited becauseHCFA does not validate the
information included in the states' self-assessment as wasrequired
under this program's predecessor, and thus has no assurance that
the statessurface all serious problems or that they correct all the
problems they have identified.For instance, in our prior work we
found that some states were not promptly reviewingcomplaints filed
against nursing homes, yet they had not identified this problem to
HCFAas pan of their quality improvement program.5 In addition, HCFA
has no policyregarding consequences for states that do not provide
accurate information through this
5GAO/HEHS-99-80, Mar. 22,1999.
5 GAOfr.HEHS40 27
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17
program. Furthermore. although the program also addresses some
state agencyperformance standards that must be reviewed by HCFA's
staff. these standards do notinclude some important aspects of a
state agency's performance, such as determiningwhether the timing
of a state agency's surveys can be predicted by the nursing
homes.
HCFA REGIONS ARE INCONSISTENT IN HOW THEY CONDUCT
OVERSIGHTACTIVITIES
In addition to these weaknesses in its oversight mechanisms.
HCFA regions are uneven inthe way they implement them. resulting in
limited assurance that states are being heldequally accountable to
federal standards, including the recent initiatives. AlthoughHCFA
established the current federal monitoring surveys to develop a
uniform nationalapproach for regions to follow, the regions use
different methods for selecting surveys toreview and for conducting
reviews. Examples follow:
* Some regions comply with HCFA guidance on comparative surveys
by selectinghomes with no established pattern of deficiencies,
while other regions focus on homesthat the state has already
identified as having serious deficiencies. By doing thelatter, HCFA
is unlikely to identify situations in which state surveyors
underreportserious deficiencies. Furthermore, HCFA's broad guidance
for selectingobservational surveys does not ensure that its reviews
assess as many state surveyorsas possible to maximize the training
effect.
* In conducting comparative surveys, the regions vary in how
they select residentsamples, with some regions selecting a sample
that includes some overlap with thestate's sample and other regions
making no attempt to do so.
* The regions also, on average, spend very different amounts of
time to conduct anobservational survey. While the average time
spent on these surveys is 52 hours, theregions range from an
average of 27 hours to 71 hours to conduct these surveys,
thusraising questions about the level of effort some regions devote
to gauging stateperformance. Table I provides additional detail on
the variation in regional resourcesavailable and in the time spent
to complete observational surveys.
6GAOa-HEHSX0-276
-
18
Table 1: Variation in Resources Available and in Time to
Comolete ObservationalSurveys
Region Ratio of state to Ratio of observational Average no. of
ourn perfederal surveyor surveys required in observational
survey
1999 to federal (OCL 1998- July 1999)______________ _
__________surveyors
Boston 4 to I 5 to 27New York 33 to I 7to 1 31Philadelphia 16to
I 6to 1 49Atlanta 33 to 1 7 to I 61Chicago 31 lto I to 71Dallas
60to I * lo 1 38Kansas City 30 tO I 6 to I 51Denver Ito 1 4 to
59San Francisco 27 to 1 8to I 54Seattle 16 to I 3to I 52Nationwide
28 to I 7 to I 32
In addition. HCFA regional officials make different use of the
State Agency QualityImprovement Program for overseeing state agency
performance. Some regionssupplement information provided by the
states through the quality improvement programby extensively
analyzing available survey performance data, while other regions do
notbelieve there is a need to use these supplemental data to assess
state survey performance.For example, HCFA's Atlanta region
recently started a program to conduct in-depthanalyses of each
state agency in its region using available survey data. Through
theseanalyses, the region determined that the annual state surveys
of nursing homes in four ofits eight states are highly predictable,
contrary to HCFA policy. It also found that in fourof the six
states where it has completed reviews, more than half of the time
statesurveyors did not conduct revisits of nursing homes, to
determine whether identifieddeficiencies had been corrected, within
the 55 days recommended by HCFA.
