Nursing Homes: Despite Increased Oversight, Challenges Remain in 
Ensuring High-Quality Care and Resident Safety (28-DEC-05,	 
GAO-06-117).							 
                                                                 
Since 1998, GAO has issued numerous reports on nursing home	 
quality and safety that identified significant weaknesses in	 
federal and state oversight. Under contract with the Centers for 
Medicare & Medicaid Services (CMS), states conduct annual nursing
home inspections, known as surveys, to assess compliance with	 
federal quality and safety requirements. States also investigate 
complaints filed by family members or others in between annual	 
surveys. When state surveys find serious deficiencies, CMS may	 
impose sanctions to encourage compliance with federal		 
requirements. GAO was asked to assess CMS's progress since 1998  
in addressing oversight weaknesses. GAO (1) reviewed the trends  
in nursing home quality from 1999 through January 2005, (2)	 
evaluated the extent to which CMS's initiatives have addressed	 
survey and oversight problems identified by GAO and CMS, and (3) 
identified key challenges to continued progress in ensuring	 
resident health and safety. GAO reviewed federal data on the	 
results of state nursing home surveys and federal surveys	 
assessing state performance; conducted additional analyses in	 
five states with large numbers of nursing homes; reviewed the	 
status of its prior recommendations; and identified key workforce
and workload issues confronting CMS and states. 		 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-06-117 					        
    ACCNO:   A43917						        
  TITLE:     Nursing Homes: Despite Increased Oversight, Challenges   
Remain in Ensuring High-Quality Care and Resident Safety	 
     DATE:   12/28/2005 
  SUBJECT:   Comparative analysis				 
	     Data collection					 
	     Health care facilities				 
	     Health surveys					 
	     Long-term care					 
	     Medicaid						 
	     Medicare						 
	     Noncompliance					 
	     Nursing homes					 
	     Patient care services				 
	     Performance measures				 
	     Quality control					 
	     Safety standards					 
	     Standards						 
	     State programs					 
	     Strategic planning 				 
	     HCFA Online Survey, Certification, and		 
	     Reporting System					 
                                                                 

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GAO-06-117

     

     * Results in Brief
     * Background
          * Standard Surveys and Complaint Investigations
          * Enforcement Policy
          * Oversight
     * Available Data Show Significant Overall Decrease in Serious
     * CMS Has Addressed Many Shortcomings in Survey and Oversight
          * Surveys: Key Initiatives Are under Development, but Most Hav
               * Survey Methodology
               * Investigative Protocols
               * Definitions of Actual Harm and Immediate Jeopardy
               * Additional Survey Initiatives
               * Survey Predictability
          * Complaint Investigations: CMS Has Strengthened State Guidanc
               * Complaint Guidance
               * Complaint Oversight
          * Enforcement: CMS Has Strengthened the Potential Deterrent Ef
               * Immediate Sanctions Policy
               * Additional Enforcement Policy Issues
               * Special Focus Facility Program
               * Civil Money Penalties
               * Past Noncompliance Policy
          * Oversight: Intensity and Scope of Federal Efforts Has Increa
               * Federal Comparative Surveys
               * Smoke Detectors in Homes without Sprinklers
               * Assessments of State Survey Activities
               * Data Systems and Analysis
               * Sharing Data with the Public
               * Quality Improvement Organizations
               * Coordination and Dissemination of Best Practices
     * Resource and Workload Issues Pose Key Challenges to Further
          * Cost Could Delay Retrofitting of Older Nursing Homes with Sp
          * States Continue to Have Problems in Hiring and Retaining Sur
          * Workload Issues and Competing Priorities Pose Challenges for
               * Increased Workload Has Contributed to Delays
               * Number of Providers Subject to Surveys Is Growing
               * Key Nursing Home Initiatives Continue to Compete for Priorit
     * Concluding Observations
     * Agency and State Comments and Our Evaluation
     * GAO Contact
     * Acknowledgments
     * GAO's Mission
     * Obtaining Copies of GAO Reports and Testimony
          * Order by Mail or Phone
     * To Report Fraud, Waste, and Abuse in Federal Programs
     * Congressional Relations
     * Public Affairs

Report to Congressional Requesters

United States Government Accountability Office

GAO

December 2005

NURSING HOMES

Despite Increased Oversight, Challenges Remain in Ensuring High-Quality
Care and Resident Safety

Nursing Home Quality and Safety Initiatives 

GAO-06-117

Contents

Letter 1

Results In Brief 4
Background 6
Available Data Show Significant Overall Decrease in Serious Quality
Problems but Indicate Continued Inconsistency and Understatement in State
Findings 9
CMS Has Addressed Many Shortcomings in Survey and Oversight Activities,
but Work Continues on Some Key Initiatives 15
Resource and Workload Issues Pose Key Challenges to Further Improving
Nursing Home Quality and Safety 37
Concluding Observations 45
Agency and State Comments and Our Evaluation 46
Appendix I Prior GAO Recommendations, Related CMS Initiatives, and
Implementation Status 50
Appendix II Percentage of Nursing Homes Cited for Actual Harm or Immediate
Jeopardy during Standard Surveys 59
Appendix III Percentage of Homes Surveyed Within 15 Days of the 1-Year
Anniversary of Prior Survey 62
Appendix IV Percentage of State Nursing Home Surveyors with 2-Years'
Experience or Less, 2002 and 2005 65
Appendix V Comments from the Centers for Medicare & Medicaid Services 66
Appendix VI GAO Contact and Staff Acknowledgments 73
Related GAO Products 74

Tables

Table 1: Scope and Severity of Deficiencies Identified During Nursing Home
Surveys 8
Table 2: Percentage of Nursing Homes Identified as Having Serious
Deficiencies during State Nursing Home Surveys, July 2003 through January
2005 11
Table 3: Federal Comparative Surveys in Five States that Identified
Serious Deficiencies Missed by State Surveys and the Number of Missed
Deficiencies, March 2002 through December 2004 14
Table 4: Nursing Home Surveys: CMS Initiatives and Implementation Status
16
Table 5: Percentage of Predictable Current Nursing Home Surveys, as of
April 2002 and July 2005 20
Table 6: Complaint Investigations: CMS Initiatives and Implementation
Status 20
Table 7: Enforcement: CMS Initiatives and Implementation Status 24
Table 8: Oversight: CMS Initiatives and Implementation Status 28
Table 9: Percentage of Surveyors with 2 Years' Experience or Less, as of
July 2005 40
Table 10: Implementation Status of CMS's Initiatives Responding to GAO's
Nursing Home Quality and Safety Recommendations, July 1998 through
November 2004 51
Table 11: Percentage of Nursing Homes Cited for Actual Harm or Immediate
Jeopardy, by State 60
Table 12: Percentage of Nursing Homes with Predictable Surveys, April 2002
and June 2005 63

Figures

Figure 1: Percentage of Nursing Homes Nationwide with Serious
Deficiencies, January 1999 through January 2005 10
Figure 2: Percentage of Federal Comparative Surveys That Noted Serious
Deficiencies Not Identified in State Surveys 12

Abbreviations

AHFSA Association of Health Facility Survey Agencies

ASPEN Automated Survey Processing Environment

AST ASPEN Scheduling and Tracking

CMS Centers for Medicare & Medicaid Services

HHS Department of Health and Human Services

MDS minimum data set

MFCU Medicaid Fraud Control Unit

NFPA National Fire Protection Association

OSCAR On-Line Survey, Certification, and Reporting system

QIO Quality Improvement Organization

QIS Quality Indicator Survey

RN registered nurse

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United States Government Accountability Office

Washington, DC 20548

December 28, 2005

The Honorable Charles E. Grassley Chairman Committee on Finance United
States Senate

The Honorable Herb Kohl Ranking Minority Member Special Committee on Aging
United States Senate

Numerous congressional hearings since July 1998 have focused attention on
the need to improve the care and safety of the nation's 1.5 million
nursing home residents, a highly vulnerable population of elderly and
disabled individuals for whom remaining at home is no longer feasible.
Many nursing home residents require help with feeding, toileting,
grooming, or other routine activities of daily living; are cognitively
impaired; or have chronic health care conditions such as heart disease.
Some individuals with chronic conditions are long-term residents of
nursing homes, while others enter nursing homes for a short period, such
as after a hospitalization. With the aging of the baby boom generation,
the number of individuals needing nursing home care is expected to
increase in size dramatically. Combined Medicare and Medicaid payments for
nursing home services were about $65 billion in 2003, including a federal
share of about $43 billion.1

In a series of reports, we have identified significant weaknesses in
federal and state activities designed to detect and correct quality and
safety problems at nursing homes.2 Our key findings included the
following:

1Medicare is the federal health care program for elderly and disabled
people. In addition to other health and long-term care services, Medicare
covers up to 100 days of nursing home care following a hospital stay.
Medicaid is the joint federal-state health care financing program for
certain categories of low-income individuals. Medicaid also pays for
long-term care services, including nursing home care. Data for 2003 are
the most recent data available.

2See Related GAO Products at the end of this report.

           o  A small but unacceptable proportion of nursing homes repeatedly
           caused actual harm to residents, such as worsening pressure sores
           or untreated weight loss, or placed residents at risk of death or
           serious injury.
           o  The results of state inspections, known as surveys, understated
           the extent of serious quality-of-care and fire safety problems,
           reflecting weaknesses in the survey methodology and an
           inconsistent application of federal standards.
           o  Serious complaints by residents, family members, or staff
           alleging harm to residents remained uninvestigated for weeks or
           months, and delays in the reporting of abuse allegations
           compromised the quality of available evidence, hindering
           investigations.
           o  When serious deficiencies were identified, federal and state
           enforcement policies did not ensure that the deficiencies were
           addressed and remained corrected.
           o  Federal mechanisms for overseeing state monitoring of nursing
           home quality and safety were limited in their scope and
           effectiveness.

           The Centers for Medicare & Medicaid Services (CMS)-the federal
           agency responsible for managing the Medicare and Medicaid
           programs, as well as overseeing compliance with federal nursing
           home standards-announced a set of initiatives intended to address
           many of the weaknesses we identified in July 1998 as well as
           needed improvements CMS identified in its own self-assessment.3
           Over time, CMS has refined and expanded these initiatives,
           including launching a Web site-Nursing Home Compare-that has
           progressively increased the data available to the public about the
           care provided by nursing homes.4 You asked us to review the
           progress made by CMS since 1998 in addressing quality and safety
           problems in the nation's nursing homes. In response to your
           request, we (1) reviewed the trends in nursing home quality by
           analyzing nursing home survey results, (2) evaluated the extent to
           which CMS's initiatives have addressed survey and oversight
           shortcomings identified by us and CMS, and (3) identified key
           remaining challenges to continued progress in ensuring resident
           health and safety.

           To assess trends in nursing home quality, we analyzed data from
           the federal On-Line Survey, Certification, and Reporting system
           (OSCAR), which compiles the results of state nursing home surveys;
           we focused on trend data since CMS announced its nursing home
           initiatives. We have used OSCAR data since 1997 to track trends in
           the proportion of homes found to have harmed residents or placed
           them at risk of immediate jeopardy. To better understand the
           trends identified through our OSCAR analysis, we evaluated the
           results of federal comparative surveys for all states for the
           period March 2002 through December 2004 and compared the results
           for two other time periods-October 1998 through May 2000 and June
           2000 through February 2002. Federal comparative surveys are
           conducted at nursing homes recently surveyed by the state to
           assess the adequacy of the state surveys. We judgmentally selected
           five large states-California, Florida, New York, Ohio, and
           Texas-for additional analysis based on the change in the
           proportion of homes cited with serious deficiencies, geographic
           representation, and the number of nursing homes. These five states
           account for almost 30 percent of the nation's nursing homes.5 CMS
           officials generally recognize OSCAR data to be reliable. We have
           used OSCAR data in prior work to examine nursing home quality
           issues and we updated certain data for this report. Throughout the
           course of our work, we discussed our analysis of OSCAR data with
           CMS officials at both the central office and the regional offices
           to ensure that the data accurately reflected state nursing home
           survey activities. We determined that these data were accurate for
           our purposes.

           To evaluate the extent to which survey and oversight shortcomings
           we identified had been addressed by CMS's initiatives, we reviewed
           the status of our recommendations, and updated our understanding
           of the initiatives by analyzing relevant documentation and
           discussing their implementation status with CMS officials (see
           app. I). We also discussed with CMS officials the initiatives
           implemented as a result of CMS's self-assessment of needed
           improvements. We focused on four areas: surveys, complaints,
           enforcement, and oversight. We discussed the preliminary findings
           from our OSCAR data trend analysis with CMS and state survey
           agency officials. To assess the remaining challenges to continued
           improvement of nursing home oversight, we identified through
           interviews with CMS and state survey agency officials key
           workforce and workload issues that confront states and CMS in
           protecting the health and safety of nursing home residents. We
           also contacted officials at the Association of Health Facility
           Survey Agencies (AHFSA) to update information on surveyor turnover
           and retention issues. We conducted our review from May through
           December 2005 in accordance with generally accepted government
           auditing standards.

           CMS's nursing home survey data show a significant decrease in the
           proportion of nursing homes with serious quality problems, from
           about 29 percent in 1999 to about 16 percent by January 2005, but
           this trend masks two important and continuing issues:
           inconsistency among state surveyors in conducting surveys and
           understatement by state surveyors of serious deficiencies.
           Inconsistency in states' surveys is demonstrated by CMS data that
           reveal continued wide interstate variability in the proportion of
           homes found to have serious deficiencies. For example, in the most
           recent time period, one state found such deficiencies in about 6
           percent of homes, whereas another state found them in about 54
           percent of homes. We previously reported that confusion about the
           definition of actual harm contributed to inconsistency and
           understatement in state surveys. In addition, state surveyors
           continue to understate serious deficiencies, as shown by the
           larger number of serious deficiencies identified in federal
           comparative surveys than in state surveys of the same homes.
           Although federal comparative surveys since October 1998 show an
           overall decline in the proportion that identify serious
           deficiencies not identified by state surveys, data for the two
           most recent periods show an increase in such discrepancies, from
           22 percent to 28 percent of comparative surveys. In the five large
           states we reviewed, federal surveyors concluded that the state
           surveyors had missed serious deficiencies in from 8 percent to 33
           percent of comparative surveys-that is, these deficiencies existed
           and should have been identified at the time of the state survey.
           The federal surveyors' assessment is consistent with our July 2003
           findings: a sample of deficiencies demonstrated considerable
           understatement of quality-of-care problems such as serious,
           avoidable pressure sores. The continuing evidence of inconsistency
           in survey results among states and understated deficiencies
           underscores the importance of CMS's initiatives to improve the
           consistency and rigor of nursing home surveys.

           CMS has addressed many of the shortcomings we identified in
           nursing home survey and oversight activities, but several
           important initiatives have not yet been implemented, such as those
           intended to make state surveys more consistent across states and
           to reduce the understatement of deficiencies. Important steps CMS
           has taken include (1) revising the survey methodology, (2) issuing
           states additional guidance to strengthen complaint investigations,
           (3) implementing immediate sanctions for homes cited for repeat
           serious violations, and (4) strengthening oversight by conducting
           assessments of state survey activities. In addition, CMS has
           undertaken initiatives of its own. For example, it has made
           important information available to the public on nursing home
           quality through its Nursing Home Compare Web site and has
           contracted with independent quality organizations to work with
           nursing homes to improve quality. Although CMS has addressed many
           weaknesses in survey and oversight processes, other initiatives
           either have not effectively targeted the problems identified or
           have shortcomings that impair their effectiveness. For example,
           CMS has not fully addressed issues with the accuracy and
           reliability of the data underlying consumer information published
           on its Web site.

           CMS, states, and nursing homes face a number of key resource and
           workload challenges in their efforts to further improve nursing
           home quality and safety. CMS is moving to require older nursing
           homes to install sprinkler systems, a proven life-saving device,
           but implementation could be delayed because of concerns about the
           cost of the retrofit to these homes. CMS indicated that it plans
           to ask for public comment about the length of the phase-in period
           rather than proposing one itself. States are continuing to
           experience problems in hiring and retaining qualified surveyors, a
           factor that survey agency officials believe contributes to
           inconsistency and understatement in the citation of serious
           deficiencies. State survey agencies attributed high turnover and
           recruiting difficulties to the lack of competitive salaries for
           registered nurses (RN), who are a major component of states'
           surveyor workforce, and intense competition from hospitals and
           other providers because of the RN shortage. Increased nursing home
           oversight has strained both CMS and state survey agency resources,
           resulting in delays for some key initiatives. For example, CMS has
           undertaken time-consuming state survey agency performance reviews
           and significantly increased the number of federal comparative
           surveys performed. In addition, state survey agency workloads have
           grown as a result of initiatives that require the prompt
           investigation of complaints alleging resident harm and the need to
           conduct on-site revisits at nursing homes to ensure that serious
           problems actually have been corrected. However, the increased
           number of quality and safety initiatives has required CMS to
           establish priorities, with some initiatives taking precedence over
           others. For example, CMS attached a high priority to including
           quality indicator data on its public Web site and implemented this
           initiative promptly, while the revision of the survey process has
           encountered delays due to higher priorities. Continued attention
           and commitment to improving nursing home oversight are essential
           to maintaining the momentum built by CMS's accomplishments to date
           and thus better ensuring quality care and safety for nursing home
           residents.

           In commenting on a draft of this report, CMS generally concurred
           with our findings, describing the progress it has made in several
           areas and agreeing that challenges remain. CMS also indicated that
           while it remained concerned about understatement, it did not
           believe that understatement was worsening. CMS described the
           ongoing challenges it faces and the steps it will take to address
           them. In commenting on the section of the draft report focused on
           trends in nursing home quality, the states we reviewed commented
           on the actions they have taken to improve nursing home survey
           quality and the challenges they face in conducting nursing home
           survey and oversight activities.

           Oversight of nursing homes is a shared federal-state
           responsibility. Based on statutory requirements, CMS defines
           standards that nursing homes must meet to participate in the
           Medicare and Medicaid programs and contracts with states to assess
           whether homes meet these standards through annual surveys and
           complaint investigations. A range of statutorily defined sanctions
           is available to CMS and the states to help ensure that homes
           maintain compliance with federal quality requirements. CMS also is
           responsible for monitoring the adequacy of state survey
           activities.6

           Every nursing home receiving Medicare or Medicaid payment must
           undergo a standard survey not less than once every 15 months, and
           the statewide average interval for these surveys must not exceed
           12 months.7 During a standard survey, separate teams of surveyors
           conduct a comprehensive assessment of federal quality-of-care and
           fire safety requirements. In contrast, complaint investigations
           generally focus on a specific allegation regarding resident care
           or safety.

