VA Long-Term Care: Oversight of Community Nursing Homes Needs	 
Strengthening (27-JUL-01, GAO-01-768).				 
								 
The Department of Veterans Affairs (VA) spent about $1.9	 
billion--or about 10 percent of its health care budget--to	 
provide nursing home care to veterans in fiscal year 2000. VA is 
likely to see increasing demand for nursing home care over the	 
next decade. The number of veterans age 85 and older is expected 
to triple--from 422,000 veterans in 2000 to nearly 1.3 million in
2010. Among the very old, the prevalence of chronic health	 
conditions and disabilities increases markedly. In addition, VA  
is required to provide long-term care to some veterans, which may
further increase veterans' demand for nursing home care. Almost  
73 percent of VA's nursing home care in fiscal year 2000 went to 
VA's 134 nursing homes; the rest went to state-owned and operated
veterans' nursing homes (15 percent) or to community nursing	 
homes under local or national contract to VA (12 percent). VA	 
generally requires its medical center staff to conduct annual	 
inspections of state veterans' homes and community nursing homes;
it also requires monthly staff visits to veterans in community	 
nursing homes. However, VA plans to change its oversight	 
mechanism for community nursing homes, eliminating the		 
requirement for annual VA inspections and instead relying on	 
Medicare and Medicaid certification inspections conducted by	 
state agencies under contract to the Centers for Medicare and	 
Medicaid Services (CMS). This report reviews (1) VA's policies	 
for overseeing state veterans' homes and community nursing homes,
including the mechanisms available to VA to ensure that nursing  
homes correct problems, and the extent to which VA has followed  
these policies and (2) planned changes in VA's oversight policies
and the strategies to implement them. GAO found that VA's	 
adherence to its oversight policies for state veterans' homes and
community nursing homes has been mixedbecause of a lack of VA	 
monitoring and oversight. VA medical staff are required to	 
inspect each state veterans' home annually, and of the 86	 
inspections reviewed by GAO, about 85 percent were done within	 
the time frame or shortly thereafter. VA lacks a departmentwide  
approach to monitoring medical centers' community nursing home	 
oversight activities and enforcing VA's oversight		 
policies--particularly regarding locally contracted homes, which 
make up about 75 percent of the community nursing homes under	 
contract to VA--and individual medical centers vary in how well  
they have overseen community nursing homes. Under its planned	 
policy change, VA would eliminate the requirement for annual	 
inspections of community nursing homes and instead would rely on 
Medicare and Medicaid certification inspections. Local VA medical
centers' staff will review state inspection reports and CMS data 
to evaluate community nursing homes. However, the quality of	 
state inspections of nursing homes varies, and CMS is unable to  
accurately assess state inspection results in all cases.	 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-01-768 					        
    ACCNO:   A01480						        
    TITLE:   VA Long-Term Care: Oversight of Community Nursing Homes  
             Needs Strengthening                                              
     DATE:   07/27/2001 
  SUBJECT:   Community health services				 
	     Veterans benefits					 
	     Inspection 					 
	     Elder care 					 
	     Federal/state relations				 
	     Long-term care					 
	     Data integrity					 
	     Nursing homes					 
	     State-administered programs			 
	     Medicaid Program					 
	     Medicare Program					 

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GAO-01-768
     
Report to Congressional Requesters

United States General Accounting Office

GAO

July 2001 VA LONG- TERM CARE

Oversight of Community Nursing Homes Needs Strengthening

GAO- 01- 768

Page i GAO- 01- 768 VA Nursing Home Oversight Letter 1

Results in Brief 3 Background 4 VA Oversight Has Been Mixed and
Headquarters? Involvement

Insufficient 7 VA?s Plan to Rely on Community Nursing Home Inspections

Conducted by States Appears Reasonable, but Implementation Is Uncertain 16
Conclusions 21 Recommendations for Executive Action 22 Agency Comments 23

Appendix I Scope and Methodology 25

Appendix II Instances in Which VA Has Withheld State Veterans? Home Per Diem
Payments 28

Appendix III Comments From the Department of Veterans Affairs 30

Related GAO Products 32

Tables

Table 1: 10 VA Medical Centers? Reported Annual Inspection Activities for
Locally Contracted Community Nursing Homes 12 Table 2: 10 VA Medical
Centers? Adherence to VA?s Veteran Visit

Policy 14 Table 3: State Veterans? Homes We Contacted During Our Review,

and the Associated VA Medical Centers Performing Inspections 27 Contents

Page ii GAO- 01- 768 VA Nursing Home Oversight Figures

Figure 1: Fiscal Year 2000 Program Expenditures and Average Daily Census for
VA?s Nursing Home Programs 5 Figure 2: Two Ways in Which VA Contracts with
Community

Nursing Homes 6 Figure 3: Location of VA Medical Centers Included in Our
Review 25

Abbreviations

CMS Centers for Medicare and Medicaid Services HCFA Health Care Financing
Administration JCAHO Joint Commission on Accreditation of Healthcare

Organizations OSCAR On- Line Survey, Certification, and Reporting QI quality
indicator VA Department of Veterans Affairs

Page 1 GAO- 01- 768 VA Nursing Home Oversight

July 27, 2001 The Honorable Lane Evans Ranking Democratic Member Committee
on Veterans? Affairs House of Representatives

The Honorable Christopher Bond Ranking Minority Member Subcommittee on VA,
HUD, and Independent Agencies Committee on Appropriations United States
Senate

In fiscal year 2000, the Department of Veterans Affairs (VA) spent about
$1.9 billion- or about 10 percent of its health care budget- to provide
nursing home care to veterans. VA is likely to see an increase in demand for
nursing home care over the next decade because the number of veterans age 85
and older is expected to triple- from 422,000 veterans in 2000 to nearly 1.3
million in 2010- and the prevalence of chronic health conditions and
disabilities increases markedly at advanced age. In addition, as a result of
the Veterans Millennium Health Care and Benefits Act (P. L. 106- 117, Nov.
30, 1999) VA is required to provide long- term care to certain veterans,
which may further increase veterans? demand for nursing home care. 1

About 73 percent of VA?s fiscal year 2000 nursing home care spending was for
care in VA?s 134 nursing homes; the remainder was for veterans? care in the
94 state- owned and operated veterans? nursing homes (15 percent) or in
approximately 3,400 community nursing homes under local or national contract
to VA (12 percent). In the past, we have reported on problems concerning the
quality of care provided in community nursing homes. For example, in 2000 we
reported that nearly 30 percent of nursing homes

1 Prior to the Veterans Millennium Health Care and Benefits Act, long- term
care was generally provided on a first- come, first- served basis within VA
budget constraints. The act requires that VA provide nursing home care to
(1) any veteran needing such care for a disability connected to his or her
military service and (2) any veteran who is at least 70 percent disabled by
a service- connected condition and who needs nursing home care, regardless
of whether the care is required specifically for the disabling condition.
The act contains a provision that requires VA to evaluate and report on its
long- term care experience under this statute to assist the Congress in
deciding whether these benefits should be modified or extended beyond
December 31, 2003, the current expiration date.

