    [Senate Hearing 110-173]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 110-173

                       THE NURSING HOME REFORM ACT TURNS
        TWENTY: WHAT HAS BEEN ACCOMPLISHED, AND WHAT CHALLENGES REMAIN?

    =======================================================================

                                    HEARING

                                   before the

                           SPECIAL COMMITTEE ON AGING
                              UNITED STATES SENATE

                           ONE HUNDRED TENTH CONGRESS

                                 FIRST SESSION

                                   __________

                                 WASHINGTON, DC

                                   __________

                                  MAY 2, 2007

                                   __________

                                Serial No. 110-6

             Printed for the use of the Special Committee on Aging

      Available via the World Wide Web: http://www.gpoaccess.gov/congress/
                                   index.html

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                           SPECIAL COMMITTEE ON AGING

                         HERB KOHL, Wisconsin, Chairman
    RON WYDEN, Oregon                    GORDON H. SMITH, Oregon
    BLANCHE L. LINCOLN, Arkansas         RICHARD SHELBY, Alabama
    EVAN BAYH, Indiana                   SUSAN COLLINS, Maine
    THOMAS R. CARPER, Delaware           MEL MARTINEZ, Florida
    BILL NELSON, Florida                 LARRY E. CRAIG, Idaho
    HILLARY RODHAM CLINTON, New York     ELIZABETH DOLE, North Carolina
    KEN SALAZAR, Colorado                NORM COLEMAN, Minnesota
    ROBERT P. CASEY, Jr., Pennsylvania   DAVID VITTER, Louisiana
    CLAIRE McCASKILL, Missouri           BOB CORKER, Tennessee
    SHELDON WHITEHOUSE, Rhode Island     ARLEN SPECTER, Pennsylvania
                          Julie Cohen, Staff Director
                Catherine Finley, Ranking Member Staff Director

                                      (ii)

                                C O N T E N T S

                                  ----------
                                                                       Page
    Opening Statement of Senator Herb Kohl...........................     1

                                    Panel I

    Kathryn Allen, director of Health Care, U.S. GAO, Washington, DC.     3
    James Randolph Farris, M.D., regional administrator, Dallas
      Office, Centers for Medicare and Medicaid Services (CMS),
      Dallas, TX.....................................................    48

                                    Panel II

    Charlene Harrington, professor of Sociology and Nursing,
      University of California, San Francisco, CA....................    68
    Alice Hedt, executive director, NCCNHR, Washington, DC...........    83
    Mary Ousley, president, Ousley & Associates, former chair,
      American Healthcare Association, Richmond, KY..................    92
    Orlene Christie, director, Legislative and Statutory Compliance
      Office, Michigan Department of Community Health, Lansing, MI...   103

                                    APPENDIX

    Prepared Statement of Senator Gordon Smith.......................   117
    Kathryn G. Allen responses to Senator Smith questions............   118
    Randy Farris responses to Senator Smith questions................   119
    Dr. Charlene Harrington responses to Senator Smith questions.....   121
    Alice Hedt responses to Senator Smith questions..................   122
    Mary Ousley responses to Senator Smith questions.................   123
    Orlene Christie responses to Senator Smith questions.............   124
    Additional material submitted by Dr. Charlene Harrington.........   125
    Statement of the American Occupational Therapy Association.......   150
    Statement of the Center for Medicare Advocacy, Inc...............   154
    Statement submitted by Sam Perlin, Long Term Care Advocate
      Consultant.....................................................   158
    Statement submitted by Cheryl Zuccola............................   161
    Statement submitted by Diane Reed, program director, Consumer
      Advocates for Better Care of Montachusett Home Care Corporation   163
    Statement submitted by Linda Sadden, State long-term care
      ombudsman, Louisiana...........................................   165
    Statement submitted by Missouri Coalition for Quality Care.......   166
    Statement submitted on behalf of the Friends and Relatives of
      Institutionalized AGED (FRIA)..................................   167
    Statement submitted by Rose B. McGarry, ombudsman program
      director, Elder Services of Merrimack Valley...................   174
    Statement of the Center for Advocacy for the Rights and Interests
      of the Elderly (CARIE).........................................   175
    Nursing Home Reform Act (OBRA '87): 20 Years of History submitted
      by the Senate Special Committee on Aging.......................   179
    Broken Promises II prepared by the District of Columbia Long-Term
      Care Ombudsman Program.........................................   188
    Material submitted by Health Care Policy and Research, University
      of Colorado Health Sciences Center.............................   222
    Material from Consumer Reports on Nursing Homes..................   272
    Faces of Neglect submitted by NCCNHR Reform......................   276

                                     (iii)

     THE NURSING HOME REFORM ACT TURNS TWENTY: WHAT HAS BEEN ACCOMPLISHED,
                          AND WHAT CHALLENGES REMAIN?

                                  ----------                              --

                             WEDNESDAY, MAY 2, 2007

                                           U.S. Senate,
                                    Special Committee on Aging,
                                                        Washington, DC.
        The Committee met, pursuant to notice, at 10:28 a.m., in
    room 628, Dirksen Senate Office Building, Hon. Herb Kohl
    (chairman of the committee) presiding.
        Present: Senators Kohl and McCaskill.

            OPENING STATEMENT OF SENATOR HERB KOHL, CHAIRMAN

        The Chairman. Hello. At this time, we will call this
    hearing to order. We welcome all of our guests and witnesses
    who are present.
        Back in January, as Chairman of the Committee, I promised
    that we would take a close look at nursing homes to see if our
    seniors are getting the safest, highest-quality care. Today, we
    are going to do exactly that.
        We know that the vast majority of nursing home providers
    care deeply about their residents, and are doing their very
    best to provide the best possible care. But as we will hear
    today, many problems still exist in some of our Nation's
    nursing homes.
        The Nursing Home Reform Act became law 20 years ago. Better
    known as OBRA 1987, this law set Federal standards for the
    quality of services for staffing and for inspection and
    oversight of long-term care facilities.
        Without question, it has improved nursing home care. For
    example, OBRA 1987 led to a sharp drop in unnecessary physical
    and chemical restraints of residents. Other accomplishments and
    events are on the posters on this podium.
        We will hear today from GAO that, in 2006, nearly one in
    five nursing homes nationwide were cited for poor care that
    caused actual harm to residents. Among a group of facilities
    studied in 1998 and 1999 that provided poor care, the agency
    found that nearly half have made no progress between that time
    and now. Now, this is unacceptable, and it raises questions
    about how and why our enforcement system is not getting the job
    done.
        From CMS, we will hear about the challenges facing State
    inspection agencies in overseeing nursing homes. Surveys do the
    tough work of visiting facilities, documenting the conditions
    and deficiencies they find, and recommending sanctions. But it
    is troubling that fines and sanctions are often not levied,
    even when inspectors find violations that leave residents
    suffering.
        For facilities that continually slip in and out of
    compliance, regulators need to take much swifter action. Bad
    apples give the nursing home industry a black eye, and they
    should not be in this business.
        This Committee has a long history of closely scrutinizing
    the quality of nursing home care, and we intend to reaffirm
    that commitment. We need to regularly monitor the nursing home
    industry and the performance of Federal and State regulators to
    make sure quality standards are met.
        As a first step, we will follow this hearing with a written
    request to CMS to brief us every 2 months on progress made to
    implement the recommendations and GAO's testimony that come out
    of this hearing. We will continue to press the Administration
    to tighten up the enforcement system and make sanctions stick.
        We will work with advocates, the industry and regulators on
    proposals to tighten the enforcement process, so that the bad
    actors no longer escape sanctions.
        We will also be requesting ideas for improving public
    information about the quality of nursing homes. When consumers
    look at CMS's Nursing Home Compare Web site, they should be
    better able to tell immediately which facilities are providing
    good care and which are providing substandard care.
        We also want to make sure that the nursing home workforce
    is the best it can be by establishing a nationwide system of
    background checks for workers in long-term care facilities.
        Today, we will hear about groundbreaking work being done in
    the State of Michigan. They have successfully organized a
    streamlined, cost-effective system of background checks for
    people who apply for jobs in long-term care facilities.
        Michigan's program is being conducted as part of a pilot
    program that was started in 2003. This program is producing
    impressive results in other States as well, including my own
    State of Wisconsin, and I believe it is time to expand it
    nationwide.
        The vast majority of long-term care workers do an excellent
    job at taking care of our family members. But individuals who
    have a record of criminal abuse obviously should not care for
    the most vulnerable in our society. To that end, I plan to
    introduce legislation that is modeled on Michigan's background
    check program.
        We look forward to joining with all of our colleagues on
    this Committee and in the Congress to ensure that all nursing
    home residents are safe and receive the highest quality of
    care. Clearly, our Nation's families deserve nothing else.
        At this time, I would like to welcome our first panel to
    come forward.
        Our first witness will be Kathryn Allen, who is director of
    Health Care for the U.S. Government Accountability Office. Ms.
    Allen has extensive expertise in Medicaid, children's health
    issues and long-term care issues, including nursing homes. Ms.
    Allen has had a long and distinguished career at GAO, also
    directing studies on private health insurance issues, medical
    malpractice and access to care.
        Also on this panel we have Dr. James Randolph Farris of the
    Centers for Medicare and Medicaid Services, CMS. Dr. Farris has
    served as the regional administrator of the Dallas office since
    1998. In this capacity, Dr. Farris has responsibility for
    Medicare, Medicaid, the Clinical Laboratory Improvement Act,
    and State Children's Health Insurance Programs in the States of
    Texas, Oklahoma, New Mexico, Arkansas and Louisiana. He also
    serves as the lead CMS Regional Administrator for rural health
    issues and for the survey and certification program.
        We thank you very much for being with us.
        At this time, Ms. Allen, we would like to hear your
    testimony.

       STATEMENT OF KATHRYN ALLEN, DIRECTOR OF HEALTH CARE, U.S.
            GOVERNMENT ACCOUNTABILITY OFFICE, WASHINGTON, DC

        Ms. Allen. Thank you, Mr. Chairman. I am pleased to be here
    today as the Committee acknowledges the 20th anniversary of the
    passage of OBRA 1987, which, as you have already mentioned,
    contained very important nursing home reform provisions.
        The Nation's 1.5 million nursing home residents are a very
    vulnerable population of elderly and disabled individuals for
    whom remaining at home is no longer feasible. This population
    is also expected to increase dramatically in future years,
    along with the cost of their care, with the aging of the baby-
    boomer population.
        The public investment is large. Combined Medicare and
    Medicaid payments for nursing home services were almost $73
    billion in 2005, including a Federal share of about $49
    billion.
        In 1986, the Institute of Medicine reported, among other
    things, the quality of care in many nursing homes was not
    satisfactory. In 1987, GAO issued a report that recommended,
    consistent with that report, that Congress pass legislation to
    strengthen enforcement of Federal nursing home requirements.
        Subsequent to these reports, Congress enacted the nursing
    home provisions of OBRA 1987, which changed the focus of
    quality standards from inputs in a home's capability to provide
    care to its actual delivery of care and the outcomes of that
    care.
        Since this Committee subsequently asked GAO to investigate
    the quality of care in California nursing homes in 1997, we
    have reported to and testified before the Congress many times
    on these issues, identifying issues and problems in Federal and
    State activities that have been designed to detect and correct
    quality problems. We have made numerous recommendations to
    improve enforcement and oversight.
        CMS has taken many actions in response to our
    recommendations, and has also undertaken its own initiatives to
    address these and other issues. As a result of OBRA and these
    other more recent efforts, much has transpired over the last 20
    years in terms of assessing, overseeing and improving the
    quality of nursing home care.
        My remarks today will focus on progress made and some of
    the challenges that remain in three specific areas: evaluating
    the quality of nursing home care and the enforcement and
    oversight functions intended to ensure high-quality care. My
    statement will be based on our prior work.
        First, OBRA 1987's reforms and subsequent efforts by CMS
    and the nursing home industry to improve the quality of care
    have indeed focused on resident outcomes, as was intended.
        However, as you have already pointed out, a small but
    significant share of nursing homes nationwide continue to
    experience quality-of-care problems. In last fiscal year 2006,
    almost one in five nursing homes nationwide was cited for
    serious deficiencies--those that caused actual harm or placed
    residents in immediate jeopardy.
        Now, while this rate has varied over the last 7 years, we
    have regularly found persistently wide variation across the
    States in terms of the rate at which they cite serious
    deficiencies, which indicates inconsistency in how they assess
    quality of care. We have also found understatement in the
    severity of reported deficiencies in States where we have
    reviewed this in more depth.
        My second point: CMS has indeed strengthened its
    enforcement capabilities since OBRA 1987 to better ensure that
    nursing homes achieve and maintain high-quality care. For
    example, the agency has implemented additional sanctions
    authorized in the legislation, such as civil monetary
    penalties. It has established an immediate sanctions policy for
    nursing homes found to repeatedly harm residents, and it has
    developed a new enforcement management system. However, several
    important initiatives require refinement.
        We recently reported that the deterrent effect of CMPs,
    civil monetary penalties, was diluted for a sample of homes
    that we reviewed with a history of serious deficiencies,
    because CMS often imposed penalties at the lower end of the
    allowable range. Significant time, sometimes years, could pass
    between the citation of deficiencies on a survey and a home's
    payment because they are allowed to appeal, and the penalty is
    not required to be paid while it is under appeal.
        We also found that CMS's immediate sanctions policy is
    complex and appears to induce only temporary compliance for
    homes with a history of noncompliance. Moreover, CMS's new
    enforcement data system are not well-integrated, and the
    national reporting capabilities are incomplete, which hinders
    the agency's ability to track and monitor enforcement.
        Third, CMS has increased its oversight of nursing home
    quality and State surveys since the passage of OBRA 1987. But
    certain initiatives continue to compete for staff and financial
    resources.
        In recent years, CMS has focused its resources on prompt
    investigation of complaints and allegations of abuse. It has
    conducted more frequent and many more Federal comparative
    surveys. It has strengthened its fire safety standards and has
    upgraded its data systems.
        But CMS's intensified oversight efforts, coupled with an
    increase in the number of Medicare-Medicaid providers, has
    produced greater demands on its resources, which has led to
    delays in certain very important activities. For example, the
    implementation of new survey methodology has been in process
    for 8 years, and resource constraints threaten the planned
    expansion of this methodology beyond the initial demonstration
    sites.
        In conclusion, Mr. Chairman, significant attention from
    this Committee, the Congress, the Institute of Medicine and
    others served as a very important catalyst to focus national
    attention on nursing home quality issues that culminated in the
    nursing home reform provisions of OBRA 1987.
        Most would agree that many significant reforms and measures
    have been initiated and implemented since that time to improve
    the quality of nursing home care. But the task is not complete.
    It is imperative to continue to focus national attention on and
    to ensure public accountability for nursing homes to provide
    high-quality care for all residents.
        With such ongoing efforts, the momentum of earlier
    initiatives can be sustained and perhaps even enhanced, so that
    quality of care for all nursing home residents can be secured,
    as surely was intended by the Congress when it passed this
    legislation.
        Mr. Chairman, this concludes my prepared remarks.
        [The prepared statement of Ms. Allen follows:]

        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        The Chairman. Thank you. That is a very fine statement.
        Dr. Farris.

