California Nursing Homes: Care Problems Persist Despite Federal and State
Oversight (Letter Report, 07/27/98, GAO/HEHS-98-202).

Pursuant to a congressional request, GAO reviewed allegations that
residents in California nursing homes are not receiving acceptable care,
focusing on: (1) examining, through a medical record review, whether
these allegations had merit and whether serious care problems currently
exist; (2) reviewing the adequacy of federal and state efforts in
monitoring nursing home care through annual surveys; and (3) assessing
the effectiveness of federal and state efforts to enforce sustained
compliance with federal nursing home requirements.

GAO noted that: (1) despite the federal and state oversight
infrastructure currently in place, certain California nursing homes have
not been and currently are not sufficiently monitored to guarantee the
safety and welfare of their residents; (2) GAO reached this conclusion
primarily using data from federal surveys and state complaint
investigations conducted by California's Department of Health Services
(DHS) on 1,370 California homes, supplemented with more in-depth
analysis of certain homes and certain residents' care; (3) GAO found
that surveyors can miss problems that affect the safety and health of
nursing home residents and that even when such problems are identified,
enforcement actions do not ensure that they are corrected and do not
recur; (4) with regard to allegations made about avoidable deaths in
1993, GAO's expert nurses' review of the 62 resident cases sampled found
that residents in 34 cases received care that was unacceptable and that
sometimes endangered their health and safety; (5) in the absence of
autopsy information or other additional clinical evidence, GAO cannot be
conclusive about the extent to which this unacceptable care may have
contributed directly to individual deaths; (6) unacceptable care
continues to be a problem in many homes; (7) GAO believes that the
extent of serious care problems portrayed in federal and state data is
likely to be understated; (8) GAO found that homes could generally
predict when their annual on-site reviews would occur and, if inclined,
could take steps to mask problems otherwise observable during normal
operations; (9) GAO found irregularities in the homes' documentation of
the care provided to their residents; (10) in visiting homes selected by
California DHS officials, GAO found multiple cases in which DHS
surveyors did not identify certain serious care problems; (11) surveyors
missed these care problems because federal guidance on conducting
surveys does not include sampling methods that can enhance the spotting
of potential problems and help establish their prevalence; (12) the
Health Care Financing Administration's (HCFA) enforcement policies have
not been effective in ensuring that the deficiencies are corrected and
remain corrected; (13) California's DHS grants all noncompliant homes,
with some exceptions, a 30- to 45-day grace period, during which they
may correct the deficiencies without penalty; (14) a substantial number
of California's homes that have been terminated and later reinstated
have soon thereafter been cited again for serious deficiencies; and (15)
the problems GAO identified are indicative of systemic survey and
enforcement weaknesses.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  HEHS-98-202
     TITLE:  California Nursing Homes: Care Problems Persist Despite 
             Federal and State Oversight
      DATE:  07/27/98
   SUBJECT:  Elder care
             Sanctions
             Elderly persons
             Nursing homes
             Surveys
             Noncompliance
             Medical records
             State programs
             Safety standards
IDENTIFIER:  California
             Medicare Program
             Medicaid Program
             
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Cover
================================================================ COVER


Report to the Special Committee on Aging, U.S.  Senate

July 1998

CALIFORNIA NURSING HOMES - CARE
PROBLEMS PERSIST DESPITE FEDERAL
AND STATE OVERSIGHT

GAO/HEHS-98-202

California Nursing Homes

(101700)


Abbreviations
=============================================================== ABBREV

  ACLAIMS - Automated Certification and Licensing Administrative
     Information Management System
  DHS - Department of Health Services
  HCFA - Health Care Financing Administration
  HHS - Department of Health and Human Services
  OBRA87 - Omnibus Budget Reconciliation Act of 1987
  OSCAR - On-Line Survey, Certification, and Reporting
  UTI - urinary tract infection

Letter
=============================================================== LETTER


B-278399

July 27, 1998

The Honorable Charles E.  Grassley
Chairman
The Honorable John B.  Breaux
Ranking Minority Member
Special Committee on Aging
United States Senate

Nursing homes play an important role in the health care system of the
United States.  Among other services, they provide skilled nursing
and supportive care to older individuals who do not need the
intensive medical care provided by hospitals, but for whom receiving
such care at home is no longer feasible.  An estimated 43 percent of
Americans who passed their 65th birthday in 1990 will use a nursing
home at some time in their lives.  In 1997, there were more than
17,000 nursing homes in the United States with over 1.7 million beds. 
The federal government, through the Medicare and Medicaid programs,
paid these homes nearly $28 billion in 1997. 