United States General Accounting Office Washington, DC 20548

Page 2 GAO- 01- 768 VA Nursing Home Oversight

inspected by state agencies under contract to the Health Care Financing
Administration (HCFA) 2 had problems serious enough to cause actual harm to
their residents. 3

VA generally requires its medical center staff to conduct annual inspections
of state veterans? homes and community nursing homes; it also requires
monthly staff visits to veterans in community nursing homes. However, VA
plans to change its oversight mechanism for community nursing homes,
eliminating the requirement for annual VA inspections and instead relying on
Medicare and Medicaid certification inspections conducted by state agencies
under contract to the Centers for Medicare and Medicaid Services (CMS).
Concerned about VA?s ability to monitor the care provided in non- VA
settings, you asked us to (1) review VA?s policies for overseeing state
veterans? homes and community nursing homes, including the mechanisms
available to VA to ensure that nursing homes correct problems, and the
extent to which VA has followed these policies and (2) evaluate planned
changes in VA?s oversight policies and the strategies to implement them.

To address these issues, we met with officials of VA?s Geriatrics and
Extended Care Strategic Healthcare Group at VA headquarters and officials at
10 VA medical centers, and obtained and reviewed written policies and
regulations governing the frequency of state veterans? home inspections and
the frequency of, and staff participating in, community nursing home
inspections and visits. To determine whether state veterans? homes have been
inspected as frequently as required, we reviewed VA inspection reports from
state veterans? home inspections conducted during calendar years 1997
through 2000. To determine whether the medical centers we visited inspected
community nursing homes and visited veterans as frequently as required and
with the required staff, we (1) interviewed staff and reviewed community
nursing home inspection reports at each medical center we visited and (2)
reviewed the patient records of about 800 veterans placed in community
nursing homes by these medical centers. We also interviewed officials at 10
state veterans?

2 On June 14, 2001, the Secretary of Health and Human Services announced
that HCFA?s name had been changed to the Centers for Medicare and Medicaid
Services. In this report, we will continue to refer to HCFA where our
findings apply to the organizational structure and operations associated
with that name.

3 Nursing Homes: Sustained Efforts Are Essential to Realize Potential of the
Quality Initiatives (GAO/ HEHS- 00- 197, Sept. 28, 2000).

Page 3 GAO- 01- 768 VA Nursing Home Oversight

homes across the country. (See app. I for a more detailed description of our
scope and methodology.) Our work was conducted from August 2000 through May
2001, in accordance with generally accepted government auditing standards.

VA?s adherence to its oversight policies for state veterans? homes and
community nursing homes has been mixed, reflecting a lack of VA
headquarters? monitoring and oversight. VA medical center staff are required
to inspect each state veterans? home annually, and of the 1997 through 2000
state veterans? home inspections we analyzed, VA completed about 86 percent
within the required time frame- 12 months of the prior inspection- or
shortly thereafter. If VA finds serious problems in a state veterans? home,
VA may withhold per diem payments to the home until the problems are
corrected. VA has withheld payments from three state veterans? homes; two of
the three homes have corrected their problems to VA?s satisfaction and VA
has reinstated per diem payments, but VA continues to withhold payments from
the remaining home. VA headquarters appears to be appropriately monitoring
VA medical centers? oversight of state veterans? homes, but its monitoring
of community nursing home oversight is less diligent. VA lacks a
departmentwide approach to monitoring medical centers? community nursing
home oversight activities and enforcing VA?s oversight policies-
particularly regarding locally contracted homes, which make up about 75
percent of the community nursing homes under contract to VA- and individual
medical centers vary in how well they have overseen community nursing homes.
VA medical center staff are required to conduct annual inspections of all
community nursing homes with which they have local contracts and to visit
veterans in those homes monthly, but only 4 of the 10 VA medical centers we
reviewed reported conducting the required annual inspections, and only 4 of
10 generally made required visits to veterans. The remaining centers we
reviewed exhibited varying levels of adherence to these policies. If VA
finds problems in a community nursing home, it may take one of four actions:
stop placing veterans in the home, withdraw veterans from the home,
terminate the home?s contract, or allow the contract to expire without
renewal. However, the number and type of actions taken by VA nationwide to
ensure that community nursing homes correct problems are unknown because
neither VA headquarters nor the VA medical centers we visited maintain data
on these actions.

Under its planned policy change, VA would eliminate the requirement for
annual inspections of community nursing homes and instead rely on Medicare
and Medicaid certification inspections. Local VA medical Results in Brief

Page 4 GAO- 01- 768 VA Nursing Home Oversight

centers? staff will review state inspection reports and CMS data to evaluate
community nursing homes. However, relying on this information may be
problematic for VA because the quality of state inspections of nursing homes
varies, and CMS is unable to accurately assess state inspection performance.
As a result, VA may not be able to rely on state inspection results in all
cases. Moreover, without additional information VA will be unable to discern
which states provide reliable data and which do not. In addition, many VA
field staff told us that they did not know how to obtain or interpret all of
the information they will be expected to review under VA?s planned policy,
yet VA has not decided how, or if, it will assist medical centers in
obtaining or using this information. To improve VA?s oversight of community
nursing homes, we are recommending that VA (1) develop a structured,
comprehensive, and uniformly applied policy for overseeing all community
nursing homes under contract to VA, including a mechanism to monitor the
reliability of state inspections of nursing homes, (2) provide guidance on
implementing its policy, and (3) develop a means to ensure that medical
centers follow the policy. In commenting on a draft of our report, VA agreed
with our conclusions and recommendations.

In addition to providing nursing home care in its own facilities, 4 VA
contracts with community nursing homes and pays state veterans? homes part
of the cost to care for veterans. 5 Figure 1 below shows the fiscal year
2000 program expenditures for each of VA?s three nursing home programs as
well as the average number of veterans cared for on any given day (known as
the average daily census) in each setting.

4 Because VA nursing home care units were not within the scope of our
review, this report does not assess the oversight of, or care provided in,
these facilities. 5 These VA programs encompass only a portion of the
veterans needing nursing home care. VA has estimated that it meets about 16
percent of veterans? demand for nursing home care; most veterans? nursing
home care is financed through Medicare or Medicaid, private insurance, or
personal assets. Background

Page 5 GAO- 01- 768 VA Nursing Home Oversight

Figure 1: Fiscal Year 2000 Program Expenditures and Average Daily Census for
VA?s Nursing Home Programs

Source: VA data.

State veterans? homes are nursing homes owned and operated by individual
states. 6 These homes originated in the post- Civil War era, when the
federal government was unable to meet Civil War veterans? demands for care.
In response, states established and began operating homes for the care of
soldiers at state expense; in fiscal year 2000, there were 94 state
veterans? homes operating in 43 states. 7 VA subsidizes a portion of the
daily cost of care of veterans residing in these homes, paying a flat daily
rate ($ 51.38 in fiscal year 2001) for each eligible veteran. VA also pays a
portion of the construction costs for some homes. However, VA does not
directly place patients in state veterans? homes as it does in community
nursing homes. Rather, veterans must apply to the homes for admission, and
eligibility and admission requirements vary by each state. For

6 Some state veterans? homes include- or consist solely of- domiciliaries,
which are facilities for the care of veterans who do not require hospital or
nursing home care but are unable to live independently because of medical or
psychiatric disabilities. Some state veterans? homes also offer hospital
care or adult day health care. In this report, references to state veterans?
homes refer only to nursing homes? portions of these facilities.

7 VA expects the number of state veterans? homes to increase markedly in the
next several years. At the time of our review, VA had received applications
requesting assistance to help fund the construction of another 24 homes.

$1, 352,880,000 $227,817,000

$279,834,000 11, 812 3,685

15, 258 Program expenditures Average daily census

VA nursing homes State veterans? homes Community nursing homes

Page 6 GAO- 01- 768 VA Nursing Home Oversight

example, certain states admit only veterans who served during wartime, while
other states admit all honorably discharged veterans.