        STATEMENT OF DR. JAMES RANDOLPH FARRIS, M.D., REGIONAL
    ADMINISTRATOR, DALLAS OFFICE, CENTERS FOR MEDICARE AND MEDICAID
                       SERVICES (CMS), DALLAS, TX

        Dr. Farris. Good morning, Mr. Chairman. I would like to
    thank you and the committee for inviting me to discuss the
    quality of care provided by nursing homes across our Nation
    upon the 20th anniversary of the Omnibus Budget Reconciliation
    Act of 1987.
        This sweeping legislation ushered in a series of landmark
    nursing home reform initiatives designed to significantly
    improve quality of care.
        More than 3 million elderly and disabled Americans will
    receive care in nearly 16,000 Medicare and Medicaid certified
    nursing homes this year. About 1.5 million Americans reside in
    these nursing homes on any given day.
        Our Nation is aging. It is a reality that shapes the public
    discourse, looms large in our imaginations, and affects our
    everyday lives.
        As families struggle to care for aging parents and other
    relatives who are living longer but often with coexisting and
    chronic health conditions and increasingly complex medical
    needs, and as more members of the baby-boom generation age into
    seniority, the need for high-quality nursing home care will
    grow exponentially.
        We have come a long way since OBRA. Nursing home quality,
    safety, oversight and enforcement have advanced significantly
    since the reforms were implemented in 1990.
        Today, we face a changed and, in fact, much improved
    landscape that is vastly different from the one that existed
    even 10 years ago. To that end, CMS is grateful for the support
    and assistance of current and past members of the Senate
    Special Committee on Aging who have demonstrated their tireless
    commitment to these issues.
        My statement before you now, as well as my written
    testimony, will describe some of our most significant and
    successful initiatives.
        At the outset, however, I must express my deep concern for
    the future of CMS's nursing home survey, certification and
    quality improvement efforts. Without appropriate funding and
    adequate resources, the agency will not be able to sustain, let
    alone strengthen and expand, the programs and initiatives that
    have yielded positive results thus far.
        The high priority that CMS has afforded to meeting and
    exceeding its statutory requirements in these areas has indeed
    paid off. 99.9 percent of all Medicare and Medicaid certified
    nursing homes are surveyed every 15 months or less.
        In the coming years, however, to our regret, we may need to
    shift our limited resources and rethink our priorities. The
    Medicare budget for survey and certification has remained flat
    for the last 3 years. Should this trend persist, we anticipate
    a $25 million shortfall by the middle of fiscal year 2008.
        Under such a scenario, it is inevitable that our efforts
    will sputter and slow. Already, our implementation of systems
    improvements has wound down to a crawl.
        Finally, we face the possibility of less frequent surveys
    of facilities, diluted oversight of accreditation and
    compromised progress on the critical front of quality measures,
    in particular the rollout of a key national demonstration
    project.
        For several years now, improving the safety and quality of
    nursing home care has been the focus of much Congressional and
    regulatory attention. For CMS and its partners, it has meant
    massive effort and unprecedented activity.
        Currently, CMS is evaluating the complexity of its
    immediate sanctions policy in an effort to strengthen it and
    make it more effective, preparing to issue a civil money
    penalty analytic tool to help States to monitor enforcement
    actions and to improve national consistency, planning to seek
    legislative authority to collect civil money penalties during
    appeals, planning to analyze the feasibility and costs of
    systems modifications to improve the interface between
    complaint and enforcement data systems, and continuing to
    respond to nursing home complaints in a timely manner.
        Nearly 12,000 more complaint investigations were conducted
    by the agency and the States in 2005 than in 1999.
    Additionally, since 1990, CMS has been posting nursing home
    characteristics, survey results and information about facility-
    specific complaint investigations on its publicly searchable
    Nursing Home Compare Web site.
        For the past few years, nursing homes with the worst
    quality-of-care track records, dubbed ``special focus
    facilities,'' have been subject to more frequent surveys and
    decisive punitive actions if significant improvements are not
    achieved and sustained. As a result, many nursing homes have
    been induced to operate within Federal requirements. Clearly,
    such a program requires considerable resources.
        In 2005, the last time Congress increased the Medicare
    budget for survey and certification, CMS expanded the number of
    special focus facilities by 35 percent. To the extent that
    Congress supports the President's 2008 proposed budget for
    survey and certification, CMS will embark on a highly
    recommended special focus facility program expansion.
        Mr. Chairman, thank you for the opportunity to testify on
    the quality of care in our Nation's nursing homes. With our
    combined efforts, continued vigilance and adequate resources, I
    am confident that we will see continued improvement on this
    front.
        I look forward to answering your questions.
        [The prepared statement of Dr. Farris follows:]

