Armed Forces Retirement Home: Health Care Oversight Should Be	 
Strengthened (30-MAY-07, GAO-07-790R).				 
                                                                 
The Armed Forces Retirement Home (AFRH), an independent executive
branch entity, operates two continuing care retirement		 
communities (CCRC). It provides care in three			 
settings--independent living, assisted living, and a nursing	 
home--and also operates a health and dental clinic for residents.
The responsibilities of a CCRC generally include (1)		 
appropriately transitioning residents from independent living to 
other settings as their care needs increase, (2) ensuring the	 
availability of appropriate health services as residents progress
to higher-level settings, and (3) ensuring residents' access to  
community-based or on-site health care. The law establishing AFRH
sets forth the framework for its oversight and management. The	 
NDAA for Fiscal Year 2006 required GAO to assess the regulatory  
oversight and monitoring of health care and nursing home care	 
services provided by AFRH. As discussed with the committees of	 
jurisdiction, we focused our review on (1) the standards that	 
could be used to monitor health care provided by AFRH and (2) the
adequacy of DOD oversight of AFRH health care. To address these  
issues, we (1) identified existing standards applicable to health
services in the three settings at AFRH and similar facilities;	 
(2) discussed accreditation process and follow-up between	 
accreditation surveys with officials from standard-setting	 
organizations; (3) reviewed the statutory oversight structure for
AFRH; (4) reviewed relevant DOD and AFRH reports related to	 
oversight issues, including complaints; (5) interviewed DOD, DOD 
inspector general (IG), and service IG officials involved in	 
oversight, including the Under Secretary's Principal Deputy	 
(PDUS); (6) interviewed two civilian experts in health care for  
the elderly and retirement home administration serving on the	 
AFRH-Washington Local Advisory Board; and (7) compared health	 
care-related problems identified during Joint Commission	 
accreditation reviews with those identified during service IG	 
inspections.							 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-07-790R					        
    ACCNO:   A70081						        
  TITLE:     Armed Forces Retirement Home: Health Care Oversight      
Should Be Strengthened						 
     DATE:   05/30/2007 
  SUBJECT:   Agency evaluation					 
	     Elder care 					 
	     Health care facilities				 
	     Health care services				 
	     Home health care services				 
	     Nursing homes					 
	     Patient care services				 
	     Retirement 					 
	     Standards						 
	     Institution accreditation				 
	     Executive agency oversight 			 

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GAO-07-790R

   

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May 30, 2007

The Honorable Carl Levin
Chairman
The Honorable John McCain
Ranking Member
Committee on Armed Services
United States Senate

The Honorable Ike Skelton
Chairman
The Honorable Duncan Hunter
Ranking Member
Committee on Armed Services
House of Representatives

Subject: Armed Forces Retirement Home: Health Care Oversight Should Be
Strengthened

The Armed Forces Retirement Home (AFRH), an independent executive branch
entity, operates two continuing care retirement communities (CCRC).^1 It
provides care in three settings--independent living, assisted living, and
a nursing home--and also operates a health and dental clinic for
residents. The responsibilities of a CCRC generally include (1)
appropriately transitioning residents from independent living to other
settings as their care needs increase, (2) ensuring the availability of
appropriate health services as residents progress to higher-level
settings, and (3) ensuring residents' access to community-based or on-site
health care. The law establishing AFRH sets forth the framework for its
oversight and management. The National Defense Authorization Act (NDAA)
for Fiscal Year 2006 required GAO to assess the oversight of health care
provided by AFRH.^2

As of 2006, AFRH served about 1,200 individuals at its Washington, D.C.,
campus who have served primarily as enlisted personnel in the armed
forces. Eighty-three percent of AFRH residents are divorced, widowed, or
single; the majority are male and the
average age is 79.^3 About 77 percent of residents reside in independent
living and the remainder are in either assisted living or the nursing
home. While AFRH is required by statute to seek accreditation by a
nationally recognized civilian accrediting organization, such as "the
Continuing Care Accreditation Commission and the Joint Commission...", the
statute does not address the accreditation of specific levels of care.^4
The Joint Commission accredits the nursing home and the AFRH clinic, which
provides physician and routine dental services.

^1Hurricane Katrina destroyed the AFRH Gulfport, Mississippi, facility in
2005 and many residents now live at the AFRH Washington, D.C., campus.

^2Pub. L. No. 109-163, S 909(b), 119 Stat. 3136, 3405.