There are about 17,000 community nursing homes in the nation, providing care
to about 1. 6 million Americans, including veterans receiving care at VA?s
expense. Several factors influence whether veterans are placed in community
nursing homes. For example, about one- fourth of VA medical centers have no
in- house nursing homes, and thus rely on community nursing homes to provide
such care. Also, some veterans may prefer placement in community nursing
homes- to be closer to family, for example.

VA purchases care from community nursing homes in one of two ways (see fig.
2). Most nursing homes under contract to VA have a contract with a local VA
medical center. VA also contracts with community nursing homes under its
Regional Community Nursing Home initiative, in which nursing home chains in
single or multiple states contract directly with VA headquarters for
services at their nursing homes. In 2000, VA contracted with about 2,500
nursing homes on a local basis and with about 900 more nursing homes under
its Regional Community Nursing Home program.

Figure 2: Two Ways in Which VA Contracts with Community Nursing Homes

VA headquarters Local VA

medical center

CONTRACT CONTRACT

Nursing home chain Individual nursi ng homes

Page 7 GAO- 01- 768 VA Nursing Home Oversight

All Medicare- or Medicaid- certified nursing homes, whether state veterans?
homes or community nursing homes, are required to undergo periodic
inspections by state agencies under contract to CMS. (Virtually all of the
approximately 17,000 community nursing homes across the country are
Medicare- or Medicaid- certified; at the time of our review, 43 state
veterans? homes were so certified.) CMS contracts with states and requires
that they inspect each nursing home annually, with the time between
inspections not to exceed 15 months. These inspections are conducted by
teams of state surveyors who spend several days on site conducting a broad
review of whether the care and services delivered meet CMS quality standards
and seeking to ensure that inadequate resident care is identified and
corrected. The results of each inspection are recorded in a report detailing
the nature of any identified problems, and are also entered into CMS? On-
Line Survey, Certification, and Reporting (OSCAR) database, which contains
the results of state inspections as well as information about the homes?
residents. OSCAR also contains information on complaints, which states are
required to investigate.

VA has established written oversight policies to help ensure that state
veterans? homes and community nursing homes provide care of acceptable
quality. However, VA medical centers? adherence to these policies has been
incomplete. VA records show that VA medical centers across the country have
generally inspected state veterans? homes as often as required, and VA
headquarters has taken several recent steps to increase its own monitoring
of medical centers? performance. On the other hand, fewer than half of the
10 VA medical centers we visited followed VA?s community nursing homes
oversight policies, and VA headquarters has neither effectively monitored VA
medical centers? oversight of these homes nor provided sufficient guidance
on how these oversight activities should be conducted. VA Oversight Has

Been Mixed and Headquarters? Involvement Insufficient

Page 8 GAO- 01- 768 VA Nursing Home Oversight

VA policy requires that VA medical center staff inspect state nursing homes
before they can be certified as state veterans? homes, and annually
thereafter. In January 2000, VA issued regulations detailing standards to be
used when inspecting state veterans? homes. 8 These standards are
considerably more detailed and lengthy than those they replaced, and cover
such issues as resident rights, quality of life, quality of care, and
physical environment.

Based on our review of VA documentation for 250 inspections conducted from
calendar years 1997 through 2000, about 58 percent of inspections were
conducted within 12 months of the prior inspection, as required by VA
policy. An additional 28 percent were conducted within 15 months, the
maximum time CMS allows between Medicare or Medicaid certification
inspections. Time lapses between other inspections varied, up to a maximum
of 48 months; VA records show that one state veterans? home has not been
inspected by VA since January 1997.

VA facility officials gave varying reasons for not making inspections on
time. One VA facility, for example, did not inspect the state veterans? home
for which it has oversight in 1997, 1998, or 1999 because the home was
accredited by the Joint Commission on Accreditation of Healthcare
Organizations (JCAHO), and VA medical center officials accepted JCAHO
accreditation as proof that the home met VA standards. 9 Another facility
gave the same reason for not inspecting a state veterans? home in 2000.
Other officials stated that they believed VA?s policy had been changed to
allow VA medical centers to accept Medicare or Medicaid certification as
evidence that state veterans? homes meet VA standards, and as a result
stopped making inspections. The chief of VA?s state veterans? home program
told us, however, that these were not acceptable reasons for discontinuing
annual inspections and that all state veterans? homes must be inspected
annually.

On the other hand, some state veterans? homes have been inspected more than
once every 12 months. For example, one home received six VA inspections from
May 1998 through May 2000 because of VA concerns about the home?s quality.
Another home has been inspected twice each

8 See 65 FR 962, at 971, Jan. 6, 2000; 38 C. F. R. Part 51. 9 JCAHO is an
accrediting organization that certifies homes that request inspections and
meet its standards. Most State Veterans?

Homes Are Inspected as Often as Required, and VA Headquarters Has Increased
Its Monitoring of VA Medical Centers? Performance

Page 9 GAO- 01- 768 VA Nursing Home Oversight

calendar year since 1997 to ensure that identified problems were corrected.

If VA finds deficiencies in a state veterans? home it can provisionally
certify the home, meaning that VA will continue to pay per diem to the home
while allowing time to correct the deficiencies. However, if the inspection
team finds serious uncorrected deficiencies at the home, VA can withdraw its
recognition of the home and stop per diem payments. VA does not have the
authority to withdraw veterans from a state veterans? home even if the home
fails to meet VA standards, although VA requires that all state veterans?
homes make the results of their most recent VA inspections available.
According to VA officials, VA has withheld per diem payments to three state
veterans? homes. VA withheld one home?s payments beginning in 1999, and
withheld the other homes? payments beginning in 2000. A VA official
attributed one home?s problems to the lack of funds allocated to it by the
state; another?s to its remote location, which made attracting staff
difficult; and the third home?s to its antiquated building, which has been
unable to meet VA?s life safety requirements. One of the three homes had per
diem payments reinstated within 4 months, and another within about 10
months, but the remaining home has not had per diem payments reinstated. In
each case, according to the VA field staff, the state operating the home
made up the resulting shortfall; veterans were not required to pay the
difference. (See app. II for a more detailed description of each home?s
problems and VA?s actions.)

VA has taken several recent steps to increase its monitoring of, and improve
VA medical centers? performance of, state veterans? home inspections. In the
past, not all VA medical centers provided copies of their annual state
veterans? home inspection reports to VA headquarters, although VA policy
calls for medical centers to submit copies of these reports within 30 days
of the inspections, and VA headquarters officials told us that they had no
way of knowing whether a missing report meant that the inspection was not
conducted or that the report was simply not sent. Additionally, those
reports that were submitted to headquarters were often not sent until
several months after the inspections. VA headquarters was also concerned
that VA medical centers were not performing inspections with the necessary
thoroughness or consistency to ensure adequate, uniform oversight of all
state veterans? homes.

To increase its involvement in the state veterans? home program, VA
headquarters has made several program changes. First, in 2000, VA emphasized
in a policy memorandum that VA medical centers were to submit inspection
reports to headquarters within 30 days of the

Page 10 GAO- 01- 768 VA Nursing Home Oversight

completion of the inspections. To track the results of these inspections, VA
headquarters officials have entered the results of all state inspections
conducted since 1998 into a database and plan to enter the results of all
future inspections. 10 Program officials told us that they will use this
database to analyze inspection results and trends, including the extent to
which identified problems recur in subsequent inspections, and to determine
which state veterans? homes are due for an annual inspection. Using this
information, the program officials can contact the inspecting facilities to
remind them of upcoming inspections. VA is also developing an electronic
inspection form to be used by VA field staff to enter the results of
inspections; the electronic form is expected to speed submission of the
report and eliminate the need for headquarters to enter the information
manually into the database. Finally, program officials established an e-
mail discussion group and initiated quarterly telephone conference calls to
all field locations responsible for state veterans? home oversight; both of
these activities are intended to facilitate communication between VA program
officials and VA field staff charged with carrying out inspections.