In testimony before your Committee this summer, we also noted
that the HCFA regionsdo not consistently monitor state
implementation of new, stronger policies resulting fromHCFA's
nursing home initiatives. When we asked the regional offices how
they weremonitoring states' implementation of these initiatives,
their responses ranged from nomonitoring of most of the implemented
initiatives to requiring states to submit specialmonthly reports on
how they were implementing several of the initiatives. These
unevenmonitoring practices, combined with the limitations we found
in HCFA's moreformalized monitoring approaches, result in HCFA not
being sufficiently informed aboutwhat the states are doing to
implement these initiatives.
HCFA'S OPTIONS FOR ADDRESSING POORLY PERFORMING STATEAGENCIES
ARE INADEQUATE
Even if HCFA identifies inadequate state agency performance, it
currently does not havean adequate array of effective remedies or
sanctions to ensure corrections. Mostcommonly, HCFA provides
training to surveyors or survey teams. HCFA may also
GAOrr-HEHs-00-277
-
19
require the state to submit a plan of correction. provide
technical assistance, and assumeresponsibility for developing the
state's survey schedule. If these remedies fail. HCFAhas two
sanctions available that it may then apply--reducing a state's
survey andcertification funding or terminating its survey contract.
Because of the extreme nature ofthese sanctions. HCFA has only once
reduced state funding and has never terminated astate's
contract.
To support reducing the state's survey and certification
funding, HCFA requires evidenceshowing a pattern of inadequate
state performance, which its current oversight structuredoes not
effectively provide. In essence, HCFA must show that a state
agencydemonstrates a pattern of failing to identify serious
deficiencies. However, becauseHCFA conducts so few comparative
surveys, and observational surveys are not intendedto identify all
missed deficiencies, it is not currently possible for HCFA to
establish that astate consistently fails to identify serious
deficiencies.
As part of its nursing home initiatives, HCFA established a task
force in late 1998 toexpand and clarify the definition of
inadequate state survey performance and to suggestadditional
remedies and sanctions for state agencies that perform poorly. The
task forcehas preliminarily proposed two additional sanctions for
HCFA's use: (I) placing a stateagency on notice that it is not in
compliance with its Medicaid plan regarding nursinghome survey
performance and (2) requiring HCFA officials to meet with the
governorand other high-level state officials. Although HCFA refers
to these two proposed actionsas sanctions, they are not as severe
as what are normally thought of as sanctions and maynot be forceful
enough to compel a state to improve its performance. Regarding
placingthe state agency on notice, we were told that it means that
HCFA expects its regions to..,.coh,,..rainve!y tavi y eths
a.gencies to urg crnmni.nr. with the --uifn-nts in
their state Medicaid plans. Furthermore, although the proposed
sanction requiring HCFAofficials to meet with the governor or other
state officials can raise problems to a higherlevel in state
government and possibly secure greater state support to
improveperformance, it is not clear what effect this sanction would
have in compelling a stateagency to improve its performance. HCFA
intends to have these two new sanctions inplace by the end of 1999.
HCFA also plans to issue additional state survey agencyperformance
standards and measures, and indicated that over the next 18 months,
it willdetermine whether the expanded remedies and sanctions have
been effective inimproving state agency performance. At that time,
HCFA will determine whetheradditional remedies or sanctions should
be developed.
HCFA SHOULD STRENGTHEN ITS OVERSIGHT OF STATE PROGRAMS
HCFA has taken many positive steps-including 30 wide-ranging
initiatives--thatdemonstrate its commitment to improving the
quality of care that nursing home residentsreceive. These steps
include a major effort to enhance its oversight of state agencies,
butthe limited scope and rigor of its various state performance
monitoring mechanisms, andtheir uneven application across the
regions, do not give HCFA a systematic, consistentmeans of
assessing state survey performance. Specifically, the negligible
use ofcomparative surveys, combined with delays in starting them,
does not provide HCFAwith sufficient evidence to determine whether
states are appropriately assessing nursing
a GAOIr-HEHS--27
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20
homes' compliance with federal standards. Furthermore,
inconsistencies among theregional offices in their oversight of
state agency performance hamper HCFA's ability toensure that all
state agencies are being held equally accountable for their
performance.Even though HCFA is strengthening its oversight
mechanisms to be able to establish apattern of unacceptable state
survey performance, it has not developed effectivealternatives for
ensuring that states meet federal standards.