AFRH is financed through a dedicated trust fund. The AFRH Trust Fund has
several revenue sources, including a 50-cent monthly payroll deduction
primarily from enlisted personnel. Concerns about the solvency of the
Trust Fund led to the creation in 2001 of a joint military services study
group within the Department of Defense (DOD) and, in response to the
group's findings, Congress restructured oversight and management of AFRH
in the NDAA for Fiscal Year 2002.^5

The restructuring increased DOD's oversight role by giving it supervisory
responsibility over the management of AFRH. The act established a Chief
Operating Officer (COO) for AFRH appointed by and reporting to the
Secretary of Defense. The COO is required to have experience and expertise
in the operation and management of retirement homes and in the provision
of long-term medical care for older persons. The COO replaced the National
Board; the Board's chairman was the chief executive officer of AFRH and
was responsible to the National Board rather than to the Secretary of
Defense. Moreover, Local Boards were made advisory to the COO.^6 The Local
Boards are required to have at least 11 members, with expertise in areas
such as law, finance, nursing home or retirement home administration, and
gerontology; several positions are designated for senior representatives
of specific military offices, such as a senior representative of a
personnel chief of one of the armed forces.

The Secretary of Defense delegated appointment and oversight
responsibility to the Under Secretary of Defense for Personnel and
Readiness and the Under Secretary's Principal Deputy (PDUS). Under this
delegation, the PDUS exercises primary
oversight responsibility; within the PDUS's office, the Deputy Under
Secretary for Military Community and Family Policy's staff for Morale,
Welfare, and Recreation Policy interacts more frequently with AFRH. Two
other DOD components have oversight responsibilities: (1) the Inspectors
General (IG) for the Departments of the Air Force, Army, and Navy
alternate inspections of AFRH every 3 years and (2) the DOD IG has
authority to conduct investigations of AFRH, including complaints.^7


^3AFRH has few comparable models. According to a 2002 census, there are
about 4,000 CCRCs nationwide. A February 2006 AFRH study identified 15
CCRCs as serving military retirees. Other facilities serving veterans
focus on nursing home services and are not CCRCs. For example, there are
139 state veterans' homes and the Department of Veterans Affairs operates
133 nursing homes.

^4The Continuing Care Accreditation Commission was purchased by the
Commission on Accreditation of Rehabilitation Facilities in 2003 and is
now known as CARF-CCAC. It is an independent, nonprofit accreditor of
human service providers, including medical and vision rehabilitation,
behavioral health, child and adult day care, and CCRCs. The Joint
Commission, formerly known as the Joint Commission on Accreditation of
Healthcare Organizations, is a private, nonprofit accreditor of health
care organizations and programs, including hospitals and clinical labs and
organizations that provide home care, ambulatory care, and long-term care
services.

^5Pub. L. No. 107-107, SS 1401-1410, 115 Stat. 1012, 1257-67 (2001)
(codified, as amended, at 24 U.S.C. SS 411-423).

^6Prior to the NDAA for Fiscal Year 2002, the Local Boards exercised
operational oversight over AFRH campuses.

The first COO of AFRH, who was appointed in 2002, has changed how AFRH
operates. Key COO changes involving health care included (1) remodeling of
the health and dental clinics and changing clinic staffing and (2)
upgrading transportation for medical appointments through outsourcing to a
licensed contractor.^8 In addition, AFRH's 2006 annual report indicated
that from fiscal years 2003 through 2006, the Trust Fund increased from
$94 million to $146 million. Residents filed a lawsuit in 2005 alleging
problems with access to and quality of health care at AFRH. The U.S.
District Court for the District of Columbia dismissed the lawsuit.^9 As of
May 2007, the residents' appeal was pending in the U.S. Court of Appeals
for the District of Columbia Circuit.

The NDAA for Fiscal Year 2006 required GAO to assess the regulatory
oversight and monitoring of health care and nursing home care services
provided by AFRH. As discussed with the committees of jurisdiction, we
focused our review on (1) the standards that could be used to monitor
health care provided by AFRH and (2) the adequacy of DOD oversight of AFRH
health care. To address these issues, we

           o identified existing standards applicable to health services in
           the three settings at AFRH and similar facilities;
           o discussed accreditation process and follow-up between
           accreditation surveys with officials from standard-setting
           organizations;
           o reviewed the statutory oversight structure for AFRH;
           o reviewed relevant DOD and AFRH reports related to oversight
           issues, including complaints;
           o interviewed DOD, DOD IG, and service IG officials involved in
           oversight, including the PDUS;^10 
           o interviewed two civilian experts in health care for the elderly
           and retirement home administration serving on the AFRH-Washington
           Local Advisory Board; and
           o compared health care-related problems identified during Joint
           Commission accreditation reviews with those identified during
           service IG inspections.

^724 U.S.C. SS 418, 411(f).

^8Previously, the vehicles owned and operated by AFRH lacked restrooms.