In 1997, a lawyer and an investigator raised allegations to your
Committee that 3,113 residents died in 971 California nursing homes
in 1993 as a result of malnutrition, dehydration, and other serious
conditions for which they did not receive acceptable care.  Poor
nutrition, dehydration, and improper care of incontinent and immobile
residents can result in bedsores (pressure sores) or urinary tract
infections, which, if not properly treated, can lead to more serious
infection and death.  The federal government, through the Health Care
Financing Administration (HCFA), and the state of California, through
its Department of Health Services (DHS), share oversight
responsibilities for California nursing homes that participate in the
Medicare and Medicaid programs.  To assess compliance with federal
standards, DHS relies primarily on a yearly standard survey conducted
by nurses or other staff with medical or social service backgrounds
who review the care and services provided by the homes.  California
has more than 1,400 nursing homes, with over 141,000 resident beds. 
The Medicare and Medicaid programs paid these homes approximately $2
billion in 1997. 

Concerned about the life-threatening potential of these conditions,
you asked us to (1) examine, through a medical record review, whether
these allegations had merit and whether serious care problems
currently exist; (2) review the adequacy of federal and state efforts
in monitoring nursing home care through annual surveys; and (3)
assess the effectiveness of federal and state efforts to enforce
sustained compliance with federal nursing home requirements. 

To address the allegations pertaining to the acceptability of care in
1993, two registered nurses, one with a doctoral degree in
gerontological nursing and the other with a master's degree in the
same field, and both with clinical expertise in nursing home care and
data abstraction, conducted a clinical review of the medical records
for a sample of residents included in the allegations.  Using
clinical practice guidelines, published research, and professional
judgment concerning acceptable nursing home care, the nurses
determined whether residents received acceptable or unacceptable
care.  Their work was further reviewed by another registered nurse on
our staff with experience working in nursing homes and judging
whether care met acceptable clinical standards.  This second review
focused specifically on a critical examination of all cases in which
the first team of registered nurses identified residents as having
had unacceptable care.  Our registered nurse also discussed some of
the cases with physicians and additional registered nurses
specializing in geriatric care to further clarify whether care was
acceptable or unacceptable.  From this second review, we excluded all
questionable cases from the final unacceptable care group.  Because
of our sampling method, the results of this analysis of medical
records pertaining to deaths in 1993 cannot be generalized to the
universe of all residents in California nursing homes operating then
or now. 

To assess the adequacy of federal and state efforts in monitoring
nursing home care, we (1) reviewed federal and state data that showed
the results of surveys, complaint investigations, and enforcement
actions taken from 1995 to 1998; (2) accompanied state surveyors
during their regularly scheduled annual survey of two nursing homes
and, with the help of a second team of registered nurses experienced
in assessing nursing home care, conducted a concurrent survey of care
at these two homes; and (3) interviewed officials from nursing homes,
DHS, HCFA, nursing home industry associations, and advocacy groups. 
Before releasing the draft for official comment, we consulted with a
number of noted clinical experts,\1 who reviewed our findings and
found the report well supported and balanced. 

We conducted our work between October 1997 and July 1998 in
accordance with generally accepted government auditing standards. 
(See app.  I for a detailed description of our scope and
methodology.) In addition to this report, we are currently
conducting, for you and other requesters, a broader-based review that
addresses nursing home enforcement nationwide.  We expect to issue
that report early in 1999. 