To improve the conduct and consistency of inspections around the country, VA
program officials also developed a 3- day training course, which has been
delivered to inspection personnel in about half of VA?s 22 networks. 11
(Another eight networks currently are scheduled to receive training in
calendar year 2001. Training for the remaining networks has not yet been
scheduled.) The training course is designed to familiarize inspectors with
VA?s standards for state veterans? homes and provide guidance on planning,
conducting, and documenting inspections. The training is delivered by a
program official from headquarters, who is accompanied by field personnel
familiar with VA standards and inspection procedures who provide insight
based on their own inspection experiences.

10 We developed this database to facilitate our analysis of VA data. VA
officials requested the results of our analysis for their own use, and began
using the database to help oversee the state veterans? home program.

11 In 1995, VA created 22 Veterans Integrated Service Networks, a new
management structure to coordinate the activities of and allocate funds to
VA hospitals, outpatient clinics, nursing homes, and other facilities in
each region.

Page 11 GAO- 01- 768 VA Nursing Home Oversight

In contrast to VA?s oversight of state veterans? homes, VA oversight of
community nursing homes, both locally and centrally contracted, has been
inadequate. Most VA medical centers we visited have not inspected homes or
visited veterans with required frequency, and VA headquarters has similarly
failed to review centrally contracted homes as often as required. VA
headquarters has not centrally monitored and enforced its community nursing
home oversight policies, nor has it provided sufficient guidance on
conducting oversight activities.

VA?s oversight policy differs between community nursing homes under local
contract to individual VA medical centers and those homes under central
contract to VA headquarters. VA policy requires that VA medical centers
contracting with community nursing homes send at least a nurse and a social
worker, and other staff as needed (such as dietitians or pharmacists), to
inspect each home annually after reviewing the most recent state inspection
report for the home. 12 VA?s standards for evaluating community nursing
homes are those CMS uses for Medicare and Medicaid certification. However,
VA has exempted centrally contracted homes- those in its Regional Community
Nursing Home program- from annual inspections. VA officials told us they
believed that exempting such homes from annual inspections would serve as an
incentive for nursing home chains to participate in the program. They also
believed that VA did not want to add to the oversight burden on local VA
medical centers by requiring them to inspect additional homes. VA policy
calls for VA headquarters staff to review available CMS data on these homes
in order to determine whether the homes provide acceptable care.

VA policies also require VA medical center staff to visit each veteran
receiving community nursing home care at VA?s expense every 30 days,
regardless of whether the veteran is in a locally contracted or a centrally
contracted home. Every 60 days the visits must be made by registered nurses.
Through these visits, VA staff are expected to monitor quality of care and
review individual patients? care plans, assist patients and families with
the social and emotional aspects of the transition to long- term care, and
observe the homes? conditions. VA does not have a standard checklist for use
by VA staff visiting veterans in community nursing homes, instead noting in
its written policy that ?it is important to emphasize the individual

12 VA?s written policies governing community nursing home oversight are
contained in Veterans? Health Administration Manual M- 5, Part II, Chapter
3. VA Medical Centers?

Adherence to Community Nursing Home Oversight Policies Has Been Incomplete,
and VA Headquarters? Monitoring Insufficient

Page 12 GAO- 01- 768 VA Nursing Home Oversight

basis of [the visits]. When visits become routine, there is a danger that
the focus will be lost and that quality will suffer.?

If VA staff detect problems in a community nursing home, whether through
annual inspections or monthly visits, the medical center may take one of
four disciplinary actions: discontinue placing additional veterans in the
home, remove veterans receiving VA- funded care in the home, terminate the
home?s contract, or decline to renew the contract upon expiration. Although
staff at the VA medical centers we visited told us they had used these
actions rarely, the number and type of disciplinary actions taken by VA
nationwide are unknown because neither VA headquarters nor the medical
centers we visited maintain data on such actions.

Only 4 of the 10 VA medical centers we visited reported following VA policy
by having at least a nurse and a social worker inspect each locally
contracted community nursing home, and review the state inspection report
for each home. (See table 1.) One additional VA medical center reviewed the
state inspection report, but the inspection was conducted by a nurse only.
Among the five remaining VA medical centers, four reviewed the state
inspection report but did not conduct annual inspections, while one neither
reviewed the report nor conducted annual inspections.

Table 1: 10 VA Medical Centers? Reported Annual Inspection Activities for
Locally Contracted Community Nursing Homes VA medical center Conducted
inspection with at least

a nurse and social worker Reviewed state inspection report

Birmingham, AL X X Loma Linda, CA X Gainesville, FL X New Orleans, LA X X
Minneapolis, MN X Cleveland, OH X X Muskogee, OK X X Pittsburgh, PA a X
Providence, RI Seattle, WA X

Note: These are the practices that the medical centers reported using at the
time of our visits, which we conducted from November 2000 through February
2001. a Pittsburgh conducted inspections using a nurse only.

Staff at facilities that did not conduct the required annual inspections
told us that they did not have sufficient resources to conduct inspections
or did not see any value in duplicating state inspections. An official at
one VA VA Has Not Inspected

Community Nursing Homes as Required

Page 13 GAO- 01- 768 VA Nursing Home Oversight

medical center told us that because VA policy did not require inspections of
centrally contracted homes, staff at that medical center were no longer
required to inspect locally contracted homes. According to the chief of VA?s
community nursing home program, staff at several VA medical centers told him
(in response to our visits) they did not know that the policies requiring
annual inspections were still in effect.

Homes in the Regional Community Nursing Home initiative have also not been
overseen as required. The VA headquarters official responsible for reviewing
CMS data on centrally contracted community nursing homes told us that he has
reviewed such data on only about 60 percent of centrally contracted homes
each year. According to this official, the large number of centrally
contracted homes (currently about 900) and the lack of sufficient staff to
review data on these homes has prevented VA from reviewing these data
promptly.

This lack of oversight may have serious implications because, according to
our analysis of HCFA data from calendar years 1999 and 2000, about 30
percent of homes in the Regional Community Nursing Home initiative were
cited in their most recent state inspections for deficiencies serious enough
to cause harm to residents. For example, one home participating in the
program was cited in its last state inspection for 4 deficiencies causing
actual harm to residents in addition to another 31 lesser deficiencies, for
a total of 35 deficiencies- the most of any nursing home in that state.
Overall, however, the 30 percent of homes with serious deficiencies in the
regional program is identical to the portion of all HCFAcertified homes
nationwide- 30 percent- that were cited for such deficiencies by state
inspectors from January 1999 through July 2000. 13

Veterans receiving community nursing home care at VA?s expense must,
according to VA policy, receive visits from VA staff every 30 days; every 60
days, these visits must be made by VA nurses. However, the 10 VA medical
centers we visited varied in their adherence to this policy. (See table 2.)
During calendar years 1999 through 2000, only 4 of these 10 VA medical
centers generally sent both a staff member to visit each veteran every 30
days and a nurse to visit each veteran every 60 days. In a few cases even
these four medical centers allowed longer than 30 days between visits, or
longer than 60 days between nurse visits. Another VA medical center began
making visits as required in August 2000, about the time we began

13 GAO/ HEHS- 00- 197. VA Has Not Visited Veterans in

Community Nursing Homes as Often as Required

Page 14 GAO- 01- 768 VA Nursing Home Oversight

our review. Before then, records show that medical center staff made visits
only sporadically; staff from this medical center made only 40 percent of
the required visits to veterans in our sample who were discharged prior to
August 2000.