Our report issued today contains several specific
recommendations to HCFA tostrengthen its oversight of state survey
agencies' activities. These recommendations areintended to help
HCFA ensure that states meet federal standards for certifying
thatnursing homes provide adequate care and consistently implement
the more stringentstandards required by HCFA's recent initiatives.
Our recommendations include that theHCFA Administrator
* Improve the scope and rigor of HCFA's oversight process by
increasing the use ofcomparative surveys and ensuring that they are
initiated more promptly after states'surveys.
* Improve the consistency of HCFA oversight across regional
offices bystandardizing procedures for selecting and conducting
federal monitoring surveys.
* Further explore the feasibility ofappropriate alternative
remedies or sanctionsfor those states that prove unable or
unwilling to meet HCFA's performancestandards.
In reviewing a draft of our report, HCFA reaffirmed that
enhanced oversight of stateprograms is critical to improving the
quality of care in nursing homes and generallyagreed with our
recommendations. Although HCFA indicated that it needs to
furtherevaluate the appropriate course of action, it is clear that
HCFA's continued efforts andinitiatives, in concert with the
Committee's ongoing oversight, have the potential to makea decided
difference in the quality of care for the nation's nursing home
residents.
Mr. Chairman, this concludes my statement. I will be happy to
answer any questions thatyou or other Members of the Committee may
have.
GAO CONTACT AND ACKNOWLEDGMENTS
For further contacts regarding this testimony, please call
William J. Scanlon or KathrynG. Allen at (202) 512-7114.
Individuals making key contributions to this testimonyincluded John
Dicken, Jack Brennan, and Mary Ann Curran.
GAOrr-HEHS-40279
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21
RELATED GAO PRODUCTS
Nursing Home Oversight: Industr" Examples Do Not Demonstrate
That RegulatorvActions Were Unreasonable (GAO/HEHS-99-154R. Aug.
13, 1999).
Nursing Homes: HCFA Initiatives to Improve Care Are Under Way
but Will ReguireContinued Commitment (GAOiT-HEHS-99-155, June 30,
1999).
Nursing Homes: Provosal to Enhance Oversight of Poorly
Performing Homes Has Merit(GAO/HEHS-99-157. June 30, 1999).
Nursine Homes: Complaint Investigation Processes in Maryland
(GAO/T-HEHS-99-146,June 15. 1999).
Nursing Homes: Complaint Investigation Processes Often
Inadeauate to ProtectResidents (GAO/HEHS-99-80, Mar. 22, 1999).
Nursing Homes: Additional Steos Needed to Strengthen Enforcement
of Federal OualityStandards (GAO/HEHS-99-46, Mar. 18,1999).
California Nursing Homes: Care Problems Persist Desvite Federal
and State Oversight(GAO/HEHS-98-202, July 27, 1998).
2005
GAOfr-HEHS-OO2710
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_~~~~~~~~~~
__~~~~
__~~~A
' _~~~~~ _
I ~ ~ ~ e '**j
.~~~~~~
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23
United StatesGi ^(i) General Accounting
offiee~~~~~~~~~Washington, D.C. 20548
Health, Education, andHuman Services Division
B-281759
November 4, 1999
The Honorable Charles E. GrassleyChairmanThe Honorable John B.
BreauxRanking Minority MemberSpecial Committee on AgingUnited
States Senate
The federal government and the states are jointly responsible
for ensuringthat the nation's more than 17,000 nursing homes
provide adequate care totheir highly vulnerable 1.6 million elderly
and disabled residents. TheHealth Care Financing Administration
(HcPA), within the Department ofHealth and Human Services, is
responsible for ensuring that each stateestablishes and maintains a
survey capability that effectively identifies andresolves problems
in nursing homes that receive Medicare or Medicaidpayments. Under
contract with HcFA, state agencies conduct surveys atnursing homes
to ensure that the homes provide quality care to residents.On the
basis of their surveys, these agencies certify to the
federalgovernment that each home is in compliance with federal
nursing homestandards, which enables the home to receive federal
payments. Federalpayments to these nursing homes under the Medicare
and Medicaidprograms are expected to total $39 billion in 1999.