        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        The Chairman. Thank you, Dr. Farris.
        Ms. Allen, your March report suggests that penalties
    applied by CMS against the worst-performing homes appear to be
    ineffective, since many of these homes continue to cycle in and
    out of compliance.
        Why do you think that the penalties are ineffective? How
    much of this problem occurs at the State level, and how much of
    it is attributable to CMS?
        Ms. Allen. It begins at the State level. It is up to the
    State to decide to what extent that they will use their own
    authority. States do have their own authority to impose
    penalties, and some choose to do that. Then, they can decide if
    they want to refer to CMS to impose penalties. Some choose to
    do that. Then, CMS makes the decision to what extent that it
    will provide notice, and then there is an opportunity for
    appeals.
        With civil monetary penalties, as I said earlier, while it
    is under appeal, they do not have to pay it. So there is a
    combination of factors that depend on the timeliness and the
    effectiveness of it.
        One of the reasons that CMS advised us that they tend to go
    with the lower end of the range is because they are concerned
    that, by taking resources away from the home, that that will
    interfere with their ability to provide the care that needs to
    be. So they see that that could be really counter to the intent
    for putting money toward direct care.
        The Chairman. Are these penalties that are meted out almost
    always appealed?
        Ms. Allen. They are often appealed, yes.
        The Chairman. That takes time?
        Ms. Allen. Yes, it does. That was one of the
    recommendations, though, that we made in our report, and CMS
    agreed that it would seek the authority that it needs to try to
    have the penalty paid up front when it is imposed. Then, if it
    is overturned at a later time, that it is refunded or
    something, with perhaps even interest. There is precedent for
    that in other Federal programs.
        The Chairman. Would that be a significant improvement, or
    cause, in your opinion, a significant improvement in these
    homes that are being sanctioned, if they were required to pay
    the penalty up front pending the appeal?
        Ms. Allen. We think it could be more of a deterrent effect,
    yes.
        The Chairman. What about you, Dr. Farris? Do you think that
    would help?
        Dr. Farris. I think it would. As my colleague has said, we
    are certainly pursuing establishment of escrow accounts that
    will allow us to be able to collect those penalties in advance,
    up front, and be able to refund them if necessary. But because
    of the fact that the appellate process does take a while, it
    would send a strong message if we were able to make these
    collections early on.
        The Chairman. Ms. Allen, your testimony cites concerns that
    CMS's double-G immediate sanctions policy, in which homes cited
    for actual harm in successive inspections are immediately
    notified by CMS that a sanction will be implemented, is not
    working as intended.
        Should CMS consider scrapping the 15-day notification
    interval during which homes can correct the deficiencies and
    escape the proposed penalty? What else might we do?
        Ms. Allen. We did not recommend that they scrap the 15-day
    notice, because the home deserves to have notice. But what we
    do recommend is that CMS simplify the policy, because the
    immediate sanctions policy is a complicated policy. It is even
    very complicated to explain about with all the requirements and
    how it works.
        Again, we made some recommendations to CMS about how it
    could simplify it and remove some of the barriers that get in
    the way of even imposing the penalties. Again, CMS has agreed
    that the complexity has been a hindrance to its implementation,
    and they are working to do that.
        The Chairman. Dr. Farris, you want to comment on that?
        Dr. Farris. Yes. We agree on those comments. It is
    important for us to take a look at the reasons why some homes
    do conform, some homes do correct the deficiencies that they
    have, and some homes don't.
        Certainly, we agree that there is some complexity to the
    double-G policy, and we are re-evaluating that policy. We are
    going to look at it and see if it would make sense to
    significantly change it.
        The period of time that facilities have for their notice is
    a required period of time, so we really can't scrap that. But
    we can look at ways that we can more efficiently and more
    effectively give them notification that they are out of
    compliance and that we do plan to impose penalties.
        We certainly are looking at revamping that policy and
    simplifying it to make it more workable and more effective.
        The Chairman. How important is it, in your opinions, that
    we really do come up with a system that more effectively does
    sanction those facilities successfully that are not in
    compliance and require them to get in compliance or go out of
    business?
        Is this something that you would say is a really, really
    high priority in this industry, that we do a much better job of
    ferreting out those institutions that are not providing the
    kind of quality care? That we have a system to not only
    identify them, but insist that there be quick compliance or
    that they be fined or even put out of business?
        What is your sense of priority on this, Ms. Allen?
        Ms. Allen. GAO would suggest that there needs to be some
    mechanism to deal with the homes that repeatedly are out of
    compliance on a continuous basis. We had multiple examples of
    that in our most recent report that was just released.
        When so many Federal dollars are going into these homes and
    there are vulnerable residents who are experiencing significant
    neglect from the care, it is difficult to explain how those
    homes can be allowed to continue to participate in the Federal
    programs.
        Now, as CMS responded in its comments to our report, and we
    would agree, that sometimes it takes a combination of factors.
    Sometimes it is not sanctions alone, monetary sanctions,
    because, again, that could be taking money out of the system.
        But there are other ways. There is denial of payment for
    new admissions. There are temporary managers that can go in.
    Perhaps if the home is a member of a chain, there can be ways
    to have the chains hold them accountable for bringing in
    additional resources. There can be alternatives.
        One of the concerns about terminating a home is, that what
    happens with the residents? There is the concern about transfer
    trauma. Where do the residents go? That is a difficult issue.
        But at the same time, which is worse: staying in a home
    where a person is receiving very poor and negligent care, or
    moving to a facility where they may receive better care? It is
    a very difficult dilemma.
        But again, it seems like that, for the homes that are
    providing very poor care on a continuous basis, there really is
    a question whether they should be allowed to continue in the
    Federal program.
        The Chairman. Thank you.
        Dr. Farris, what are your thoughts?
        Dr. Farris. We think that there is definitely a great need
    to prioritize, making certain that homes that do participate in
    the Medicare and Medicaid programs provide good-quality care.
    There are a number of mechanisms that can be implemented to
    ensure this short of termination.
        I think Ms. Allen is entirely correct in mentioning
    entities such as transfer trauma. We know that transfer trauma
    is a real problem for some residents of long-term care
    facilities, particularly those who are cognitively impaired.
        We also know that, in the part of the world where I live,
    there are access problems. There are times when closing a
    facility may mean that the next closest facility is anywhere
    from 60 to 200 miles away. This imposes a hardship on families
    who would like to go and visit their relatives.
        So we are looking, No. 1, as I said earlier, to try to find
    a way to find out why some homes will improve and implement
    sustainable corrections and why others will not.
        The special focus facilities that I mentioned earlier would
    be one example. We started out in 1999 with 100 of those
    facilities. We expanded it in 2005 to 135. We are looking very
    closely at what we can do to improve the quality of care in
    these facilities, which are considered the worst of the worst.
        There are a number of different modalities that are
    available, as I said and as Ms. Allen mentioned, in addition to
    the civil monetary penalties we have, denial of payment for new
    admissions, but we also have the ability to go in and provide
    them with directed plans of care and directed plans of
    correction.
        We are also looking not to penalize the residents of these
    homes, who are really helpless in this situation and very
    vulnerable. So we are looking at ways that we can work with the
    boards of directors of these homes, and particularly in cases
    where they are parts of national chains. We want to make
    certain that, if the owners are not the operators, we make the
    owners aware of the fact that poor care is being rendered in
    these facilities.
        So we are applying a multi-pronged approach to try to bring
    these facilities along, and we are studying what works and what
    does not over the course of time. I think that we will be able
    to come up with some measures and some mechanisms that will
    allow us to ensure high-quality care and terminate only when it
    is absolutely necessary.
        The Chairman. This is, I think fairly obviously, but I
    think we need to highlight it and discuss it a bit. We are
    talking about, in every case almost, management, right? It is
    people who are in charge of the facility or their immediate
    bosses.
        I have found, in my experience, where you have good
    management, inevitably you have a well-operated business,
    whether it be nursing homes or anything else. Where you have
    poor managers, that is where you run into trouble.
        Isn't it true, or is it not true, that in these problem
    facilities, if you could replace management with a different
    management, you would almost be certain to expect improvement?
    Would you make that judgment?
        Ms. Allen.
        Ms. Allen. It is management. It is leadership. It is also
    resources. It is a matter of the resources that are going into
    the home, in terms of nursing level, the nurse aid level, as
    well as nutrition and a number of things. So it is not only the
    leadership, but it is also the financial resources, as well.
        The Chairman. I am sure that is true.
        Dr. Farris.
        Dr. Farris. Ms. Allen is absolutely right. It is multi-
    factorial. We think that the resource constraints that some
    facilities have would need to be addressed in order to allow
    them to provide better care, working with the leadership, and
    again, particularly if the ownership is different from the
    management of the facilities.
        It is important to make sure that that board of directors
    that is in charge, or the owners of the facilities, are made
    aware of the fact that there are problems there that need to be
    addressed. In some instances, perhaps in many instances, those
    boards or that leadership can actually bring to bear some of
    the other parameters that will allow us to make corrections,
    such as infusing more resources into it.
        The Chairman. We have, what, about 16,000 nursing homes
    across the country, and the estimate is that perhaps 20 percent
    are on that list of having to need great improvement, so that
    is like 3,000.
        Is that somewhere in the ballpark, without trying to be too
    arithmatic? Because obviously even the other 80 percent, many
    of those can improve. But in terms of really needing direct
    attention, would you say that there may be 20 percent out of
    the 16,000 that you might estimate that would be on that list?
        Ms. Allen.
        Ms. Allen. Yes, that is correct. But may I just add a
    comment to that, or another perspective?
        One of the things that I mentioned in my remarks is that
    there is great variation across the States with that number. It
    ranges from about 2 percent in one State that reports on
    nursing homes that are cited for actual deficiencies to a high
    of almost 50 percent of homes in another State.
        We don't believe that the actual quality really varies that
    much. What we believe, rather, is that it shows differences in
    terms of how quality is assessed. That is one of the reasons--
    and at the same time, we also have found that there is
    understatement.
        So there could be understatement across the States across
    the board. So we continue to be concerned about what the data
    are telling us.
        That is one of the reasons, though, that we would like to
    suggest it is so important that some of the measures that CMS
    is working on, for example its survey methodology, is so very
    important, because we need to know what is going on in the
    homes. There needs to be more consistency in terms of how the
    level of care and quality of care is being assessed.
        So I just wanted to make that remark. We are confident that
    about 20 percent of the homes are being cited for deficiency of
    care, but it does vary across the States very significantly. We
    need to pay attention to that variation, as well.
        The Chairman. That is a good comment.
        Dr. Farris.
        Dr. Farris. I think that that variation is key to this
    discussion. We are working with State survey agencies. We have
    begun to implement training for the State survey agencies to
    make certain that we take out any differential that may be
    there on a State-by-State basis to make sure that the protocols
    are implemented consistently across the country.
        In terms of the numbers of facilities, again, as we said,
    we have already identified 135 of the worst of the worst
    facilities. Certainly we think that that number could be
    expanded. I wouldn't go so far as to say it could be expanded
    to 20 percent based upon the variation and the variability that
    we just talked about, but it can certainly be expanded beyond
    135.
        To the extent that the resources are infused into the
    survey and certification budget, we can expand that number,
    just as we did in 2005 where we increased it by 35 percent, to
    be able to look at a larger number of the worst of the worst
    and to begin to work with them to bring them into compliance.
        The Chairman. Would you say that, if you had sufficient
    resources, an increase in the resources that you have now, that
    you could make a quick and significant improvement in these
    troubled homes?
        Dr. Farris. We can certainly begin to effectuate
    improvements and to find ways to not only implement these
    improvements but to also ensure that they are sustainable, to
    work with these homes on an ongoing basis and to work with our
    State survey agencies, again, to achieve consistency.
        But also to work with the homes through the various
    modalities that we talked about, applying not only sanctions
    but also management, different management to come in, and
    directed plans of care, to ensure that they do come into
    compliance and continue or begin to provide good quality of
    care on a sustainable basis.
        The Chairman. Ms. Allen, is it a question of resources?
        Ms. Allen. I think that there is no doubt that additional
    resources would be helpful.
        The Chairman. OK.
        We have with us the very fine Senator from Missouri, Claire
    McCaskill.
        Would you make some comments, ask some questions?
        Senator McCaskill. Thank you, Mr. Chairman.
        One of the issues I think, having done a number of audits
    on nursing home care as the State auditor in Missouri, and
    looking at what I think those of us who have spent some time on
    this issue call the roller-coaster syndrome, that is the right-
    to-cure problem.
        There is this incredible tension between the inspectors on
    the ground in terms of keeping that facility open and
    penalizing appropriately to mandate that the care improves.
        Reality: You have a small nursing home in a small
    community, and they are getting cited and curing, getting cited
    and curing, and, frankly, were it not for the reality of where
    would those people go, I think they might be tougher and,
    frankly, appropriately tougher on some of the nursing homes.
        But I think what happens to the inspectors on the ground
    that are doing the surveys is, one, they develop relationships
    with the administrators. They see some administrators that are
    trying to do good but are having difficulty, whether it is--I
    know we are going to talk about the nursing shortage, but there
    is a real shortage in terms of qualified health care
    professionals, especially at the level of pay that some of
    these nursing homes can give.
        I guess, has there been any efforts to look at having a
    mandatory plan in place in every State that would allow for the
    transferal of patients on an immediate basis so that tension is
    relieved?
        In other words, having so many beds being required to be
    available in facilities that haven't had Class I violations,
    that haven't had the history of problems, and that--because I
    think if you really began to have some dramatic penalties,
    like, ``Hey, you are done, we are shutting the door,'' I think
    you would have more of a deterrent effect on some of the other
    consistently problematic homes.
        Have there been any States that you are aware of that have
    always had kind of a plan in place to transfer nursing home
    residents, long-term care residents, to other facilities?
        Ms. Allen. GAO has not specifically looked at that
    systematically.
        We do know that one of the more effective penalties has
    been denial of payment for new admissions. In other words, if
    there are problems, to simply say we are not going to allow any
    more to come in until you correct that. In other words, if
    there is something to affect the income stream, that can be a
    powerful incentive to correct.
        One of the other issues, though, in some respects, the
    occupancy rate of nursing homes has been coming down. So in
    some communities, it may be possible to transfer residents to
    another nearby facility. There may be other beds. If there are
    Medicaid beds available--and that is typically the population
    we are talking about, Medicaid beds--there may not be a
    Medicaid-certified bed available, so that is an issue of
    availability.
        There may also be, though, the issue of, in the smaller
    community, more rural community, is there an available facility
    for them to go to? That is one of the very difficult issues.
    Are there alternatives for that?
        There is the issue of transfer trauma that is a very
    difficult issue as well. So we acknowledge it is a very
    difficult issue about what do we do at that point where there
    is a tradeoff between poor care being delivered, particularly
    for those that is chronically poor care, cycling in and out of
    compliance, the roller-coaster effect.
        If you care about the resident, which is better or worse:
    moving the resident someplace else out of that facility, which
    is more compassionate, or to leave them in that facility, where
    they may continue to get----
        Senator McCaskill. Less-than-great care.
        Ms. Allen. Less-than-quality care.
        Dr. Farris. Well, Senator, you raise a very important point
    that actually revolves around the issue of access. As we begin
    to look at imposing sanctions against a nursing home, and
    particularly if we are considering strongly the termination of
    the provider agreement for that nursing home, we begin to work
    in conjunction with the State to find places where there is
    adequate capacity for patients to be moved.
        Aside from the conversation about the transfer trauma,
    which is a real entity, we have found that there are
    circumstances in which it is very difficult to move patients
    from one facility to another.
        In some instances it will be imposed by geographic
    constraints. There may not be another home within 60 to 100
    miles, where a number of patients could be transferred, and
    this imposes a hardship on the families that would want to
    visit those patients.
        We also have to look at special needs that some patients
    may have. Some facilities have a particular expertise in taking
    care of certain types of patients. One of the ones that we
    recently dealt with had to do with ventilator patients. There
    is not a lot of capacity if you need to move patients from a
    home where there are ventilator-dependent patients. There are
    some homes that have large populations of pediatric patients,
    which require some special care, and you cannot put those into
    every particular situation.
        So access becomes very important as we start to look at
    where we can move people. We always work with the States to
    allow them to tell us where that capacity is, or if it is not
    there.
        So, yes, you are absolutely right. There are instances in
    which we are not able to move forward with termination because
    of access issues or because of real strong concerns about
    transfer trauma.
        But there are other modalities that we can implement, short
    of termination, such as bringing in new managers, different
    managers, imposing directed plans of care, that we will force
    them to implement. These modalities have been shown to actually
    bring them back into compliance.
        But as we have said, one of the things that we are looking
    for is to find sustainable corrections.
        Senator McCaskill. Right.
        I have so many areas I would like to cover in this because
    of the work that we did on this in Missouri. But one of the
    things that is troubling me about the future of nursing home
    care is that there is a trend in my State to begin to use
    nursing homes as an alternative to mental health facilities by
    public administrators.
        In the urban areas of our State, there are mental health
    facilities that the courts can use to place people that they
    believe must be put in a facility. But as you probably are
    aware, in our country, we began trying to de-institutionalize
    our mental health patients by moving them ``out into the
    community.'' Well, in some instances, that meant to a homeless
    shelter. In rural areas, where you don't have any kind of
    safety net for the homeless population, many times they end up
    in a probate court as a ward of the court, and the court
    determines they must be placed somewhere.
        Well, if you are in a relatively rural area, where are you
    going to place these people that may be schizophrenic or
    psychopaths? Well, they are being placed in nursing homes.
        So you have two types of populations in the same nursing
    home. You have an elderly geriatric population that, frankly,
    with what is changing in our health care spectrum, where we are
    going all the way from assisted living, home health care, and
    we have the wide spectrum that we didn't have--people's notion
    that people are going into nursing homes to play checkers and
    maybe stay a while and go back home, that is not what the
    reality is in nursing homes now in terms of acuity.
        We have a much larger population. It is non-ambulatory. You
    have people that have much more aggressive needs in terms of
    day-to-day care because they are only there because the
    hospital is not letting them stay in the hospital anymore, and
    they are going there to die because they can't be cared for in
    their home with hospice, or whatever. Many of them are.
        Then, you have the juxtaposition of a mental health
    population under the same roof, with two separate requirements
    in terms of regulation. You may have a probate judge telling
    that nursing home, ``You must keep this population from
    wandering anywhere. They must be in lockdown.'' Then, you have
    the requirement for the nursing home population that you put
    them in the least restrictive environment, that you can't use
    restraints or you are not allowed to use restraints because
    that, in fact, would be sanctioned if you were inappropriately
    using restraints on the geriatric population. Well, then
    inspectors come in to do surveys, and they see a mental health
    patient that is being used with restraints, and they are
    getting cited.
        So, what steps has CMS taken to acknowledge these two
    different types of population?
        If it is happening in my State, I am sure it is happening
    in other States, this juxtaposition between--and kind of the
    gray area in the middle is the Alzheimer's. What is happening
    is a lot of these mental health patients are ending up in
    Alzheimer's units. So, that is completely inappropriate.
        By the way, a lot of these staff don't have a requirement
    to even train their people on the mental health issues, how to
    deal with the mental health population. So you have people who
    have been trained to deal with somebody who is non-ambulatory
    and geriatric that is now dealing with a sociopath or a
    schizophrenic. It is just not good.
        I am curious what, if anything, is going on in your agency
    to acknowledge that this is happening in our country, and
    taking steps to make sure that we have the appropriate
    regulations, inspections and training in place.
        Dr. Farris. Yes, Senator. You, again, raise a very
    important point. This has been recognized, and it is something
    that is being addressed by the leadership at CMS.
        The long-term care team that has been put together across
    the agency, across CMS, where we have input from a number of
    different sources, is taking this sort of situation under
    advisement. It has been recognized.
        If I may change hats for just one second and go back to my
    former life as a public health official, the de-
    institutionalizing of the mentally ill that took place back in
    the 1980's has really caused a number of problems not only in
    this particular setting, but----
        Senator McCaskill. Don't even get me started on the group
    homes that have nobody doing surveys. I mean, there are no
    surveys going on in these mental health group homes.
        What is going on in terms of abusive practices and wrong
    medication, the top of my head can blow off if I start thinking
    about what is going on to these poor people in some of these
    group homes across our country.
        Dr. Farris. Let me just say that, during the time that I
    was the Dallas County health director in Texas, the largest
    mental health institution in Dallas was the Dallas County Jail.
        Senator McCaskill. Right.
        Dr. Farris. Until we are able to address the appropriate
    placement of patients with mental illnesses, actually through
    the system of jurisprudence, we tried to implement a system
    where there were diversion programs to keep people out of the
    criminal justice system who had mental illnesses.
        I think we need to begin to look at this problem from the
    same perspective as it relates to nursing home patients,
    because many of the patients who go into the nursing homes are
    not going because they want to; they are being sent there. So
    it has to be addressed at a different level.
        Senator McCaskill. I am worried about the families of the
    elderly. I mean, what I worry about is we are not doing full
    disclosure. If you are about to place a loved one in a nursing
    home, do we have an obligation to tell them that they have a
    half a dozen sociopaths that have been committed to that
    facility?
        We are talking about young people. We are talking about
    people, many of whom have tendencies to act out, sexually and
    aggressively, and in terms of assaultive behavior, and they are
    being heavily medicated in order to deal with that.
        Do we have an obligation to make sure that consumers that
    are going to use a nursing home are aware that there are these
    people in the nursing home? Do we need specific regulations
    requiring that nursing homes that have these dual populations,
    that there is two standards of training and that States should
    have two sets of regs, making sure that there is the
    appropriate oversight in both areas?
        Dr. Farris. Well, Senator, I think as the group that I
    mentioned, our long-term care team at CMS, begins to delve more
    deeply into these issues, we will be more than happy to get
    back with you to let you know where our thinking is going on
    this and how we plan to address this issue.
        Senator McCaskill. I would appreciate that, because, at the
    same time, we do have a problem of census in terms of these
    homes. So homes are looking at ways to fill the beds, so they
    are turning to this issue. Now, some are doing it responsibly,
    with training. Some of them aren't.
        I think getting a handle on this is really important
    because, as these nursing homes deal with struggling census--
    and census is the bottom-line determinator as to whether or not
    they can afford to pay the people who work there to give the
    care that is necessary.
        I don't want to shut off the availability of bed space to
    mentally ill people who need it, and it may be that we need to
    take a role as government in designating facilities as those
    that are appropriate to receive these types of patients when we
    are confident that we have the appropriate amount of training
    and oversight in place.
        Dr. Farris. We will be very happy to get back with you on
    that.
        Senator McCaskill. Thank you.
        Thank you, Mr. Chairman.
        The Chairman. Thank you very much, Senator McCaskill. Those
    were really insightful comments based on your experience and
    questions, and made a real contribution.
        We thank you both for being here this morning. You have
    been excellent witnesses, and I think you have shed a lot of
    light on this issue. Thank you so much.
        Dr. Farris. Thank you.
        The Chairman. Our first witness on our second panel will be
    Charlene Harrington, who is a professor of sociology and
    nursing at the University of California in San Francisco.
    Professor Harrington's research focuses on quality, access,
    utilization and nursing home expenditures, home and community-
    based care, as well as personal care services. She has been a
    leader in nursing home care reform efforts for the past 3
    decades. She has served on the Institute of Medicine's panel,
    whose 1986 report led to the passage of the Nursing Home Reform
    Act of 1987.
        The second witness will be Alice Hedt, executive director
    of the National Citizens Coalition for Nursing Home Reform,
    which is an advocacy organization that provides information and
    leadership and Federal and State regulatory legislative policy
    development to improve care and life for residents of nursing
    homes and other long-term care facilities. Ms. Hedt will
    testify that conditions in many nursing homes are still
    unacceptable, and provide the Committee with recommendations of
    creating a stronger enforcement system.
        Our third witness will be Mary Ousley. Ms. Ousley is the
    president of Ousley & Associates, former chair of the American
    Healthcare Association, which is the largest trade organization
    representing long-term care. Since 1988, she has acted as an
    advisor, provider representative on the policy and regulatory
    development of OBRA 1987, on survey and final certification, as
    well as on enforcement.
        Our last witness will be Orlene Christie, who is director
    of the Legislative and Statutory Compliance Office for the
    Michigan Department of Community Health. Ms. Christie will
    discuss how Michigan has designed and implemented its
    background check program, which excludes individuals with
    certain criminal histories and records of abuse from working in
    nursing homes.
        So we welcome you all here.
        We would start with your testimony, Ms. Harrington.