Of the remaining five VA medical centers in our study, two generally sent
staff to visit veterans every 30 days as required, but nearly all visits
were made by social workers- few nurse visits occurred, and those that did
were often spaced much further apart than 60 days. Conversely, one VA
medical center generally made nurse visits as required, approximately every
60 days, but few other visits were made to veterans. Finally, staff from two
VA medical centers made few visits to veterans; in one location, of the 73
veterans whose records we reviewed, only 3 had received visits from January
1, 1999, through December 2000. Several veterans at this location had been
in community nursing homes continually since January 1, 1999, without
receiving visits from VA medical center staff .

Table 2: 10 VA Medical Centers? Adherence to VA?s Veteran Visit Policy VA
medical center Visited veterans every

30 days a A nurse visited veterans every 60 days a

Birmingham, AL Loma Linda, CA X Gainesville, FL X X New Orleans, LA X X
Minneapolis, MN Cleveland, OH X X Muskogee, OK X Pittsburgh, PA X
Providence, RI Seattle, WA X X

Note: At each selected VA medical center, we reviewed the staff?s visiting
activities from January 1, 1999, through the date of our site visit to that
medical center. Our site visits began in November 2000 and were completed in
February 2001. a At no locations were all veterans visited exactly within
the 30- or 60- day time frames required by VA

policy. However, the facilities indicated in each column made nearly all
visits within these time frames.

In explaining their lack of adherence to VA policies, several staff told us
that their medical centers did not have sufficient personnel both to make
visits and complete their other duties. Staff at the two facilities making
very few visits told us that in addition to having insufficient staff to
make

Page 15 GAO- 01- 768 VA Nursing Home Oversight

visits, they did not believe the visits provided them information that they
could use to oversee care.

VA headquarters has had little involvement in VA?s community nursing home
oversight program. Although VA policy requires medical centers to inspect
locally contracted community nursing homes annually and to visit veterans in
locally and centrally contracted homes, they are not required to report the
results of these inspections or visits to VA headquarters- or even to report
whether they performed them. Because it has little or no knowledge of the
extent to which medical centers have followed its inspection requirements,
VA has not implemented any mechanism to ensure that VA medical centers
conduct oversight as specified- primarily, according to a VA official,
because VA?s community nursing home program office has not had sufficient
resources to monitor VA medical centers? oversight of community nursing
homes under contract to VA. In contrast to its handling of the community
nursing home program, VA monitors and ensures adherence to its state
veterans? home oversight policies by requiring each medical center director
to certify annually that the state veterans? home( s) under that medical
center?s jurisdiction meet VA standards.

In addition to poorly monitoring VA medical centers? inspection activities,
VA headquarters has not provided guidance to medical centers on how to
implement VA?s oversight policies. For instance, although VA policy states
that VA medical centers are to use CMS? nursing home standards when
evaluating community nursing homes, no structured process or format has been
developed for conducting either annual inspections or monthly visits, and
individual VA medical centers have made determinations about what elements
of community nursing home care they will examine during these inspections
and visits. Thus, even when annual inspections and monthly visits are made,
VA has no assurance that the nursing home processes and care indicators
examined by one VA medical center will be the same as those examined by
other VA medical centers. Indeed, at the 10 VA medical centers we visited,
documentation of nursing home inspections and visits to veterans showed that
medical centers differed in the processes and indicators they examined. VA
Headquarters Has Neither

Monitored VA Medical Centers nor Provided Adequate Guidance

Page 16 GAO- 01- 768 VA Nursing Home Oversight

From the beginning of our review, VA has been planning to eliminate its
requirement for annual inspections of locally contracted community nursing
homes by VA medical center staff because these homes are already inspected
by CMS- sponsored state surveyors. However, state veterans? homes would
continue to undergo annual inspections by VA. Under the planned policy, VA
medical center staff would be allowed to rely on the results of the state
inspections and on other available information about locally contracted
community nursing homes to determine whether the homes meet VA standards.
While, in general, state inspections appear to be more thorough than VA
inspections, some state inspection agencies find considerably more nursing
home problems than others do, and CMS does not know whether this variation
results from differences in nursing home quality or differences in inspector
practices and abilities. In addition, VA has not yet decided how medical
centers should use CMS and other information in assessing nursing home
quality or what assistance headquarters will provide. Without effective
guidance from VA headquarters on the use of these data, VA facilities may
not be able to accurately and consistently interpret the data and make
judgments about nursing home quality nationwide.

VA?s planned oversight policy for locally contracted community nursing homes
would eliminate the requirement for a physical VA inspection of each locally
contracted home and instead would allow local VA facilities to base annual
contract renewal decisions about homes on available documentation. The VA
official responsible for developing this policy told us that, while its
implementation is imminent, VA has not set a date for its new policy
implementation. Under the planned policy, local facilities would review CMS
and other data to assess the quality of care provided in these locally
contracted homes. The data include the following.

 CMS? OSCAR data. VA?s planned policy requires a review of data from CMS?
OSCAR database. For all Medicare- or Medicaid- certified nursing homes,
OSCAR contains the results of the three most recent state inspections as
well as information about the homes? residents and complaints against the
homes.

 Quality indicators. VA?s planned policy also requires VA facilities to
review nursing home resident data known as the Facility Quality Indicator
(QI) Profile. QIs serve as numeric warning signs of care problems, such as
greater- than- expected instances of weight loss, dehydration, or pressure
VA?s Plan to Rely on

Community Nursing Home Inspections Conducted by States Appears Reasonable,
but Implementation Is Uncertain

New Oversight Policy Relies Heavily on CMS Data, but Incorporates Other
Information

Page 17 GAO- 01- 768 VA Nursing Home Oversight

sores. QI profiles are derived by CMS from nursing homes? assessments of
residents and are used to rank a facility in 24 areas compared with other
nursing homes in a state. 14 In using this tool, staff at a VA medical
center could, for example, compare the percentage of residents experiencing
weight loss in a particular community nursing home with the average for all
nursing homes in that state to determine whether the home?s prevalence of
weight loss is above or below the state average.

 Veteran visit results. VA?s planned policy also states that the results of
staff visits to veterans in community nursing homes- which would continue to
be required under the planned policy- can provide information about the
quality of care in these homes. Moreover, VA officials told us that they
expect that visits would take on more importance as an oversight tool if
annual inspections were no longer required. According to the planned policy,
the results of VA?s visits to veterans in community nursing homes, in
conjunction with CMS and state data, can be used to make judgments about the
quality of care in these homes.

In using these sources of information, VA?s planned policy directs VA
medical centers to obtain and analyze OSCAR and QI profile data on locally
contracted community nursing homes, 15 if the homes are Medicareor Medicaid-
certified, along with other necessary state inspection reports and
information. No VA inspection would be required for Medicare- or Medicaid-
certified homes. Instead, an ?informational? visit would be made to each
home by a VA representative to meet the home?s leadership, learn about any
special programs in the home, and determine how the home can best meet
veterans? needs. If the home is not Medicare- or Medicaidcertified, the VA
medical center would instead send, at a minimum, a social worker, nurse,
dietician, fire safety officer, and contracting officer to inspect the home.
Other VA staff, such as physicians or clinical pharmacists, may be included
in the inspection if the VA inspection team deems it necessary. Regardless
of whether an inspection is conducted, information gained by visiting
veterans is expected to be incorporated into the quality assessment process.