--------------------
\1 They included Sydney Katz, M.D., Professor Emeritus of Geriatric
Medicine, Columbia University, who had led the Institute of Medicine
study that influenced the Omnibus Budget Reconciliation Act of 1987
nursing home reforms; Mathy Mezey, Ed.D., R.N., FAAN, Independence
Foundation Professor of Nursing Education, New York University, and
Director of the Hartford Institute for Geriatric Nursing; John W. 
Rowe, M.D., President of Mount Sinai Medical Center and School of
Medicine; and T.  Franklin Williams, M.D., Professor of Medicine
Emeritus and Department of Veterans Affairs Distinguished Physician,
University of Rochester School of Medicine and Dentistry, and
Director, National Institute on Aging, National Institutes of Health
(1983 through 1991). 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :1

Overall, despite the federal and state oversight infrastructure
currently in place, certain California nursing homes have not been
and currently are not sufficiently monitored to guarantee the safety
and welfare of their residents.  We reached this conclusion primarily
by using data from federal surveys and state complaint investigations
conducted by California's DHS on 1,370 California homes, supplemented
with our more in-depth analysis of certain homes and certain
residents' care.  We also found that surveyors can miss problems that
affect the safety and health of nursing home residents and that even
when such problems are identified, enforcement actions do not ensure
that they are corrected and do not recur. 

With regard to allegations made about avoidable deaths in 1993, our
expert nurses' review of the 62 resident cases sampled\2 found that
residents in 34 cases received care that was unacceptable and that
sometimes endangered their health and safety.  Our team found such
care problems as inadequate intervention by the nursing home to
prevent dramatic, unplanned weight loss and failure to properly treat
pressure sores that became infected and toxic.  However, in the
absence of autopsy information that establishes the cause of death,
we cannot be conclusive about the extent to which this unacceptable
care may have contributed directly to individual deaths. 

Unacceptable care continues to be a problem in many homes.  For
example, our analysis of federal survey and state complaint
investigations found that nearly 1 in 3, or 407, of 1,370 California
nursing homes were cited by state surveyors for having serious or
potentially life-threatening care problems.\3

Moreover, we believe that the extent of current serious care problems
portrayed in these federal and state data is likely to be
understated.  We found that homes could generally predict when their
annual on-site reviews would occur and, if inclined, could take steps
to mask problems otherwise observable during normal operations.  In
addition, we found instances of irregularities in the homes'
documentation of the care provided to their residents, such as
missing pages of clinical notes needed to explain a resident's injury
later identified through physician observation.  These types of
irregularities could shield from surveyor scrutiny such problems as
inadequate staffing or avoidable injuries.  Finally, in visiting
homes selected by California DHS officials themselves, our team found
multiple cases in which DHS surveyors did not identify certain
serious care problems--including unaddressed dramatic weight loss and
related nutritional problems.  Surveyors missed these and other care
problems, in part, because federal guidance on conducting surveys
does not include sampling methods that can enhance the spotting of
potential problems and help establish their prevalence. 

Even when the state identifies serious deficiencies, HCFA's
enforcement policies have not been effective in ensuring that the
deficiencies are corrected and remain corrected.  For example,
California state surveyors had cited about 1 in 11 homes in our
analysis--accounting for over 17,000 resident beds--for violations in
both of their last two surveys that resulted in harm to residents. 
Nevertheless, HCFA generally took a lenient stance toward many of
these homes.  California's DHS, consistent with HCFA's guidance on
imposing sanctions, grants all noncompliant homes--except for the few
homes that qualify as posing the greatest danger to residents--a 30-
to 45-day grace period.  During this period, these homes may correct
deficiencies without penalty, regardless of their past performance. 
In addition, a substantial number of California's homes that have
been terminated and later reinstated have soon thereafter been cited
again for serious deficiencies when reviewed in subsequent surveys. 
Recognizing its enforcement shortcomings, California's DHS launched a
pilot program this month intended to target for increased vigilance
certain of the state's nursing homes with the worst performance
records. 

Although our report focuses on nursing homes in California, the
problems we identified are indicative of systemic survey and
enforcement weaknesses.  Our recommendations therefore target federal
guidance in general so that improvements are available to any state
experiencing problems with seriously noncompliant homes.  Thus,
through HCFA's leadership, federal and state oversight of nursing
homes can be strengthened nationally and residents nationwide can
enjoy increased protection. 


--------------------
\2 Our criteria for inclusion in the sample were that a case came
from a home with at least 5 of the allegedly avoidable deaths and at
least 5 such deaths per 100 beds; 72 nursing homes met these
criteria.  The 62 cases were drawn randomly and came from 15 of those
nursing homes. 