     STATEMENT OF MS. CHARLENE HARRINGTON, PROFESSOR OF SOCIOLOGY
        AND NURSING, UNIVERSITY OF CALIFORNIA, SAN FRANCISCO, CA

        Ms. Harrington. Thank you, Mr. Chairman.
        I first became aware of the serious quality problems in
    nursing homes in 1976, when I was the director of the
    California Licensing and Certification Program. At that time,
    about one-third of California nursing homes were providing
    substandard care.
        Today, over 30 years later and 20 years after the adoption
    of OBRA 1987, still a very large percent of nursing homes offer
    poor care, resulting in harm, jeopardy and death to residents.
    Literally dozens of studies, including those by the GAO and the
    OIG and researchers, have documented these persistent quality
    problems.
        I am going to argue today that three areas need to be
    improved in order to ensure high-quality care: first, the
    enforcement of existing laws; second, adequate nurse staffing
    levels; and third, financial accountability for government
    funding.
        The GAO should be commended for its new report and its
    recommendations, which I certainly endorse. CMS should revise
    its enforcement procedures and practices to streamline them, to
    increase the size of penalties, and take swift action against
    poor performing nursing homes.
        In addition, our studies of the wide variation in
    enforcement practices across States have found that the States
    that do a better job of enforcement are those that receive
    higher survey and certification funds from CMS. This shows the
    need for increased Federal funding for State survey agencies.
        Moving to the underlying issue of poor quality in nursing
    homes, I really think there is no mystery about it. The basic
    problem is that we have inadequate nurse staffing levels in
    nursing homes.
        The positive relationship between high nurse staffing
    levels, especially R.N. staffing, and the quality of care in
    nursing homes has been shown in numerous studies. A study by
    Abt Associates for CMS in 2001 reported that a minimum of 4.1
    hours per resident per day, including .75 R.N. hours, are
    needed to prevent harm to residents with long stays in nursing
    homes. Two IOM reports have recommended increased minimum
    Federal staffing standards for nursing homes.
        Unfortunately, the total nurse staffing levels across the
    country have remained flat for the last 10 years, well below
    the recommended levels, and some nursing homes have dangerously
    low staffing. Shockingly, R.N. staffing hours have declined by
    25 percent across the Nation since the year 2000 alone.
        The decline is directly related to the implementation of
    the Medicare Prospective Payment System, because nursing homes
    no longer need to provide the level of nursing care that is
    paid for in the Medicare rate. Recognizing the low staffing,
    some States have begun to set their own minimum staffing
    levels, and Florida has recently established a 3.9 total nurse
    staffing level.
        Studies have shown that nursing homes will increase
    staffing if the Medicaid reimbursement rates are increased.
    This encourages nursing homes to add more staff. But a new
    study that I have just done shows that high State minimum
    licensed staffing standards are the most effective policy that
    you can use to get the staffing levels up.
        The nursing turnover rates continue to be high, and those
    reduce the continuity and the quality of care, and they
    increase the cost of nursing homes. Turnover rates are directly
    related to the heavy workloads that nurses have and the low
    wages and benefits and poor working conditions.
        Now, government is paying 61 percent of the Nation's
    nursing home expenditures, so it has focused most of its
    efforts on cost containment. The majority of State Medicaid
    programs have adopted prospective payment systems, and nursing
    homes respond by cutting their staff and cutting their quality
    to stay under those rates.
        In 1998, when Medicare adopted prospective payment, it was
    established, but with very little or no accountability. One way
    to make nursing homes more financially accountable under
    prospective payment is to establish cost centers.
        Four cost centers should be set up: one for direct care,
    like nursing and therapy; one for indirect care, like
    housekeeping and dietary; three, for capital costs; and four,
    for administrative costs.
        After the rates are determined for each cost center, the
    nursing home should be prevented from shifting funds away from
    the nursing and the direct care to pay for administrative costs
    for capital or profits. Retrospective audits should be
    conducted to collect funds that were not expended on the direct
    and indirect care that it was allocated for, and penalties
    should be issued for diverting funds away from direct care.
        In summary, we need to improve the enforcement, the
    staffing levels and the financial accountability if we are ever
    going to solve these intractable quality problems.
        Thank you very much.
        [The prepared statement of Ms. Harrington follows:]

        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        The Chairman. Thank you for your very fine statement.
        Ms. Hedt.

     STATEMENT OF MS. ALICE H. HEDT, EXECUTIVE DIRECTOR, NATIONAL
      CITIZENS' COALITION FOR NURSING HOME REFORM, WASHINGTON, DC

        Ms. Hedt. Good morning.
        Twenty years ago I was a local ombudsman in North Carolina,
    working with 12,000 residents in eight counties. I joined the
    Coalition for Nursing Home Reform because that organization was
    leading the way to get OBRA written and implemented. I am
    honored to be here to represent that organization today.
        Senator Kohl, we particularly want to thank you for your
    leadership on criminal background checks, on funding on the
    ombudsman program, and on the Elder Justice Act.
        I also want to point out that your homestate, Wisconsin,
    has one of the best procedures for nursing home closures, so
    that residents do not suffer from transfer trauma like they do
    in some of the other States. It should be held up as a model
    for the rest of the Country.
        The Chairman. Thank you.
        Ms. Hedt. When OBRA was passed in 1987, a lot of changes
    started happening in nursing homes that I was able to observe.
        Those changes included taking off of restraints of
    residents. At that time, over 40 percent of residents were
    restrained. If you think about it a minute, if those numbers
    were realized today, it would mean that 680,000 people each
    year would be restrained in nursing homes. Right now, our rate
    is about 10 percent. We need to make a lot of improvements in
    that, but there has been a significant change.
        Residents also were chemically restrained, and one
    resident, Judith Mangum, who has been on our board of directors
    and been in a nursing home since before OBRA, told me that she
    went into the nursing home and was literally drugged because
    she was 21 years old and they didn't know what to do with her.
    We have seen significant changes in that area.
        Social workers at that time became very involved in
    promoting residents' rights, and so did long-term care
    ombudsmen. One of those particularly that is still with us is
    from Missouri, Carol Scott, the State ombudsman. They worked
    hard to make sure that residents knew that they don't give up
    their Constitutional rights as United States citizens just
    because they enter a facility.
        Mail started being delivered every day. People started
    knocking on doors before they went into residents' rooms. There
    were huge improvements.
        I was proud to be a part of an organization that led a
    coalition to bring about nursing home reform, and that included
    many people in the room today--consumers, providers, health
    professionals.
        Sadly, our vision for nursing home reform was not realized,
    and has not been realized over the last 20 years. I want to
    point to four major reasons why.
        The first, as Ms. Harrington discussed, is staffing. We
    know, that there has to be a minimum standard of 4.1 hours of
    nursing care per resident each day to have adequate care, so
    that residents are not harmed. Ninety percent of facilities do
    not staff at this standard. Moreover, consumers do not know at
    what levels facilities are staffing because there is not
    accurate, audited, publicly available data on nursing home
    staffing at this time. NCCNHR has a staffing standard that
    details the staff needed for quality care. NCCNHR has a
    staffing standard that details the staff needed for quality
    care.
        Particularly important is the role of nurses. We know that
    pressure sores, weight loss and other serious problems that
    residents can experience can be directly impacted by having
    more R.N. care.
        A lot of times, we forget that there are high costs to poor
    care. When we don't have enough staff, it results in high cost
    and increased hospitalizations, more pressure sores and other
    things that are very costly to us as a society.
        The second big area is the enforcement of OBRA that needs
    to be addressed. We fully support the GAO recommendations that
    were brought forth today.
        From a consumer viewpoint, we feel strongly that
    information about sanctions needs to be made available to the
    public. Right now, if I choose a nursing home, I can't tell if
    that nursing home has been sanctioned or not. I don't know if
    admissions have been closed. This information needs to be on
    Nursing Home Care. Consumers have a right to know which nursing
    homes the states and CMS have sanctioned.
        We also feel that temporary managers should be used, and
    the good-performing facilities should be able to take over
    poor-performing facilities so that it is not the residents that
    suffer.
        Residents and their family members also need to be involved
    in dispute resolution. Right now, it is the facilities that
    have the option of disputing the survey's findings, not the
    complainant or the resident.
        I want to put into the record our ``Faces of Neglect''
    book. This documents family members who suffer terribly in
    nursing homes, and whose facilities, in most cases, were not
    sanctioned. The system literally broke down for these families.
    We need to make sure that other Americans do not suffer like
    these families did.
        Third, I want to point out that facilities themselves can
    make a huge difference in implementing OBRA. OBRA called for
    individualized resident care. If care is individualized, that
    will handle the issues around people with mental illness,
    because facilities should have staff that are trained and
    equipped to handle those facilities. If care is individualized,
    that should handle the issues of people with very specific
    needs going into facilities and with dementia that need to be
    handled.
        Besides staffing and enforcement, we want to make sure that
    every nursing home in the country uses total quality management
    practices to work for individualized care. The Pioneer Movement
    can assist in this, the Quality Improvement Organizations
    (QIOs), the Advancing Excellence Campaign, are all resources
    that facilities can use to improve management and move toward
    individualized care.
        Finally, consumers are asking that information be made
    publicly available that they need. Consumers need to know about
    the staffing levels. They need to know about if a facility has
    been sanctioned. They need to know, and want to know, about the
    cost reports and how tax dollars are being used in facilities.
    Basically, they need to know who owns and manages facilities.
    Right now, that information is not available to the public on
    nursing home compare.
        Today, 20 years after the implementation of OBRA, a lot of
    us that worked on that issue will soon need long-term care, as
    will our family members. So I thank you for holding this
    hearing and not forgetting the 3 million Americans who need and
    utilize nursing home care now and those of us who will need
    care in the future.
        Thank you.
        [The prepared statement of Ms. Hedt follows:]

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        The Chairman. Thank you very much, Alice.
        Mary Ousley.