In previous reports to you, we found that residents received
anunacceptably poor quality of care in some nursing homes and that
thefederal and state programs designed to identify and correct
theseproblems had significant weaknesses. For example, we reported
that
. nearly a third of the 1,370 homes in California had been cited
for careviolations classified as serious under federal or state
deficiencycategories;'
* one-fourth of the nation's nursing homes had serious
deficiencies thatcaused actual harm to residents or that placed
them at risk of death orsenous injury and that 40 percent of these
homes had repeated seriousdeficiencies;
2
serious complaints alleglng that nursing home residents are
being harmedcan remain uninvestigated for weeks or months,
prolonging situations in
'Cal PtoDlea P-inS DeW Fdl and Sly OvpsteH- ,1Ad B. N
'No Hme5 A il arenea Needed la S ocr~r E~doirrttr dcFnl Q4Uo
Soarm
GAOMESE0Oa Fedes NoS lane- OvWSMPweil
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which residents may be subject to abuse, neglect resulting in
serous careproblems like malnutrition and dehydration, preventable
accidents, andmedication errors3 andwhen serious deficiencies are
identified, federal and state enforcementpolicies have not been
effective in ensuring that the deficiencies arecorrected and remain
corrected'
In response to these problems and our recommendations, HCFA
hasdeveloped about 30 initiatives to strengthen federal standards,
oversight,and enforcement for nursing homes.' One of these
initiatives is to enhancefederal oversight of the state survey
agencies to help ensure that the statesare adequately protecting
the health and safety of nursing home residentsWhen it is
determined that a state agency is rot adequately performing
Itssurvey responsibilities, HCFA has indicated It would develop
appropriatesanctions to penalize the state agency, including
terminating its contract.HCr&'S initiatives are fundamental to
its ability to hold states accountablefor reliably and consistently
performing their contractual responsibilitiesfor certifying that
nursing homes meet Medicare and Medicaid standardsand provide
quality care for nursing home residents.
Because an effective oversight program is critical to HcFA's
ability to gaugethe states success in implementing HCFA's many
initiatives, you asked usto evaluate HCFA'S oversight programs of
state agencies nuring homesurvey process. Specifically, we assessed
(1) the effectiveness of HCFA'Sapproaches to assessing state agency
performance, (2) the extent to whichHcFA's regional offices vary in
their application of these approaches, and(3) the corrective
actions available to HCFA when it identifies poor stateagency
performance. To do this work, we contacted HCFA's 10
regionaloffices to obtain data about each region's oversight
programs from 1996 tothe present, interviewed officials at HCFA's
headquarters in Baltimore aswen as federal surveyors and their
managers in HCFA's regional offices;interviewed HCFA officials from
the Atlanta, Kansas City, and Seattleregions and met with state
surveyors and their managers in four statesfrom these three
regions-Flonida, Missouri, Tennessee, and Washington;and reviewed
data provided by HCPA and its regional offices regarding thenumber
and types of oversight reviews conducted during the past 3 years.We
conducted our work between March and September 1999 Inaccordance
with generally accepted government auditing standards.
TGUVHEM49.46 M.. is 1_.
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B5281755
Results in Brief Since last year, HCFA has undertaken a series
of initiatives intended toaddress quality problems facing the
nation's nursing home residents,including redesigning its program
for overseeing state agencies that surveynursing homes to ensure
quality care. The objective of HCFA'5 oversightprogram is to
evaluate the adequacy of each state agency's performance inensuring
quality care in nursing homes, but the mechanisms it has createdto
do so are limited in their scope and effectiveness. In addition,
HCFA'soversight mechanisms are not applied consistently across each
of its 10regional offices. As a result, HCFA does not have
sufficient, consistent, andreliable data to evaluate the
effectiveness of state agency performance orthe success of its
recent initiatives to improve nursing home care. Giventhe wide
range in the frequencies with which states identify
seriousdeficiencies, HcFA cannot be certain whether some states are
falling toidentify serious deficiencies that harm nursing home
residents.Furthermore, HcFA does not have an adequate array of
effective sanctionsto encourage a state agency to correct serious
or widespread problemswith its survey process.