\3 The 1,370 homes represent 95 percent of Medicare- and
Medicaid-certified homes in California in operation at some time
between July 1, 1995, and February 26, 1998. 


   BACKGROUND
------------------------------------------------------------ Letter :2

The Omnibus Budget Reconciliation Act of 1987 (OBRA 87) introduced
major reforms in the federal regulation of nursing homes that
responded to growing concerns about the quality of care that
residents received.  Among other things, these reforms revised care
requirements that facilities must meet to participate in the Medicare
or Medicaid programs, modified the survey process for certifying a
home's compliance with federal standards, and introduced additional
sanctions and decertification procedures for homes that fail to meet
federal standards. 


      OVERSIGHT IS SHARED FEDERAL
      AND STATE RESPONSIBILITY
---------------------------------------------------------- Letter :2.1

The federal responsibility for overseeing nursing facilities belongs
to HCFA, an agency of the Department of Health and Human Services
(HHS).  Among other tasks, HCFA defines federal requirements for
nursing home participation in Medicare and Medicaid and imposes
sanctions against homes failing to meet these requirements.  The law
requires HCFA to contract with state agencies to survey nursing homes
participating in Medicare and Medicaid.  In California, DHS performs
nursing home oversight, and its authority is specifically defined in
state and federal laws and regulations.  As part of this role, DHS
(1) licenses nursing homes to do business in California; (2)
certifies to the federal government, by conducting reviews of nursing
homes, that the homes are eligible for Medicare and Medicaid payment;
and (3) investigates complaints about care provided in the licensed
homes. 

To assess nursing home compliance with federal and state laws and
regulations, DHS relies on two types of reviews--the standard survey
and the complaint investigation.  The standard survey, which must be
conducted no less than once every 15 months at each home, entails a
team of state surveyors spending several days on site conducting a
broad review of care and services with regard to meeting the assessed
needs of the residents.\4 The complaint investigation entails
conducting a targeted review with regard to a specific complaint
filed against a home.  California state law mandates that a complaint
must be investigated within 2 to 10 days, depending on the
seriousness of the infraction being alleged.  HCFA requires that any
complaint involving immediate jeopardy to a resident's health or
safety be investigated within 48 hours. 


--------------------
\4 The standard survey is used not only to meet HCFA's requirement to
certify homes for Medicare and Medicaid participation but also to
ensure that a home is continuing to meet its state licensing
requirements. 


      SEPARATE FEDERAL AND STATE
      ENFORCEMENT SYSTEMS
---------------------------------------------------------- Letter :2.2

The state and HCFA each has its own enforcement system for
classifying deficiencies that determines which remedies, sanctions,
or other actions should be taken against a noncompliant home.  During
standard surveys, California's DHS typically cites deficiencies using
HCFA's classification and sanctioning scheme; for complaint
investigations, it generally uses the state's classification and
penalty scheme, which allows the imposition of penalties and other
actions under state enforcement criteria. 

Table 1 shows HCFA's classification of deficiencies and their
accompanying levels of severity and compliance status. 



                          Table 1
          
          HCFA's Deficiency Classification System

                                              Compliance
                                              status of
                                              home cited
                                Level of      for this
HCFA deficiency category        severity      deficiency
------------------------------  ------------  ------------
Immediate jeopardy to resident  Most serious  Noncompliant
health or safety

Actual harm that does not put   Serious       Noncompliant
resident in immediate jeopardy

No actual harm, with potential  Less serious  Noncompliant
for more than minimal harm

No actual harm, with potential  Minimal       Substantiall
for minimal harm                              y compliant
----------------------------------------------------------
HCFA guidance also classifies deficiencies by their scope, or extent,
as follows:  (1) isolated, defined as affecting a limited number of
residents; (2) pattern, defined as affecting more than a limited
number of residents; and (3) widespread, defined as affecting all or
almost all residents.  HCFA guidance on citing a deficiency's scope
as "widespread" states that "`the universe' [of residents required
for determining `widespread'] is the entire facility," not just those
who, by their condition, would have been affected by the deficiency
cited.  The example provided explains that if a facility was
deficient in appropriately treating all of a facility's tube-fed
residents--but the number of tube-fed residents was less than the
facility's total number of residents--surveyors must cite the
deficiency's scope as "pattern" and not widespread. 