     STATEMENT OF MS. MARY OUSLEY, PRESIDENT, OUSLEY & ASSOCIATES,
      FORMER CHAIR, AMERICAN HEALTH CARE ASSOCIATION, RICHMOND, KY

        Ms. Ousley. Thank you. Thank you, Chairman Kohl, Members of
    the Committee.
        Twenty years ago, the passage of the Omnibus Budget
    Reconciliation Act ushered in an era of change in resident
    care. Congress made the care mandate very clear: All certified
    facilities must obtain or maintain the highest practical
    mental, physical, psychosocial well-being for each resident.
        A second mandate of OBRA 1987 was the requirement that each
    facility establish a quality improvement committee. This
    important committee offered a platform from which each facility
    could evaluate their own outcomes of care, as well as the
    processes that generated good outcomes of care.
        This commitment to quality improvement is best demonstrated
    by a recent quote by acting CMS Administrator Leslie Norwalk.
    She states, ``Nursing home providers have been on the leading
    edge of this quality movement, long before hospitals, doctors,
    home health providers, pharmacy, dialysis facilities and others
    came to the table. The nursing home industry was out front with
    quality first to volunteer effort to elevate quality and
    accountability.'' She goes on to say that quality measurement
    is working in nursing homes, and it is the best path to high
    quality.
        OBRA 1987 was also intended to move the survey and
    certification process in a new direction. The statute
    envisioned a resident-centered, outcome-oriented, consistent
    system of oversight. Unfortunately, the system that we have
    today, many times, bears little resemblance to that vision.
    What we have is a system that defines success and quality in a
    regulatory context that is often measured by the level of fines
    levied and the violations tallied, not by the actual quality of
    care or quality of life.
        We, the American Healthcare Association and all of our
    members, take very seriously the recently released GAO report,
    and acknowledge that we still have many challenges ahead of us
    in addressing and improving the Nation's most troubled
    facilities. However, we are also pleased to note in the report
    that it indicates that there has been a dramatic decrease in
    the number of facilities cited for actual harm or immediate
    jeopardy.
        From a historical and comparative standpoint, let us
    briefly look at the 2003 GAO report, which found an almost 30
    percent reduction in the number of actual harm deficiencies
    cited over an 18-month period. However, it went on to say that
    it was unclear whether this was due to an understatement of
    deficiencies or, as we would argue, whether or not it was a
    true indication of quality improvement.
        This dichotomy points to the central problem in
    understanding today's oversight process and underscores the
    inability to distinguish the failure to identify deficiencies
    and true quality improvement.
        The GAO makes several recommendations in their report, and
    I want to highlight and speak to just a few of those.
        Recommendations include: Expand the CMS Nursing Home
    Compare site to include imposed sanctions and homes subject to
    immediate sanctions, we agree. But we also agree with the
    concern that the GAO raises in the report that says that if
    these data are to be put on the Web, then we need to make sure
    that they are accurate and understandable by families.
        No. 2, expand the special focus facility program to include
    all homes that meet criteria as poor-performing. We support the
    transparent processes that ensure improvement in these
    facilities, and encourage greater involvement by the quality
    improvement organizations in each and every State.
        As it has been clearly demonstrated that such cooperation
    is effective in improving the quality of care, I do want to say
    we are supportive of CMS terminating consistently poor-
    performing facilities that cannot achieve or sustain compliance
    over time.
        No. 3, ensure the consistency of the imposition of civil
    monetary penalties by issuing standardized grids, which was
    piloted in 2006. We disagree with this recommendation. We
    believe that circumstances surrounding noncompliance must be
    evaluated on an individual basis before any remedy can be
    imposed, and we do not believe a standardized grid would
    achieve this goal.
        We believe the path to continued improvement is found in
    assessing the effectiveness of the joint Federal provider
    nursing home quality initiative and our own quality first. I am
    proud to say it is working, and it is being effective.
        Here are some of the facts. Key quality indicators tracked
    by the initiative over the past 5 years have shown improvement,
    including improvement in pain management for nursing home
    residents, reduced use of restraints, decreased number of
    residents with depression, and decrease in occurrences of
    pressure ulcers, just to mention a few.
        We all know that the satisfaction of residents and families
    are absolutely paramount in determining the true quality. A
    recent independent study showed that four out of five residents
    and families indicated that they were satisfied with their
    care, and they would actually rate that care as good or
    excellent.
        Each of us here today seek precisely the same objective,
    which is to work to improve the quality of health care in our
    Nation and, specifically, long-term care. To this end, we
    applaud the legislation, the Long-Term Care Quality and
    Modernization Act, which Senators Smith and Lincoln introduced
    in the 109th Congress. We hope that such a bill that encourages
    a culture of cooperation will be reintroduced.
        In summary, Mr. Chairman, Members of the Committee, I have
    been in long-term care for 30 years, and I can say to you that
    the commitment to quality has never been higher than it is
    today. From the CEOs of the major corporations to the
    individuals that own single facilities, it is on everyone's
    mind. Everyone is working toward it, and we are doing it, and
    we are getting better every day.
        Over 4,000 nursing homes today are participating in the
    just-announced-in-September, ``Advancing Excellence in
    America's Nursing Homes.'' From my perspective, I simply want
    us to all continue to work together to take the platform that
    OBRA 1987 gave us and help us get better every single day and
    keep these systems and methods evolving so that we all get from
    our nursing homes what we deserve.
        Thank you.
        [The prepared statement of Ms. Ousley follows:]

        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        The Chairman. Thank you, Ms. Ousley.
        Ms. Christie.

      STATEMENT OF MS. ORLENE CHRISTIE, DIRECTOR, LEGISLATIVE AND
     STATUTORY COMPLIANCE OFFICE, MICHIGAN DEPARTMENT OF COMMUNITY
                          HEALTH, LANSING, MI

        Ms. Christie. Thank you, Chairman Kohl and Members of the
    Special Committee on Aging, for this opportunity today to
    testify before you on the Michigan Workforce Background Check
    Program. As you have stated before, my name is Orlene Christie,
    and I oversee that program.
        In 2004, Governor Granholm and the Michigan Department
    director, Janet Olszewski, proposed strong requirements to
    assure the health and safety of Michigan's citizens in long-
    term care facilities. This project is a priority for the
    Governor and for the Department Director.
        Working cooperatively with the Michigan legislature, the
    Office of Attorney General and the Centers for Medicaid and
    Medicare Services, Michigan successfully implemented the
    Workforce Background Check Program. Through a competitive
    process, Michigan was also successful in securing a $3.5
    million grant to create an effective statewide background check
    system.
        Through the passage of Public Acts 27 and 28 of 2006,
    Michigan laws were enhanced and improved to require all
    applicants for employment that would have direct access to our
    most vulnerable population, the elderly and disabled, to
    undergo a background check. Additionally, all employees who are
    hired before the effective date of April 1, 2006, would need to
    be fingerprinted within 24 months of the enacted laws.
        Before the new laws were passed, only some employees in
    nursing homes, county medical care facilities, homes for the
    aged and adult foster care facilities were required to have
    some kind of background check. Prior to 2006, the background
    checks were less comprehensive and primarily included just a
    name-based check of the Internet criminal history tool. The
    FBI's fingerprint check was only required for employees
    residing in Michigan for less than 3 years.
        The previous law also did not require all employees with
    direct access to residents in long-term care facilities to
    undergo a background check. Further, for those persons who were
    subject to a background check, there was no systematic process
    across the multiple health and human services to conduct the
    checks to disseminate findings or to follow through on results.
        With Michigan's expansion of the laws, all individuals with
    direct access to residents' personal information--that
    information can be financial, medical records, treatment
    information or any other identifying information--are now
    required to be a part of Michigan's Workforce Background Check
    program.
        The scope of the checks was also enhanced to include
    hospice, psychiatric hospitals, hospitals with swing beds, home
    health and intermediate care facility/mental retardation.
        Let me explain a little bit about how our program works.
        Michigan created a Web-based application that integrates
    the data bases for the available registries and provides a
    convenient and effective mechanism for conducting criminal
    history checks on employees. Independent contractors and those
    granted clinical privileges in long-term care facilities, those
    individuals are now covered under the new laws.
        Further, the online Workforce Background Check System is
    designed to eliminate unnecessary fingerprinting through a
    screening process. As of April 1, 2007, almost 99,000
    applicants have been screened through Michigan's Workforce
    Background Check Program.
        Of the 61,000 or so individuals that a background check was
    prompted on, about 3,200 were deemed unemployable and excluded
    from potential hiring pools due to information found on the
    State lists that include the iChats, the Office of Inspector
    General exclusion list, the nurse aid registry, the sex
    offender registry, the offender tracking system, and the FBI
    list.
        The applicants that have been excluded from employment are
    not the types of people that Michigan could ever afford to
    hire. These people have contact with some of our most
    vulnerable population. We have prevented hardened criminals
    that otherwise would have access to these vulnerable
    populations from employment.
        As Michigan's demographic profile mirrors that of the
    Nation, the offenses that disqualify individuals from
    employment in long-term care under the new laws are expected to
    all be similar across the United States.
        Of the criminal history reports that were examined,
    fraudulent activity and controlled substance violation
    accounted for 25 percent of all disqualifying crimes.
    Fraudulent activity, as we all know, includes such things as
    embezzlement, identity theft and credit card fraud. This is
    particularly alarming, given the projected increase in
    financial abuse amongst the elderly.
        Accessible to long-term care providers through a secure
    I.D. and password, a provider is easily able to log on to the
    Workforce Background Check System to conduct a check of a
    potential employee. If no matches are found on the registries,
    the applicant goes on to an independent vendor for a digital
    life scan of their fingerprints. The prints are then submitted
    to the Michigan State Police and then to the FBI.
        If there is a hit on the State or national data base
    search, a notice is sent to either the Michigan Department of
    Community Health or our other agency, the Michigan Department
    of Human Services, for their staff and our staff to analyze the
    results of the criminal history.
        Michigan has also implemented what we call a ramp-back
    system, where Michigan State Police notifies the two agencies
    that I have just talked about of a subsequent arrest and, in
    turn, the agency notifies the employer. This way, we can assure
    that, in real-time, as soon as a criminal history record is
    updated--and that can include an arrest, a charge or a
    conviction--the Department and the employer will know about it
    and will be notified.
        As I conclude, as a result of Michigan's Workforce
    Background Check Program, the health and safety of Michigan's
    vulnerable population is protected by ensuring that adequate
    safeguards are in place for background screens of direct
    service workers.
        While the vast majority of health care workers are
    outstanding individuals--and I do want to make that point--who
    do a wonderful job of caring for people in need, we are
    extremely pleased that Michigan's Workforce Background Check
    Program has stopped more than 3,000 people with criminal
    histories from possibly preying on our most vulnerable
    population.
        By building an appeals process, we also have developed a
    fair system for reviewing inaccurate criminal records or
    convictions.
        So, as you can see, Mr. Chairman, Michigan has been leading
    the way in the area of employee background checks. As I
    indicated before, this project is and has been and will
    continue to be a priority for Governor Jennifer Granholm and
    for the Michigan State director, Janet Olszewski.
        We appreciate this opportunity to share this information
    with you today and look forward to our continued cooperation on
    this vital topic. Thank you.
        [The prepared statement of Ms. Christie follows:]

