[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:]

    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    
    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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