Whether a deficiency is judged by surveyors to be isolated, a
pattern, or widespread has implications for enforcement.  For
example, under HCFA regulations, a home is to be cited for
"substandard quality of care" when it has certain deficiencies
exceeding a particular severity and scope level.  Receiving a
substandard rating is significant because, depending on a home's past
performance, such a rating can prompt stronger enforcement actions
than are typically taken under HCFA policy. 

The deficiencies that can warrant a substandard rating involve
federal requirements related to quality of care, quality of life, and
resident behavior and facility practices.  Any of these types of
deficiencies involving immediate jeopardy to resident health and
safety results in a substandard rating.  In addition, these types of
deficiencies lead to a substandard rating if they are of the
following severity and scope combinations:  a pattern of or
widespread actual harm that is not immediate jeopardy; or a
widespread potential for more than minimal harm that is not immediate
jeopardy, with no actual harm. 


   SERIOUS CARE PROBLEMS FOUND IN
   MANY NURSING HOMES REVIEWED
------------------------------------------------------------ Letter :3

The work of our expert nurses indicates that some of California's
nursing home residents who died in 1993 received unacceptable care
that, in certain cases, endangered their health and safety.  We also
found evidence that serious care problems exist today in California
nursing homes.  Data from standard and complaint surveys indicate
that nearly a third of California's nursing homes experience serious
care problems. 


      REVIEW OF 1993 MEDICAL
      RECORDS UNCOVERED SERIOUS
      CARE PROBLEMS
---------------------------------------------------------- Letter :3.1

We examined medical records of residents who died in 1993 from such
causes as malnutrition, dehydration, pressure sores, and urinary
tract infections with sepsis (the presence of bacteria and toxins in
the blood or tissue).  Their deaths were alleged to have been caused
by unacceptable nursing home care.  The 3,113 cases of alleged
unacceptable care were distributed across nearly three-fourths of
California's nursing homes in 1993.  However, to avoid selecting
isolated instances of such deaths, our cases were drawn from about 5
percent of California's homes that had at least five of the allegedly
avoidable deaths.  Our review suggests that 34 residents--more than
half of the 62 cases reviewed--received unacceptable care.\5 Our
expert nurses concluded that, in some of these cases, unacceptable
care endangered residents' health and safety.  Care problems included
dramatic, unplanned weight loss, failure to properly treat pressure
sores, and failure to manage pain.  The examples in figure 1
illustrate the nature of the care problems we identified. 

   Figure 1:  Examples of
   Quality-of-Care Problems Found
   in Review of 1993 Medical
   Records

   (See figure in printed
   edition.)

In other cases we reviewed from 1993, the care documented in the
medical record was acceptable.  For example, when nursing home staff
recognized that a resident was having difficulty swallowing food,
they changed her diet to pureed food and placed the resident in a
restorative feeding program, where she received additional help in
eating.  Although the resident later refused all food and liquid and
eventually died of dehydration, our expert reviewers concluded that
the nursing home staff provided acceptable care during the resident's
4-month stay in the home.  The cause of death listed on her death
certificate might raise questions about the care she received, but
only medical record review could determine whether the care was
acceptable. 


--------------------
\5 Care was considered unacceptable based on the clinical judgment of
our nurse reviewers--using practice guidelines to help them reach
their judgment-- and supplemented with additional review.  The
unacceptable care they identified led to outcomes that caused serious
harm to some residents.  Care given in 1993 was not analyzed as to
whether the homes would have been considered compliant using HCFA's
1995 enforcement requirements. 


      STATE'S QUALITY REVIEWS SHOW
      SUBSTANTIAL CARE PROBLEMS
      OCCURRING TODAY
---------------------------------------------------------- Letter :3.2

DHS surveyors identified a substantial number of homes with serious
care problems through their annual standard surveys of nursing homes
and through ad hoc complaint investigations.  Through examining the
most recent two surveys from homes that had at least two standard
surveys conducted between July 1995 and February 1998, and that may
have had complaint investigations in 1996 or 1997, we found that
surveyors cited 407 homes--nearly a third of the 1,370 homes included
in our analysis--for serious violations classified under the federal
deficiency categories, the state's categories, or both.  These homes
were cited for violations that caused death, seriously jeopardized
residents' health and safety, or were considered by state surveyors
to have constituted substandard care. 