        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        The Chairman. Thank you. Thank you, Ms. Christie.
        I would like to ask you, each member briefly, to comment on
    Ms. Christie's background check program, and would you think
    that is a high priority, in terms of having a national
    background check program?
        Ms. Harrington.
        Ms. Harrington. Yes, I certainly agree. I think it is a
    very important step forward, and I am very pleased to hear
    about the Michigan program. I think Federal legislation is in
    order. A number of States do have it, but there is half of the
    States that don't.
        The Chairman. Right.
        Ms. Hedt.
        Ms. Hedt. Yes, we think it is essential.
        There are two kinds of abuse and neglect that residents
    experience. One is from individuals who should not be working
    in the field, and the other is from neglectful practices, for
    not having enough staff or not caring for a resident
    appropriately. This would help very much to handle that first
    situation.
        The Chairman. Ms. Ousley?
        Ms. Ousley. Yes, we absolutely have had longstanding policy
    with the American Healthcare Association that we support
    background checks, and we are very supportive.
        The Chairman. I would like to ask for your comments on
    CMS's Nursing home Compare Web site. Many people find that it
    is not clear how to use it. They don't find the information
    they are looking for.
        For example, you, Ms. Ousley, don't think that it should
    have a list of sanctions. I guess that is your position, or
    something like that.
        Ms. Ousley. I agree that the sanctions should be there. It
    is simply that we want to make sure that the data is accurate
    when it goes up, that there are not mistakes.
        The Chairman. Right, and listed for each nursing home the
    level of staffing and things of that sort.
        Is that Web site really important to the public? If so, how
    can we improve it? Ms. Harrington?
        Ms. Harrington. Yes, I think it is really important.
        One of the most important aspects of that Web site is the
    staffing information. Unfortunately, the data for the staffing
    comes from the survey at the 2-week time period of the annual
    survey, and it is not audited.
        So what we would recommend is that all nursing homes be
    required to report their detailed staffing data electronically
    every quarter, and that that be put up on the Web site, and for
    the full year, rather than just at the time of the survey.
        The Chairman. OK.
        Ms. Hedt.
        Ms. Hedt. We think it is a very important Web site because
    it is a sole source for consumers to go to to compare across
    the country.
        There are States that have Web sites that are more
    consumer-friendly and that have more detailed information. I
    can provide that to you later.
        Years ago in my career, an administrator said to me, ``I
    don't mind paying my civil monetary penalty, but please don't
    put it in your newsletter that goes out to the public.'' I
    think that a lot can be accomplished by making sure that the
    public knows when facilities have provided poor care and the
    sanctions that are applied.
        The Chairman. Thank you.
        Ms. Ousley.
        Ms. Ousley. Yes, I think the Nursing Home Compare is
    extremely important, and we are very supportive of it. As I
    said earlier, we do want to make sure that that data is
    accurate, that it is updated frequently.
        I also want to say, from OBRA 1987's perspective, I am very
    proud of the comprehensive assessment that nursing homes do on
    each and every resident. It is the only sector of health care
    in America where you can actually go on a Web site and you can
    see outcomes of care that are occurring. I am proud of that,
    and I am proud that CMS has it there.
        It is difficult to read. It is complicated, and I know that
    the average consumer has some problem with that. One of the
    things that I do when I work with nursing home administrators,
    I encourage them, when families come in to talk about admitting
    a loved one to the nursing home, that they take the time to
    explain to that consumer how to read and what it actually
    means. I think that is very important. I think it is a very
    important role that an administrator can play.
        The Chairman. Thank you.
        Ms. Christie.
        Ms. Christie. I do believe that that information is vital.
    I believe knowledge is key, and with that type of tool that
    anyone can access, people can have a better understanding and a
    better knowledge in terms of where their loved ones are being
    sent and what kind of care they are getting.
        The Chairman. Thank you.
        Senator McCaskill.
        Senator McCaskill. Thank you, Mr. Chairman.
        One of the things that I think we struggle with in this
    area is, first, the staffing levels and whether we need
    mandatory staffing. I didn't know how many States have
    mandatory staffing levels. I should know that, but I have not
    been focused on the whole Country for very long. So, pardon my
    ignorance as to how many States have it. But I think,
    obviously, the staffing issue is paramount and very, very
    important, and the nurse component of that, also.
        The other thing that I think I mentioned previously is the
    acuity level, and the vast differences there are between
    various facilities in terms of what percent of their population
    is ambulatory versus non-ambulatory. What is the acuity level
    they are dealing with? All nursing home facilities are not
    created equal, in terms of what type of population they are
    dealing with on an ongoing basis.
        I know that there has been discussion about this, and I
    would certainly, for both Dr. Harrington and Ms. Hedt, what are
    your feelings about--I think the cost containment centers, that
    is a great way of getting at the issue, but I didn't hear an
    acuity cost center in there.
        It is much more expensive and requires much more staffing
    to deal with the more seriously needy clients in long-term care
    as opposed to those who aren't. What can we do at the Federal
    level to begin to address reimbursement levels on the basis of
    acuity, so that those homes that have the more aggressive
    acuity patients maybe are not getting the same reimbursement as
    those who won't take those more difficult clients.?
        Ms. Harrington. Yes, I think that is a very good point,
    that acuity needs to be taken into account when you estimate
    staffing. In fact, the Medicare rates do take into account
    acuity. It has all the different case mix levels when it
    calculates the Medicare rates.
        Senator McCaskill. The Medicare or Medicaid?
        Ms. Harrington. Medicare. Then, about half of the States
    have acuity built into the State rate.
        The problem is that, once these rates are given out, set
    for each facility, then the nursing home is allowed to spend
    the money the way they want. So they don't have to spend it on
    the staffing to address the acuity that they were given the
    right for. So that is the flaw.
        Senator McCaskill. In the States that have acuity built
    into their reimbursement rates--we certainly don't in Missouri.
    For those that do have acuity in their reimbursement rates, are
    those audited? If so, how?
        Ms. Harrington. Yes, the States that have case mix
    reimbursement usually do have some auditing procedures. They
    may need to be more extensive.
        Senator McCaskill. Because my fear would be that they would
    come in with a high acuity, and then it would be a very--then,
    for whatever reason, either by circumstances or by planning,
    that that acuity level would drop, and that the reimbursement
    rate would remain high, or vice versa. How do we get at that?
        Ms. Harrington. Well, most States only set their rates once
    a year, so they don't necessarily adjust during the year. They
    probably figure it averages out.
        Senator McCaskill. Missouri went, I think, a decade without
    resetting its rates, so I would like the idea that rates would
    be readjusted on an annual basis. How many States adjust on an
    annual basis?
        Ms. Harrington. I actually don't know right now.
        Senator McCaskill. Wow. That would be great.
        Ms. Harrington. Most States do have a rate increase on an
    annual basis, but the rate increase is more tied to how much
    money the legislature feels they have that year for the cost-
    of-living increases, rather than looking at the acuity.
        But the problem is that most States don't have very good
    mechanisms for auditing, so the money is not necessarily spent
    on what it is intended for. This is what I am raising as the
    key issue.
        Ms. Hedt. From our perspective, the minimum staffing
    standard is just that, it is a minimum standard, and that would
    need to be adjusted for increased acuity of the residents that
    are there.
        We are absolutely mindful of the need for financial
    resources to care for people, depending on the level of care
    that they need, but we strongly believe that funding has to be
    spent close to the resident as opposed to corporate profits or
    high salaries of the executives.
        We need to make sure that the workforce has health care
    benefits, an adequate living wage, as well as appropriate
    supervision and is a part of that planning for individualized
    resident directed care.
        Senator McCaskill. I am trying to pick the ones I want,
    because it is hard for me to narrow it down in a short period
    of time of all the things I would like to talk about.
        I would like to talk more about the background check, and I
    think there is absolutely no excuse that background checks are
    so difficult across this country right now, with the technology
    we now have available to us.
        I know that in Missouri we had several audit findings on
    background checks. Frankly, there was this huge backlog of
    background checks, and it was because we had put into place a
    new carry-and-conceal weapon law, and so they were trying to
    decide which checks were more important, the people who wanted
    to carry a weapon all the time or the people who were caring
    for elderly or the mentally ill in our State. It was really a
    huge public policy issue and problem.
        But in terms of the surveys, I think that the Web site is
    great, where consumers can potentially compare nursing homes on
    a number of different bases in terms of making a decision. I
    understand the need for the data to be accurate.
        The problem I have with those is that so much of it is
    based on the annual survey. Where I come from, it is pretty
    hard not to know when your annual survey is going to be. I am
    not sure that the information we get from annual surveys is
    what we need it to be. There is no question that there have
    been incidents that where facilities have staffed up for the
    annual survey, and staffed back down when annual survey was
    over.
        I would like the reaction of the panelists as to the
    potential of mandating the annual survey on a spot basis, so
    that no one knows when the annual survey is going to occur,
    that the folks that are doing the annual survey show up at the
    facility unannounced and without any kind of prediction as to
    when they are going to be there.
        We found the problem was so bad at one point in Missouri
    that not only were the annual surveys predictable, every survey
    was predictable. I mean, every check, whether it was a follow-
    up, everybody knew always when the State was coming. We weren't
    getting a realistic look at what true care on the ground was
    because of the predictability of the survey time.
        So if you all would address that in terms of the
    predictability of the annual survey and the lack of an accurate
    glimpse of what the standard of care really is in that home.
    Because everyone spiffs up, polishes up, paints, gets everybody
    there just to prepare for the annual survey.
        Ms. Harrington. Absolutely, I agree. They need more
    frequent surveys. We think they need at least an annual survey
    at a minimum. But part of the problem is the resources that the
    agencies have. They don't even have enough resources to do
    their complaint investigations, in many cases.
        So I think that increasing the Federal resources so that
    they could have more frequent surveys, especially of these
    poor-performing facilities, would make an enormous difference.
        Senator McCaskill. Should we require that they be
    surprised?
        Ms. Harrington. Yes, absolutely.
        Ms. Hedt. That is part of what should be happening now. In
    reality, it isn't happening. But residents tell us, and family
    members, that the more surveys that take place at night, the
    more surveys that take place on the weekend, the better picture
    they are----
        Senator McCaskill. Right. That was one of our findings,
    that there was never an investigation that occurred in the dark
    of night. Now, this has been several years ago. I think they
    have begun doing that now. I think they have improved on that
    in Missouri.
        Ms. Hedt. Yes, there is a required percentage, a minimum
    goal that the State should be doing at night and on weekends.
        That being said, we want to make sure that all facilities
    are surveyed on a consistent basis so that it is not more than
    a year when a facility receives a survey. Partly, that is why
    facilities know they are going to get a survey now, because it
    is every 9 to 15 months, and so we know it is going to happen.
    It is not necessarily that they are being told.
        The key to it is that facilities should always be prepared
    for a survey, and be meeting those basic nursing home reform
    law requirements all the time.
        Senator McCaskill. I get that, that if you have to do it
    once a year, everybody kind of knows when it is going to be.
    But to me, it seems like the value we get out of maybe a
    facility having a survey in January and then being surprised by
    having another survey in June would more than overcome in terms
    of the kind of inoculating effect that would have on the whole
    industry, would more than overcome the fact that maybe one
    wasn't going to get one except once every 18 months.
        You see what I am saying? The lack of predictability
    overall I think would have such a positive impact that it would
    make up for the fact that maybe everyone wasn't getting in
    right around the 12- or 13-month mark.
        Ms. Ousley. Well, both Alice and I spoke to the issue of
    quality improvement and quality management in facilities. Quite
    honestly, if a facility has a well-functioning quality
    management program that takes into consideration the entire
    operations and all of the requirements, it makes no difference.
    It should never make any difference when a facility is
    surveyed.
        Again, I go back to the comprehensive assessment that OBRA
    1987 brought, and the survey methodology around outcomes. That
    is to be an overtime evaluation, that when a surveyor comes in,
    they are to look at: What did this patient look like the day
    they came to this facility, and what do they look like now? Did
    facility practice help them get a lot better, or has facility
    practice made them not get well or actually decline?
        If you do that correctly and look at the outcomes, it
    really doesn't matter. If everyone feels more comfortable with
    a more frequent survey, more power to it.
        I do want to speak to an issue that Dr. Farris said, and
    that was the new quality indicator survey process that is being
    piloted now by CMS. This would be a way that, actually, this
    software can be made available also to nursing home providers,
    and they can use it as part of their quality management
    program.
        Have an ongoing assessment at all times so that, when
    something starts to go a little bit wrong, you can get that
    fixed quickly, and you understand that the regulations are not
    for surveyors. They are for making sure that we give good
    patient care every single day.
        Ms. Christie. Senator, while I am not the most appropriate
    person to answer your specific question, I do know that those
    conversations are being held at levels higher than myself, and
    I will be more than happy to go back and get the information
    that you are requiring.
        Senator McCaskill. OK.
        Thank you, Mr. Chairman.
        The Chairman. Thank you, Senator McCaskill. Your
    contributions have been really good to this hearing because of
    your background, your experience, and the questions that you
    have asked.
        We would like to thank the second panel. You have been
    outstanding and made real contributions in our ongoing efforts
    to improve the quality of care in nursing homes across this
    country.
        I would note that what you had to say and your testimony
    was relevant enough so that I would note that our first two
    panelists stuck around, which is not always true at hearings.
        So we thank you for staying around, and we thank you for
    your contributions.
        We thank you all for being here, and this hearing is
    closed.
        [Whereupon, at 12:05 p.m., the Committee was adjourned.]
                                A P P E N D I X

                                  ----------

                   Prepared Statement of Senator Gordon Smith

        I want to thank Senator Kohl for holding this important
    hearing today. The issue of nursing home quality and safety has
    long been an issue of particular interest for me and I thank
    the panelists for being here today. The essential work that
    they do whether it is monitoring or evaluating care, providing
    care or advocating for nursing home residents, supplies the
    framework that helps so many of our elderly family members age
    with dignity.
        We are here to look at the Nursing Home Reform Act, also
    called OBRA '87. This Act was created more 20 years ago to
    ensure quality care for the now more than 1.7 million nursing
    home residents in America. By signing this bill into law,
    President Reagan, along with Congress, indicated that the
    Federal government has responsibility to ensure the health and
    safety of nursing home residents. It is a responsibility that I
    take very seriously, as I know my colleagues do.
        We are a nation that is living longer than ever before.
    With the baby boomers, we will see an exploding elderly
    population. This surge will only compound any safety or quality
    issues currently in the system. That is why I look forward to
    continuing to work with the advocacy community, nursing home
    care providers and the Centers for Medicare and Medicaid
    Services (CMS) to ensure the capacity and quality standards
    meet our current needs and adequately anticipate the needs of
    the future.
        I believe that all stakeholders must work collaboratively
    to solve problems within the system. In fact, I am currently
    working with Senator Lincoln to reintroduce the ``Long-Term
    Care Quality and Modernization Act,'' that we first proposed in
    the 109th Congress. This bill encourages improvements to
    nursing homes and the long-term care system generally. I look
    forward to continuing to work with many of the advocates, care
    providers, and regulators here today to continue to improve and
    to ultimately pass this legislation.
        Some good news is that nursing home quality has improved
    since 1987. The GAO has reported in their March 2007 study that
    the number of serious deficiencies in the four states they
    examined has decreased between 2000 and 2005. I understand that
    national data shows a similar downward trend. This is to be
    applauded. However, we must not rest on our laurels. With about
    22 percent of nursing homes still out of compliance with
    Federal standards--more improvement are necessary.
        The past two decades have revealed a true culture shift
    occurring within the world of long-term care, including
    services that put the patient at the center of care, encourage
    inclusion of families in decision-making and giving more
    choices in the location of the care, such as community-based
    and in-home care.
        In fact, my home state of Oregon is a leader in helping
    elderly and dependent persons remain in their homes as they age
    and/or require more hands on care. The vast majority of
    Americans want to retain their independence and remain in their
    homes. Because of this culture change, they are able to do that
    now more than ever. Federal programs and funding should
    continue to move in this direction.
        However, while our elderly are being given more choices in
    their care, we know that there will always be a section of the
    population that is too frail, too dependent upon services, to
    remain in their homes and communities. Nursing homes become the
    option that can most suit their needs. Nursing home residents
    are some of the most vulnerable people in our nation. Some have
    families that can help monitor their care, but many do not.
    These people depend upon the care providers and the regulators
    to ensure they are receiving the services they need.
        Some of the reports that we will discuss today, including
    the most recent by the Government Accountability Office (GAO),
    point out the bad actors within the nursing home industry.
    Today we must look at these actors and determine what we can do
    to either help them perform at a much higher level and with
    consistency, or look at ways they can phased out of the system.
    We must also look at how the closing of these facilities would
    affect the patients they serve and communities in which they
    are located.
        I am confident that our panel of experts will help to
    answer these questions. I want to thank all of our witnesses
    for being here today and for their tireless work to improve
    quality of care for all who reside in our nation's nursing
    homes.
                                    ------