           The quality-of-care component of a survey focuses on determining
           whether (1) the care and services provided meet the assessed needs
           of the residents and (2) the home is providing adequate quality
           care, including preventing avoidable pressure sores, weight loss,
           and accidents. Nursing homes that participate in Medicare and
           Medicaid are required to periodically assess residents' care needs
           in 17 areas, such as mood and behavior, physical functioning, and
           skin conditions, in order to develop an appropriate plan of care.
           Such resident assessment data are known as the minimum data set
           (MDS). To assess the care provided by a nursing home, surveyors
           select a sample of residents and (1) review data derived from the
           residents' MDS assessments and medical records; (2) interview
           nursing home staff, residents, and family members; and (3) observe
           care provided to residents during the course of the survey. CMS
           establishes specific investigative protocols for state survey
           teams-generally consisting of RNs, social workers, dieticians, and
           other specialists-to use in conducting surveys. These procedural
           instructions are intended to make the on-site surveys thorough and
           consistent across states.

           The fire safety component of a survey focuses on a home's
           compliance with federal standards for health care facilities.8 The
           fire safety standards cover 18 categories ranging from building
           construction to furnishings. Examples of specific requirements
           include the use of fire- or smoke-resistant construction
           materials, the installation and testing of fire alarms and smoke
           detectors, and the development and routine testing of a fire
           emergency plan. Most states use fire safety specialists within the
           same department as the state survey agency to conduct fire safety
           inspections, but about one-third of states contract with their
           state fire marshal's office.

           Complaint investigations provide an opportunity for state
           surveyors to intervene promptly if problems arise between standard
           surveys. Complaints may be filed against a home by a resident, the
           resident's family, or a nursing home employee either verbally, via
           a complaint hotline, or in writing. Surveyors generally follow
           state procedures when investigating complaints but must comply
           with certain federal guidelines and time frames. In cases
           involving resident abuse, such as pushing, slapping, beating, or
           otherwise assaulting a resident by individuals to whom their care
           has been entrusted, state survey agencies may notify state or
           local law enforcement agencies that can initiate criminal
           investigations. States must maintain a registry of qualified nurse
           aides, the primary caregivers in nursing homes, that includes any
           findings that an aide has been responsible for abuse, neglect, or
           theft of a resident's property. The inclusion of such a finding
           constitutes a ban on nursing home employment.

           Deficiencies identified during either standard surveys or
           complaint investigations are classified in 1 of 12 categories
           according to their scope (i.e., the number of residents
           potentially or actually affected) and their severity. An A-level
           deficiency is the least serious and is isolated in scope, while an
           L-level deficiency is the most serious and is considered to be
           widespread in the nursing home (see table 1). States are required
           to enter information about surveys and complaint investigations,
           including the scope and severity of deficiencies identified, in
           CMS's OSCAR database.

           Table 1: Scope and Severity of Deficiencies Identified During
           Nursing Home Surveys

           Source: CMS.

           aActual or potential for death/serious injury.

           bNursing home is considered to be in "substantial compliance."

           Ensuring that documented deficiencies are corrected is a shared
           federal-state responsibility. CMS imposes sanctions on homes with
           Medicare or dual Medicare and Medicaid certification on the basis
           of state referrals. CMS normally accepts a state's recommendation
           for sanctions but can modify it. The scope and severity of a
           deficiency determine the applicable sanctions, which can involve,
           among other things, requiring training for staff providing care to
           residents, imposing money fines, denying the home Medicare and
           Medicaid payments for new admissions, and terminating the home
           from participation in these programs. States are responsible for
           enforcing standards in homes with Medicaid-only
           certification-about 14 percent of homes. They may use the federal
           sanctions or rely on their own state licensure authority and
           nursing home sanctions.

           CMS is responsible for overseeing each state survey agency's
           performance in ensuring quality of care in nursing homes
           participating in Medicare or Medicaid. Its primary oversight tools
           are statutorily required federal monitoring surveys conducted
           annually in at least 5 percent of the state-surveyed Medicare and
           Medicaid nursing homes in each state and annual state performance
           reviews. Federal monitoring surveys can be either comparative or
           observational. A comparative survey involves a federal survey team
           conducting a complete, independent survey of a home within 2
           months of the completion of a state's survey in order to compare
           and contrast the findings. In an observational survey, one or more
           federal surveyors accompany a state survey team to a nursing home
           to observe the team's performance. Roughly 81 percent of the
           approximately 800 federal monitoring surveys are observational.
           Performance reviews examine state survey agency compliance with
           seven standards: (1) timeliness of the survey, (2) documentation
           of survey results, (3) quality of state agency investigations and
           decision making, (4) timeliness of adverse action procedures, (5)
           budget analysis, (6) timeliness and quality of complaint
           investigations, and (7) timeliness and accuracy of data entry.

           CMS's nursing home survey data show a significant decrease in
           serious quality problems in recent years, but other information
           indicates that this trend masks two important and continuing
           issues: inconsistency in how states conduct surveys and
           understatement of serious quality problems. OSCAR data continue to
           show wide interstate variability in the proportion of homes found
           to have serious deficiencies, suggesting inconsistency in states'
           interpretation and application of federal regulations. We
           previously reported that confusion about the definition of actual
           harm contributed to inconsistency and understatement in state
           surveys. Moreover, although federal comparative surveys conducted
           from October 1998 through December 2004 showed a decline in the
           proportion of serious deficiencies that were not identified by
           state surveys, this overall trend masks a more recent increase
           from 2002 through 2004 in federally identified understatement of
           serious deficiencies. In five large states we examined with a
           significant decline in the proportion of homes found to have
           harmed residents, federal comparative surveys found that a
           significant proportion of state surveys had missed serious
           deficiencies, that is, state surveyors either failed to cite the
           deficiencies altogether or cited them at too low a level of scope
           and severity.

           From January 1999 through January 2005, the proportion of nursing
           homes nationwide with actual harm or immediate jeopardy
           deficiencies declined from about 29 percent to about 16 percent.
           Figure 1 shows the proportion of homes nationwide with these
           deficiencies for four consecutive time periods from January 1999
           through January 2005.9 During the 6-year time period, 41 states
           had a decline in serious deficiencies ranging from about 5 to
           about 36 percentage points (see app. II).

           Figure 1: Percentage of Nursing Homes Nationwide with Serious
           Deficiencies, January 1999 through January 2005

           The nationwide data show a decline in nursing homes cited for
           serious deficiencies; however, the data obscure the continued
           significant interstate variation in the proportion of homes with
           serious deficiencies, which suggests inconsistency in how states
           conduct surveys. Table 2 shows that while 10 states identified
           serious deficiencies in less than 10 percent of the homes
           surveyed, 15 states found similar deficiencies in more than 20
           percent of homes surveyed from July 2003 through January 2005. For
           example, during that period California identified actual harm and
           immediate jeopardy deficiencies in about 6 percent of the state's
           nursing homes, while Connecticut found such deficiencies in
           approximately 54 percent of its facilities. Since January 1999,
           the proportion of homes with serious deficiencies had declined
           nearly 23 percentage points in California but increased by about 6
           percentage points in Connecticut.

           Table 2: Percentage of Nursing Homes Identified as Having Serious
           Deficiencies during State Nursing Home Surveys, July 2003 through
           January 2005

           Source: GAO analysis of OSCAR data.

           We discussed the decline in serious deficiencies in the five large
           states we examined with state survey agency officials and
           officials from the responsible CMS regional offices. Officials in
           four of the five states believed that there had been some
           improvement in nursing home quality. CMS regional office
           officials, however, were concerned about the magnitude of the
           decline in serious deficiencies in two states-Texas and
           California. The Texas state survey agency noted both some
           improvement in quality as well as a significant number of
           inexperienced surveyors who it believed were hesitant in citing
           actual harm. The San Francisco regional office and state survey
           agency officials acknowledged that confusion by state surveyors as
           to what constituted actual harm had contributed to the decline in
           California. The regional office staff discussed this issue with
           California survey agency officials and believed that training
           combined with the CMS inquiries might have contributed to a recent
           increase in actual harm deficiency citations.

           The overall decline in the proportion of federal comparative
           surveys nationwide that noted serious deficiencies not identified
           by state surveyors across the three time periods we examined masks
           a reversal of this trend in the most recent time period analyzed,
           suggesting ongoing understatement of deficiencies. The time
           periods analyzed were October 1998 through May 2000, June 2000
           through February 2002, and March 2002 through December 2004. From
           October 1998 through February 2002, the proportion of federal
           comparative surveys nationwide that noted serious deficiencies
           that were not identified by state surveyors declined from 34
           percent to 22 percent (see fig. 2). However, federal surveys
           conducted from March 2002 through December 2004 that found serious
           deficiencies not identified by state surveyors increased from 22
           percent to 28 percent. In addition, our work in the five states we
           examined demonstrates continued understatement by state surveyors
           of serious deficiencies that cause actual harm or immediate
           jeopardy.

           Figure 2: Percentage of Federal Comparative Surveys That Noted
           Serious Deficiencies Not Identified in State Surveys

           Because some serious deficiencies found by federal, but not state,
           surveyors may not have existed at the time of the state survey,10
           CMS requires its regional offices to specifically identify on
           worksheets which deficiencies state surveyors had missed during
           the state survey. We analyzed CMS regional office worksheets for
           73 comparative surveys in five large states-California, Florida,
           New York, Ohio, and Texas-with a significant decline in serious
           deficiencies from January 1999 through January 2005.11 Overall, 18
           percent of these federal comparative surveys identified at least
           one serious deficiency missed by state surveyors, ranging from a
           low of 8 percent in Ohio to a high of 33 percent in Florida (see
           table 3). Table 3 also shows that in comparative surveys noting
           serious deficiencies that state surveyors missed, from one to
           seven serious deficiencies were missed. Federal surveyors'
           findings of understatement of serious deficiencies are consistent
           with our own work. Our July 2003 report analyzed state surveys of
           homes with a history of harming residents but whose most current
           survey identified quality-of-care problems at below the level of
           harm; we concluded that about 40 percent of the 76 homes we
           analyzed had harmed residents, including instances of severe
           weight loss; multiple falls resulting in broken bones and other
           injuries; and serious, avoidable pressure sores. Similarly, our
           November 2004 report on Arkansas nursing home deaths found
           numerous instances of serious, understated quality-of-care
           problems.

           Table 3: Federal Comparative Surveys in Five States that
           Identified Serious Deficiencies Missed by State Surveys and the
           Number of Missed Deficiencies, March 2002 through December 2004

           Source: GAO analysis of federal comparative surveys conducted from
           March 2002 through December 2004.

           aOn one comparative survey, federal surveyors did not provide
           information on whether any of the deficiencies they identified
           existed at the time of the state survey; therefore, this number
           may be understated.

           bThe number of serious missed deficiencies could be higher because
           federal surveyors sometimes did not indicate whether they believed
           that a serious deficiency they cited had existed at the time of
           the state survey and therefore was missed by state surveyors.

           Our prior reports identified five factors that we believe
           contribute to inconsistency and the understatement of deficiencies
           by state surveyors: (1) weaknesses in CMS's survey methodology;
           (2) confusion about the definition of actual harm; (3)
           predictability of surveys, which allows homes to conceal problems
           if they so desire; (4) inadequate quality assurance processes at
           the state level to help detect understatement in the scope and
           severity of deficiencies; and (5) inexperienced state surveyors
           due to retention problems. CMS has initiatives under way to revise
           the survey methodology and address the confusion about what
           constitutes harm, and it has taken some steps to reduce survey
           predictability. However, CMS did not implement the recommendation
           in our July 2003 report to strengthen the ability of state quality
           assurance processes to detect understatement. While it agreed with
           the intent of our recommendation, CMS indicated that its state
           performance standards initiative already incorporated this
           concept. The status of these initiatives and state workforce
           issues are discussed in the following section.

           CMS has addressed many shortcomings in nursing home survey and
           oversight activities both in response to our recommendations and
           as a result of its own assessment of needed improvements, but it
           is still working on key initiatives that have not yet been
           implemented.12 Appendix I provides a complete listing of our
           previous recommendations and the implementation status of CMS
           initiatives taken in response. Examples of CMS's initiatives to
           address shortcomings include (1) revising the survey methodology,
           (2) issuing states additional guidance to strengthen complaint
           investigations, (3) implementing immediate sanctions for homes
           cited for repeat serious violations, and (4) strengthening
           oversight by conducting assessments of state survey activities.
           CMS also has published information on its Web site about nursing
           home quality and has engaged independent quality organizations to
           work with nursing homes to improve quality.13 Despite CMS's
           initiatives in four distinct areas-surveys, complaints,
           enforcement, and oversight-some initiatives either have not
           effectively targeted the problems we identified or have
           shortcomings that impair their effectiveness.

           Several CMS initiatives are intended to address shortcomings in
           the survey process, but most of these initiatives are in the
           developmental stage and have not yet been implemented. In
           addition, despite CMS's efforts to make scheduling of surveys less
           predictable, many remain predictable. (See table 4).

           Table 4: Nursing Home Surveys: CMS Initiatives and Implementation
           Status

           Source: GAO analysis of CMS initiatives.

           In response to our 1998 recommendation to improve the rigor of the
           survey methodology to help ensure that surveyors do not miss
           significant care problems, CMS took some interim steps and
           launched a longer-term initiative. As interim steps, CMS
           instructed state survey agencies in 1999 to (1) increase the
           sample of residents reviewed during surveys and (2) review
           available quality indicator information on the care provided to a
           home's residents before actually visiting the home. By using the
           quality indicators, which are essentially numeric warning signs of
           the prevalence of care problems, to select a preliminary sample of
           residents before the on-site review, surveyors are better prepared
           to target their surveys and to identify potential care problems.14
           Surveyors augment the preliminary sample with additional resident
           cases once they arrive in the home.

           For the longer term, CMS awarded a contract in 1998 to revise the
           methodology used to survey nursing homes, and the agency plans to
           pilot this new methodology in the fall 2005. Under development for
           7 years, the proposed two-stage, data-driven Quality Indicator
           Survey (QIS) is intended to systematically target potential
           problems at nursing homes. Its expanded sample should help
           surveyors better assess the scope of any deficiencies identified.
           In stage 1, a large resident sample will be drawn and relevant
           data from on- and off-site sources will be analyzed to develop a
           set of quality-of-care indicators, which will be compared to
           national benchmarks.15 Stage 2 will systematically investigate
           potential quality-of-care concerns identified in stage 1. In June
           2005, CMS selected five states to pilot test the new survey
           methodology.16 The QIS pilot test will begin during the fall 2005,
           with a final evaluation of the pilot due in the fall 2006. The
           evaluation will examine the QIS's cost-effectiveness, focusing on
           the time and surveyor team size required under QIS compared to the
           current survey methodology, and on the QIS's impact on deficiency
           citations. In developing the QIS, CMS has attempted to prevent
           increases in the time required to complete surveys. Depending on
           evaluation findings and any subsequent streamlining of the QIS,
           national implementation could begin in mid-2007.

           Since 2001, CMS has been developing surveyor investigative
           protocols to ensure greater rigor in on-site investigations of
           specific quality-of-care areas. We recommended in July 2003 that
           CMS finalize the development of these important protocols;
           however, CMS is still working on this initiative. In 2001, CMS
           hired a contractor to facilitate the convening of expert panels
           for the development and review of these protocols.17 In November
           2004, more than 1 year later than scheduled, CMS implemented a
           protocol on pressure sores. Since then, CMS has implemented
           protocols in two other areas-incontinence and medical director
           qualifications and responsibilities. The protocols provide
           detailed interpretive guidelines and severity guidance. Protocols
           in seven more areas are under development, with an issuance target
           of fall 2005.18

           To promote increased consistency among states in deficiency
           citations, a work group of CMS central office, regional office,
           and state survey agency staff was convened in early 2005 to
           clarify the definitions of actual harm and immediate jeopardy. Our
           July 2003 report noted that confusion about the definitions
           contributed to the understatement of serious deficiencies.
           According to CMS, the 2005 draft revised definition of actual harm
           attempts to clarify the existing definition by eliminating
           confusing language and identifying indicators and examples of
           actual harm.19 The draft revised definition of immediate jeopardy
           is intended to provide additional guidance on documenting whether
           deficiencies are at the immediate jeopardy severity level,
           including criteria for identifying whether immediate jeopardy
           exists, and updates examples of immediate jeopardy. A CMS official
           indicated that the draft revised definition of immediate jeopardy
           stresses that action must be taken at once to prevent harm. As of
           August 2005, CMS had no target issuance date for the revised
           definitions.

           CMS is implementing two additional survey initiatives-developing
           guidance to ensure surveyors are able to report concerns to CMS
           regional offices and studying surveyors' use of photographic
           evidence.

           o  To address anecdotal reports that surveyors are sometimes asked
           to overlook or downgrade survey findings, CMS has issued and is
           obtaining state comments on draft guidance to ensure that
           surveyors can cite survey findings without such inappropriate
           pressure. Currently, surveyors report concerns to the state survey
           agency. CMS officials indicated that the draft guidance tries to
           (1) establish a nonthreatening option for voicing concerns to CMS
           regional office staff without overburdening the regional offices
           with additional investigations and (2) give CMS a way to identify
           any patterns of problems. Implementation of this effort is
           anticipated in late 2005.
           o  CMS also contracted for a study of the use of photographic
           evidence by surveyors to support survey findings. In our 2004
           report on Arkansas nursing home deaths, we reported that
           photographs taken by coroners provided key evidence supporting
           neglect of nursing home residents and the existence of serious,
           avoidable care problems. The goal of CMS's study is to identify
           issues and develop training materials related to surveyors' use of
           photographic evidence. This study began in the summer 2005, with
           final training materials to be issued in the summer 2006.