14 QIs were the result of a HCFA- funded project at the University of
Wisconsin. The developers based their work on nursing home resident
assessment information known as the minimum data set- data that all
Medicare- or Medicaid- certified homes are required to report. See Center
for Health Systems Research and Analysis, Facility Guide for the Nursing
Home Quality Indicators (University of Wisconsin- Madison: Sept. 1999).

15 Centrally contracted homes will continue to be reviewed by VA
headquarters staff.

Page 18 GAO- 01- 768 VA Nursing Home Oversight

Because state inspections of community nursing homes generally appear to be
more lengthy and thorough than those performed by VA, and because the states
use trained, professional inspectors while VA does not, VA?s planned policy
seems reasonable. However, states vary in the extent to which they report
nursing home problems and, as a result, VA may not be able to rely on state
data in all cases. Further, VA will have difficulty discerning which states
provide reliable information and which do not because CMS has not determined
the reason for the variation in states? inspection results.

Many VA medical center staff told us that their inspections did not match
the duration of state inspections. Based on our discussions with staff who
perform the required inspections at the VA medical centers we visited, VA
inspections consumed an average of about 14 hours of staff time per
inspection. One medical center reported spending only about 6 hours on each
of its inspections (three staff spending 2 hours at each home), while
another reported spending about 18 hours on each of its inspections. In
contrast, the state inspection agencies in the four states we examined in
our September 2000 report averaged at least 94 hours per inspection,
including one state that averaged 162 hours per inspection. 16

State inspections may be superior to VA inspections in other areas as well.
For example, CMS requires that each state inspector receive training within
his or her first year of employment. A VA official told us that VA has
provided no such training to its community nursing home inspectors. State
inspectors also are employed solely to conduct inspections, while VA
inspectors perform inspections in addition to their normal duties at VA
medical centers. CMS is required by statute to evaluate the performance of
state survey agencies by evaluating 5 percent of state inspections performed
annually. CMS most often complies with this requirement by accompanying
state officials on nursing home inspections (known as observational surveys)
and at other times by independently inspecting nursing homes already
inspected by states and then comparing the results

16 The difference in duration between VA inspections and state inspections
may significantly affect the quality of oversight, given a 1998 study by the
University of Wisconsin?s Center for Health Systems Research and Analysis
that showed a correlation between the average survey time and the number of
deficiencies identified. See Center for Health Systems Research and
Analysis: Analysis of LTC Survey Time and Workload Factors (University of

Wisconsin- Madison: May 1998). VA?s Planned Policy

Appears Reasonable, but Concerns Remain About Variations in State
Inspections

Page 19 GAO- 01- 768 VA Nursing Home Oversight

of the inspections (known as comparative surveys). 17 VA performs no such
oversight or evaluation of VA medical centers? inspections.

While state inspections appear to be more thorough than VA?s, they may not
be sufficiently reliable to fully disclose the quality of care in a home.
For example, we noted in our July 1998 report that state inspection results
could be understated because nursing homes could often predict when their
reviews would occur and take steps to mask problems. 18 Problems were also
missed because sampling methods were not used that could enhance the
identification of potential problems and help determine their prevalence. We
also noted in our September 2000 report that in 70 percent of HCFA
comparative surveys conducted from October 1998 through May 2000, HCFA
inspectors found deficiencies that were more serious than those found by the
state inspectors, suggesting that the state inspectors did not detect all
existing problems in the homes. HCFA also found serious, substantiated
complaints in homes that state inspectors reported as deficiency- free.

Some VA medical center staff we visited during this review reached similar
conclusions through their own inspections. At 2 of the 10 sites we visited,
VA staff told us that they do not believe state inspection reports in their
states contain information on all the problems that may exist at the homes.
At one facility, VA staff responsible for conducting inspections stated that
they frequently found nursing home problems that were not reported by the
state inspection team; in some cases, the state certified that a home had
corrected identified problems when, according to the VA inspection team, the
problems were clearly not corrected. Similarly, staff at a VA medical center
in another state told us that they did not believe that state inspection
reports reflected all deficiencies in the nursing homes inspected.

However, VA will likely find it difficult to identify all the states whose
inspections provide inadequate information because neither VA nor CMS has
sufficient information to do so. Notwithstanding the knowledge of selected
VA staff we spoke with, local knowledge at each VA medical center may be
insufficient to give VA adequate information about which

17 In fiscal year 2000, HCFA performed 782 observational surveys and 111
comparative surveys. 18 California Nursing Homes: Care Problems Persist
Despite Federal and State Oversight (GAO/ HEHS- 98- 202, July 27, 1998), p.
4.

Page 20 GAO- 01- 768 VA Nursing Home Oversight

states provide reliable data on community nursing home performance. Further,
CMS does not have such information; as noted in our prior work, its
oversight of state efforts has serious limitations that prevent it from
developing accurate and reliable assessments of state inspection
performance. Although data show a wide range in the number of times states
cite nursing homes for deficiencies (for example, in 1999 the average number
of deficiencies cited by state inspectors ranged from 2 deficiencies per
home in New Jersey to 11.4 deficiencies per home in Nevada), CMS cannot
accurately determine whether this variation stems from differences in the
quality of care in the home or in the quality of state inspections. This is
partly because there have been too few comparative surveys in each state to
assess whether the state appropriately identifies serious deficiencies. HCFA
conducted only one to three comparative surveys per state annually,
providing little information on how representative these surveys are of
overall state performance. 19

Our discussions with VA field staff revealed considerable unfamiliarity with
the information they will be expected to use to evaluate community nursing
home quality under VA?s planned policy. However, VA has not determined what
guidance, if any, to provide to its medical centers in implementing the new
policy. Although it is important that any guidance leave room for local
knowledge and understanding when using the information, without such
guidance, VA risks having different standards applied by different VA
medical centers in assessing whether community nursing homes are suitable
for veteran placement.

Nearly all of the medical centers we visited use the results of state
inspections, which are public documents, as part of their required efforts
to evaluate locally contracted community nursing homes. However, according
to a VA headquarters program official, no VA medical centers have access to
OSCAR data, although VA is negotiating with CMS to allow access at all VA
medical centers. Further, the same VA headquarters official told us that VA
has no plans to provide criteria for VA medical centers to apply when using
state inspection reports or OSCAR data to evaluate community nursing homes.
Without such criteria, or even minimal guidelines, VA headquarters will have
no assurance that staff at

19 A CMS official stated that CMS intends to increase the number of
comparative inspections it conducts, from 111 comparative surveys in 2000 to
162 in 2001. VA Has Developed No

Guidance to Help Medical Center Staff Who Are Unfamiliar With Planned
Oversight Tools

Page 21 GAO- 01- 768 VA Nursing Home Oversight

each VA medical center are using such data consistently and appropriately.

VA field staff we visited were generally unfamiliar with the facility QI
profile. Staff at two facilities were not aware that patient assessments are
aggregated by CMS into a profile of each nursing home, and staff we spoke
with at most facilities did not know how to obtain QI profiles for nursing
homes or how to interpret the information. However, VA?s planned policy has
no provisions for guidance on the use of the QI profile, including guidance
on how, in combination with other information, the QI profile can be used to
make preliminary assessments of nursing home quality. Without guidance on
how to use the QI profile, the staff at each VA medical center will need to
determine where to obtain facility QI profiles, how to decide which
indicators are most important in evaluating quality, and what scores might
suggest nursing home problems.