        Responses to Senator Smith Questions from Kathryn G. Allen, GAO

        Question. GAO identified in its 2005 report on nursing home
    enforcement that CMS's efforts have been further hampered by an
    expanded workload due to increased oversight and initiatives
    that compete for staff and financial resources. The latest GAO
    report identifies that we are still not succeeding in removing
    the worst offenders from the system. How could CMS refocus its
    energy on oversight tasks and initiatives to target the real
    underperformers?
        Answer. In our March 2007 report, we recommended two
    actions, among others, the Centers for Medicare & Medicaid
    Services (CMS) could take to provide more effective oversight
    of poorly performing nursing homes.\1\ First, we recommended
    that CMS strengthen the criteria for terminating homes with a
    history of serious, repeated noncompliance by limiting the
    extension of termination dates, increasing the use of
    discretionary terminations, and exploring alternative
    thresholds for termination, such as the cumulative number of
    days that they are out of compliance with federal quality
    requirements. Second, we recommended that CMS consider further
    expanding the Special Focus Facility program which still fails
    to include many homes with a history of repeatedly harming
    residents.\2\ In commenting on a draft of that report, CMS also
    agreed to collect additional information on complaints for
    which data are not reported in federal data systems, which will
    help CMS to better identify and deal with consistently poorly
    performing homes.
    ---------------------------------------------------------------------------
        \1\ GAO, Nursing Homes: Efforts to Strengthen Federal Enforcement
    Have Not Deterred Some Homes from Repeatedly Harming Residents, GAO-07-
    241 (Washington, D.C.: Mar. 26, 2007).
        \2\ Special Focus Facilities are subject to two standard surveys
    each year rather than annually and may be terminated from participation
    in the Medicare and Medicaid program if they do not show significant
    improvement within 18 months. In December 2004, CMS expanded the
    program from about 100 homes to about 135 homes.
    ---------------------------------------------------------------------------
        In addition, a GAO report issued after the Committee's May
    2, 2007, hearing recommended that CMS take two actions to
    ensure that available resources are better targeted to the
    nursing homes and quality-of-care areas most in need of
    improvement.\3\ First, we recommended that CMS further increase
    the number of low-performing nursing homes that Quality
    Improvement Organizations (QIO) assist intensively.\4\ Second,
    we recommended that CMS direct QIOs to focus intensive
    assistance on those quality-of-care areas on which homes need
    the most improvement.
    ---------------------------------------------------------------------------
        \3\ GAO, Nursing Homes: Federal Actions Needed to Improve Targeting
    and Evaluation of Assistance by Quality Improvement Organizations, GAO-
    07-373 (Washington, D.C.: May 29, 2007).
        \4\ CMS contracts with QIOs to work with providers such as
    hospitals and nursing homes to improve the quality of care provided to
    Medicare beneficiaries in each state, the District of Columbia, and the
    territories.
    ---------------------------------------------------------------------------
        Question. As a Commissioner with the National Commission
    for Long Term Quality Care, I have heard stories of good actors
    being punished for precisely the innovation we want them to
    encourage. For instance, I was told of a facility that is well
    known for treating pressure sores. Because of their innovation,
    they receive patients from other facilities who have persistent
    pressure sores. However, when they are evaluated, the number of
    patients with pressure sores is then counted against them. Have
    you heard of stories like this and what do you recommend can be
    done to encourage innovation and good actors?
        Answer. As you indicated, some nursing homes specialize in
    wound care, such as treating pressure sores. The nursing home
    quality-of-care requirement pertaining to pressure sores
    focuses on the care a nursing home is providing a resident with
    a pressure sore. It specifically states that a nursing home
    must ensure that a resident who enters a home without pressure
    sores does not develop any unless the individual's clinical
    condition demonstrates that they were unavoidable and a
    resident who has pressure sores receives necessary treatment
    and services to promote healing, prevent infection, and prevent
    new sores.\5\ As such, a nursing home should not be cited for a
    deficiency in quality of care simply because residents have
    pressure sores. A deficiency in quality of care does exist,
    however, if the nursing home is providing inadequate treatment
    to residents with pressure sores.
    ---------------------------------------------------------------------------
        \5\ CMS, State Operations Manual, Appendix PP--Guidance to
    Surveyors for Long Term Care Facilities,  483.25(c).
    ---------------------------------------------------------------------------
        Question.  While I want to ensure quality care for patients
    in nursing facilities, I am concerned that if we close
    facilities that are consistently underperforming that we may
    cause more harm to patients. I am concerned that if a facility
    in a rural or very low income area is closed that patients will
    be at risk of not receiving care at all in those areas or being
    relocated away from their families and support networks. In
    your studies, where are most of the poor performing facilities,
    and if they are in rural and low-income areas, do you think
    that there is a real risk of a negative impact on resident
    care?
        Answer. We have not reported on geographic distribution of
    all poorly performing nursing homes. In our March 2007 report,
    we assessed whether there were alternative placements for
    several poorly performing homes in our sample from four states
    and found that there were alternative homes in the vicinity. As
    I testified before this Committee on May 2, we acknowledge that
    terminating a nursing home from participation in Medicare and
    Medicaid can cause concerns about relocating residents to
    another home, including the adverse effect known as transfer
    trauma; however, we believe that such concerns must be balanced
    against the actual harm to residents as a resulting from poor
    quality care if they continue to reside in a perpetually poorly
    performing home.
        Question. One issue that I have heard discussed concerning
    the survey process is that surveyors may not report on some
    deficiencies because they consider the penalties too onerous
    for the facilities. Is this an issue that you have studied and
    have you heard surveyors mention any concerns to this affect?
        Answer. We have not reported on this issue. In commenting
    on a draft of our March 2007 report, however, CMS expressed
    concern about whether its policy of immediate sanctions for
    homes with serious deficiencies on consecutive surveys actually
    discouraged the citation of serious deficiencies. We are
    currently examining the understatement of serious deficiencies
    during state surveys, a study requested by Senators Kohl and
    Grassley. As part of our work for this study, we are planning a
    Web-based survey of state surveyors concerning the factors that
    may influence the deficiencies they cite.
                                    ------

          Responses to Senator Smith questions from Randy Farris, CMS

        Sanction Effectiveness?
        The Government Accountability Office (GAO) has identified
    that while CMS has attempted to improve both the collection and
    deterrent effect of civil money penalties (CMPs) that serious
    problems still exist that call into question the CMPs'
    effectiveness. CMS even commented in GAO's recent report that
    providers view CMPs as the ``cost of doing business'' and are
    tantamount to a ''slap on the wrist''.
        Question. In addition to improvements to the actual policy,
    what is CMS doing to assess the enforcement capability of this
    particular sanction in light of these comments?
        Answer. CMS' examination of our enforcement effectiveness
    in the area of Civil Money Penalties (CMPs) has been primarily
    along 2 tracks:

        1) potential refinements to CMP maximum amounts, and
        2) refinements to the decisionmaking process on imposing
    the CMPs.

        Our recent pilot and evaluation of the CMP Analytic Tool
    addresses the latter track. The imposition of a CMP is an
    optional remedy under the Nursing Home Reform Legislation
    promulgated in 1987. We have issued the CMP Analytic Tool. The
    Tool includes a scope and severity framework for CMS Regional
    Offices to monitor enforcement actions, communicate with
    States, address outliers that significantly depart from the
    norm, and improve national consistency.
        To improve national consistency for this remedy, CMS'
    guidance also includes a scope and severity framework for CMS
    to (a) monitor enforcement actions, (b) facilitate
    communication with States, and (c) address outliers that
    significantly depart from the norm.
        We expect the guidance and the CMP Analytic Tool to
    mitigate the extent to which civil money penalties tend to
    cluster at the lower end of the allowable range, particularly
    for nursing homes with repeated, serious quality of care
    deficiencies.
        With regard to the argument that CMPs may simply be viewed
    as a ``cost of doing business'' (and may therefore be
    ineffective as a motivator to improve or as a deterrent to
    quality lapses), we are examining additional enforcement
    techniques that apply a combination of sanctions rather than so
    much reliance on just one type of sanction. An example is a
    combination of CMP and denial of payment for new admissions.
    While we believe CMPs do indeed function as a motivator,
    attention-driver, and deterrent for most nursing homes, we are
    concerned that CMPs may lose much of their effectiveness for
    those providers with the lowest levels of compliance. An
    important initiative for testing and tracking the effectiveness
    of multivariate enforcement action is our Special Focus
    Facility initiative that focuses on those nursing homes with
    the most deficiencies. CMS' 2007 Nursing Home Action Plan
    describes these and other initiatives. The Action Plan may be
    found at http://www.cms.hhs.gov/CertificationandCompliance/12--
    NHs.asp#TopOfPage
        Is a Statutory Fix in Order?
        One of the bigger problems with CMPs is the delay in
    receipt of payment because of the statutory requirement that
    requires exhaustion of all administrative appeals before
    collection of the CMP. This makes the deterrent effect of the
    final all that more attenuated. GAO has recommended that CMS
    consider the provision on CMPs in the Surface Mining and
    Reclamation Act of 1977, which requires that the mining
    operator either pay in full the fine or place the proposed
    amount in an escrow within 30 days that is held until the
    resolution of an appeal.
        Question. Has CMS considered the effectiveness of a pre-
    appeal payment or escrow account option? Would that offer a
    greater deterrent effect that fits within the spirit of the
    CMPs?
        Answer. We do not currently have the authority under the
    Social Security Act to collect CMPs prior to the appeals
    hearing and determination. We agree that collecting CMPs during
    the period of an appeal likely would have a greater deterrent
    effect.
        The Federal/State Disconnect
        In the most recent GAO report on nursing home enforcement,
    one of the findings that struck me was the level of disconnect
    between CMS here in Washington and the regional offices and
    state agencies that are tasked with implementing that statutes
    and guidelines regarding the nursing home industry.
        Question. From your perspective as a CMS Regional
    Administrator, can you comment on this discrepancy and offer a
    few ideas on how this can be remedied so that everyone can get
    on the same page and work towards more uniform enforcement and
    oversight?
        Answer. In a large program of national scope, we seek to
    ensure all agencies are aligned through major efforts such as:
        (a) a very detailed State Operations Manual (SOM) that
    specifies the manner in which statutes and regulations are to
    be applied,
        (b) 40-60 publicly available Survey & Certification letters
    each year to communicate consistent approaches to surveys and
    clarification of important policy issues,
        (c) extensive training programs to orient both State and
    federal surveyors (especially new surveyors),
        (d) weekly conference calls between survey and
    certification central office leadership and leadership in the
    CMS regional offices.
        We also bring CMS (both central and regional offices) and
    States together to identify and develop strategies for
    improving communication and consistency. Annually, CMS hosts a
    Leadership Summit that brings together State survey agency
    leadership as well as management representatives from all ten
    CMS regional offices. CMS Regional Offices bring States
    together on a regular basis and conduct monitoring visits. The
    CMS also participates in the annual Association of Health
    Facility Survey Agencies (AHFSA) conference. AHFSA is the
    association made up a State survey agencies throughout the
    country.
        As described previously, CMS also publishes an annual
    Action Plan which serves as a blueprint for initiatives CMS
    will undertake. The CMS 2007 Nursing Home Action Plan provides
    several initiatives that:

          Improve how nursing home surveyors interpret
    specific nursing home requirements. We have revised surveyor
    guidance for selected regulatory requirements that relate to
    quality of care through an interactive process with nationally
    recognized experts and stakeholders;
          Develop a national surveyor training tool for use
    in training regional and State surveyors;
          Refine State Performance Standards to ensure
    uniform monitoring of State performance;
          Expand training opportunities for surveyors to
    better equip them by increasing the number of available
    courses, adding more geographic sites for training and by
    adding web based training; and
          Develop a triage policy to guide States in
    determining whether a discretionary Denial of Payments for New
    Admissions is imposed or a termination date is set earlier than
    the time periods required by law.