Figure 2 shows the distribution of the nursing homes included in our
analysis by the seriousness of the federal and state violations
cited. 

   Figure 2:  Distribution of
   1,370 California Nursing Homes
   by Seriousness of Federal and
   State Violations Cited, 1995-98

   (See figure in printed
   edition.)

Note:  Violations can be federal deficiencies cited in either of a
home's two most recent surveys or state deficiencies cited for 1996
or 1997. 

\a Federal and state violations in this category include (1) improper
care leading to death and (2) life-threatening harm or other serious
injury--federal violations classified as immediate and serious
jeopardy and state violations cited as class AA or A.  Federal
violations also include a specified set of 49 deficiencies of
severity and scope that constitute substandard care.  State
violations additionally include intentional falsification of medical
records or material omission in medical records. 

\b Federal and state violations in this category include harm to a
resident that regulators judged to be less than
life-threatening--federal violations classified as causing residents
actual harm that do not put a resident in immediate jeopardy and are
not classified as substandard care.  State violations included in
this category are those cited as class B, which have a direct or
immediate relationship to the health, safety, or security of a
resident. 

\c Federal violations in this category include deficiencies that have
not caused actual harm but could cause more than minimal harm to
residents if not corrected.  California has no directly equivalent
state citation for this category. 

\d Homes in this category either were cited for no violations or for
federal violations that did not cause harm to residents but could
result in minimal harm if not corrected.  California has no directly
equivalent state citation for this category. 

The four wedges in figure 2 correspond to federal deficiency
categories shown in table 1 and include comparable-level deficiencies
cited using the state's separate classification scheme, as follows: 

  -- "Caused death or serious harm" represents any federal deficiency
     that surveyors classified as constituting immediate jeopardy or
     substandard care and California deficiencies of improper care
     leading to death, imminent danger or probability of death,
     intentional falsification of medical records, or material
     omission in medical records. 

  -- "Caused less serious harm" represents federal violations
     constituting actual harm but not immediate jeopardy or
     substandard care and California violations that have a direct or
     immediate relationship to the health, safety, or security of a
     resident. 

  -- "More than minimal deficiencies" represents federal violations
     that could cause more than minimal harm to residents if not
     corrected. 

  -- "Minimal or no deficiencies" represents either no violations or
     federal violations that could have resulted in minimal harm to
     residents if not corrected. 

Figure 3 shows the distribution of types of deficiencies in the
category called "caused death or serious harm" and gives examples of
each type.  The category "improper care leading to death" does not
include all residents who died in homes cited for violations related
to residents' care, because the category "life-threatening harm" can
also include such violations and associated deaths. 

   Figure 3:  Examples of
   Deficiencies DHS Cited Between
   1995 and 1998 That Correspond
   to the "Caused Death or Serious
   Harm" Category in Figure 2

   (See figure in printed
   edition.)

\a State violations cited as class AA. 

\b Federal violations classified as "immediate and serious jeopardy"
and state violations cited as class A.  This category includes some
violations causing harm that were associated with a resident's death. 

\c Federal violations are classified as "substandard quality of care"
if (1) the deficiencies are in one of three requirement
categories--quality of care, quality of life, and resident behavior
and facility practices and (2) their prevalence is widespread and has
a potential for harming residents, or they have harmed more than a
limited number of residents or put the health and safety of one or
more residents in immediate jeopardy.  Substandard quality-of-care
violations that put residents in immediate jeopardy are included in
"life-threatening harm" in this figure. 

\d State violations classified as "intentional falsification of
medical records" or "material omission in medical records." Three
other homes were cited for falsification of or key omissions from
medical records, but because they were also cited for other serious
care violations, they were included in the "other serious improper
care" group. 

We also found examples of poor care that were ranked by state
surveyors as causing less serious harm under the federal and state
classification systems.  For example, the cases described in figure 4
were not classified in the group of "most serious" violations. 