Although VA has generally overseen state veterans? homes with the frequency
required by its policies, the community nursing home program has problems
that require attention. Serious gaps exist in VA?s knowledge about the
quality of care provided to veterans in community nursing homes because,
although some VA medical centers are conducting the required inspections and
visits, other medical centers have decided not to follow VA?s oversight
policy. Further, because headquarters has not participated sufficiently in
VA?s community nursing home oversight program and has not monitored medical
centers? performance, it has remained unaware of these centers? decisions.
The result is that VA cannot be assured that all of its veterans receive
care in nursing homes that meet VA standards.

VA?s recent plan to eliminate its requirement for inspections of locally
contracted community nursing homes in favor of state inspection reports and
other data has merit, in principle, because it may reduce unnecessary
duplication and allow VA to better use its resources. Such a policy would
also eliminate the disparity between oversight of locally contracted homes,
for which VA currently requires annual inspections, and oversight of
centrally contracted homes, for which VA requires a review of CMS data.
However, sufficient information about the reliability of individual state
inspections does not exist, and without such information VA will be unable
to determine whether in all cases state data provide credible information
about nursing home quality. VA could determine which states provide adequate
information by conducting its own inspections in a portion of community
nursing homes under contract and comparing its Conclusions

Page 22 GAO- 01- 768 VA Nursing Home Oversight

own findings to those of the states, or by contracting with CMS to do so and
comparing CMS? findings to those of the states. Currently, however, VA has
plans to do neither.

VA field staff also lack sufficient guidance to ensure that oversight
activities are regularly and consistently carried out. VA field staff who
might (under the new plan) review OSCAR, QI, and other data to determine
whether community nursing homes meet VA standards generally do not know how
to obtain the data and what elements of these data are most critical to
evaluating home quality. Similarly, although VA has provided an inspection
protocol and inspection training to staff who inspect state veterans? homes,
it has provided no such protocol or training for staff who inspect community
nursing homes, and currently these inspections do not appear to provide
comprehensive or comparable data on nursing home performance.

Finally, the inconsistency between the ongoing requirement for an annual
inspection of all state veterans? homes and the plan to eliminate such
inspections of community nursing homes is confusing and needs to be
resolved. If VA believes that CMS- sponsored state inspections of nursing
homes, combined with other available data, will provide adequate assurance
of acceptable quality in community nursing homes, this logic could
reasonably apply to Medicare- or Medicaid- certified state veterans? homes
where CMS- sponsored state inspections already occur. Such a decision,
however, would still require VA to evaluate the reliability of state
inspection reports, as we believe VA will need to do under the planned
oversight policy for its community nursing home program.

To strengthen its oversight of community nursing homes and better ensure
that veterans receive acceptable quality of care, we recommend that the
Secretary of Veterans Affairs direct the Under Secretary for Health to take
the following actions.

 Develop a single structured, comprehensive, and uniformly applied policy
for overseeing all community nursing homes under local or national contract
to VA. Such a policy may require annual VA inspections of all such homes or
rely on state inspections and other data, including information on
substantiated complaints, to provide information on nursing home quality.
However, if VA chooses the second option, it should monitor the reliability
of state inspection data by conducting its own inspections of a portion of
all community nursing homes under contract, or contract with CMS to do so,
and use the results of these comparative Recommendations for

Executive Action

Page 23 GAO- 01- 768 VA Nursing Home Oversight

inspections to make judgments about the quality of state data. In those
states where nursing home inspections appear inadequate, VA should conduct
its own inspections of all community nursing homes under contract to VA.

 Ensure consistent and comprehensive VA medical center oversight activities
by (1) developing and implementing an inspection protocol and conducting
inspection training for all VA staff expected to conduct community nursing
home inspections, (2) providing guidance and direction on the objectives of
VA?s monthly visits and the methodology to be used during the visits, and
(3) providing guidance on how to obtain, interpret, and use OSCAR, QI, and
other data in assessing community nursing home quality of care when VA
implements its planned policy.

 Ensure that VA medical centers follow VA?s community nursing home
oversight policies by (1) developing and implementing a system through which
headquarters can determine which VA medical centers have conducted oversight
as required and (2) establishing a mechanism for ensuring that VA medical
centers adhere to these policies. For example, VA could require medical
center directors to certify annually that they have inspected or otherwise
assessed the quality of care in community nursing homes as required, similar
to what is required of medical center directors under the state veterans?
home program.

We provided VA a draft copy of our report for its review and comment. VA
agreed with our conclusions and recommendations and noted that it is
developing a comprehensive draft directive on community nursing home
evaluation and monitoring that will address our concerns about VA oversight.
It also noted that it has plans underway to establish annual review
protocols and follow- up training for VA staff who conduct community nursing
home inspections. VA?s comments are reprinted in appendix III.

As agreed with your offices, unless you announce the report?s contents
earlier, we plan no further distribution until 30 days after its issue date.
We will then send copies to the Secretary of Veterans Affairs, appropriate
congressional committees, and other interested parties. We will make copies
available to others upon request. Agency Comments

Page 24 GAO- 01- 768 VA Nursing Home Oversight

Please contact me at (202) 512- 7101 or Ronald J. Guthrie at (303) 572- 7332
if you or your staffs have any questions. Joe Buschy, Steve Gaty, and Alan
Wernz also made key contributions to this report.

Stephen P. Backhus Director, Health Care- Veterans?

and Military Health Care Issues

Appendix I: Scope and Methodology Page 25 GAO- 01- 768 VA Nursing Home
Oversight

To identify VA?s policies for overseeing community nursing homes and state
veterans? homes, we met with officials of VA?s Geriatrics and Extended Care
Strategic Healthcare Group and reviewed applicable laws, regulations, and
directives. We then evaluated adherence to these policies by reviewing
documents and interviewing staff at a judgmentally selected sample of 10 VA
medical centers. We selected our sample as follows. First, we limited our
selection pool to those medical centers having oversight over at least one
state veterans? home, because we wished to review VA medical centers?
oversight procedures for state veterans? homes. Out of VA?s 172 medical
centers, we identified 65 having such oversight. We then used VA data to
determine the average daily census of veterans placed in community nursing
homes by each of these 65 medical centers. We used these data to further
limit our selection pool to those medical centers for which the average
daily census was above or near the median average daily census for all VA
medical centers nationwide. Finally, we selected VA medical centers from
various geographic regions of the country. The information we obtained from
the 10 medical centers is not necessarily representative of VA medical
centers in total. Figure 2 shows the VA medical centers we visited.

Figure 3: Location of VA Medical Centers Included in Our Review

To determine the extent to which VA has followed its policies governing the
frequency of community nursing home inspections and the type of staff (for
example, nurses and social workers) making those inspections, we interviewed
staff and reviewed community nursing home inspection reports (if available)
and other documentation at the 10 medical centers Appendix I: Scope and
Methodology Seattle Loma Linda Minneapolis Muskogee New Orleans Providence
Pittsburgh Gainesville Birmingham Cleveland

Appendix I: Scope and Methodology Page 26 GAO- 01- 768 VA Nursing Home
Oversight

we visited. To determine the extent to which VA has followed its policies
governing the frequency of visits to veterans in community nursing homes and
the type of staff making those visits, we reviewed the VA records of
veterans placed in community nursing homes by these 10 medical centers. We
limited our evaluation to veterans who had spent at least 30 consecutive
days in community nursing homes from January 1, 1999, through the dates of
our visits. At centers where the number of such veterans substantially
exceeded 100, we reviewed the records of about 100 veterans selected at
random. At the remaining centers, we reviewed the records of all such
veterans. In total, we reviewed the records of 832 veterans.