HCFA's primary mechanism to monitor state survey performance
stemsfrom its statutory requirement to survey annually at least 5
percent of thenation's 17,000 nursing homes that states have
certified as eligible forMedicare or Medicaid funds.' But HCFA's
approach to these federalmonitoring surveys does not produce
sufficient information to assess theadequacy of state agency
performance. To fulfill its 5 percent monitoringmandate, HcOA makes
negligible use of its most effective technique-anindependent survey
done by -crA surveyors following completion of astate's survey-for
assessing state agencies' abilities to identify seriousdeficiencies
in nursing homes. For the vast majority of states, HCFArequires
only one or two of these comparative surveys per state, per
year.Yet, in the 64 comparative surveys conducted from October 1998
toAugust 1999, HCFA found deficiencies that were more serious than
thosethe state found in about two-thirds of the surveys, which
suggest thatsome state surveyors miss some serious deficiencies But
because ofelapsed time between the federal and state surveys, HcrA
cannot tenwheheir ihe differences between is survey resuits and
those of ihe stateare attributable to poor state performance, such
as underreporting by statesurveyors, or to conditions in the
nursing home that changed since thestate survey. Rather than making
extensive use of comparative surveys,HCFA focuses 90 percent of its
own survey efforts on observational
*hOi. T-9 h BdgdRe-sdimiAof 198 sef__ to the - HCFAut ,,s a .% -
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his aw teHA.a.des6 t -htt4 u.oeies - i - s .dto Fod.9 Oodtt . pd
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26
B458175
surveys," in which it relies on its regional surveyors to
observe statesurveyors as they conduct at least a portion of their
surveys While thisapproach is useful in many respects, including
identifying training needsfor state surveyors, it also has a
serious limitation as a way to evaluatestate performance. HCFA's
presence may make state surveyors moreattentive to their survey
tasks than when they are not being observed (theHawthorne effect);
therefore, this approach does not necessarily provide avalid
assessment of typical performance.
A second HCFA oversight mechanism also has significant
shortcomings.About 3 years ago, HCFA implemented the State Agency
QualityImprovement Program (siA), a program under which the state
agencydoes a self-assessment to inform HCrA, at least once a year,
whether thestate is in compliance with seven standard requirements
For instance, allstates are expected to evaluate their surveyors'
ability to correctlydocument deficiencies in nursing homes and to
conduct complaintinvestigations effectively. sP is limited as an
oversight program,however, because HCFA (1) does not independently
validate theinformation that the states provide, so it is uncertain
whether all seriousproblems are identified or whether identified
problems are beingcorrected, and (2) has no policy regarding
consequences for states that donot comply. For example, in our
prior work, we found that some stateswere not promptly reviewing
complaints filed against nursing homes andthat these slates had not
identified this problem in their ssaP reports toHcAr7 SAQIP also
includes four indicators of state performance that Hmca,rather than
the slates, assesses. aSiA specifies, for example, that HcFA
willdetermine whether states conduct nursing home surveys within
specifictime frames and enter the survey results into HCFA's
database. However,the four indicators do not address some important
aspects of a stateagency's perfonmance, such as the predictability
of the timing of statesurveys
In addition to these weaknesses in its oversight programs, HCFA
regions areuneven in the way they implement them, resulting in
limited assurance
-that states are being held equally accountable to federal
standards,including the recent initiatives. Although mc7A
established the currentfederal monitoring surveys to develop a
uniform national approach forregions to follow in conducting
federal oversight surveys, the regions usedifferent methods for
selecting oversight reviews and conducting themSome regions, for
instance, comply with HcFA guidance to select homeswith no
established pattern of deficiencies, while other regions focus
on
'GaOMsEH%80, M.. 22, 19s.