           In 1998, we reported that nursing homes could mask certain
           deficiencies if they chose to because of survey predictability.
           CMS responded by directing states to (1) avoid scheduling a home's
           survey for the same month of the year as the home's previous
           standard survey and (2) begin at least 10 percent of standard
           surveys outside the normal workday (either on weekends, early in
           the morning, or late in the evening).20 However, our current
           analysis showed that a significant proportion of state nursing
           home surveys remain predictable. We consider surveys to be
           predictable if they are conducted within 15 days of the
           anniversary of a home's prior survey.21 From 2002 to 2005, the
           proportion of predictable surveys increased from 13 percent to
           14.5 percent (see app. III). Overall, 29 states had an increase in
           survey predictability. As shown in table 5, as of July 2005, from
           10 percent to over 50 percent of current nursing home surveys in
           35 states were conducted within 15 days of the anniversary of a
           home's last standard survey. CMS officials stated that avoiding
           surveys close to the 12-month anniversary of a home's prior
           survey, while meeting the requirements that surveys occur not less
           than once every 15 months and maintaining a statewide average
           interval of 12 months, could require increased funding because
           more surveys would need to be accomplished within the first 9
           months after a survey.22 However, CMS noted that states are not
           currently funded to conduct surveys within the first 9 months
           after the previous survey. CMS officials also told us that CMS had
           introduced the ASPEN Scheduling and Tracking (AST) module for its
           central and regional offices and the states in February 2004 as a
           tool to reduce survey predictability; however, state officials we
           spoke with about AST were unfamiliar with its survey
           predictability features.23

           Table 5: Percentage of Predictable Current Nursing Home Surveys,
           as of April 2002 and July 2005

           Source: GAO analysis of OSCAR data.

           Notes: "Predictable surveys" are defined as surveys conducted
           within 15 days of the anniversary of homes' prior surveys.

           CMS has completed certain initiatives to ensure that quality
           problems found during complaint investigations are promptly
           addressed and has taken steps to address weaknesses in the
           notification and investigation of abuse in nursing homes. CMS is
           continuing work on (1) ensuring state compliance with federal
           nurse aide registry requirements and (2) assessing the
           effectiveness of conducting employee background checks. (See table
           6).

           Table 6: Complaint Investigations: CMS Initiatives and
           Implementation Status

           Source: GAO analysis of CMS initiatives.

           CMS guidance issued since 1999 has helped to strengthen state
           procedures for investigating complaints. In 1999, we reported that
           complaints alleging that nursing home residents were being harmed
           were not being investigated for weeks or months in several states
           and recommended that CMS develop additional standards for the
           prompt investigation of serious complaints alleging situations
           that may harm residents but are categorized as less than immediate
           jeopardy. CMS promptly instructed states to investigate complaints
           alleging harm to a resident within 10 workdays of receiving the
           complaint and later specified that investigations of these
           complaints be conducted on-site at the nursing home.24 During
           1999, CMS developed and issued guidance intended to help states
           identify complaints that allege harm to residents. Also in 1999,
           CMS hired a contractor to study and recommend improvements to
           state complaint practices. CMS used the findings of this study to
           develop more detailed guidance for states to help improve the
           effectiveness of complaint investigations. In 2004, CMS issued
           this guidance to states, which further clarified the 1999
           instructions on identifying actual harm.

           In March 2002, we recommended that CMS ensure that state survey
           agencies immediately notify local law enforcement agencies or
           Medicaid Fraud Control Units (MFCU) of allegations or confirmed
           complaints of abuse.25 In response, CMS issued a March 2002 letter
           to CMS regional offices and state survey agencies clarifying its
           policies on abuse reporting time frames, requirements for
           reporting to local law enforcement and/or the MFCU, displaying
           complaint telephone numbers, and citing abuse on surveys. CMS
           issued additional guidance in December 2004 clarifying nursing
           home reporting requirements and definitions for alleged
           violations, including mistreatment, neglect, abuse, injuries of
           unknown source, and misappropriation of resident property. CMS has
           not, however, implemented our March 2002 recommendation to
           accelerate the agency's campaign to increase public awareness of
           nursing home abuse through the development and distribution of
           posters that are to be prominently displayed in nursing homes, and
           other materials.26

           CMS has taken three important steps to improve its oversight of
           state complaint investigations, including allegations of abuse.
           First, it required in its annual state performance review, which
           was established in fiscal year 2001 and fully implemented in
           fiscal year 2002, that federal surveyors review a sample of
           complaints in each state to determine whether states properly
           categorize complaints (i.e., determine how quickly they should be
           investigated), investigate complaints within the time specified,
           and properly include the results of investigations in CMS's
           database. Our March 1999 report on complaints had recommended that
           CMS strengthen its oversight in these areas. During its 2004
           review of state performance, CMS identified 5 states that did not
           meet the standard for properly categorizing complaints and 13
           states that did not conduct timely investigations of all
           complaints alleging immediate jeopardy to residents; however, 11
           of the 13 states missed the requirement by a small margin.27
           States failing state performance review standards are asked to
           submit a corrective action plan to CMS.

           Second, in January 2004, CMS implemented a new national automated
           complaint tracking system, the ASPEN Complaints and Incidents
           Tracking System. Our March 1999 report on enforcement noted that
           the lack of a national complaint reporting system hindered CMS's
           and states' ability to adequately track the status of complaint
           investigations as well as CMS's ability to maintain a full
           compliance history on each nursing home. To address these
           concerns, we recommended the development of a better management
           information system. One goal of CMS's new management information
           system is to standardize reported complaints so that analysis can
           be conducted across all states. This system is intended to provide
           CMS with an effective tool for overseeing and managing state
           complaint investigations.28

           Third, in November 2004, CMS requested state survey agency
           directors to self-assess their states' compliance with federal
           requirements for maintaining and operating nurse aide registries,
           to which states are required to report substantiated findings of
           abuse, neglect, or theft of nursing home residents' property by
           nurse aides. CMS has not issued a formal report of findings from
           the state self-assessment, but CMS officials noted that as a
           result of resource constraints some states reported having
           difficulty maintaining compliance with certain federal
           requirements, such as (1) timely entry by state survey staff of
           information in nurse aide registries and (2) state notification to
           nursing homes employing nurse aides found guilty of abuse at
           another facility. In our March 2002 report, we recommended that
           CMS shorten the state survey agencies' time frames for determining
           whether to include findings of abuse in the nurse aide registry.
           Annotations to nurse aide registries are made after final
           determinations that abuse occurred, which entail completion of the
           state's investigation as well as adjudication of any appeals.29
           Until the final determination, residents may continue to be
           exposed to aides who are allegedly abusive. CMS noted that while
           most of the time frames are defined in regulation, it can review
           the time frames when regulatory changes are considered. No changes
           to the regulations had been made as of August 2005.

           As part of its third effort, CMS also is conducting a Background
           Check Pilot Program. Our March 2002 report recommended an
           assessment of state policies and practices for complying with
           federal requirements prohibiting employment of individuals
           convicted of abusing nursing home residents. The pilot program
           will test the effectiveness of state and national
           fingerprint-based background checks on employees of long-term care
           facilities, including nursing homes.30 Pilot programs in seven
           states-Alaska, Idaho, Illinois, Michigan, Nevada, New Mexico, and
           Wisconsin-will be phased in from fall 2005 through September 2007.
           An independent evaluation is planned.

           CMS significantly strengthened the potential deterrent effect of
           enforcement actions by requiring immediate sanctions for homes
           found to have a pattern of harming residents. Moreover, CMS
           continues to develop new policies and to clarify existing ones in
           order to strengthen enforcement activities and encourage nursing
           home compliance with federal requirements. (See table 7).

           Table 7: Enforcement: CMS Initiatives and Implementation Status

           Source: GAO analysis of CMS initiatives.

           Responding to our July 1998 recommendation to eliminate grace
           periods for homes cited for repeat serious violations, CMS began a
           two-stage phase-in of a new enforcement policy. In the first
           stage, effective September 1998, CMS required states to refer for
           immediate sanction homes found to have a pattern of harming
           residents or of exposing them to actual harm or potential death or
           serious injury (H-level deficiencies and above on CMS's scope and
           severity grid). Effective January 2000, CMS expanded this policy,
           requiring referral of homes found to have harmed one or a small
           number of residents (G-level deficiencies) on successive standard
           surveys.31 In response to our 2003 finding that states failed to
           refer a substantial number of homes that met the criteria for the
           immediate sanctions, CMS initiated oversight of state compliance
           with this policy. To conduct this oversight, CMS analyzed
           deficiency data for 2000 through 2003 to identify potential
           instances of homes that should have been but were not referred for
           immediate sanctions. In ongoing work, we are assessing the impact
           and implementation of the immediate sanctions policy.

           Based on recommendations in our July 1998 report and our March
           1999 report on enforcement, CMS has addressed weaknesses in its
           policies in three areas: nursing homes' correction of
           deficiencies, the nursing home appeals process, and the
           enforcement data tracking system.

           o  CMS now requires on-site follow-up, referred to as a revisit,
           of homes with substandard quality of care or actual harm or
           higher-level deficiencies until the state verifies correction of
           each deficiency cited.32 Our 1998 report found that CMS's policy
           of allowing nursing homes to self-report resumed compliance was
           sometimes inappropriately applied to homes with deficiencies in
           the immediate jeopardy category or that were found to have
           substandard quality of care. We recommended that CMS require that
           for homes with recurring serious violations, state surveyors
           substantiate resumed compliance by means of an on-site revisit.
           CMS also has issued additional guidance on the "reasonable
           assurance period" during which terminated homes must demonstrate
           that they have corrected the deficiencies that led to their
           terminations.33 This guidance provided additional examples of
           reasonable assurance decisions.
           o  CMS and the Department of Health and Human Services (HHS)
           requested and received funding and staffing increases for the HHS
           Departmental Appeals Board in fiscal years 1999 and 2000 to
           address our March 1999 finding that the growing backlog of appeals
           hampered the effectiveness of civil money penalties by delaying
           their collection. The Board is responsible for adjudicating the
           appeals. By August 2003, the backlog of appeals of civil money
           penalties had been significantly reduced.
           o  CMS implemented the automated ASPEN Enforcement Manager on
           October 1, 2004, to facilitate tracking of enforcement actions.
           Prior to implementing this system, CMS had no centralized system
           for tracking or managing federal and state enforcement actions.34
           The ASPEN Enforcement Manager is intended to provide real-time
           entry and tracking of enforcement actions, issue monitoring
           alerts, generate enforcement letters, and facilitate analysis of
           enforcement patterns. CMS expects that ASPEN Enforcement Manager
           data will enable states, CMS regional offices, and the CMS central
           office to more easily track and evaluate nursing home performance
           and compliance status as well as respond to emerging issues. In
           ongoing work, we are assessing whether data from the ASPEN
           Enforcement Manager can be used to analyze nursing homes'
           deficiency and enforcement histories.35

           In December 2004, CMS revised the method for selecting nursing
           homes for the Special Focus Facility Program to ensure that the
           most poorly performing homes were included in the program and to
           strengthen enforcement for those nursing homes with an ongoing
           pattern of substandard care.36 For this program, first initiated
           in January 1999, states were directed to select two nursing homes
           to be special focus facilities, conduct two standard surveys each
           year in the special focus facilities, and submit monthly status
           reports on the selected homes. The revised guidance directs states
           to select, from an expanded list of facilities, a minimum of up to
           six nursing homes, depending on the number of nursing homes in the
           state; the revised guidance gives states the option to select more
           than the minimum.37 States are also given the flexibility to
           remove from the list homes that have made significant
           improvements. Enforcement authority over special focus facilities
           has been strengthened so that while homes are in the Special Focus
           Facility Program, immediate sanctions must be imposed if homes
           fail to significantly improve performance from one survey to the
           next; termination from participation in Medicare and Medicaid is
           required for homes with no significant improvement in 18 months
           and three surveys.

           In April 2004, CMS launched a Civil Money Penalty Improvement
           Project to improve its ability to track and collect civil money
           penalties in an effort to make them a more effective enforcement
           tool. CMS mapped out the current process for tracking and
           collecting civil money penalties to identify weaknesses and
           developed draft guidance with detailed policies and procedures for
           addressing areas identified as needing improvement, with a target
           release date of fall 2005. Also planned are enhancements to the
           Civil Money Penalty Tracking System, CMS's information system for
           civil money penalties. The enhancements are intended to streamline
           the system, improve its reporting capabilities, and improve its
           compatibility with the enforcement monitoring system. The system's
           changes are planned to occur through 2005 and 2006.

           Also in 2004, CMS, in conjunction with various state survey
           agencies, began developing a civil money penalty grid-an optional
           guideline for use by states and CMS regional offices to help
           ensure greater consistency across states in the amounts of civil
           money penalties recommended. The grid is expected to provide
           ranges for minimum civil money penalties for deficiencies, while
           allowing for flexibility to adjust the penalties on the basis of
           factors such as the severity of an identified deficiency, the care
           areas in which deficiencies were cited, and past history of
           noncompliance.38 The target issuance date for a draft grid was
           August 2005.

           In October 2005, CMS issued a revised past noncompliance policy
           that (1) clarifies how to address recently identified past
           deficiencies, (2) further defines "past noncompliance," (3)
           eliminates the use of the term "egregious," and (4) clarifies the
           methods for determining whether past noncompliance has been
           corrected. Past noncompliance occurs when a current survey reveals
           no deficiencies but determines that an egregious violation of
           federal standards occurred in the past and was not identified
           during an earlier survey.39 In November 2004, we reported that
           CMS's past noncompliance policy was ambiguous. The policy did not
           define what constituted an egregious violation or relate egregious
           violations to its scope and severity grid. Moreover, the policy
           did not hold homes accountable for negligence associated with
           resident deaths unless current residents are experiencing the same
           quality-of-care problems and it obscures the nature of care
           problems. CMS's revised policy responds to our recommendation and
           holds homes accountable for all past noncompliance resulting in
           harm to residents. We also recommended that past noncompliance
           citations identify the specific nature of the care problem in the
           OSCAR database and on the Nursing Home Compare Web site. In 2007,
           CMS plans to enhance the information on the Nursing Home Compare
           Web site to include the specific nature of the past noncompliance.
           According to CMS officials, the delay is related to the
           implementation of higher priority initiatives by the agency.
           Currently, the Web site only indicates whether there were
           instances of past noncompliance and does not identify the nature
           of the care deficiency.

           CMS has significantly improved the intensity and scope of its
           oversight activities and has made significant improvements both in
           its data systems and in its analysis and use of the data it
           collects on survey activities. The effectiveness of several of
           these oversight initiatives, however, is uneven, and more work
           remains to be done. (See table 8).

           Table 8: Oversight: CMS Initiatives and Implementation Status

           Source: GAO analysis of CMS initiatives.

           In response to recommendations in our November 1999 and July 2004
           reports, CMS has (1) significantly increased the number of federal
           comparative surveys both for quality of care and fire safety and
           (2) decreased the time between the end of the state survey and the
           start of the federal survey for quality-of-care comparative
           surveys, allowing CMS to better distinguish between serious
           problems missed by state surveyors and changes in a home that
           occurred after the state survey. We found earlier that CMS was
           making negligible use of comparative surveys, its most effective
           tool for assessing a state survey agency's ability to identify
           serious quality-of-care and fire safety deficiencies in a nursing
           home, to fulfill its 5 percent monitoring mandate.40 Only 21
           quality-of-care comparative surveys were conducted from November
           1996 through October 1998. Our 2004 fire safety report found that
           CMS had conducted only 40 fire safety comparative surveys in
           fiscal year 2003, ranging from 4 in some states to none in others.

           Since 2001, CMS has required its regional offices to complete at
           least two quality-of-care comparative surveys per state per year,
           but federal surveyors have been exceeding this minimum
           threshold.41 During the period March 1, 2002, through December 31,
           2004, CMS completed 424 comparative surveys, about 140 per year.
           In addition, the average elapsed time between state and
           comparative surveys has decreased from 33 calendar days for the 64
           comparative surveys we reviewed in 1999 to 26 calendar days for
           the 424 surveys completed through 2004.

           CMS planned to further increase the number of comparative surveys
           by contracting in the fall of 2003 for 170 quality-of-care
           comparative surveys in addition to those conducted by federal
           surveyors. However, an increase in the number of quality-of-care
           comparative surveys is unlikely because of delays in contractor
           readiness and the addition of fire safety comparative surveys to
           the contract. CMS had expected to have a sufficient number of
           contract surveyors trained and available to start surveys by the
           winter of 2005, but it took longer than anticipated to train the
           new surveyors. In addition, CMS modified the contract to include
           fire safety comparative surveys. In fiscal year 2005, the
           contractor conducted 34 quality-of-care comparative surveys and
           250 fire safety comparative surveys. Together, the contractor and
           CMS regional offices conducted a total of 859 fire safety
           comparative surveys in fiscal year 2005. CMS also is using the
           contract surveyors to augment federal survey teams. According to
           CMS, it will use contract funds carried over from earlier years to
           conduct quality-of-care comparative surveys during fiscal year
           2006, and will only use fiscal year 2006 funds to conduct fire
           safety comparative surveys.

           In response to a recommendation in our July 2004 report to
           strengthen fire safety standards, CMS published an interim final
           rule in March 2005 requiring nonsprinklered nursing homes to
           install battery-powered smoke detectors in resident rooms and
           common areas, including resident dining, activity, and meeting
           rooms. Previously, federal standards required smoke detectors in
           (1) corridors or resident rooms only in homes built after 1981 and
           (2) nonsprinklered resident rooms containing furniture brought
           from the resident's home. We reported that the lack of smoke
           detectors in resident rooms may delay staff response and fire
           department notification, which in turn may increase the number of
           nursing home fire-related fatalities. CMS will begin surveying
           nursing homes' compliance with the new requirement in May 2006.

           In October 2000, CMS regional offices began conducting on-site
           state performance reviews to assess compliance with federal
           standards.42 Previously, CMS permitted states to evaluate and
           report on their own performance against a number of standards, a
           technique that essentially allowed states to write their own
           report cards because CMS did not independently validate
           information provided by the states. In fiscal year 2005, CMS began
           to tie funding increases for state survey agencies to one of the
           seven performance standards-the timely conduct of standard
           surveys-time frames that are established in federal statute.