^9Cody v. Rumsfeld, 450 F. Supp. 2d 5 (D.D.C. 2006). In dismissing the
lawsuit, the court cited the NDAA for Fiscal Year 2006, which required the
availability of a physician and dentist during daily business hours, daily
scheduled transportation to nearby medical facilities, and establishment
by the COO of uniform standards for access to health care services.

^10The current PDUS has been in this position since July 2006.

Because Hurricane Katrina resulted in the closure of AFRH-Gulfport, we
focused our review on AFRH-Washington. We did not evaluate the quality of
health care provided by AFRH or its compliance with provisions of the NDAA
for Fiscal Year 2006 regarding available services because of the pending
lawsuit. We conducted our review from November 2006 through May 2007 in
accordance with generally accepted government auditing standards.

In April 2007, we briefed your staffs on the results of our work. The
briefing slides which have been updated with agency comments are included
as enclosure I. This report documents the information we provided in the
briefing and transmits our recommendations to the Secretary of Defense.

Results in Brief

Several organizations have standards applicable to the health care
provided by AFRH, but no single standard-setting organization has
standards that cover all such care. The Joint Commission accredits
providers of clinic and nursing home services but does not accredit the
independent or assisted living settings (see table 1). Oversight of the
independent and assisted living settings is important because AFRH--as a
CCRC--must ensure that residents are in the appropriate setting as their
care needs increase. The Joint Commission conducts on-site surveys of
clinic and nursing home services at AFRH every 3 years and investigates
complaints. During the most recent AFRH triennial survey in 2005, the
Joint Commission cited 10 requirements for improvement in clinic care and
8 in nursing home care, placing it in the bottom quartiles of such
facilities surveyed by the Joint Commission that year. Requirements for
improvement are among the most serious Joint Commission findings.

Table 1: AFRH Care Settings and Current Oversight Standards Applied

Care setting       Standards applied          
Independent living None                       
Assisted living    None                       
Nursing home       Joint Commission standards 
Clinics            Joint Commission standards 

Source: GAO.

Two federal agencies--the Centers for Medicare & Medicaid Services (CMS)
and the Department of Veterans Affairs (VA)--also have standards
applicable to nursing home care. AFRH is not subject to CMS standards
because such standards only apply to facilities paid by Medicare or
Medicaid. VA nursing homes are accredited by the Joint Commission, and VA
inspects state veterans' homes using standards similar to CMS's. Overall,
the standards applied to nursing homes serving veterans include CMS, VA,
and Joint Commission standards. While CARF-CCAC has standards applicable
to all three care settings at AFRH, it has no standards for clinic
services. AFRH has not sought CARF-CCAC accreditation, which would result
in inspections once every 5 years. In general, independent and assisted
living facilities are less regulated than nursing homes.

DOD oversight of AFRH health care is inadequate because it is too limited
and lacks sufficient independent input. The PDUS--the DOD official who
exercises primary oversight over AFRH---told us that he sees the COO as an
expert in managing retirement homes and that the COO has health care
experts on his staff. The PDUS noted, however, that he recently called on
Health Affairs, an office within Personnel and Readiness, for health care
expertise. Because he can reach out for health care expertise independent
of the COO on an as-needed basis and because he views AFRH as primarily a
retirement community for which he must ensure a high quality of life,
rather than a health care facility, the PDUS told us that the delegation
of AFRH oversight responsibility to his office is the best option within
DOD. The PDUS told us, however that the other sources of information
independent of the COO that he has to assist him in his oversight of AFRH
health care have limitations.

First, he told us that Joint Commission accreditation every 3 years may be
insufficient. He recognized that there was no oversight of independent or
assisted living and told us he is exploring alternatives. Additionally,
service IG inspections occur during the same year as Joint Commission
accreditation, resulting in a 3-year gap in scheduled oversight. Second,
we found that as a result of direction by the office of the PDUS the
service IGs no longer focus their reviews on health care provided by AFRH
in all three settings. This 2005 change may result in health care problems
remaining unidentified. Our comparison of service IG and Joint Commission
inspection reports since 1999 found that the service IGs had concerns
about access to outpatient specialty care and about residents residing in
settings not staffed to meet their needs--areas not addressed by Joint
Commission findings.^11 Moreover, the PDUS and the COO declined to provide
the 2005 service IG inspection team with the Joint Commission
accreditation report for AFRH-Washington, preventing the team from
effective follow-up to ensure AFRH was taking appropriate corrective
actions.