   Figure 4:  Examples of
   Deficiencies DHS Cited Between
   1995 and 1998 That Correspond
   to the "Caused Less Serious
   Harm" Category in Figure 2

   (See figure in printed
   edition.)

Deficiencies classified as "potential for more than minimal
harm"--corresponding to the "more than minimal deficiencies" category
in figure 2--can also include problems more serious than their
classification implies, as figure 5 shows. 

   Figure 5:  Examples of
   Deficiencies DHS Cited Between
   1995 and 1998 That Correspond
   to the "More Than Minimal
   Deficiencies" Category in
   Figure 2

   (See figure in printed
   edition.)

Homes with deficiencies classified as having "potential for minimal
harm"--corresponding to the "minimal or no deficiencies" category in
figure 2--are considered by HCFA to be in substantial compliance, as
shown in table 1.  However, figure 6 shows examples of deficiencies
that California surveyors classified in this category in which the
harm could be considered by some to be greater than minimal. 

   Figure 6:  Examples of
   Deficiencies DHS Cited Between
   1995 and 1998 That Correspond
   to the "Minimal or No
   Deficiencies" Category in
   Figure 2

   (See figure in printed
   edition.)


   PREDICTABILITY OF SURVEYS,
   QUESTIONABLE RECORDS, AND
   SURVEY LIMITATIONS HINDER
   EFFORTS TO IDENTIFY CARE
   PROBLEMS
------------------------------------------------------------ Letter :4

The deficiencies that state surveyors identified and documented very
likely capture part but not the full extent of care problems in
California's homes, for several reasons.  Some homes can mask
problems because they are able to predict the timing of annual
reviews or because medical records sometimes contain inaccurate
information that overstates the care provided, given the resident's
observed condition.  In addition, state surveyors can miss
identifying deficiencies because of limitations on the methods used
in the annual review--methods established in HCFA guidance on
conducting surveys--to identify potential areas of unacceptable care. 


      SURVEYS' PREDICTABLE TIMING
      LIKELY CONCEALS ADDITIONAL
      CARE PROBLEMS
---------------------------------------------------------- Letter :4.1

The extent of care problems is likely to be masked because of the
predictability of homes' standard surveys.  The law requires that a
standard survey be unannounced, that it begin no later than 15 months
after the last day of the previous standard survey, and that the
statewide average interval between standard surveys not exceed 12
months.  Because many California homes were reviewed in the same
month--sometimes almost the same week--year after year, homes could
often predict the timing of their next survey and, if inclined,
prepare to cover up problems that may normally exist at other times. 
For example, a home that may routinely operate with too few staff
could temporarily augment its staff during the period of the survey
in order to mask an otherwise serious deficiency in staffing levels. 
Advocates and residents' family members told us they believe that
such staffing adjustments are common, given their own observations in
homes they visited. 

At two homes we visited, we saw that the homes' officials had made
advance preparations--such as making a room ready for survey
officials--indicating that they knew the approximate date and time of
their upcoming oversight review.  When we discussed these
observations with California DHS officials, they acknowledged that a
review of survey scheduling showed that the timing of some homes'
surveys had not varied by more than a week or so for several cycles. 
DHS officials have since instructed district office managers to
schedule surveys in a way that reduces their predictability. 

The issue of the predictable timing of surveys is long-standing.  In
the mid-1980s, the Institute of Medicine recommended adjusting the
timing of surveys to make them less predictable and maximize the
element of surprise.  It suggested that standard surveys be conducted
between 9 and 15 months after the previous standard survey.\6 In OBRA
87, the Congress established a civil monetary penalty to be levied
against an individual who notifies a nursing home about the time or
date of an impending survey.  In 1995, HCFA issued guidance to states
to keep the timing of the standard survey unpredictable by ensuring
that all surveys are unannounced.  However, the guidance is silent on
varying the survey cycle as a way to reduce the predictability of
these reviews. 

Since the guidance was issued, two studies have found that regular
timing of surveys is still a problem.  The National State Auditors
Association found that in nine states it studied, the timing of
inspections in some states was around the same date every year, which
allowed nursing homes to predict when their survey would occur.\7
Similarly, nursing home advocates in 41 states and the District of
Columbia polled by HCFA noted that the predictability of surveys was
a continuing problem.\8 One state's advocate noted that a home's
care, food, and environment change dramatically as the time of the
home's standard survey nears. 