           Nevertheless, in our current analysis of the standard that is
           intended to measure the supportability of survey findings, we
           found that three key issues we identified in July 2003 still
           exist. First, distinctions in state performance were hard to
           identify because, while some states have consistently met the
           standard for documentation of deficiencies, federal comparative
           surveys completed during essentially the same time frame found
           that surveyors in these states frequently missed serious
           deficiencies. Second, CMS regional offices were inconsistent in
           conducting state performance reviews. For fiscal year 2004, five
           states nationwide did not meet this standard, but three of the
           five states were in one CMS region. Third, the standard for
           assessing the supportability of deficiencies is composed of 11
           elements that mix major and minor issues.43 Although CMS has
           simplified the standard for assessing the supportability of
           deficiencies, we believe that many of the elements reviewed remain
           essentially administrative in nature rather than substantive.44 Of
           the elements that make up the standard, only 2 assess the
           appropriateness of the cited scope and severity; the remaining
           elements assess such issues as how the deficiency is written,
           including avoiding the use of the passive voice. We do not believe
           that this standard is sufficiently focused on identifying
           understatement.

           CMS did not implement our July 2003 recommendation that it require
           states to review a sample of deficiencies cited at or below the
           level of actual harm in order to detect understatement because,
           according to CMS, the state performance review of the
           supportability of deficiencies already accomplished this
           objective. In discussing our current findings regarding the
           standard intended to measure the supportability of survey
           findings, CMS officials agreed that (1) measuring the quality of
           state surveys, one goal of reviewing the supportability of
           deficiencies, was particularly challenging because there is no one
           agreed-upon way to measure quality; and (2) some standards are
           complex, contributing to consistency problems.

           In developing this report, we also noted two additional problems
           with the state performance reviews that were not previously
           reported. First, in its fiscal year 2004 review, CMS began
           combining state performance review results across the different
           provider types, such as nursing homes and home health agencies,
           for which states have oversight responsibility. For example, CMS
           calculates one overall state score on the supportability of
           deficiencies across provider types, rather than issuing
           provider-specific scores. One CMS region suggested that because
           nursing homes are generally surveyed by a unique pool of
           surveyors, combining results in this manner limits the usefulness
           of the feedback to state survey agencies. Second, CMS provides
           feedback to states regarding their performance each year, but it
           does not publicly report the results. Doing so would appear to be
           consistent with CMS's stated philosophy of sharing information
           with the public to help improve nursing home quality.

           CMS has pursued important upgrades in the system used to track the
           results of state survey activities and has increased its analysis
           of OSCAR and other data to improve oversight by CMS central and
           regional offices and state survey agencies. Examples include the
           following:

           o  In 2000, CMS began to produce 19 periodic reports to monitor
           both state and regional office performance.45 Some reports, such
           as survey timeliness, are used during state performance reviews,
           while others are intended to help identify problems or
           inconsistencies in state survey activities and the need for
           intervention.
           o  In 2001, 2002, and 2005 CMS published a "Nursing Home Data
           Compendium," which includes detailed tables and figures on nursing
           homes, resident demographics, resident clinical characteristics,
           and survey results.
           o  In 2004, CMS commissioned a series of "White Papers" on topics
           ranging from enforcement to resource issues. The goal was to
           stimulate discussion among key stakeholders and generate ideas for
           "next steps" to help mitigate problems. The reports, authored by
           CMS and state survey agency staff, relied on data analysis from
           OSCAR and other CMS databases.
           o  In 2004, CMS prepared an internal study on enforcement trends
           since the imposition of the immediate sanctions policy using data
           from the Enforcement Tracking System.
           o  In 2005, CMS unveiled a Web site for use by regional offices
           and state survey agencies that generates a series of standard
           reports through a software program called Providing Data Quickly;
           this software permits easier access to the data contained in
           OSCAR. One such report identifies homes that have repeatedly
           harmed residents and meet the criteria for imposition of immediate
           sanctions.

           CMS indicated that it is continuing to make progress in
           redesigning the OSCAR system. In our March 1999 report on
           enforcement, we recommended that the agency develop an improved
           management information system that would help it to track the
           status and history of deficiencies, integrate the results of
           complaint investigations, and monitor enforcement actions.
           Although the target implementation date for the redesigned system
           has slipped from 2005 to 2008, depending on competing priorities
           and available funding, CMS has implemented two key components of
           the redesigned system-a complaint tracking system and a system to
           track the status of enforcement actions. Both systems are intended
           to provide CMS with critical management capabilities that it
           previously lacked.

           Using market forces to help drive quality improvement is an
           important CMS objective behind sharing data with the public on
           nursing home quality. Since CMS launched Nursing Home Compare in
           1998, the agency has progressively expanded the information
           available on this Web site. In addition to data on the
           deficiencies identified during standard surveys, the Web site now
           includes data on the results of complaint investigations,
           information on nursing home staffing levels, and quality
           indicators, such as the percentage of residents with pressure
           sores. However, CMS continues to address ongoing problems with the
           accuracy and reliability of the underlying data, such as the MDS,
           quality indicators, and nurse staffing levels.

           In February 2002, we concluded that CMS efforts to ensure the
           accuracy of the underlying MDS data46 used to calculate the
           quality indicators (1) relied too much on off- site review
           activities by its contractor and (2) anticipated on-site reviews
           in only 10 percent of its data accuracy assessments, representing
           fewer than 200 of the nation's nursing homes.47 CMS did not concur
           with our recommendation that it reorient its review program to
           complement ongoing state MDS accuracy efforts as a more effective
           and efficient way to ensure MDS data accuracy.48 CMS commented
           that its efforts already provided adequate oversight of state
           activities and complemented state efforts. In April 2005, CMS
           ended work under its data assessment and verification contract
           because of cost concerns, but signed a new contract in September
           2005 that focuses on on-site reviews of MDS accuracy.49 According
           to CMS officials, the on-site reviews were more effective in
           identifying discrepancies because the reviewers were able to find
           more information on-site that conflicted with the nursing homes'
           assessments.50

           In November 2002, CMS began reporting on its Web site quality
           indicator data for each nursing home nationwide that participates
           in Medicare and Medicaid, even though our October 2002 report
           concluded that such reporting was premature given serious
           questions about the sufficiency of CMS efforts to validate the
           quality indicators and improve the accuracy of the underlying
           data.51 CMS disagreed with our recommendation to postpone its
           scheduled November 2002 public reporting of the data until these
           problems were addressed. Since 2002, however, CMS has taken steps
           to address the questions we raised about the validity of quality
           indicators. For example, CMS dropped certain quality indicators
           that it found were not sufficiently reliable for public reporting,
           such as the facility-adjusted profile prevalence of pressure
           sores. In addition, CMS worked with the National Quality Forum to
           address measurement problems with the pressure sore quality
           indicator by developing separate indicators for short- and
           long-term nursing home residents; these new indicators were added
           to the Web site in January 2004.52 A weight loss quality indicator
           also was developed and added to the Web site in November 2004. Our
           October 2002 report had noted the potential for consumer confusion
           in interpreting and using quality indicator data. CMS conducted
           consumer testing of new language and displays on Nursing Home
           Compare during the summer of 2004.

           Although nursing home staffing data have been available on the
           Nursing Home Compare Web site since June 2000, a CMS official told
           us that the agency has been aware of problems with these
           self-reported data since the late 1990s.53 This official stressed
           that, despite problems, they were the only available data on
           nursing home staffing. Examples of erroneously reported data
           include facilities with no nurse staffing hours or hours equal to
           thousands of residents per day. In addition, the staffing data do
           not address important issues such as turnover or retention.54 As a
           temporary fix, CMS developed edits that examine staffing ratios to
           determine whether any facility falls above or below certain
           thresholds and, effective July 2005, temporarily excluded the
           questionable staffing data from Nursing Home Compare until they
           can be corrected or confirmed. To address this issue, CMS is
           considering a proposal for a new system that relies on nursing
           home payroll data. If approved, such a system could take 3 to 4
           years to implement because of the need to solicit and consider
           public comment and to develop software to transmit the staffing
           data.

           CMS's initiative to include quality indicator data on its Nursing
           Home Compare Web site also established a new role for Quality
           Improvement Organizations (QIO) with regard to nursing homes. From
           2002 through 2005, QIOs worked intensively with at least 10
           percent of nursing homes in each state to improve quality.55
           Although we have not evaluated QIO nursing home quality
           improvement activities, CMS's preliminary analyses indicate that
           the QIO program has helped to reduce the use of daily physical
           restraints, increased management and treatment of pain, and
           reduced the incidence of delirium among post-acute-care residents.
           However, less progress has been made in decreasing the prevalence
           of pressure sores, according to CMS's analyses. In August 2004,
           the QIO and state survey agency in 18 states launched a new pilot
           program. Working together, they identified from one to five
           nursing homes per state that had significant quality problems. The
           QIO then worked with these homes to help them redesign their
           clinical practices. According to CMS, the results of this pilot
           indicated that these historically "troubled" nursing homes had
           dramatically improved their clinical quality and decreased their
           quality-of-care survey deficiencies.56 In 2005, the QIOs' role
           with nursing homes was extended for an additional 3 years, and
           QIOs will continue to focus on statewide improvement in four
           areas-pressure sores, physical restraints, pain management, and
           depression. In addition, QIOs will help nursing homes set
           individual targets for quality improvement, implement and document
           process-related clinical care, and assist in the development of a
           more resident-focused care model. QIO expenditures on nursing home
           quality improvement for the period of August 2002 through July
           2008 are expected to total about $216 million.

           CMS has taken certain actions to maximize the experience and
           resources of state survey agencies as well as the CMS central and
           regional offices to improve nursing home oversight. Specifically,
           in 2004, CMS convened an internal Long-Term Care Task Force and
           charged it with providing guidance on and coordinating long-term
           care efforts within CMS and included representation across the
           agency's divisions and the regional offices. Also in 2004, CMS
           began an effort to collect and disseminate nursing home survey and
           certification best practices developed by professional
           associations, universities, and federal agencies.57 Through the
           best practices effort, CMS plans to share successful strategies
           used by states and regional offices in a broad range of issues
           affecting survey and certification of nursing homes, such as
           surveyor recruitment and complaint intake. A contractor will
           identify, research, and document best practices, which CMS plans
           to post on its Web site. One of the issues the best practices
           effort will address is surveyor recruitment initiatives underway
           in states. As of August 2005, these best practices had not been
           published on the CMS Web site.

           CMS, states, and nursing homes face a number of key challenges in
           their efforts to further improve nursing home quality and safety,
           including (1) the cost of retrofitting older nursing homes with
           automatic sprinklers, a potentially costly requirement that has a
           demonstrated ability to prevent deaths in the event of a fire; (2)
           continuing problems in hiring and retaining qualified surveyors, a
           factor that states indicated can contribute to variability in the
           citation of serious deficiencies; and (3) an increasing federal
           and state survey workload due to increased oversight, the
           identification over time of additional initiatives, and growth in
           the number of Medicare and Medicaid providers that must be
           surveyed, including expected growth in nursing homes. The
           increased workload has created competition for both staff and
           financial resources and required the establishment of priorities,
           which may have contributed to delays in developing and
           implementing several key quality initiatives, such as the
           implementation of a more rigorous survey methodology.

           Although the substantial loss of life in two 2003 nursing home
           fires could have been reduced or eliminated by the presence of
           properly functioning automatic sprinkler systems, cost has been an
           impediment to CMS's requiring them for all homes nationwide. Newly
           constructed homes must incorporate sprinkler systems; however,
           older homes constructed with noncombustible materials that have a
           certain minimum ability to resist fire are not required to install
           sprinklers. We previously reported that cost has been a barrier to
           requiring sprinklers for all older nursing homes. In July 2005,
           the National Fire Protection Association (NFPA) voted to require
           retrofitting of older homes with sprinklers, a requirement that
           will become a part of the 2006 edition of the NFPA code.
           Anticipating this action, CMS indicated that it has been
           developing a notice of proposed rule making, the first step in
           adopting the NFPA requirement for all homes that serve Medicare
           and Medicaid beneficiaries. A CMS official stated that the agency
           plans to issue the notice in March 2006 and after reviewing public
           comments, it will publish a final version of the rule and
           stipulate an effective date for homes to come into compliance.58

           One issue that remains unresolved is how much time older homes
           will be given to install sprinklers. As we reported in 2004,
           industry officials believe that a transition period must be
           considered for homes to come into compliance and to determine how
           to pay for the cost of installing sprinklers.59 Rather than
           proposing a phase-in period, the proposed rule will request input
           on how much time homes should be given to come into compliance
           with the requirement. According to CMS, a longer phase-in period
           could help alleviate concerns about the cost of retrofitting homes
           with sprinklers. Based on our recommendation, CMS collected data
           on the sprinkler status of homes nationwide and found that about
           21 percent of nursing homes are unsprinklered or partially
           sprinklered.60 Although CMS has not completed its cost analysis,
           the agency believes that the costs associated with the retrofit
           will be less than the industry's $1 billion estimate.

           The hiring and retention of surveyors, particularly RNs, remains a
           major, frequently discussed issue among state survey agency
           directors, according to an AHFSA official, the association that
           represents state survey agency directors. In July 2003, we
           reported that the limited experience level of state surveyors
           because of a high turnover rate was a contributing factor to (1)
           variability in citing actual harm or higher-level deficiencies and
           (2) understatement of such deficiencies. In more than half of the
           42 states that responded to our inquiry, from 30 percent to more
           than 50 percent of surveyors had 2 years' experience or less, as
           of July 2002. Twenty-five states responded to our request for
           updated information on surveyor workforce issues as of July 2005.

           Of 23 states that provided data in both 2002 and 2005, 13 reported
           an improvement in 2005 (i.e., a decline in the proportion of
           inexperienced surveyors); 9 indicated that the situation had
           worsened (e.g., an increase in the proportion of inexperienced
           surveyors); and 1 state reported no change (see app. IV). As of
           July 2005, however, 20 percent or more of surveyors in 20 of the
           25 states had 2 years' experience or less (see table 9). Surveyor
           vacancy rates in the 25 states ranged from about 3 percent in
           Tennessee to 31 percent in Alabama and Florida; overall, 15 states
           had double-digit vacancy rates. Officials in 18 states believed
           that inexperienced surveyors contributed to interstate variability
           in the citation of serious deficiencies. One state survey agency
           indicated that staff attrition resulted in a workforce of less
           experienced surveyors who demonstrated a hesitance to cite actual
           harm and contributed to understatement. State survey agency
           officials in several states, however, suggested that the problem
           for less-experienced surveyors was not identifying harm but rather
           investigating and documenting the circumstances that led to the
           harm, including facility culpability, a skill that surveyors
           develop as they gain more experience.61

           Table 9: Percentage of Surveyors with 2 Years' Experience or Less,
           as of July 2005

           Source: AHFSA data from 25 states.

           Because state survey agency salaries are rarely competitive with
           the private sector, state survey agencies told us that it is
           difficult to retain surveyors and to fill vacancies. RNs, a major
           component of states' surveyor workforce, are in high demand and
           short supply, according to AHFSA. Furthermore, 9 states responding
           to our July 2005 inquiry indicated that state civil service
           requirements can make it more difficult to fill vacancies. Several
           of the 9 states characterized the hiring process as either
           cumbersome or time-consuming, or both, and 1 state noted that the
           process takes close to 9 months. Two states reported that they had
           to select candidates to interview from a certified list. One of
           the states indicated that the certified list often contained
           unqualified applicants, while the other state noted that some of
           the applicants were not the "best fit." Of the 25 states, 21
           indicated that they had implemented initiatives to help retain
           surveyors. The most popular retention strategies were to increase
           starting salaries and to implement flexible surveyor work
           schedules. For example, New York instituted a locality pay
           differential for New York City. While 5 of the 25 states indicated
           that they had a state-imposed hiring freeze, 1 state reported that
           budget pressures prevented it from taking steps to improve
           retention rates.62 A continuing problem cited by AHFSA is that
           federal funds are distributed late in the fiscal year, which does
           not tie into state budget cycles for approving additional
           positions. This problem may be particularly acute in the 5 states
           that reported having a hiring freeze.

           CMS and states have experienced increased survey workloads due to
           the greater intensity of nursing home oversight, the increasing
           number of initiatives, and growth in the number of Medicare and
           Medicaid providers requiring oversight. This workload growth
           required the prioritization of initiatives that, in some cases,
           has resulted in implementation delays for some key initiatives.
           The consensus-building process necessary to bring initiatives to
           fruition also has contributed to some delays. The initiatives
           likely will continue to compete for priority with other CMS
           programs, posing a challenge for efforts to further improve
           nursing home quality and safety.

           Greater nursing home oversight has increased demand on both CMS
           and state survey agency resources, causing delays for some key
           initiatives. CMS's increased workload is evident in the
           labor-intensive state performance reviews. Since their
           introduction in October 2000, the reviews have been gradually
           expanded from nursing homes to several other Medicare and Medicaid
           providers, such as home health agencies and hospitals. CMS also
           has significantly increased the number of federal quality-of-care
           and fire safety comparative surveys. Such surveys are more
           labor-intensive than the alternative type of federal monitoring
           surveys, known as observational surveys, because they require an
           entire federal survey team rather than a smaller number of federal
           surveyors. The agency also has committed considerable resources to
           developing new data systems for complaints and enforcement actions
           while simultaneously increasing its use of available data to
           further improve federal and state oversight. Despite the increased
           workload, CMS implemented survey staff reductions of 5 percent in
           regional offices and 3 percent in its central office in January
           2004. As of August 2005, these staff reductions have remained in
           effect.

           As state survey agency workloads grew with the implementation of
           the initiatives, they also experienced resource pressures. States
           are now required to conduct on-site revisits to ensure serious
           deficiencies have been corrected, investigate complaints alleging
           actual harm on-site and do so more promptly, and initiate off-hour
           standard surveys. Thus, surveyors' presence in nursing homes has
           increased and surveyors' work hours have effectively been expanded
           to weekends, evenings, and early mornings. The requirement to
           impose immediate sanctions on homes that repeatedly harm residents
           also has had a workload impact because in the past a grace period
           allowed homes to correct deficiencies before the sanctions went
           into effect. The imposition of immediate sanctions requires states
           to track, which some states do manually, the homes that must be
           referred for immediate sanctions and requires CMS and states to
           act to impose recommended sanctions that in the past would have
           been rescinded because the homes could have corrected the
           deficiencies during a grace period. While states' budget pressures
           appear to be easing, many state survey agencies reported hiring
           freezes, staff vacancies, or high turnover as of July 2002 when
           all of these initiatives had already been fully implemented.

           The number of initiatives that CMS has implemented on its own has
           grown, further increasing its workload. For example, CMS added
           quality indicator data to its Nursing Home Compare Web site and
           has involved QIOs in helping nursing homes to improve quality of
           care. In addition, CMS created a task force to develop guidance
           intended to improve consistency across states in the imposition of
           civil money penalties.