Third, the Local Boards, which could be another source of independent
information for the PDUS, have met infrequently and have not been allowed
to fulfill their advisory roles. While members of the Local Boards include
an expert in CCRC administration and a gerontologist, the COO told us that
the Local Boards are "not helpful" and lack appropriate expertise. The two
Local Board members we interviewed said that meetings consist of
presentations by the COO to members rather than requests by the COO for
members' advice. Despite the fact that the service IG raised concerns
about the functioning of the Local Boards in 2005, PDUS actions to make
the Local Boards effective in their advisory role have been limited since
then. In March 2007, PDUS directed the COO to recommend new members to
serve on the Local Boards before the current board members' terms expire
in 2007. At the same time, the PDUS directed the COO to propose how best
to make the boards effective in their advisory role.

^11Service IGs examined health care in clinics and all three care settings
while the Joint Commission's inspections were more limited.

Conclusions

Oversight of health care at AFRH is inadequate. Currently, there are no
inspections of AFRH's independent and assisted living settings. Such
oversight is important to ensure that residents are receiving appropriate
care and are transitioned to other care settings as their care needs
increase. Although the primary oversight responsibility for AFRH has been
delegated to PDUS, this office's health care oversight has been limited
and the sources of independent information to inform PDUS oversight have
shortcomings. For example, the Joint Commission and service IG inspections
occur triennially in the same year and, according to the PDUS, a Joint
Commission inspection once every 3 years may be insufficient. In addition,
PDUS shifted the focus of service IG inspections away from health care in
2005, but directed the service IGs to review Joint Commission
accreditation reports to ensure AFRH follow-up. Our review of service IG
and Joint Commission inspection reports demonstrated that this decision
may result in health care problems remaining unidentified. Moreover,
according to the service IG team that conducted the 2005 AFRH inspection,
it was not provided the data that it needed on Joint Commission findings,
such as the full accreditation report, to enable it to provide adequate
oversight. Although Local Boards have the potential to assist in the
PDUS's oversight, they have not been allowed to fulfill their advisory
roles to the COO, which could provide useful information to the PDUS. The
PDUS response to the 2005 service IG inspection findings that the Local
Boards were not fulfilling their advisory role has been limited. In March
2007, however, the PDUS directed the COO to find ways to effectively use
the Local Boards.

Recommendations for Executive Action

To improve health care oversight at AFRH, we recommend that the Secretary
of Defense take the following four actions:

           o refocus service IG inspections on health care, particularly in
           the independent and assisted living settings, which are not
           covered by external accreditation;
           o ensure that service IG inspections do not occur in the same year
           as Joint Commission accreditation;
           o ensure that service IGs have access to all relevant data on
           Joint Commission inspections; and
           o ensure that the Local Boards are allowed to fulfill their
           advisory roles.

Agency Comments and Our Evaluation

We obtained written comments from DOD on our draft report. Agreeing that
our recommendations would strengthen health care oversight of AFRH, DOD
partially concurred with the first recommendation and concurred with the
other three recommendations. Although DOD's response indicated only
partial concurrence with our recommendation to refocus service IG
inspections on health care, its proposed actions fully meet the intent of
our recommendation. Thus, beginning in 2008, DOD will ensure that the
service IG triennial inspections include a comprehensive review of health
care services and ensure appropriate follow-up with the independent
accreditation of the independent and assisted living and long-term care
settings. To address the current lack of oversight of the independent and
assisted living settings, DOD said that AFRH is arranging for CARF-CCAC
accreditation. According to a DOD official, the partial concurrence
reflected a decision to have the service IG inspections continue to
examine areas other than health care, which we believe is not inconsistent
with our recommendation. DOD comments are included in enclosure II.

In addition, DOD commented on the steps it had taken regarding a letter
from the Comptroller General concerning serious allegations by health care
professionals about the quality of care provided by the home. We were
referred to these health care professionals during the course of our
interviews on AFRH oversight. As noted in this report, we did not evaluate
the quality of health care provided by AFRH because of a pending lawsuit,
and instead brought these allegations to DOD's attention. DOD's comments
indicated that it took some immediate steps to investigate these
allegations and that follow-up by the DOD IG was still under way.

                                   - - - - -

We are sending copies of this report to the Secretary of Defense and
appropriate congressional committees. We will also provide copies to
others upon request. In addition, the report will be available at no
charge on GAO's Web site at http://www.gao.gov .

If you and your staffs have any questions or need additional information,
please contact Kathleen King at (202) 512-7119 or [email protected] .
Contact points for our Offices of Congressional Relations and Public
Affairs may be found on the last page of this report. Major contributors
to this report were Walter Ochinko, Assistant Director; Carrie Davidson;
Joanne Jee; Grace Materon; and Jennifer Whitworth.

Kathleen King
Director, Health Care

Enclosures - 2

Enclosure II

                    Comments from the Department of Defense

(290588)

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