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1481759
homes that the state has already identified as having serious
deficiencies.Regions that take the latter approach are unlikely to
identify situations inwhich state surveyors underreport serious
deficiencies. The regions also,on average, spend very different
amounts of time on observationalsurveys. While the average time
spent on these surveys is 52 hours, theregions range from about 27
hours to about 71 hours to complete thesesurveys, thus raising
questions about the level of effort some regionsdevote to gauging
state performance. In addition, HCFA regional officialshave varying
views about sAsp's effectiveness as an oversight program. Asa
result, some regions supplement sAQgP Information by
extensivelyanalyzing available survey performance data, while other
regions do notbelieve there is a need to use these supplemental
data to assess statesurvey performance.
Even if HCFA Identifies inadequate state agency performance, It
currentlydoes not have a sufficient anray of effective remedies or
sanctions at itsdisposal to ensure adequate state performance. When
HcrA Identifies poorstate agency survey performance, it can employ
one or more of severalremedies, such as requiring the state to
submtt a plan of correction orproviding special training to the
state surveyors. If these remedies do notbring te stare agency into
compuance with survey standards, HCFA hastwo sanctions
available-reducing a state's survey and certificationfunding or
terminating the agency's survey contract Because of theextreme
nature of these sanctions, Hca has only once reduced statefunding
and has never terminated a state agency's contract. Although HnoAis
considering additional sanctions, on the basis of our review of
them, webelieve that their potential to compel a state to Improve
Its performance isdoubtMA
To assist "A in effectively overseeing state agencies and
achieving thegoals of its broader initiatives, we are recommending
that HCFa Improvethe scope and rigor of its state oversight
mechanisms, improve theconsistency of Its oversight across its
regions, and further explore thefeasibility of additional remedies
and sanctions for states that prove^orunable a. to mee Rae as
peetonrOnce siandards.
HCFA is required by statute to establish an oversight program
for evaluatingthe adequacy and effectiveness of each stale's
nursing home surveyprocess.' If HcFA determines that a state
agency's survey performance isInadequate, it is authorized to
impose appropriate remedies or sanctions
's-c-s 19 Wst) .d 1919 (P3) ilus. Sod Sect AM
C-s.0 02EM-e4 P _r.d..Ndl I o 11 ..sftPate 5
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B.21759
against the state agency. Among HCFA's remedies and sanctions
arerequiring the state to submit a written plan of correction
explaining how itplans to eliminate the identified deficiencies;
reducing federal funds forstate survey and certification
activities; and, ultimately, terminating H(ac'scontract with the
state. HCFA surveyors in its 10 regional offices carry outthe
oversight of state agenies
Every nursing home that receives Medicare or Medicaid funding
mustundergo a standard survey conducted by the state agency no less
thanevery 15 months. This survey entails a team of state surveyors
spendingseveral days on-site conducting a broad review of whether
the care andservices delivered meet the assessed needs of the
residents.
9The Omnibus
Budget Reconciliation Act of 1987 (oBRA s7) requires HCFA
surveyors toconduct federal oversight surveys in at least 5 percent
of the nursinghomes in each state each year within 2 months of the
state's completion ofIts survey.'
0The following table shows the number of nursing homes per
HatA region, the number of federal monitoring surveys each
region inrequired to conduct in fiscal year 1999, and the number of
federalsurveyors who conduct nursing home monitoring surveys as
ofAugust 1999.
TA. l. i rNiund Hanm. ReIutredFedd ure, endriSurveyors
Avallable, by HCFA Region
Regioma rowlooBostonNow YorkPhiladelphiaAtantaChicagoDasKanas
OtyDenverSan FranclscoSeameTotwl
Federal monitoring Federal nursingsurveys required to home
sunrasyar
Nursing mea 5% requirement In aaitlableas ofhoem fisNca yewr
1999 August1999
1.170 63 121.020 56 71.526 84 12
2.772 139 193.784 1s9 222,398 122 111,693 84 12
666 37 81.681 89 11
497 32 917,207 895 122
-rne Endd. w l -W t> met HCFA7b _410M t.mob$ fivw U.11 -
'A (ft.er - -Lb. -dad INmrt -h be -dl ic, rMb Ift ntk tXWmrb.d
mlr
Pages 05404Pa6edNS01a -11O..dipop s
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B-51759
HCFA's recent initiatives relating to assessing state agency
performance arethe latest in a series of approaches HaoA has used
since oesA 8r wasenacted Until 1992, HCYA conducted only
comparative swrveys, in whichfederal surveyors performed an
Independent survey of a home andcompared their results with the
states. Since 1992, HcFA has used a mix ofcomparative and different
variations of observational surveys. Forinstance, from 1992 until
July 1995, the regions used surveys in which theydirectiy observed
individual state surveyors as they performed a survey,but did not
communicate with them until the last day of the survey.Starting in
I995, HCFA regional surveyonr observed the state surveyors
andactively communicated with them during the suvey. Under Utis
approach,federal surveyors provided on-the-spot training to the
state surveyors.Starting n July 1996, HCFA allowed the regions to
develop variations of thisapproach, and by 1998, multiple regional
variations existed. Among thesewere partial observational surveys
that focused on only parts of thesurvey, and participatory surveys
in which federal surveyors becamemembers of the state agency
teams.