           The number of nursing home initiatives simultaneously under
           development or being implemented as well as other CMS
           responsibilities, such as preparing to implement the new Medicare
           prescription drug benefit in January 2006, have necessitated the
           establishment of priorities and led to delays and queues.63 CMS
           assigned some initiatives, such as the development and public
           reporting of quality indicators, a high priority and implemented
           them swiftly despite issues related to their validity and the
           quality of the underlying data-problems that CMS is still working
           to address. In contrast, the revision of the survey process has
           encountered delays because of funding shortfalls and has been in
           process for 7 years. For example, initial testing of the new
           methodology in 2002 and 2003 was limited, even though CMS had
           already invested $4.7 million in its development from initiation
           in 1999 through September 2003. A pilot test of the new
           methodology is scheduled to begin in the fall 2005; depending on
           the results of the testing, implementation could begin in
           mid-2007. Although CMS attaches a high priority to enhancing the
           information available to the public on nursing home quality and
           safety, adding information on past noncompliance and the fire
           safety status of nursing homes are in a queue behind the
           programming required to implement higher-priority projects. There
           is also a regulatory queue, with other, higher-priority
           regulations ahead of the notice of proposed rule making to require
           retrofitting of nursing homes with automatic sprinklers.

           Delays in implementing the nursing home initiatives are also
           attributable to CMS's need to be responsive to stakeholder input.
           Appropriately, CMS seeks input from various stakeholders such as
           states, regional offices, the nursing home industry, and resident
           advocates. For example, CMS sought input from experts in
           developing investigative protocols for surveyors. Due to this
           lengthy consultative process, combined with the prolonged delays
           stemming from internal disagreement over the structure of the
           process during the initial stages, CMS has only implemented two
           investigative protocols since 2001. Likewise, implementation of
           the ASPEN Complaint Tracking System was delayed because during the
           system's pilot test, several states indicated their belief that
           their existing systems were superior and opposed the idea of
           either abandoning these systems or maintaining separate systems.

           Both the overall growth in providers and the anticipated growth in
           nursing homes pose additional workload challenges for CMS and
           states. In addition to nursing homes, CMS and states are
           responsible for surveys of other Medicare and Medicaid providers,
           such as home health agencies and hospitals. The number of these
           providers grew from 39,651 in October 2000 to 45,375 in January
           2005, approximately 14 percent.64 While the number of nursing
           homes has decreased slightly during the same period, from 17,012
           to 16,146, the rate of decline has slowed; and as the baby boom
           generation ages, increasing the number of elderly needing
           long-term care services, the number of nursing homes is expected
           to grow to meet the demand. In 2000, 35.1 million people were aged
           65 or older. This number is expected to grow to about 54.7 million
           by 2020.

           Nursing home survey activities consume the majority of state
           survey budgets and resources. Nursing homes make up about 31
           percent of Medicare and Medicaid providers, but account for 73
           percent of the federal budget for oversight of such providers.65
           The funding for nursing home surveys is disproportionate because
           the time frames for standard nursing home surveys are statutory.
           For those survey requirements not in statute, CMS determines the
           survey time frames; these surveys are therefore a lower
           priority.66 Even among nursing home survey activities, however,
           annual standard surveys are considered a higher priority than
           complaint surveys or initial surveys for which the statute does
           not dictate specific time frames.67 CMS and state survey agency
           officials recognize that CMS may have shifted its focus and
           resources to nursing homes at the expense of adequate oversight of
           other providers serving Medicare and Medicaid beneficiaries, and
           some states contend that the focus on nursing home standard
           surveys has hampered their ability to investigate nursing home
           complaints within mandated time frames. For example, according to
           a California state survey agency official, California law mandates
           that all nursing home resident complaints, not just complaints
           alleging actual harm, be investigated within 10 days. Likewise, an
           official from the Pennsylvania state survey agency stated that in
           Pennsylvania, all complaints must be investigated within 48 hours.
           California survey agency officials have told us that a complaint
           alleging a care problem deserves a higher priority than a standard
           survey, which may or may not identify deficiencies.

           According to CMS officials, key nursing home initiatives continue
           to compete for priority with other CMS projects. Examples of
           nursing home initiatives that have been affected include revision
           and testing of the new survey methodology, continued development
           of the investigative protocols that surveyors use to investigate
           care problems, and an increase in the number of quality-of-care
           comparative surveys.

           o  Revised survey methodology. CMS officials have indicated that
           nationwide implementation of the revised survey methodology could
           be affected if its use requires additional survey time or a
           greater number of surveyors to conduct each survey. The pilot test
           of the new methodology, scheduled for 2005 and 2006, includes an
           examination of steps to streamline the revised process, if
           necessary. Cost considerations limited the pilot of the new
           methodology to fewer states than the 20 that volunteered.
           o  Investigative protocols for quality-of-care problems. Only
           three sets of investigative protocols had been implemented as of
           November 2005, and it is unclear whether the contractor's
           assessment of the protocols' effectiveness can be completed before
           the contract ends in 2006. Furthermore, unless the contract for
           the investigative protocols is re-bid, CMS expects to return to
           the traditional revision process even though agency staff believe
           that the expert panel process used under the contract produced a
           high-quality product.
           o  Federal comparative surveys. CMS hired a contractor in 2003 to
           further increase the number of federal quality-of-care comparative
           surveys, but dropped funding for quality-of-care comparative
           surveys from the fiscal year 2006 contract.68 The agency
           reallocated the funds to help state survey agencies meet the
           increased survey workload resulting from growth in the number of
           other Medicare providers.

           CMS has focused considerable attention since 1998 on addressing
           weaknesses in state and federal oversight activities in order to
           better care for and protect nursing home residents. The agency has
           implemented many important improvements in the areas of surveys,
           complaints, enforcement, and oversight, such as taking steps to
           address survey predictability, issuing additional guidance to
           ensure timely on-site investigations of complaints alleging harm
           to residents, implementing an immediate sanctions policy to
           eliminate grace periods for homes cited for repeat serious
           violations, and strengthening oversight by conducting assessments
           of state survey activities. However, some key activities are still
           in process. For example, CMS's effort to revise the survey
           methodology has been underway for 7 years. Given the pivotal role
           played by surveys in helping to ensure that nursing home residents
           receive high-quality care, the development and implementation of a
           more rigorous survey methodology is one of the most important
           contributions CMS can make to addressing oversight weaknesses.
           Certain other initiatives, such as sharing data with the public in
           an effort to use market forces to drive quality improvement, also
           remain in process. Since launching Nursing Home Compare in 1998,
           CMS has been aware of accuracy and reliability issues with the
           underlying data and began changing its approach to data integrity
           in 2005. The agency is working to address issues concerning data
           on nursing home staffing that compelled it to temporarily exclude
           questionable data from its Web site in July 2005 until its
           accuracy can be verified. Because consumers use these data to make
           decisions about nursing home care, ensuring the accuracy,
           reliability, and timeliness of nursing home quality data is
           critical. Even with CMS's increased efforts to improve nursing
           home quality, the agency's continued attention and commitment to
           these efforts is essential in order to maintain and build upon the
           momentum of its accomplishments to date.

           We provided CMS a draft of this report for review. CMS generally
           concurred with our findings, noting that progress has been made in
           many areas such as surveys and complaint investigations, oversight
           activities, and citation of serious deficiencies, but that
           challenges remain. (CMS's comments are reproduced in app. V.) CMS
           also provided technical comments, which we included in the report
           as appropriate. We also provided the five states we contacted an
           opportunity to review the portion of the draft focused on trends
           in nursing home quality. California, Florida, Ohio, New York, and
           Texas provided written comments. California's comments focused on
           clarifying its experience seeking CMS guidance on the definition
           of actual harm, but did not state whether it agreed with our
           findings. Ohio commented that our report's findings related to
           continued inconsistency and understatement of serious deficiencies
           by state surveyors did not apply to its state survey agency. New
           York stated that including a more detailed description of states'
           efforts to improve nursing home quality would provide a more
           balanced view of the reasons for the decline in serious
           deficiencies. Florida and Texas generally concurred, but Texas did
           not provide specific comments. CMS and states' specific comments
           focused primarily on four issues: understatement of serious
           deficiencies, the definition of actual harm, data availability,
           and challenges to conducting nursing home survey and oversight
           activities.

           CMS commented that it remains concerned about the possible
           understatement or omission of serious deficiencies, but that it
           did not believe that understatement caused the decline in serious
           nursing home deficiencies or that understatement was worsening.
           CMS noted its efforts to work with states that fail to improve
           their ability to identify deficiencies such as withholding funding
           increases until corrective action plans are developed. Florida,
           New York, and Ohio similarly commented that efforts such as their
           states' quality improvement initiatives, regulatory changes to
           improve nursing home operations, and engagement of the provider
           community have contributed to the decline.

           CMS suggested that including the results of observational surveys
           in our analysis of the percentage of federal surveys that found
           serious deficiencies missed by states would show that the
           percentage remained relatively constant from 2002 to 2004 rather
           than increasing. As we noted in our 1999 report, however,
           comparative surveys are more effective than observational surveys
           in identifying serious deficiencies missed by state surveyors
           because they are the only oversight tool that provides an
           independent federal survey where results can be compared to those
           of the state. Observational surveys can serve as an effective
           training tool for state surveyors but, in our view, they do not
           accurately represent typical state surveyor performance due to the
           likelihood that state surveyors modify their performance when they
           are aware that they are being observed by federal surveyors.

           Florida and Ohio noted that in addition to comparative surveys,
           CMS conducted many observational surveys during the time period
           studied. Ohio disagreed that our analysis of federal comparative
           surveys suggests that nursing home surveyors in Ohio missed
           serious deficiencies, citing its combined performance ratings for
           observational and comparative surveys. New York commented that
           federal comparative surveys often do not include the same resident
           sample used in the state survey and that only looking at
           comparative surveys provides a narrow analysis of state survey
           quality. New York suggested a more detailed analysis of
           comparative survey data and consideration of state performance
           review results. We note that, in 2002, CMS directed federal
           surveyors to include at least 50 percent of the residents included
           in the state survey sample. We also acknowledge that CMS is
           conducting state performance reviews as part of its oversight of
           state survey activities, but note that the reviews have
           shortcomings as described in our July 2003 report. Florida noted
           that our analysis of federal comparative surveys that identified
           missed serious deficiencies is based on limited data. We
           acknowledge that our analysis is based on a small number of
           surveys, but note that it includes the full universe of
           comparative surveys conducted from March 2002 through December
           2004 in the five states we reviewed.

           The range of comments from states reinforces the need for CMS to
           clarify the definition of actual harm, as it plans to do.
           California noted that while some of its state surveyors were
           confused about the definition of actual harm, after discussions
           with CMS from 1998 through 2004, the survey agency and CMS are now
           in agreement on the definition of actual harm. New York stated
           that confusion about the definition of actual harm has been
           reduced. Ohio noted that its state surveyors are not confused by
           the definition of actual harm, but that states have not received
           clear and specific guidance from CMS. Florida agreed that clearer
           guidance would be useful.

           CMS indicated that it is taking steps to improve the reliability
           and accuracy of publicly reported data by identifying suspect data
           and posting more detailed information about past noncompliance. As
           we state in our report, we believe that consumers should have
           timely and accurate data to inform their decisions regarding
           nursing home care.

           CMS commented that the workload issues described in this report
           present challenges beyond those we have previously reported. CMS
           stated that continued constraint of resources could "likely cause
           some erosion of the gains already made" in the survey and
           oversight activities to date. To address the challenges it faces,
           CMS plans to increase efforts to improve productivity, determine
           the cost and value of policies, focus state performance standards
           on substantive issues, prioritize survey activities, coordinate
           with stakeholders, address increasing fuel costs, and enhance
           emergency preparedness. California, Florida, New York, and Ohio
           reiterated the staffing challenges they have experienced and the
           steps they have taken to address them, some of which are described
           in this report. Despite these efforts, California indicated that
           its staffing challenges have negatively impacted the investigative
           process. While we recognize the challenges CMS and states face, we
           continue to believe that maintaining the momentum developed over
           the last several years on key CMS initiatives, such as the
           development of the revised survey methodology (i.e., Quality
           Indicator Survey), is critical to addressing nursing home survey
           and oversight weaknesses.

           As arranged with your office, unless you publicly announce its
           contents earlier, we plan no further distribution of this report
           until 30 days after its issue date. At that time, we will send
           copies of this report to the Administrator of the Centers for
           Medicare & Medicaid Services and appropriate congressional
           committees. We also will make copies available at no charge on the
           GAO Web site at http://www.gao.gov .

           If you or your staff have any questions about this report, please
           contact me at (202) 512-7118 or [email protected] . Contact points
           for our Offices of Congressional Relations and Public Affairs may
           be found on the last page of this report. GAO staff who made major
           contributions to this report are listed in appendix VI.

           Kathryn G. Allen Director, Health Care

           Table 10 summarizes our recommendations from 14 reports on nursing
           home quality and safety, issued from July 1998 through November
           2004; CMS's actions to address weaknesses we identified; and the
           implementation status of CMS's initiatives. The recommendations
           are grouped into four categories-surveys, complaints, enforcement,
           and oversight. If a report contained recommendations related to
           more than one category, the report appears more than once in the
           table. For each report, the first two numbers identify the year in
           which the report was issued. For example, HEHS-98-202 was released
           in 1998. The Related GAO Products section at the end of this
           report contains the full citation for each report. Of our 36
           recommendations, CMS has fully implemented 13, implemented only
           parts of 3, is taking steps to implement 13, and declined to
           implement 7.

3Prior to July 2001, CMS was known as the Health Care Financing
Administration. Throughout this report, we refer to the agency as CMS,
even when describing initiatives taken prior to its name change.

4 http://www.medicare.gov/NHCompare/home.asp .

5In this report, we use the term "states" to include the 50 states and the
District of Columbia.

                                Results in Brief

                                   Background

Standard Surveys and Complaint Investigations

6In addition to nursing homes, CMS and state survey agencies are
responsible for oversight of other Medicare and Medicaid providers such as
home health agencies, intermediate care facilities for the mentally
retarded, accredited and nonaccredited hospitals, end-stage renal dialysis
facilities, ambulatory surgical centers, rural health clinics, outpatient
physical therapy centers, hospices, portable x-ray suppliers,
comprehensive outpatient rehabilitation facilities, and Community Mental
Health Centers.

7CMS generally interprets these requirements to permit a statewide average
interval of 12.9 months and a maximum interval of 15.9 months for each
home.

8CMS requires nursing homes to meet applicable provisions of the fire
safety standards developed by the National Fire Protection Association
(NFPA), of which CMS is a member. NFPA is a nonprofit membership
organization that develops and advocates scientifically based consensus
standards on fire, building, and electrical safety.

                                                   Scope
Severity                             Isolated Pattern Widespread 
Immediate jeopardya                     J        K        L      
Actual harm                             G        H        I      
Potential for more than minimal harm    D        E        F      
Potential for minimal harmb             A        B        C      

Enforcement Policy

Oversight

Available Data Show Significant Overall Decrease in Serious Quality Problems but
     Indicate Continued Inconsistency and Understatement in State Findings

9In the time period prior to CMS's implementation of its quality
initiatives (January 1, 1997, through June 30, 1998), the proportion of
homes nationwide with actual harm or higher-level deficiencies was 27.7
percent. However, this report focuses on trend data following CMS's July
1998 announcement of the initiatives. In our September 2000 report on
CMS's quality initiatives, we compared trends in nursing home deficiency
citations for two time periods-one before (January 1, 1997, through June
30, 1998) and one after (January 1, 1999, through July 10, 2000) the
implementation of the nursing home initiatives. Since our 2000 report, we
have updated this trend analysis for three time periods: July 11, 2000,
through January 31, 2002; February 1, 2002, through July 10, 2003; and
July 11, 2003, through January 31, 2005.

Percentage of homes with serious deficiencies Number of states 
More than 20 percent                                        15 
10 percent to 20 percent                                    26 
Less than 10 percent                                        10 

10For example, a deficiency noted in a federal survey could involve a
resident who was not in the nursing home at the time of the state survey
but was admitted between the state and the federal surveys.

11The decline in serious deficiencies ranged from a low of 14.3 percentage
points in Texas to a high of 23 percentage points in California and New
York (see app. II).

                Number of   Federal comparative                    
                  federal    surveys that found    Total number of 
              comparative      missed serious              serious 
                  surveys       deficiencies          deficiencies 
State        conducted                   Number          missed Percentage 
California          23                        4              17         6b 
Florida             12                        4              33         7b 
New York            11                       2a             18a         6b 
Ohio                12                        1               8          1 
Texas               15                        2              13          5 
Total               73                       13              18         25 

CMS Has Addressed Many Shortcomings in Survey and Oversight Activities, but Work
                       Continues on Some Key Initiatives

Surveys: Key Initiatives Are under Development, but Most Have Not Yet Been
Implemented

12CMS has independently identified shortcomings in areas such as survey
processes and consumer information and has developed initiatives to
address these problems.

13Under contract with CMS, 39 Quality Improvement Organizations (QIO)
(formerly known as Peer Review Organizations) help to ensure the quality
of care delivered to Medicare beneficiaries in each state. Prior to 2002,
QIO's work focused on care delivered in acute care settings such as
hospitals.

Initiative                                            Status               
Survey methodology: Revise to ensure that surveyors   In process           
do not miss significant care problems.                
Investigative protocols: Strengthen to ensure greater In process           
rigor in surveyors' on-site investigations of         
specific areas.                                       
Definitions of actual harm and immediate jeopardy:    In process           
Revise to promote increased interstate consistency in 
deficiency citations.                                 
Additional survey initiatives: Implement initiatives  In process           
to give surveyors a way to voice concerns and explore 
the use of photographic evidence to improve the       
survey process.                                       
Survey predictability: Reduce to prevent nursing      Selected initiatives 
homes from potentially masking certain deficiencies   implemented          
if they so choose.                                    

  Survey Methodology

14Quality indicators, the result of a CMS-funded contract, are based on
nursing home resident assessment information-MDS-which is data on each
resident that homes are required to report periodically to CMS. Quality
indicators are derived from nursing homes' assessments of residents and
are used to rank a facility in 24 areas compared with other nursing homes
in the state.

  Investigative Protocols

  Definitions of Actual Harm and Immediate Jeopardy

15On-site sources include observations, interviews, and records review. An
example of an off-site data source is the MDS.