To determine the extent to which VA followed its policies governing the
frequency of state veterans? home inspections, we requested from VA
headquarters and each VA facility with state veterans? home oversight the
reports of each inspection conducted since January 1, 1997. We then entered
the results of each inspection into a database to track (1) the date of each
inspection, (2) the results of each inspection, including the number and
type of problems identified, and (3) the date each inspection report was
received by VA headquarters, if available. During our site visits we
reviewed additional documentation related to the inspections, particularly
the plans of correction submitted by the state homes in response to VA
reports of deficiencies. We also attended a 3- day state veterans? home
inspection training course delivered to one of VA?s networks.

To evaluate VA?s mechanisms for implementing its planned community nursing
home policies, we interviewed the chief of VA?s contract community- based
care programs and reviewed the planned policy directive in headquarters. We
also interviewed staff at the 10 VA medical centers we visited to determine
their familiarity with the information that VA headquarters plans to use in
lieu of annual VA inspections.

To describe the mechanisms VA uses to ensure that nursing homes correct
identified problems, we discussed VA?s options and actions with officials at
VA headquarters and at the 10 medical centers we visited, and reviewed VA
policies governing the use of these mechanisms. In addition, we either
visited or telephoned officials in 10 state veterans? homes that were
inspected by one of the 10 VA medical centers, and attended the 2001
national meeting of the National Association of State Veterans? Homes, in
order to obtain state veterans? home officials? views of the impacts of VA?s
oversight efforts. Table 3 shows the state veterans? homes we contacted.

Appendix I: Scope and Methodology Page 27 GAO- 01- 768 VA Nursing Home
Oversight

Table 3: State Veterans? Homes We Contacted During Our Review, and the
Associated VA Medical Centers Performing Inspections

Location of state veterans? homes contacted VA medical center

Alexander City, AL Birmingham, AL Barstow, CA Loma Linda, CA Daytona Beach,
FL Gainesville, FL Jackson, LA New Orleans, LA Minneapolis, MN Minneapolis,
MN Sandusky, OH Cleveland, OH Claremore, OK Muskogee, OK Pittsburgh, PA
Pittsburgh, PA Bristol, RI Providence, RI Orting, WA Seattle, WA

Appendix II: Instances in Which VA Has Withheld State Veterans? Home Per
Diem Payments

Page 28 GAO- 01- 768 VA Nursing Home Oversight

According to VA officials, VA has withheld per diem to three state veterans?
homes. In each case, according to the VA field staff, the state operating
the home made up the resulting shortfall; veterans were not required to pay
the difference. A synopsis of each case follows, based on VA documents and
comments by VA officials.

The first home to have payments withheld was cited for problems in mid1998,
even before it began accepting residents. VA subsequently approved the
home?s plan to correct the problems and recognized the facility as a state
veterans? home. However, VA inspectors continued to find problems and after
a June 1999 inspection revealed instances of patient abuse and infection
problems, the VA medical center recommended that the per diem be withheld.
On September 15, 1999, VA notified the home that per diem payments would be
withheld until VA could certify that the home complied with VA standards.
The home corrected the problems and about 3 months later, on December 28,
1999, VA notified the home that payments would be reinstated retroactive to
November 5, 1999, the date on which a VA inspection certified that all VA
standards were met. An official in VA?s state veterans? home program office
attributed this home?s problems to the lack of operating funds provided by
the state in which the home operated. VA medical center staff inspected the
home again in May 2000 and found that it met VA standards.

The second home to have payments withheld opened in 1996 and subsequently
was cited for numerous problems, including medication errors and staffing
shortages, during all VA inspections. Inspections in both February and
November 1999 found compliance with only 67 percent of VA standards, and VA
officials informed the home that they would recommend that payments be
withheld unless significant changes were made. In April 2000, VA received
the home?s plan to correct the problems found during the most recent
inspection. VA rejected the plan and recommended that per diem be withheld.
On May 31, 2000, VA notified the home that per diem payments would be
withheld as of that date, and as of July 17, 2001, those payments have not
been reinstated. 1 VA officials told us that the home?s remote location
makes it difficult for the home to hire and retain sufficient staff to
provide adequate patient care.

1 Per diem payments to the domiciliary at the home were also withheld
beginning May 31, 2000, but have since been reinstated. Appendix II:
Instances in Which VA Has

Withheld State Veterans? Home Per Diem Payments

Appendix II: Instances in Which VA Has Withheld State Veterans? Home Per
Diem Payments

Page 29 GAO- 01- 768 VA Nursing Home Oversight

The third home from which VA has withheld per diem payment began operating
as a state veteran?s home in 1993. The state veterans? home was one wing of
a facility that also houses a community nursing home with which the local VA
medical center contracted for patient care. During a January 1997 inspection
of the home, a small fire occurred, and VA inspectors found evidence
suggesting that records related to the home?s fire safety operations had
been falsified. After the home refused to take any corrective action, VA
withdrew its patients from the community nursing home portion of the
facility and recommended that per diem payments be withheld from the state
veterans? home portion. However, the home then agreed to correct its
problems and per diem was not withheld. Subsequent inspections found
continuing life safety problems, including a June 2000 inspection that found
that the home was in compliance with only 71 percent of VA?s life safety
standards. Accordingly, VA medical center staff recommended that per diem
payments be withheld, and on August 29, 2000, VA notified the home that per
diem payments were being withheld until VA could determine that its
standards were being met. The home subsequently corrected its problems and
on July 2, 2001, VA notified the home that payments would be reinstated
retroactive to April 1, 2001, the date on which VA certified that all VA
standards were met. VA officials told us that the home is an old structure,
which has made it difficult for the home to meet VA?s life safety standards.

Appendix III: Comments From the Department of Veterans Affairs

Page 30 GAO- 01- 768 VA Nursing Home Oversight

Appendix III: Comments From the Department of Veterans Affairs

Appendix III: Comments From the Department of Veterans Affairs

Page 31 GAO- 01- 768 VA Nursing Home Oversight

Related GAO Products Page 32 GAO- 01- 768 VA Nursing Home Oversight

Nursing Homes: Sustained Efforts Are Essential to Realize Potential of the
Quality Initiatives (GAO/ HEHS- 00- 197, Sept. 28, 2000).

Nursing Homes: HCFA Should Strengthen Its Oversight of State Agencies to
Better Ensure Quality Care (GAO/ T- HEHS- 00- 27, Nov. 4, 1999).

Nursing Home Care: Enhanced HCFA Oversight of State Programs Would Better
Ensure Quality (GAO/ HEHS- 00- 6, Nov. 4, 1999).

Nursing Homes: Proposal to Enhance Oversight of Poorly Performing Homes Has
Merit (GAO/ HEHS- 99- 157, June 30, 1999).

Nursing Homes: HCFA Initiatives to Improve Care Are Under Way but Will
Require Continued Commitment (GAO/ T- HEHS- 99- 155, June 30, 1999).

Veterans? Affairs: Observations on Selected Features of the Proposed
Veterans? Millennium Health Care Act (GAO/ T- HEHS- 99- 125, May 19, 1999).

Nursing Homes: Complaint Investigation Processes Often Inadequate to Protect
Residents (GAO/ HEHS- 99- 80, March 22, 1999).

Nursing Homes: Additional Steps Needed to Strengthen Enforcement of Federal
Quality Standards (GAO/ HEHS- 99- 46, Mar. 18, 1999).

California Nursing Homes: Care Problems Persist Despite Federal and State
Oversight (GAO/ HEHS- 98- 202, July 27, 1998).

VA Health Care: Better Data Needed to Effectively Use Limited Nursing Home
Resources (GAO/ HEHS- 97- 27, Dec. 20, 1996). Related GAO Products

(406189)

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