As part of its broader nursing home initiatives, in October 1998
HCYAintroduced its current program of overseeing state swuvey
agencypexiromance, referred to as te federal monnormg survey. mrs
programmodified HClA's prior oversight prograams and has two
componenms Thefirst component is a comparative survey, in which a
team of federalsurveyors conducts a complete, Independent srrvey of
a nursing boomeafter the state has completed its survey, and then
compares the resultswith the state's" The second component, which
is HcPA's primarymonitoring technique, is an observational survey,
in which generally oneor two federal surveyors accomPany state
surveyors to a nursing homeeither as part of the home's annual
standard survey or as part of a revisitor a complaint invweslgaionu
During these observational surveys, federalsrrveyors watch the
state surveyors perform a variety of tasks, give thesurveyors
verbal feedback, and later provide a written rating of the
statesurveyors performance to state manager Basicaly, the
currentobservational surveys represent an extension of the several
types ofob = .01 so0 tGZO HC.' rgoAA S aI be use o. e. ur pII V
Ouyears. However, unrlike earlier observational surveys, the
revised surveysare intended to have a national standard protocol, a
national focal point
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62-902 00- 2
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asatI75s
for collecting data about the surveys, and a single national
database fortracking survey results.
In addition to the formal review activities required under the
federalmonitoring surveys, HCFA has other sources of information
available forevaluating state agency performance. One such source,
SAQip, initiated in1996, requires states, in partnership and
collaboration with HCFA, todevelop and implement quality
improvement action plans to addressdeficiencies in the state's
survey process that either the state or HCFA hasidentified. In
addition to SAQtP, a few regions also use information fromHCFA'S
database on survey results to assess state performance in areassuch
as timeliness of providing information to nusing homes
regardingidentified deficiencies and the timeliness of enforcement
actions.
Limitations HinderHCFA OversightPrograms'Effectiveness
inAssessing StateSurvey Performance
HCFA's Use ofComparative Surveys IsNeglgible
HCFA'S current strategy for assessing state agency survey
performance haslimitations that prevent HCFA from developing
accurate and reliableassessments. The number of comparative surveys
required to becompleted each year is negligible in that only one or
two are required inmost of the states, and over half of the
comparative surveys are startedmore than a month after the state
completes its survey. Observationalsurveys are also limited in
their effectiveness because these tend to causestate surveyors to
perform their survey tasks more attentively than theywould if
federal surveyors were not present (the Hawthorne effect),
thusmasking a state's typical performance. Observational surveys
have alsohad other problems during their first year of
implementation, such as thefact that federal surveyors are not
required to observe state surveyorsperforming most survey tasks,
the lack of an effective data system forrecording results, and the
slowness of written feedback to state surveyors.Finally, &AQn'
does not require independent verification of states'self-reported
performance, and its standards do not address all importantaspects
of the state survey process.
Although comparative surveys are the only oversight tool that
furnishes anindependent federal survey where results can be
compared with those ofthe states, HcFA's use of them is negligible.
Conducting a sufficient numberof these comparisons is important
because of concern that some statesurvey agencies miss significant
problems. For example, HCFA surveyorsfound deficiencies that were
more serious than those found by the stalesurveyors in about
two-thirds of the comparative surveys they conductedbetween October
1998 and July 1999.