16The pilot states are California, Connecticut, Kansas, Louisiana, and
Ohio.

17Prior to this contract, surveyor protocols were developed by CMS, with
comments from stakeholder groups, but the development process did not
include an expert panel.

18Investigative protocols are being developed for accidents and
supervision, quality assurance, resident activities programs, psychosocial
severity, safe food handling/nutrition, pharmacy services/unnecessary
drugs, and end-of-life/pain management issues.

  Additional Survey Initiatives

  Survey Predictability

19For example, a CMS official informed us that the language, "limited
consequences to the resident," which is used in the current definition of
actual harm, confused states because it was vague and that states formed
their own interpretations of the language. The draft revised definition
eliminates this language.

20CMS disagreed with a portion of our predictability recommendation that
suggested segmenting the standard survey into more than one review to
provide more opportunities for surveyors to observe problematic homes. CMS
disagreed because of concerns that segmenting the survey would reduce the
effectiveness and increase the cost of surveys.

21CMS instructed the states to avoid, if possible, scheduling a home's
survey for the same month as the one in which the home's previous standard
survey was conducted.

22According to CMS, states consider 9 months to 15 months from the last
standard survey as the window for completing standard surveys because it
yields a 12-month average. CMS and states acknowledged that states
sometimes fall behind in conducting surveys and homes are not surveyed
until near or after the 15-month time frame. Thus, to maintain an average
survey interval of 12 months, more surveys would need to occur within 9
months of the last standard survey.

23ASPEN stands for the Automated Survey Processing Environment. ASPEN is
used by CMS central office, regional offices, and state survey agencies
for tracking surveys and survey findings. ASPEN comprises multiple modules
such as the ASPEN Enforcement Manager and the ASPEN Complaints and
Incidents Tracking System.

                                       Number of states
Percentage of predictable surveys April 2002 July 2005 
More than 50 percent                       0         1 
25 percent to 50 percent                   5         7 
10 percent to 24 percent                  26        27 
Less than 10 percent                      20        16 

Complaint Investigations: CMS Has Strengthened State Guidance and Oversight and
Is Continuing to Address Problems Involving Allegations of Abuse

Initiative                                            Status               
Complaint guidance: Issue additional guidance to      Selected initiatives 
states to strengthen complaint investigations,        implemented          
including allegations of abuse.                       
Complaint oversight: Enhance federal oversight of     In process           
state complaint investigations, including allegations 
of abuse.                                             

  Complaint Guidance

  Complaint Oversight

24Prior to this new requirement, federal guidelines required only that
complaints alleging immediate jeopardy to residents be investigated within
2 workdays. For all other complaints, states could establish their own
investigative time frame.

25MFCUs have authority to investigate the physical and sexual abuse of
nursing home residents, in addition to investigating fraud and abuse in
the Medicaid program. Typically, MFCUs are an investigative component of
the state's Office of the Attorney General but may be located in other
agencies, such as the state police, instead. Forty-eight states have a
MFCU.

26In 2002, CMS informed us that the posters were developed, but have not
yet been printed or distributed. According to a CMS official, the agency's
focus on higher-priority activities has contributed to the delay.

27Results for 2005 were not available at the time we conducted our work
for this report.

28We did not evaluate the effectiveness of the complaint tracking system.

Enforcement: CMS Has Strengthened the Potential Deterrent Effect of Sanctions
and Has Other Initiatives Under Way

29CMS requires state survey agencies to investigate allegations of nursing
home resident abuse, which can be submitted by residents, family members,
friends, physicians, and nursing home staff, within 2 days of learning of
the allegation, but does not impose a deadline for completing the
investigation. After the state survey agency has made an initial
determination, the nurse aide may request an appeal within 30 days.
Hearings may not be held for several months, and decisions are not always
immediate.

30The Background Check Pilot Program was mandated by Section 307 of the
Medicare Prescription Drug, Improvement, and Modernization Act of 2003
(Pub. L. No. 108-173, 117 Stat. 2066, 2257.). CMS issued grant
solicitation letters to states in July 2004 and made grants in January
2005.

Initiative                                            Status               
Immediate sanctions policy: Eliminate grace periods   Fully implemented    
for homes cited for repeat serious violations.        
Additional enforcement policy issues: Address         Selected initiatives 
weaknesses in policies, the appeals process, and      implemented          
enforcement tracking.                                 
Special Focus Facility Program: Revise to include the Fully implemented    
most poorly performing homes and to strengthen        
enforcement.                                          
Civil money penalties: Improve tracking and           In process           
collection to make them a more effective enforcement  
tool.                                                 
Past noncompliance policy: Revise by clarifying key   In process           
terms, increasing homes' accountability for past      
quality-of-care problems, and posting on the CMS Web  
site specific information about homes' past           
noncompliance.                                        

  Immediate Sanctions Policy

  Additional Enforcement Policy Issues

31States are now required to deny a grace period to homes that are
assessed one or more deficiencies at the actual harm level or above (G
through L on CMS's scope and severity grid) in each of two successive
surveys within a survey cycle. A survey cycle is two successive standard
surveys and any intervening survey, such as a complaint investigation.

32Substandard quality of care is defined as deficiencies cited at the F
level of scope and severity in certain care areas-quality of life, quality
of care, and resident behavior and facility practices.

33Before readmitting a terminated nursing home to Medicare, CMS requires
the home to address the situation that led to termination and provide
reasonable assurance that it will not recur. To give this assurance, a
home is required to have two surveys not more than 6 months apart, each of
which shows the problem to be corrected. The reasonable assurance period
is the time between these two surveys.

34From 2000 to 2004, CMS used a nationwide summary of the 10 regional
office enforcement databases known as the Long Term Care Enforcement
Tracking System.

  Special Focus Facility Program

  Civil Money Penalties

35We did not evaluate the performance of the ASPEN Enforcement Manager for
this report.

36In the Special Focus Facility Program, state survey agencies conduct
enhanced monitoring of nursing homes with histories of providing poor
care.

37The revised special focus facility selection methodology addressed
criticisms about the original state selection process from state survey
agencies, including that the process did not account for state size or
number of nursing homes, and used insufficient performance data in
selecting homes. Alaska is not required to select special focus
facilities.

  Past Noncompliance Policy

38CMS's guidance to states describes the factors to be considered when
determining the amount of a civil money penalty.

39The assumption is that the nursing home identified and corrected this
earlier care problem.

Oversight: Intensity and Scope of Federal Efforts Has Increased Significantly,
but Work Remains

Initiatives                                           Status               
Federal comparative surveys: Increase number to       Fully implemented    
intensify oversight.                                  
Smoke detectors: Require them in nursing homes        Fully implemented    
without sprinklers to strengthen fire safety.         
Assessments of state survey activities: Review state  Selected initiatives 
survey agencies' compliance with federal standards.   implemented          
Data systems and analysis: Upgrade to improve         In process           
tracking and oversight of state survey activities.    
Sharing data: Share quality data with the public to   Selected initiatives 
help drive quality improvement.                       implemented          
Quality Improvement Organizations: Use Quality        In process           
Improvement Organizations to help nursing homes       
improve the quality of care.                          
Coordination and dissemination of best practices:     In process           
Initiate activities to improve nursing home           
oversight.                                            

  Federal Comparative Surveys

40CMS is statutorily required to conduct federal monitoring surveys in at
least 5 percent of the surveyed nursing homes in each state each year,
with a minimum of 5 facilities in each state. As of January 2005, there
were 16,146 nursing homes, which would require 807 federal monitoring
surveys. Until 1992, all federal monitoring surveys were comparative. In
part because comparative surveys were resource intensive, CMS began to
rely more heavily on observational surveys, which require a smaller number
of federal surveyors.

41During fiscal years 1999 and 2000, CMS required a minimum of one
comparative survey to be completed yearly in the 20 states having fewer
than 200 nursing homes, two in the 24 states that had from 200 to 599
homes, and three in the 7 states that had 600 or more homes.

  Smoke Detectors in Homes without Sprinklers

  Assessments of State Survey Activities

42Since fiscal year 2001, CMS has expanded the scope of state performance
reviews to include seven additional Medicare and Medicaid providers, such
as hospitals and renal dialysis facilities, in addition to nursing homes.

43The 11 elements are (1) the citation has the full regulatory reference;
(2) evidence supports determination of noncompliance at the cited
regulation; (3) each deficient practice statement clearly summarizes the
provider/supplier failure(s) and quantifies a relevant extent; (4) the
scope accurately reflects the evidence and the residents who are, or may
be, affected by the deficient practice; (5) the severity rating in nursing
homes or the condition, standard, or element level cited reflects the
evidence and the actual and/or potential outcomes to beneficiaries; (6)
each person referred to is uniquely identified; (7) the observations,
interviews, and record reviews support the deficient practice statement
and illustrate the entity's noncompliance; (8) descriptions of observation
of provider/supplier practice include date, time, duration, and location;
(9) descriptions of interviews include dates and times and who was
interviewed; (10) record review includes date of entry and exact title of
record, and verifies lack of additional records with a knowledgeable
person; and (11) evidence is written in plain language that is clear,
concise, and easily understood.

44CMS was unable to score the standard in fiscal year 2001 because the
standard was too complicated. The standard consisted of 33 elements in
fiscal year 2001 but was reduced to 7 elements for the subsequent 2 fiscal
years. In fiscal year 2004, the number of elements was increased to 11.

  Data Systems and Analysis

45Examples include reports on pending nursing home terminations (weekly),
data entry timeliness (quarterly), tallies of state surveys that find
homes deficiency-free (semiannually), and analyses of the most frequently
cited deficiencies by states (annually).

  Sharing Data with the Public

46The MDS, which is prepared periodically for each nursing home resident,
contributes to multiple functions, including establishing patient care
plans, assisting with quality oversight, and setting nursing home payments
that account for variation in resident care needs.

47This limited on-site presence was also inconsistent with a
recommendation in a 2001 report CMS commissioned regarding the benefits of
on-site reviews in detecting MDS accuracy problems and with the view of 9
of the 10 states with separate MDS review programs that an on-site
presence at a significant number of their nursing homes is central to
their review efforts.

48Such a shift in focus would include (1) taking full advantage of the
periodic on-site visits already conducted at every nursing home nationwide
through its routine survey process; (2) ensuring that the federal MDS
review process is designed and sufficient to consistently assess the
performance of all states' reviews for MDS accuracy; and (3) providing
additional guidance, training, and other technical assistance to states as
needed to facilitate their efforts.

49Although the focus of the prior data assessment and verification
contract was MDS accuracy reviews, the contract also included an
examination of issues of interest to other CMS components that sponsored
the contract. For example, the contractor examined facility assessment
data on Medicare beneficiaries who received home health services.

50While on-site, the contractor had access to a broader range of
information gleaned from observation, interviews with residents and staff,
and reassessments of residents. During the 3-1/2 years of the data
assessment and verification contract, 69 on-site reviews were completed,
less than the 200 anticipated in 2001 and less than the revised goal of
100 on-site reviews. According to the contractor's report, the highest
discrepancy rates identified during the 69 on-site reviews of 617
assessments included the number of medications (50 percent discrepancy
rate) and pain management (10 percent discrepancy rate).

51The November 2002 roll-out of quality indicator data included a combined
total of 10 chronic care and post-acute-care quality indicators. Chronic
care quality indicators included decline in activities of daily living,
pressure sores (with facility-level adjustment), pressure sores (without
facility-level adjustment), inadequate pain management, physical
restraints used daily, and infections. Post-acute-care quality indicators
included failure to improve and manage delirium (with facility-level
adjustment), failure to improve and manage delirium (without
facility-level adjustment), inadequate pain management, improvement in
walking, and rehospitalizations.

52The National Quality Forum is a nonprofit organization created to
develop and implement a national strategy for health care quality
measurement and reporting. It has broad participation from government and
private entities as well as all sectors of the health care industry.

53The Web site reports the nursing staff hours per resident per day and
certified nurse aides per resident per day.

54The National Quality Forum has discussed expanding staffing data to
include these and other issues such as use of nonnursing staff to provide
care, use of part-time and contract nurses, and the tenure of the director
of nursing and the administrator.

  Quality Improvement Organizations

  Coordination and Dissemination of Best Practices

55In smaller states, QIOs worked with at least 10 nursing homes.

56An evaluation of the pilot program reported on the results of the pilot
program; however, the evaluation was conducted by the same QIO responsible
for facilitating the pilot program.

 Resource and Workload Issues Pose Key Challenges to Further Improving Nursing
                            Home Quality and Safety

Cost Could Delay Retrofitting of Older Nursing Homes with Sprinklers

57Best practices have been collected from organizations including the
American Medical Directors Association, University of Iowa Geriatric
Nursing Center, Association of Rehabilitation Nurses, American Diabetes
Association, National Kidney and Urologic Diseases Information
Clearinghouse, Feinberg School of Medicine (Northwestern University),
American Academy of Neurology, American Society of Consultant Pharmacists,
United Ostomy Association, and the Centers for Disease Control and
Prevention.

58To update federal fire safety standards, CMS issues notice and solicits
comments on the proposed new standards in the Federal Register, reviews
public comments, and publishes a final version of the standards with an
effective date. This process of adopting NFPA's 2000 standards in 2003
took CMS about 16 months.

59After the 2003 nursing home fire in Hartford, Connecticut, the state
passed a law requiring all nursing homes to install sprinklers not later
than July 1, 2005 (Conn. Spec. Acts 03-3, S:92.). In 2005, the state
extended the effective date to July 31, 2006 (Conn. Pub. Acts 05-187.).
Florida enacted a law in June 2005 that requires nursing homes in the
state to be protected with automatic sprinklers by December 31, 2010. A
loan guarantee program would be available in Florida because of concern
about the cost impact of retrofitting on homes (Fla. Laws Ch. 2005-234).

60This includes about 1 percent of homes whose sprinkler status is
unknown.

States Continue to Have Problems in Hiring and Retaining Surveyors

61According to CMS and state officials, the first year for a new surveyor
is essentially a training period with low productivity. It takes as long
as 3 years for a surveyor to gain sufficient knowledge, experience, and
confidence to perform the job well.

Percentage of surveyors with 2 years' experience or less Number of states 
More than 50 percent                                                    5 
More than 30 percent to 50 percent                                      5 
20 percent to 30 percent                                               10 
10 percent to less than 20 percent                                      5 

62As a result of the recession that began in 2001, states experienced
growing budget pressures and experienced significant budget shortfalls
from fiscal years 2003 through 2005. Although budget pressures diminished
at the end of fiscal year 2004, many states projected budget shortfalls in
fiscal year 2005.

Workload Issues and Competing Priorities Pose Challenges for CMS and States

  Increased Workload Has Contributed to Delays

63The Medicare Prescription Drug, Improvement, and Modernization Act of
2003 created the new Medicare prescription drug benefit, which will offer
Medicare beneficiaries outpatient prescription drug coverage (Pub. L. No.
108-173, S:101, 117 Stat. 2066, 2071-2152 (adding S:S: 1860D-1-1860D-42 to
the Social Security Act, codified at 42 U.S.C. S:S: 1395w-101-1395w-152)).
On January 28, 2005, CMS issued the final regulations implementing the
Medicare prescription drug benefit.

  Number of Providers Subject to Surveys Is Growing

64This increase includes a substantial increase in the number of end-stage
renal disease facilities and ambulatory surgical centers.

65The federal government funds 100 percent of costs associated with
certifying that nursing homes meet Medicare requirements and 75 percent of
the costs associated with Medicaid standards.

  Key Nursing Home Initiatives Continue to Compete for Priority

66The time frames for home health agency surveys are also established by
statute.

67CMS has identified four priority tiers for ranking state workload. CMS's
guidance to states for formulating budgets puts standard surveys in Tier
I, the highest tier, and puts complaints and initial surveys in Tiers II
and III, respectively.

                            Concluding Observations

68As stated earlier, CMS set aside some fiscal year 2006 funds for
conducting fire safety comparative surveys.