        CMS recognizes the need for assertive leadership and
    actions to ensure all the principal enforcers are steadfast in
    application and uniform in execution of remedies imposed. We
    welcome the interest and support of Congress in all of these
    efforts.
                                    ------

      Responses to Senator Smith questions from Charlene Harrington, UCSF

        Staffing Issues are Budget Issues
        Question. I understand that you have participated in the
    drafting of several recommendations to the Administration on
    ways to increase staffing levels, while making the fiscal
    impact less onerous.
        Can you share a few of the most feasible recommendations
    with the Committee, including the timeframe for implementation
    and any administrative needs or changes such recommendations
    would require?
        Answer. As noted in my testimony, a study by Abt Associates
    for CMS (2001) reported that a minimum of 4.1 hours per
    resident day were needed to prevent harm to residents with long
    stays (90 days or more) in nursing homes. Of this total, .75 RN
    hours per resident day, .55 LVN hours per resident day, and 2.8
    NA hours per resident day were reported to be needed to protect
    residents. The report was clear that residents in homes without
    adequate nurse staffing levels faced substantial harm and
    jeopardy. In order to meet the total 4.1 hours per resident
    day, 97% of homes would need to add some additional nursing
    staff. Based on this report and a strong body of research
    evidence, there is a clear need to increase the minimum
    staffing standards for nursing homes.
        One way to increase staffing is to increase state Medicaid
    reimbursement rates. My latest study shows that Medicaid
    reimbursement rates would need to be increased by $90 per
    resident per day in order to encourage nursing homes to
    voluntarily increase staffing levels. At this point, many
    states are struggling with budget deficits and financial
    problems so they are unlikely to be willing to raise rates this
    high.
        A more effective approach is to have the federal government
    and/or state governments increase the minimum requirements for
    registered nurses, licensed nurses (RNs and licensed practical
    nurses), and total nursing staff. Florida has increased is
    total nursing requirement to 3.9 hours per resident day and
    increased its Medicaid nursing home payment rate to cover this
    increase in staffing. Other states might be willing to increase
    the total nursing requirements if the federal government would
    give the state some financial incentive to do so. Certainly the
    federal government could take an important step forward by
    embracing higher staffing standards and encouraging states to
    raise their standards.
        Federal legislation could be used to increase its minimum
    licenses staffing standards to the level recommended in the Abt
    study (1.3 hours per resident per day) including a requirement
    for 24 hours registered nurse staffing in nursing homes. The
    question is whether reimbursement rates would need to be
    increased to meet this higher standard. Certainly the current
    Medicare reimbursement rates appear to be adequate to cover the
    Abt standards without a rate increase (based on GAO and MedPac
    reports). Medicaid reimbursement may need to be raised to meet
    the higher standard. Congress could ask each state to determine
    whether Medicaid rate increases would be needed and could pay
    for half or more of these costs in its Medicaid cost sharing
    arrangements.
        Question. In your testimony, you recommended that CMS
    utilize the sanctions of receivership and temporary management
    procedures relating to facilities with repeated poor
    performance. Is there a proven track record of success with
    this type or reorganization and if so, do you have any data on
    how a change of ownership effects the quality of care in an
    underperforming facility?
        Answer. Since temporary management is already an option
    under OBRA 1987, some states have used temporary management and
    receiverships procedures with poor performing facilities.
    California, in particular, has used this approach a number of
    times until facilities were sold, closed or brought back into
    compliance. These approaches have proven effective and yet
    states have often been reluctant to use them because of the
    amount of time and resources required to implement this
    approach. If the federal government were to assume the full
    costs for temporary management, states would be more likely to
    use this option.
        The success of the procedure depends upon either forcing an
    owner to come into compliance or attracting a reputable, high
    quality owner to purchase a facility. States need to be careful
    to review the credentials of potential buyers to make certain
    they have a good reputation for high quality of care before
    they approve an ownership change to ensure that the change will
    be an improvement over the poor performing facility.
        Question. Is there a danger that we are setting up new
    management too fail since the fines and sanctions from the
    previous poor performing management would carry over to the new
    management?
        Answer. The state and federal survey agencies could levy
    the fines and sanctions on the poor performing facility but
    forgive these fines and sanctions if the facility obtains a new
    owner. Generally, the issue of previous fines and sanctions are
    something that are negotiated as a part of the purchase price
    paid by a new owner.
        Question. Your testimony discussed the potential positive
    impact of applying cost centers to nursing facility funding as
    a way to ensure that certain operations, especially staffing,
    are properly funded. Is there a concern that this kind of
    oversight could negatively affect a nursing home's flexibility
    in caring for its residents? Could the formula be too
    restrictive and not account for different operating plans?
        Answer. This approach of establishing cost centers would
    prevent facilities from taking funds allocated for staffing,
    therapy and direct care to use for capital improvements,
    administration, and profits. Certainly accountability is a
    critical factor in the use of public funds. The Centers for
    Medicare and Medicaid Services would need to develop a clear
    procedure for allocating funds for the different established
    cost centers and for oversight. The debate would then focus on
    the amount of funds allocated to the different cost centers.
    Some nursing homes are making excessive profits by reducing
    direct care to residents and this clearly should be
    unacceptable.
                                    ------

              Responses to Senator Smith Questions from Alice Hedt

        Question. Fire Safety. How would you recommend CMS and
    nursing facilities proceed with making fire safety improvements
    that will be effective but not cost prohibitive?
        Answer. Senator Smith, NCCNHR appreciates the opportunity
    to address an issue that has been especially troubling to
    nursing home consumers and to the Senate Special Committee on
    Aging for more than 30 years: Fire safety. NCCNHR and its
    members are very concerned about the serious deficiencies in
    fire safety regulation and enforcement revealed in a GAO
    report, a USA Today investigation, and two tragic multiple-
    death fires in Connecticut and Tennessee--because we know from
    experience that public regulation and effective enforcement
    prevent deaths.
        Progress in fire safety regulation has dramatically
    improved the protection of nursing home residents from fire
    injuries and death in the years since Medicare and Medicaid
    were enacted. Two years before the aging committee published
    its 1975 paper, ``The Continuing Chronicle of Nursing Home
    Fires,'' 51 people had been killed in multiple-death nursing
    home fires, an increase from 31 the year before. Today,
    however, multiple-death nursing home fires on this scale occur
    less frequently because federal and state regulation have
    improved safety--particularly in newer facilities, where
    federal law now requires automatic sprinklers, and in states
    that require automatic sprinkler systems in all nursing homes.
    Unfortunately, the tragic deaths of 31 residents in Nashville
    and Hartford in 2003 remind us that residents are still
    unnecessarily at risk of dying in a fire in several thousand
    Medicare and Medicaid-certified facilities that are not
    required to have automatic sprinklers. Their deaths are a
    reminder that fire safety is part of the unfinished business of
    the Nursing Home Reform Act.
        According to CMS estimates, there are about 3,700 nursing
    homes in the United States that do not have sprinklers or that
    are only partially sprinklered. NCCNHR supports prompt
    implementation of CMS's proposal of October 27, 2006, to
    require all nursing homes to be fully equipped with automatic
    sprinklers. Our comments on the proposed regulations which were
    endorsed by 66 national, state and local organizations--are
    attached.
        NCCNHR has supported legislation to provide low-cost loans
    or grants to nursing homes that need financial assistance to
    install sprinklers. However, we do not believe that costs
    should deter the federal government from implementing this
    basic safety requirement that is already decades overdue. We
    urge you to consider the following:
           The costs are not unreasonable for an industry
    that annually receives $73 billion in Medicare and Medicaid
    funds (almost $50 billion of it from the federal government) to
    provide care for people who are among the most vulnerable to
    injury or death in case of fire. CMS estimates that it would
    cost an average-size or small-size nursing home 0.8 to 1.2
    percent of its revenues over a five-year period to become fully
    sprinklered. Only 821 nursing homes do not have any sprinklered
    areas, according to CMS estimates, that would require
    installation of sprinklers throughout the building(s).
           The nursing home industry is profitable and can
    afford to meet essential safety requirements. After 16
    residents died in a National HealthCare nursing home in
    Nashville in 2003, the corporation announced that it would
    install sprinklers in all of its facilities that did not have
    them. In the third quarter that year, the company's earnings
    increased by more than 23 percent over the same period the year
    before (not accounting for losses from the fire), and it has
    continued to show substantial gains in net income. In May 2007,
    National HealthCare reported increased quarterly earnings
    almost 30 percent higher than the same quarter in 2006.
           Poor care is always costly. In addition to the
    loss of life, nursing home fires increase medical expenses, the
    burden on firefighting departments, and liability costs, and
    they result in substantial property damage and loss. They may
    also leave shortages of Medicare and Medicaid beds in a
    community.
        Sprinkler installation is not a problem in many states--
    nursing homes simply have to have them to obtain a license to
    do business. All nursing homes in Oregon and a dozen other
    states are fully sprinklered, according to the American Health
    Care Association, and six other states have at least 95 percent
    of their facilities fully sprinklered. Several states are in
    the process of implementing automatic sprinkler requirements
    for all their long-term care facilities, including, in some
    cases, assisted living and personal care homes.
        Thank you again for the opportunity to address this issue.
    NCCNHR urges you to support prompt implementation of CMS
    regulations to require automatic sprinkler systems in all
    nursing homes that receive federal funding.
                                    ------

          Responses to Senator Smith Questions from Mary Ousley, AHCA

        Question. Will More Regulation Help?
        Answer. More guidance is unlikely to help and actually
    could result in more confusion. AHCA believes that joint
    training for surveyors and providers is key to ensuring there
    is uniform interpretation of CMS' guidance. While nothing can
    guarantee each surveyor and each provider will interpret CMS
    guidelines in the same way every time, presenting the
    information simultaneously and allowing for both questions and
    discussion is more likely to ensure that surveyors and
    providers share a mutual understanding of what is necessary for
    a facility to be in compliance with the regulations.
        In fact, Section 101 of, The Long Term Care Quality and
    Modernization Act (S. 1980), directs the Secretary of Health
    and Human Services to conduct a 5-state, 2-year demonstration
    program to establish a process for joint training and education
    of surveyors and providers as changes to regulations,
    guidelines and policy are implemented. Following the
    demonstration, the Secretary would be required to report to
    Congress on the program's results, including the program's
    impact on the rate and type of deficiencies that nursing homes
    participating in the demonstration compare to a state's other
    facilities (not participating in the demo). S. 1980 is
    sponsored by three members of the Senate Special Committee on
    Aging--Blanche Lincoln (D-AR), Gordon Smith (R-OR) and Susan
    Collins (R-ME).
        Question. Foreign Nurse Recruitment
        Answer. There is no simple policy to ensure that increasing
    the number of available nurses would directly benefit long term
    care. Still, eliminating artificial caps on work visas for
    foreign-born nurses would improve the current nurse shortage
    facing all health care providers, including long term care. A
    2002 AHCA study examining staff vacancy rates in our nation's
    nursing homes found approximately 52,000 Certified Nursing
    Assistants (CNAs)--those who provide 80% of direct patient
    care--are needed now just to meet existing demand for care.
    AHCA's study also estimated an additional 13,900 Registered
    Nurse (RN) and 25,100 Licensed Practical Nurse (LPN) positions
    remain vacant in nursing homes across the country. The shortage
    of available employment-based visas for nurses, primarily from
    India and the Philippines, severely limits the ability of
    nursing home providers to fill those vacancies.
        Another challenge long term care providers face, especially
    skilled nursing facilities, is competing for a limited number
    of nurses. More than 80% of nursing home residents rely on
    either the Medicare or Medicaid funding to pay for the care and
    services they need, so long term care providers depend upon
    regular and systematic cost of living increases (e.g., annual
    market basket update to SNF Medicare funding) in order to
    compete with other care settings that often can afford to pay
    higher wages to recruit and retrain skilled caregivers. Without
    adequate and stable funding--and recognition by states to
    provide Medicaid reimbursement that at least covers the cost of
    care for SNF residents--SNFs are unlikely to be able to afford
    to offer a more competitive wage to both foreign and domestic
    nurses in long term care.

           Responses to Senator Smith Questions from Orlene Christie

        Staff and Resident Background Check
        Question. Michigan, along with six other states, is
    participating in the initial pilot program on background checks
    for employees that work in long term care positions (except for
    adult foster care). I understand from my staff that the initial
    response to the program is very positive, and that Michigan is
    becoming a leader in this area.
        Answer. Our program does not include adult foster care.
        Question. Recognizing the program is still in its early
    stages, can you provide any insight into how long term
    implementation of a background check program will contribute to
    better quality of care and greater security for those in
    residential or other forms of long term care?
        Answer. The criminal history record is a tool that can be
    used to identify those individuals with a propensity for
    criminal behavior and our laws prevent them from working in
    long-term care facilities. Greater security results from
    reduced opportunity and access to vulnerable adults. Over time,
    the long-term care workforce will be comprised of individuals
    with either no history of relevant crimes or a history that
    shows no offenses after the effective date of the laws. The
    background check program shines a light on the behavior of
    caregivers and elevates the status of vulnerable adults in our
    society. The very existence of the program sends a clear
    message that we will not tolerate abuse, neglect or
    exploitation by caregivers.
        Question. Does the background check program screening
    include offenses committed outside the state or jurisdiction
    initiating the search?
        Answer. Our program includes a national fingerprint-based
    criminal history search.
        Question. What happens if there are records of abuse from
    prior employment that did not rise to the level of a criminal
    offense?
        Answer. Our law prohibits employers from hiring,
    contracting with or granting clinical privileges to an
    individual who has been the subject of a substantiated finding
    of abuse or neglect or misappropriation of property by a state
    or federal agency pursuant to an investigation conducted in
    accordance with 42 USC 1395i-3 or 1396r. A search of the
    Michigan Nurse Aide Registry and the OIG exclusion database is
    done as part of the screening process.

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