GoeSH5 4O4 Fhdat No.4 B.- 0.,Arut
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a-l1759
As we reported In July 1998, state agency surveyors can miss
problemsthat affect the health and safety of residents.h' In
addition, HcrA data showsignificant variation in the extent to
which state surveyors Identify seriousdeficiencies For example,
state survey agencies in Idaho, Kansas, NorthDakota, and Washington
identified serious deficiencies in more than halfof their surveys.
On the other hand, state surveyors in Maine, Colorado,Tennessee,
and Oklahoma identified such problems in only 8 to 13 percentof
their surveys." With such a range in identified serious
deficiencies innursing homes, H'crA needs to know to what extent
such data accuratelyportray the quality of care provided or the
adequacy of state survey agencyperformance.
Of the 64 comparative surveys that HCFA completed between
October 1998and July 1999, 44 (69 percent) identified a more
serious deficiency thanhad the stat surveyors For example, during a
comparative surveyconducted at a nursing home in Missouri in
November 1998, HCFA found 24defidencies that It believes state
surveyors should have, but did not,Identify during their review
about 6 weeks earlier. One of thesedeficiencies Identified six
residents whose nutritional status was not beingadequately assessed
by the nursing home, resulting in significant weightloss to several
of them One retiderint n1! 19 firnt of his s, idht hew,June and
October 1998. His weight at the time of HcPFA's survey was
93pounds, which aurA indicated was significantly below the
resident'sminimally acceptable body weight of 108 pounds. Less than
4 monthas afterthis resident's admission to the home, he had also
developed twomoderately severe pressure sores, which the nursing
home wasinappropriately treating with a cream that its manufacturer
stated was notintended to heal pressure sores but rather to prevent
irritation to the skin.
Until 1992, comparative surveys were the sole method HCFA used
to carryout state agency oveSight responsibilities. According to
HcFA documents,the agency began to decrease its reliance on
comparative surveys in 1992because (1) it was difficult to adjust
for changes in the nursing home thatmay have arisen between the
dates of the state and the federal surveys,(2) two separate surveys
during a short time period created a strain on thenursing home, (3)
too much time had passed between the completion ofthe state survey
and the time the state received feedback bfom federalsurveyors for
the state surveyors to recall the details of the survey, and(4)
comparative surveys were resourcentensive.
GAoJSaS= ,d y2,. 19t
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34-1759
Under the revised federal monitoring surveys, started in October
1998,HCFA acknowledged the need to do more comparative surveys than
the 21that had been done over the previous 2 years. Nevertheless,
under thisprogram, only about 10 percent of the federal monitoring
surveyscompleted each year must be comparative surveys, and the
remaining90 percent may be observational surveys. Specifically,
HCPA now requires aminimum of one comparative survey in states
having fewer than 200nursing homes, two in states with 200 to 599
nursing homes, and three instates with 600 or more homes. Table 2
shows the minimum number ofcomparative surveys to be completed in
each state and the District ofColumbia.
Table 2: Minimum Number ofMinimum
number ofcomparetie
Number of home surveysIn stae (ae of May required each19F 9) t
nwFewver than 200 1
Number ofSlatee ststes
20 Alaska, Arizona. Delaware,District of Columbia. Hawaii.Idaho.
Maine. Montana. Nevada.New Hampshire. New Mexico.North Dakota.
Oregon, RhodeIsland, South Carolina. SouthDakota. Utah. Vermont.
WestVir-inia Wuu-nn
200 to 599 2 24 Alabamna. Arkansas. Colorado.Connechcut,
Georgia. Indiana.Iowa, Kansas. Kentucky,Louisiana,
Maryland,Massachusetts. Michigan.Minnesota. Mississippi.
Missouri.Nebraska, New Jersey. NorthCarolina. Oklahoma.
Tennessee,Virginia. Washington. Wisconsmn
600 or more 3 7 Calormia. Rorida. Illinois, NewYork, Ohio,
Pennsyhania, Texas
While providing important information, the low number of
comparativesurveys will not permit HCFA to determine how
representative these one tothree su