                  Agency and State Comments and Our Evaluation

Appendix I: Prior GAO Recommendations, Related CMS Initiatives, and
Implementation Status Appendix I: Prior GAO Recommendations, Related CMS
Initiatives, and Implementation Status

Table 10: Implementation Status of CMS's Initiatives Responding to GAO's
Nursing Home Quality and Safety Recommendations, July 1998 through
November 2004

GAO report                                                  Implementation 
number          GAO recommendation       CMS initiative         status     
Surveys                                                     
GAO/HEHS-98-202    1. Stagger or         CMS took several         0R       
                      otherwise vary the    steps to reduce    
                      scheduling of         survey             
                      standard surveys to   predictability,    
                      effectively reduce    but some state     
                      the predictability of surveys remain     
                      surveyors' visits.    predictable.       
                      The variation could                      
                      include segmenting       o  In 1999, CMS 
                      the standard survey      instructed      
                      into more than one       state survey    
                      review throughout the    agencies to (1) 
                      12- to 15-month          conduct 10      
                      period, which would      percent of      
                      provide more             surveys on      
                      opportunities for        evenings and    
                      surveyors to observe     weekends, (2)   
                      problematic homes and    vary the        
                      initiate broader         sequencing of   
                      reviews when             surveys in a    
                      warranted.               geographical    
                                               area to avoid   
                                               alerting other  
                                               homes that the  
                                               surveyors are   
                                               in the area,    
                                               (3) vary the    
                                               scheduling of   
                                               surveys by day  
                                               of the week,    
                                               and (4) avoid   
                                               scheduling      
                                               surveys for the 
                                               same month as a 
                                               home's prior    
                                               survey.         
                                               o  In 2004, CMS 
                                               provided states 
                                               with an         
                                               automated       
                                               scheduling and  
                                               tracking system 
                                               (AST) to assist 
                                               in scheduling   
                                               surveys. CMS    
                                               officials told  
                                               us that AST can 
                                               be used to      
                                               address survey  
                                               predictability. 
                                               States appeared 
                                               to be unaware   
                                               of this feature 
                                               and use of AST  
                                               is optional.    
                                               o  CMS          
                                               disagreed with  
                                               and did not     
                                               implement the   
                                               recommendation  
                                               to segment the  
                                               standard survey 
                                               into more than  
                                               one review      
                                               throughout the  
                                               12- to 15-month 
                                               period.         
                      2. Revise federal     CMS has been       
                      survey procedures to  developing a       
                      instruct surveyors to revised survey     
                      take stratified       methodology since  
                      random samples of     1998. A pilot test 
                      resident cases and    of the new         
                      review sufficient     methodology is     
                      numbers and types of  scheduled to begin 
                      resident cases so     in the fall of     
                      that surveyors can    2005.              
                      better detect         Implementation     
                      problems and assess   could begin in     
                      their prevalence.     mid-2007.          
GAO-03-561         3. Finalize the       See CMS action in  
                      development, testing, response to        
                      and implementation of recommendation to  
                      a more rigorous       revise federal     
                      survey methodology,   survey procedures  
                      including             (recommendation #2 
                      investigative         above).            
                      protocols that                           
                      provide guidance to   CMS began revising 
                      surveyors in          surveyors'         
                      documenting           investigative      
                      deficiencies at the   protocols in       
                      appropriate scope and October 2000.      
                      severity level.       Three protocols    
                                            have been issued   
                                            and several more   
                                            are under          
                                            development. In    
                                            addition, CMS is   
                                            clarifying the     
                                            definitions of     
                                            actual harm and    
                                            immediate          
                                            jeopardy.          
                      4. Require states to  CMS has no plans   
                      have a quality        to implement this  
                      assurance process     recommendation,    
                      that includes, at a   indicating that    
                      minimum, a review of  regular workload   
                      a sample of survey    and priorities     
                      reports below the     take precedence    
                      level of actual harm  over it.           
                      to assess the                            
                      appropriateness of                       
                      the scope and                            
                      severity cited and to                    
                      help reduce instances                    
                      of understated                           
                      quality-of-care                          
                      problems.                                
GAO-05-78          5. Hold homes         CMS revised its    
                      accountable for all   definition of past 
                      past noncompliance    noncompliance. CMS 
                      resulting in harm to  plans to add the   
                      residents, not just   specific nature of 
                      care problems deemed  the care problem   
                      to be egregious, and  to its Web site,   
                      develop an approach   but programming    
                      for citing such past  required for the   
                      noncompliance in a    Medicare           
                      manner that clearly   prescription drug  
                      identifies the        benefit has        
                      specific nature of    delayed            
                      the care problem both implementation.    
                      in the OSCAR database                    
                      and on CMS's Nursing                     
                      Home Compare Web                         
                      site.                                    
Complaints                                                  
GAO/HEHS-99-80     6. Develop additional In October 1999,   
                      standards for the     CMS issued a       
                      prompt investigation  policy letter      
                      of serious complaints stating that       
                      alleging situations   complaints         
                      that may harm         alleging harm must 
                      residents but are     be investigated    
                      categorized as less   within 10 days.    
                      than immediate                           
                      jeopardy. These       In January 2004,   
                      standards should      CMS provided       
                      include maximum       detailed direction 
                      allowable time frames and guidance to    
                      for investigating     states for         
                      serious complaints    managing complaint 
                      and for complaints    investigations for 
                      that may be deferred  numerous types of  
                      until the next        providers,         
                      scheduled annual      including nursing  
                      survey. States may    homes.             
                      continue to set                          
                      priority levels and   In June 2004, CMS  
                      time frames that are  made available     
                      more stringent than   updated guidance   
                      these federal         on the Internet    
                      standards.            that consolidates  
                                            complaint          
                                            investigation      
                                            procedures for     
                                            numerous types of  
                                            providers.         
                      7. Strengthen federal In 2000, CMS began 
                      oversight of state    requiring its      
                      complaint             regional offices   
                      investigations,       to perform yearly  
                      including monitoring  assessments of     
                      states' practices     states' complaint  
                      regarding             investigations as  
                      priority-setting,     part of annual     
                      on-site               state performance  
                      investigation, and    reviews.           
                      timely reporting of                      
                      serious health and                       
                      safety complaints.                       
GAO-03-561         8. Finalize the       In January 2004,   
                      development of        CMS provided       
                      guidance to states    detailed direction 
                      for their complaint   and guidance to    
                      investigation         states for         
                      processes and ensure  managing complaint 
                      that it addresses key investigations for 
                      weaknesses, including numerous types of  
                      the prioritization of providers,         
                      complaints for        including nursing  
                      investigation,        homes.             
                      particularly those                       
                      alleging harm to      In June 2004, CMS  
                      residents; the        made available     
                      handling of facility  updated guidance   
                      self-reported         on the Internet    
                      incidents; and the    that consolidates  
                      use of appropriate    complaint          
                      complaint             investigation      
                      investigation         procedures for     
                      practices.            numerous types of  
                                            providers.         
GAO-02-312         9. Ensure that state  In 2002, CMS       
                      survey agencies       issued a memo to   
                      immediately notify    the regional       
                      local law enforcement offices and state  
                      agencies or Medicaid  survey agencies    
                      Fraud Control Units   emphasizing its    
                      when nursing homes    policy for         
                      report allegations of preventing abuse   
                      resident physical or  in nursing homes   
                      sexual abuse or when  and for promptly   
                      the survey agency has reporting it to    
                      confirmed complaints  the appropriate    
                      of alleged abuse.     agencies when it   
                                            occurs.            
                                                               
                                            In 2004, CMS       
                                            informed GAO that  
                                            it continues to    
                                            hold discussions   
                                            with the           
                                            Department of      
                                            Justice and with   
                                            the HHS Office of  
                                            General Counsel    
                                            about CMS's        
                                            authority to       
                                            require, and       
                                            potential          
                                            effectiveness of   
                                            requiring, state   
                                            survey agencies to 
                                            immediately notify 
                                            local law          
                                            enforcement of     
                                            suspected physical 
                                            and sexual abuse.  
                      10. Accelerate the    CMS developed a    
                      agency's education    poster, but it is  
                      campaign on reporting not yet released,  
                      nursing home abuse by pending approval   
                      (1) distributing its  by the Secretary   
                      new poster with       of HHS.            
                      clearly displayed                        
                      complaint telephone   In 2002, CMS       
                      numbers and (2)       released a         
                      requiring state       memorandum to      
                      survey agencies to    regional offices   
                      ensure that these     and state agencies 
                      numbers are           that addresses     
                      prominently listed in displaying         
                      local telephone       complaint          
                      directories.          telephone numbers. 
                                            CMS asked all      
                                            state agencies to  
                                            review how their   
                                            telephone number   
                                            is listed in the   
                                            local directory    
                                            and asked them to  
                                            ensure that their  
                                            complaint          
                                            telephone numbers  
                                            are prominently    
                                            listed.            
                      11. Systematically    CMS is conducting  
                      assess state policies a Background Check 
                      and practices for     Pilot Program in   
                      complying with the    several states, as 
                      federal requirement   required by the    
                      to prohibit           Medicare           
                      employment of         Prescription Drug, 
                      individuals convicted Improvement, and   
                      of abusing nursing    Modernization Act  
                      home residents and,   of 2003. The pilot 
                      if necessary, develop is expected to run 
                      more specific         through September  
                      guidance to ensure    2007, followed by  
                      compliance.           an evaluation of   
                                            the results.       
                      12. Clarify the       In 2002, CMS       
                      definition of abuse   released a         
                      and otherwise ensure  memorandum to its  
                      that states apply     regional offices   
                      that definition       and state survey   
                      consistently and      agency directors   
                      appropriately.        clarifying its     
                                            definition of      
                                            abuse and          
                                            instructing them   
                                            to report          
                                            suspected abuse to 
                                            law enforcement    
                                            authorities and,   
                                            if appropriate, to 
                                            the state's        
                                            Medicaid Fraud     
                                            Control Unit.a     
                      13. Shorten the state CMS informed GAO   
                      survey agencies' time that the           
                      frames for            regulations do not 
                      determining whether   specify time       
                      to include findings   frames that states 
                      of abuse in nurse     must follow in     
                      aide registry files.  substantiating     
                                            abuse, but agreed  
                                            to review this     
                                            matter when the    
                                            agency considers   
                                            changes to the     
                                            regulations. CMS   
                                            did not indicate   
                                            when this would be 
                                            done.              
Enforcement                                                 
GAO/HEHS-98-202    14. Require that for  In 1998, CMS       
                      problem homes with    issued guidance to 
                      recurring serious     regional offices   
                      violations, state     and state survey   
                      surveyors             agencies           
                      substantiate, by      strengthening its  
                      means of an on-site   revisit policy by  
                      revisit, every report requiring on-site  
                      to CMS of a home's    revisits until all 
                      resumed compliance    serious            
                      status.               deficiencies are   
                                            corrected. Homes   
                                            are no longer      
                                            permitted to       
                                            self-report        
                                            resumed            
                                            compliance.        
                      15. Eliminate the     CMS phased in      
                      grace period for      implementation of  
                      homes cited for       its "double G"     
                      repeated serious      policy from        
                      violations and impose September 1998     
                      sanctions promptly,   through January    
                      as permitted under    2000.              
                      existing regulations.                    
GAO/HEHS-99-46     16. Improve the       As requested by    
                      effectiveness of      HHS, Congress      
                      civil money           approved increased 
                      penalties: the        funding and        
                      Administrator should  staffing levels    
                      continue to take      for the            
                      those steps necessary Departmental       
                      to shorten the delay  Appeals Board in   
                      in adjudicating       fiscal years 1999  
                      appeals, including    and 2000.          
                      monitoring progress                      
                      made in reducing the                     
                      backlog of appeals.                      
                      17. Strengthen the                             0R       
                      use and effect of                        
                      termination:                             
                      o  Continue Medicare  CMS conducted a    
                      and Medicaid payments study and          
                      beyond the            concluded that it  
                      termination date only was not practical  
                      if the home and state to establish rules 
                      Medicaid agency are   to address this    
                      making reasonable     problem.           
                      efforts to transfer                      
                      residents to other                       
                      homes or alternative                     
                      modes of care.                           
                      o  Ensure that        CMS added examples 
                      reasonable assurance  to the reasonable  
                      periods associated    assurance guidance 
                      with reinstating      in 2000, but       
                      terminated homes are  declined to        
                      of sufficient         lengthen the       
                      duration to           reasonable         
                      effectively           assurance period.  
                      demonstrate that the                     
                      reason for                               
                      termination has been                     
                      resolved and will not                    
                      recur.                                   
                      o  Strengthen the use In 2000, CMS       
                      and effect of         revised its        
                      termination: Revise   guidance so that   
                      existing policies so  pretermination     
                      that the              history of a home  
                      pretermination        is considered in   
                      history of a home is  taking subsequent  
                      considered in taking  enforcement        
                      a subsequent          actions.           
                      enforcement action.                      
                      18. Improve the       In 2000, CMS       
                      referral process: The revised its        
                      Administrator should  guidance to        
                      revise CMS guidance   require states to  
                      so that states refer  refer homes for    
                      homes to CMS for      possible sanction  
                      possible sanction     if they had been   
                      (such as civil money  cited for a        
                      penalties) if they    deficiency that    
                      have been cited for a contributed to a   
                      deficiency that       resident's death.  
                      contributed to a                         
                      resident's death.                        
Oversight                                                   
GAO/HEHS-99-46     19. Develop better    CMS has            
                      management            implemented new    
                      information systems.  national           
                      The Administrator     enforcement and    
                      should enhance OSCAR  complaint tracking 
                      or develop some other systems but does   
                      information system    not anticipate     
                      that can be used by   completing its     
                      both by the states    replacement of the 
                      and CMS to integrate  OSCAR data system  
                      the results of        until 2008.        
                      complaint                                
                      investigations, track                    
                      the status and                           
                      history of                               
                      deficiencies, and                        
                      monitor enforcement                      
                      actions.                                 
GAO/HEHS-99-80     20. Require that the  In January 2004,   
                      substantiated results CMS's new ASPEN    
                      of complaint          Complaint Tracking 
                      investigations be     system was         
                      included in federal   implemented        
                      data systems or be    nationwide.        
                      accessible by federal                    
                      officials.                               
GAO/HEHS-00-6      21. Improve the scope                    
                      and rigor of CMS's                       
                      oversight process:                       
                      o  Increase the       CMS has            
                      proportion of federal significantly      
                      monitoring surveys    increased the      
                      conducted as          number of          
                      comparative surveys   quality-of-care    
                      to ensure that a      comparative        
                      sufficient number are surveys. In fiscal 
                      completed in each     year 2006,         
                      state to assess       however, the       
                      whether the state     agency will no     
                      appropriately         longer contract    
                      identifies serious    for additional     
                      deficiencies.         quality-of-care    
                                            comparative        
                                            surveys because of 
                                            funding            
                                            constraints.       
                      o  Ensure that        To better ensure   
                      comparative surveys   that conditions in 
                      are initiated closer  a nursing home     
                      to the time the state have not changed   
                      agency completes the  since the state    
                      home's annual         survey, CMS        
                      standard survey.      regional offices   
                                            have reduced the   
                                            average time       
                                            between the state  
                                            survey and the     
                                            initiation of a    
                                            federal            
                                            comparative survey 
                                            from 33 days in    
                                            1999 to 26 days by 
                                            2004.              
                      o  Require regions to CMS instructed the 
                      provide more timely   regions to report  
                      written feedback to   the results of     
                      the states after the  federal monitoring 
                      completion of federal surveys to states  
                      monitoring surveys.   on a monthly       
                                            basis.             
                      o  Improve the data   CMS developed a    
                      system for            separate database  
                      observational surveys accessible to all  
                      so that it is an      regional offices   
                      effective management  that includes the  
                      tool for CMS to       results of         
                      properly assess the   observational      
                      findings of           surveys. Beginning 
                      observational         in fiscal year     
                      surveys.              2002, CMS added    
                                            data on the        
                                            results of         
                                            comparative        
                                            surveys.           
                      22. Improve the                                0R       
                      consistency in how                       
                      CMS holds state                          
                      survey agencies                          
                      accountable by                           
                      standardizing                            
                      procedures for                           
                      selecting state                          
                      surveys and                              
                      conducting federal                       
                      monitoring surveys:                      
                      o  Ensure that the    CMS did not        
                      regions target        implement our      
                      surveys for review    recommendation to  
                      that will provide a   select individual  
                      comprehensive         state surveys for  
                      assessment of state   federal review in  
                      surveyor performance. a manner that      
                                            ensures its        
                                            regional offices   
                                            observe as many    
                                            state surveyors as 
                                            possible.          
                      o  Require federal    In October 2002,   
                      surveyors to include  CMS instructed     
                      as many of the same   federal surveyors  
                      residents as possible to select at least 
                      in their comparative  half of those      
                      survey sample as the  residents selected 
                      state included in its by the state       
                      sample (where CMS     surveyors for      
                      surveyors have        their resident     
                      determined that the   sample.            
                      state sample                             
                      selection process was                    
                      appropriate).                            
                      23. Further explore   In December 1999,  
                      the feasibility of    CMS adopted new    
                      appropriate           state sanctions.   
                      alternative remedies  In fiscal year     
                      or sanctions for      2005, CMS began to 
                      those states that     tie survey agency  
                      prove unable or       funding increases  
                      unwilling to meet     to the timely      
                      CMS's performance     conduct of         
                      standards.            standard surveys,  
                                            a step that we     
                                            believe offers a   
                                            strong incentive   
                                            for improved       
                                            compliance.        
GAO/HEHS-02-279    24. Review the        CMS disagreed with 
                      adequacy of current   and did not        
                      state efforts to      implement this     
                      ensure the accuracy   recommendation.    
                      of minimum data set                      
                      (MDS) data, and                          
                      provide, where                           
                      necessary, additional                    
                      guidance, training,                      
                      and technical                            
                      assistance.                              
                      25. Monitor the       CMS disagreed with 
                      adequacy of state MDS and did not        
                      accuracy activities   implement this     
                      on an ongoing basis,  recommendation.    
                      such as through the                      
                      use of the                               
                      established federal                      
                      comparative survey                       
                      process.                                 
                      26. Provide guidance  CMS disagreed with 
                      to state agencies and and did not        
                      nursing homes that    implement this     
                      sufficient            recommendation.    
                      evidentiary                              
                      documentation to                         
                      support the full MDS                     
                      assessment be                            
                      included in                              
                      residents' medical                       
                      records.                                 
GAO-03-187         27. Delay the         CMS disagreed with 
                      implementation of     and did not        
                      nationwide reporting  implement this     
                      of quality indicators recommendation.    
                      until there is                           
                      greater assurance                        
                      that the quality                         
                      indicators are                           
                      appropriate for                          
                      public                                   
                      reporting-including                      
                      the validity of the                      
                      indicators selected                      
                      and the use of an                        
                      appropriate                              
                      risk-adjustment                          
                      methodology-based on                     
                      input from the                           
                      National Quality                         
                      Forum and other                          
                      experts and, if                          
                      necessary, additional                    
                      analysis and testing.                    
                      28. Delay the         CMS disagreed with 
                      implementation of     and did not        
                      nationwide reporting  implement this     
                      of quality indicators recommendation.    
                      until a more thorough                    
                      evaluation of the                        
                      pilot is completed to                    
                      help improve the                         
                      initiative's                             
                      effectiveness,                           
                      including an                             
                      assessment of the                        
                      presentation of                          
                      information on the                       
                      Web site and the                         
                      resources needed to                      
                      assist consumers' use                    
                      of the information.                      
GAO-03-561         29. Further refine    CMS did not        
                      annual state          implement this     
                      performance reviews   recommendation     
                      so that they (1)      because it         
                      consistently          believes that the  
                      distinguish between   state performance  
                      systemic problems and standards take     
                      less serious issues   into account       
                      regarding state       statutory and      
                      performance, (2)      nonstatutory       
                      analyze trends in the performance        
                      proportion of homes   standards.         
                      that harm residents,                     
                      (3) assess state                         
                      compliance with the                      
                      immediate sanctions                      
                      policy for homes with                    
                      a pattern of harming                     
                      residents, and (4)                       
                      analyze the                              
                      predictability of                        
                      state surveys.                           
GAO-04-660         30. Ensure that CMS   CMS's evaluation   
                      regional offices      of state           
                      fully comply with the surveyors'         
                      statutory requirement performance now    
                      to conduct annual     routinely includes 
                      federal monitoring    fire safety as     
                      surveys by including  part of the        
                      an assessment of the  statutory          
                      fire safety component requirement to     
                      of states' standard   annually conduct   
                      surveys, with an      federal monitoring 
                      emphasis on           surveys in at      
                      unsprinklered homes.  least 5 percent of 
                                            surveyed nursing   
                                            homes in each      
                                            state.             
                      31. Ensure that data  As nursing homes   
                      on sprinkler coverage are surveyed, CMS  
                      in nursing homes are  is in the process  
                      consistently obtained of collecting      
                      and reflected in the  consistent data on 
                      CMS database.         the sprinkler      
                                            status of homes    
                                            and entering these 
                                            data into OSCAR.   
                      32. Until sprinkler   CMS has contacted  
                      coverage data are     state survey       
                      routinely available   agencies and       
                      in CMS's database,    collected data on  
                      work with state       all but about 5    
                      survey agencies to    percent of nursing 
                      identify the extent   homes. These data  
                      to which each nursing will be verified   
                      home is sprinklered   during each home's 
                      or not sprinklered.   next annual        
                                            survey.            
                      33. On an expedited   CMS expects to     
                      basis, review all     complete its       
                      waivers and Fire      reviews of Fire    
                      Safety Evaluation     Safety Evaluation  
                      Systemb assessments   System Assessments 
                      for homes that are    by late 2005.      
                      not fully sprinklered                    
                      to determine their                       
                      appropriateness.                         
                      34. Make information  This information   
                      on fire safety        will not be        
                      deficiencies          available on the   
                      available to the      Nursing Home       
                      public via the        Compare Web site   
                      Nursing Home Compare  until 2007.        
                      Web site, including                      
                      information on                           
                      whether a home has                       
                      automatic sprinklers.                    
                      35. Work with the     CMS has issued an  
                      National Fire         interim final rule 
                      Protection            requiring the      
                      Association to        installation of    
                      strengthen fire       smoke detectors by 
                      safety standards for  May 24, 2006. It   
                      unsprinklered nursing anticipates        
                      homes, such as        issuing a notice   
                      requiring smoke       of proposed rule   
                      detectors in resident making requiring   
                      rooms, exploring the  older nursing      
                      feasibility of        homes to install   
                      requiring sprinklers  sprinklers early   
                      in all nursing homes, in 2006 but will   
                      and developing a      ask for comments   
                      strategy for          on how much time   
                      financing such        homes should be    
                      requirements.         given to come into 
                                            compliance.        
                      36. Ensure that       CMS developed and  
                      thorough              issued a           
                      investigations are    standardized       
                      conducted following   procedure to       
                      multiple-death        ensure that both   
                      nursing home fires so state survey       
                      that fire safety      agencies and its   
                      standards can be      own staff take     
                      reevaluated and       appropriate action 
                      modified where        to investigate     
                      appropriate.          fires that result  
                                            in serious injury  
                                            or death.          

Fully implemented our recommendation

0R Implemented only part of our recommendation and no further steps are
planned

Taking steps to implement our recommendation

Did not implement our recommendation

Source: GAO analysis of CMS's responses to our recommendations.

aIn 1999, CMS had required the use of an investigative protocol on abuse
prohibition during every standard survey. The protocol's objective is to
determine if the facility has developed and operationalized policies and
procedures that prohibit abuse, neglect, involuntary seclusion, and
misappropriation of resident property.

bAs an alternative to correcting or receiving a waiver for deficiencies
identified on a standard survey, a home may undergo an assessment using
the Fire Safety Evaluation System. The system provides a means for nursing
homes to meet the fire safety objectives of CMS's standards without
necessarily being in full compliance with every standard.

Appendix II: Percentage of Nursing Homes Cited for Actual Harm or
Immediate Jeopardy during Standard Surveys Appendix II: Percentage of
Nursing Homes Cited for Actual Harm or Immediate Jeopardy during Standard
Surveys

In order to identify trends in the proportion of nursing homes cited with
actual harm or immediate jeopardy deficiencies, we analyzed data from
CMS's OSCAR database for four time periods: (1) January 1, 1999, through
July 10, 2000; (2) July 11, 2000, through January 31, 2002; (3) February
1, 2002, through July 10, 2003; and (4) July 11, 2003, through January 31,
2005. Because surveys are conducted at least every 15 months (with a
required 12-month statewide average), it is possible that a home was
surveyed twice in any time period. To avoid double counting of homes, we
included only homes' most recent survey from each time period.

Table 11: Percentage of Nursing Homes Cited for Actual Harm or Immediate
Jeopardy, by State

                            Percentage              
                             of homes               
                            cited for               
                              actual     Percentage 
                             harm or          point 
                  Number of immediate   differenceb 
                      homes  jeopardy      1/1/99 - 
                  surveyed,             7/10/00 and           2/1/02          
                     7/03 -   1/1/99 -    7/11/03 -  7/11/00       -  7/11/03 
State              1/05a    7/10/00      1/31/05 -1/31/02 7/10/03 -1/31/05
Increase of 5                                                     
percentage                                                        
points or                                                         
greater                                                           
District of           21       10.0         33.3     38.1    33.3     23.3 
Columbia                                                          
Colorado             218       15.4         26.2     21.7    24.3      8.9 
Connecticut          247       48.5         49.4     38.8    54.3      5.8 
Change of less                                                    
than 5                                                            
percentage                                                        
points                                                            
South Carolina       178       28.7         17.8     27.0    32.0      3.4 
Oklahoma             376       16.7         20.6     22.6    18.6      2.0 
Vermont               42       15.2         17.8      9.5    16.7      1.4 
Maine                117       10.3          9.7      9.0     9.4     -0.9 
West Virginia        137       15.6         14.0     14.1    13.1     -2.5 
Rhode Island          86       12.1         10.1      2.4     9.3     -2.8 
Wisconsin            413       14.0          7.1      9.1    10.2     -3.8 
Decrease of 5                                                     
percentage                                                        
points or                                                         
greater                                                           
Utah                  94       15.8         15.8     22.6    10.6     -5.2 
Iowa                 492       19.3          9.9      7.7    14.0     -5.3 
Georgia              365       22.6         20.5     20.1    16.4     -6.1 
Kansas               380       37.1         29.0     24.9    30.5     -6.5 
Tennessee            340       26.0         16.7     19.7    19.1     -6.9 
New Mexico            81       31.7         17.1     16.2    24.7     -7.0 
South Dakota         113       24.1         30.7     24.8    16.8     -7.3 
Hawaii                45       25.5         15.2     12.8    17.8     -7.8 
Maryland             239       25.6         20.2     14.6    17.6     -8.0 
North Dakota          83       21.3         28.4     11.9    13.3     -8.1 
Missouri             550       22.3         10.2     13.6    13.8     -8.4 
Nebraska             238       26.0         18.9     19.6    16.4     -9.6 
Louisiana            332       19.9         23.4     18.0    10.2     -9.7 
Virginia             287       19.9         11.6     13.4     9.8    -10.1 
Pennsylvania         729       32.2         11.6     14.4    20.6    -11.7 
Nevada                43       32.7          9.8      6.7    20.9    -11.8 
Illinois             833       29.3         15.4     15.3    16.2    -13.1 
Nation            16,463       29.3         20.5     17.1    15.5    -13.8 
Texas              1,185       26.9         25.5     18.5    12.7    -14.3 
New Jersey           363       24.5         22.4     12.7     9.6    -14.9 
Mississippi          209       33.2         19.6     14.4    18.2    -15.0 
Florida              694       20.8         20.1      9.8     5.5    -15.4 
New Hampshire         83       37.3         21.5     21.7    21.7    -15.7 
Massachusetts        468       33.0         22.9     22.5    16.9    -16.1 
Arkansas             254       37.7         27.3     15.8    20.5    -17.3 
Ohio               1,009       29.0         23.7     21.8    11.6    -17.4 
Idaho                 80       54.2         31.0     38.3    36.3    -18.0 
Minnesota            414       31.7         18.8     17.1    12.3    -19.3 
Kentucky             296       28.8         25.2     25.0     9.5    -19.4 
Michigan             433       42.1         24.7     30.0    22.6    -19.5 
Montana              101       37.5         25.2     16.0    17.8    -19.7 
Alaska                14       20.0         33.3      0.0     0.0    -20.0 
North Carolina       425       40.8         30.1     24.0    20.2    -20.6 
California         1,325       29.1          9.3      3.4     6.3    -22.8 
Alabama              229       42.2         18.4     12.6    19.2    -23.0 
New York             666       32.2         32.3     20.0     9.2    -23.0 
Indiana              523       45.3         26.2     17.4    21.4    -23.8 
Arizona              134       33.8          8.8      3.6     8.2    -25.6 
Washington           257       54.1         38.5     36.6    26.5    -27.7 
Wyoming               39       43.9         22.5     26.3    12.8    -31.1 
Oregon               141       47.5         33.6     14.4    14.2    -33.3 
Delaware              42       52.4         14.3      4.8    16.7    -35.7 

Source: GAO analysis of OSCAR data.

Note: The first two time periods reflect data in OSCAR as of June 24,
2002. The last two time periods reflect OSCAR data as of July 10, 2003,
and April 13, 2005, respectively. The term states includes the 50 states
and the District of Columbia.

aThese data illustrate the significant variation in the number of nursing
homes across states.

bDifferences are based on numbers before rounding.

Appendix III: Percentage of Homes Surveyed Within 15 Days of the 1-Year
Anniversary of Prior Survey Appendix III: Percentage of Homes Surveyed
Within 15 Days of the 1-Year Anniversary of Prior Survey

In order to determine the predictability of nursing home surveys, we
analyzed data from CMS's OSCAR database for a home's current survey as of
April 9, 2002, and as of July 8, 2005 (see table 12). We considered
surveys to be predictable if homes were surveyed within 15 days of the
1-year anniversary of their prior survey.

Table 12: Percentage of Nursing Homes with Predictable Surveys, April 2002
and June 2005

                                Percentage of homes                    
                              surveyed within 15 days Percentage point 
                               of 1-year anniversary       difference, 
                    Number of     of prior survey           4/9/02 and 
State            homesa                     4/9/02           7/8/05 7/8/05 
More than 50                                                        
percent                                                             
North Dakota            83                    28.2             51.8   23.6 
More than 25                                                        
percent to 50                                                       
percent                                                             
District of             20                    15.0             40.0   25.0 
Columbia                                                            
Iowa                   439                    31.1             35.8    4.7 
Kansas                 357                    13.6             29.1   15.5 
Oregon                 138                    14.1             28.3   14.2 
California           1,287                     9.5             27.8   18.3 
Nebraska               221                     3.1             27.6   24.5 
Maryland               236                    20.7             27.5    6.8 
10 percent to 25                                                    
percent                                                             
Virginia               270                    30.5             20.4  -10.1 
North Carolina         418                    13.9             19.1    5.2 
Wisconsin              396                    19.6             18.7   -0.9 
New Jersey             354                    18.7             18.4   -0.3 
Michigan               428                     8.8             17.1    8.3 
Alabama                227                     5.8             16.7   10.9 
Delaware                42                    31.0             16.7  -14.3 
Texas                1,111                    15.7             16.7    1.0 
Indiana                502                    14.4             16.3    1.9 
Massachusetts          461                    17.3             16.3   -1.0 
Wyoming                 39                    10.3             15.4    5.1 
Colorado               213                     9.0             15.0    6.0 
Kentucky               294                    10.6             15.0    4.4 
Nation              15,827                    13.0             14.5    1.5 
Alaska                  14                     6.7             14.3    7.6 
Rhode Island            92                    12.5             13.0    0.5 
Montana                100                     8.7             13.0    4.3 
New Mexico              78                    13.8             12.8   -1.0 
Pennsylvania           721                    24.0             12.8  -11.2 
Washington             246                    22.4             12.6   -9.8 
Vermont                 41                    11.6             12.2    0.6 
Missouri               509                    11.9             12.0    0.1 
New Hampshire           81                    12.0             11.1   -0.9 
New York               659                    14.8             11.1   -3.7 
South Dakota           109                    18.9             11.0   -7.9 
Florida                685                     9.3             10.4    1.1 
Illinois               792                     9.7             10.4    0.7 
Maine                  116                     8.3             10.3    2.0 
Less than 10                                                        
percent                                                             
Georgia                359                     0.6              7.2    6.6 
Nevada                  43                    24.4              7.0  -17.4 
Hawaii                  45                    13.6              6.7   -6.9 
Idaho                   80                     4.8              6.3    1.5 
South Carolina         176                     6.9              6.3   -0.6 
Arizona                133                    21.0              6.0  -15.0 
Louisiana              288                    19.0              5.9  -13.1 
Tennessee              326                     6.2              5.2   -1.0 
Minnesota              408                     4.4              4.7    0.3 
West Virginia          129                     8.7              3.9   -4.8 
Arkansas               235                    27.6              3.8  -23.8 
Utah                    87                     1.1              3.4    2.3 
Connecticut            245                    15.8              2.9  -12.9 
Ohio                   960                     3.0              2.2   -0.8 
Mississippi            201                     2.1              2.0   -0.1 
Oklahoma               333                     0.6              1.8    1.2 

Source: GAO analysis of OSCAR data.

Note: The term states includes the 50 states and the District of Columbia.

aRepresents the number of nursing homes with a prior and a current survey
as of July 8, 2005.

Appendix IV: Percentage of State Nursing Home Surveyors with 2-Years'
Experience or Less, 2002 and 2005 Appendix IV: Percentage of State Nursing
Home Surveyors with 2-Years' Experience or Less, 2002 and 2005

State          2002 2005 Percentage point change 
Increase                 
Arizona          20   53                      33 
Colorado         24   53                      29 
Alaska           29   57                      28 
Illinois          5   25                      20 
Rhode Island      9   23                      14 
North Carolina   33   44                      11 
Ohio             17   21                       4 
Virginia         21   25                       4 
Florida          55   57                       2 
Arkansas         33   33                       0 
Decrease                 
Indiana          20   18                      -2 
New Jersey       30   26                      -4 
Oregon           34   29                      -5 
Texas            32   26                      -6 
Wisconsin        25   19                      -6 
Nebraska         29   20                      -9 
Alabama          48   38                     -10 
Georgia          51   35                     -16 
Tennessee        45   28                     -17 
New York         40   18                     -22 
Washington       54   26                     -28 
Louisiana        48   19                     -29 
Maryland         70   14                     -56 
South Carolina    a   52                     N/A 
Vermont           a   38                     N/A 

Source: State survey agency responses to July 2002 GAO questions, and
updates obtained from AHFSA in July 2005.

Note: The term states includes the 50 states and the District of Columbia.

aThis state did not respond to our 2002 questions about surveyor
experience.

Appendix V: Comments from the Centers for Medicare & Medicaid Services
Appendix V: Comments from the Centers for Medicare & Medicaid Services

Appendix VI: A Appendix VI: GAO Contact and Staff Acknowledgments

                                  GAO Contact

Kathryn G. Allen, (202) 512-7118 or [email protected]

                                Acknowledgments

In addition to the contact named above, Walter Ochinko, Assistant
Director; Jack Brennan; Joanne Jee; Elizabeth T. Morrison; and Christal
Stone made key contributions to this report.

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(290460)

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www.gao.gov/cgi-bin/getrpt? GAO-06-117 .

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Highlights of GAO-06-117 , a report to congressional requesters

December 2005

NURSING HOMES

Despite Increased Oversight, Challenges Remain in Ensuring High-Quality
Care and Resident Safety

Since 1998, GAO has issued numerous reports on nursing home quality and
safety that identified significant weaknesses in federal and state
oversight. Under contract with the Centers for Medicare & Medicaid
Services (CMS), states conduct annual nursing home inspections, known as
surveys, to assess compliance with federal quality and safety
requirements. States also investigate complaints filed by family members
or others in between annual surveys. When state surveys find serious
deficiencies, CMS may impose sanctions to encourage compliance with
federal requirements.

GAO was asked to assess CMS's progress since 1998 in addressing oversight
weaknesses. GAO

(1) reviewed the trends in nursing home quality from 1999 through January
2005, (2) evaluated the extent to which CMS's initiatives have addressed
survey and oversight problems identified by GAO and CMS, and (3)
identified key challenges to continued progress in ensuring resident
health and safety.

GAO reviewed federal data on the results of state nursing home surveys and
federal surveys assessing state performance; conducted additional analyses
in five states with large numbers of nursing homes; reviewed the status of
its prior recommendations; and identified key workforce and workload
issues confronting CMS and states.

CMS's nursing home survey data show a significant decline in the
proportion of nursing homes with serious quality problems since 1999, but
this trend masks two important and continuing issues: inconsistency in how
states conduct surveys and understatement of serious quality problems.
Inconsistency in states' surveys is demonstrated by wide interstate
variability in the proportion of homes found to have serious
deficiencies-for example, about 6 percent in one state and about 54
percent in another. Continued understatement of serious deficiencies is
shown by the increase in discrepancies between federal and state surveys
of the same homes from 2002 through 2004, despite an overall decline in
such discrepancies from October 1998 through December 2004. In five large
states that had a significant decline in serious deficiencies, federal
surveyors concluded that from 8 percent to 33 percent of the comparative
surveys identified serious deficiencies that state surveyors had missed.
This finding is consistent with earlier GAO work showing that state
surveyors missed serious care problems. These two issues underscore the
importance of CMS initiatives to improve the consistency and rigor of
nursing home surveys.

CMS has addressed many survey and oversight shortcomings, but it is still
developing or has not yet implemented several key initiatives,
particularly those intended to improve the consistency of the survey
process. Key steps CMS has taken include (1) revising the survey
methodology, (2) issuing states additional guidance to strengthen
complaint investigations, (3) implementing immediate sanctions for homes
cited for repeat serious violations, and (4) strengthening oversight by
conducting assessments of state survey activities. Some CMS initiatives,
however, either have shortcomings impairing their effectiveness or have
not effectively targeted problems GAO and CMS identified. For example, CMS
has not fully addressed issues with the accuracy and reliability of the
data underlying consumer information published on its Web site.

The key challenges CMS, states, and nursing homes face in their efforts to
further improve nursing home quality and safety include (1) the cost to
older homes to be retrofit with automatic sprinklers to help reduce the
loss of life in the event of a fire, (2) continuing problems with hiring
and retaining qualified surveyors, and (3) an expanded workload due to
increased oversight, identification of additional initiatives that compete
for staff and financial resources, and growth in the number of Medicare
and Medicaid providers. Despite CMS's increased nursing home oversight,
its continued attention and commitment are warranted in order to maintain
the momentum of its efforts to date and to better ensure high-quality care
and safety for nursing home residents.

CMS generally concurred with the report's findings. CMS noted several
areas of progress in nursing home quality and identified remaining
challenges to conducting nursing home survey and oversight activities.
*** End of document. ***