--------------------
\6 The Institute of Medicine, Improving the Quality of Care in
Nursing Homes (Washington, D.C.:  Institute of Medicine, 1986), pp. 
32-33. 

\7 National State Auditors Association, National State Auditors
Association Joint Performance Audit:  Long-Term Care (Baton Rouge,
La.:  Performance Audit Division, Louisiana Office of the Legislative
Auditor, 1998). 

\8 HCFA conducted a telephone survey of state nursing home ombudsmen
to determine whether the ombudsmen had observed changes in nursing
homes since the 1995 implementation of the revised survey and
enforcement processes.  Ombudsmen are members of the local community
who are trained and certified to assist in resolving problems raised
by nursing home residents, their families, and others. 


      QUESTIONABLE RECORDS SUGGEST
      THAT SOME AMOUNT OF POOR
      CARE ESCAPES DETECTION IN
      RECORD REVIEWS
---------------------------------------------------------- Letter :4.2

Another reason quality problems in nursing homes escape detection is
the questionable accuracy of some resident medical records.  When
conducting on-site reviews, surveyors screen residents' medical
records for indicators of improper care; if information in the
records is misleading or omitted, surveyors may fail to identify care
deficiencies. 

Studies of nursing home quality cite questionable accuracy of
resident medical records as a problem.  For example, one study found
that nursing home staff often incorrectly record the amount of food
consumed by residents, thus calling into question the information
maintained on the adequacy of residents' nutrition.\9 Another study
examined records on the use of restraints compared with actual
restraint use.  In this study, although nursing home records showed
that staff had removed residents' restraints every 2 hours as
required, researcher observation revealed that, in fact, 56 percent
of the residents had been continuously restrained for 3 hours or
longer.\10

In the course of reviewing the 1993 medical records, we also found
inaccuracies and otherwise misleading information.  The examples in
figure 7, abstracted from the 1993 California records we reviewed,
illustrate the implausibility or suspicious omissions of information
contained in some residents' records.  We found discrepancies in
about 29 percent of the 1993 California records we reviewed. 

   Figure 7:  Examples of
   Questionable Medical Records in
   1993

   (See figure in printed
   edition.)

\a According to medical experts, a 5-percent weight loss in 1 month
is significant. 


--------------------
\9 Jeanie Kayser-Jones and others, "Reliability of Percentage Figures
Used to Record the Dietary Intake of Nursing Home Residents," Nursing
Home Medicine, Vol.  5, No.  3 (Mar.  1997), pp.  69-76. 

\10 John F.  Schnelle, Joseph G.  Ouslander, and Patrice A.  Cruise,
"Policy Without Technology:  A Barrier to Improving Nursing Home
Care," The Gerontologist, Vol.  37, No.  4 (1997), pp.  527-32. 


      RECENT SERIOUS CARE PROBLEMS
      MISSED IN COMPREHENSIVE
      STANDARD SURVEYS
---------------------------------------------------------- Letter :4.3

Through medical record reviews as well as direct observation at two
homes, we found that the standard surveys at these facilities failed
to identify a number of serious care problems.\11 In our visits to
two facilities during their annual surveys, we arranged for our team
of registered nurses to accompany the state surveyors and conduct
concurrent surveys designed specifically to identify quality-of-care
problems.\12 Our survey methodology differed from the methodology
specified by HCFA guidance and used by state surveyors in three major
ways:  (1) we selected a stratified, random sample of a much larger
number of cases to review, including vulnerable populations such as
new admissions and those at risk for pressure sores; (2) we collected
uniform information on those cases using a structured protocol for
observations, chart review, and staff interviews; and (3) we compared
the results from those cases at each facility with data collected
under the same sampling method at more than 60 other nursing homes
nationwide, and then targeted our case review in areas where we
identified a facilitywide pattern that could denote poor care.  Using
this methodology, we were able to spot cases in which the homes had
not intervened appropriately for residents experiencing weight loss,
dehydration, pressure sores, and incontinence--cases the state
surveyors either missed or identified as affecting fewer residents. 

At the two homes where our nurses conducted their quality-of-care
surveys, the findings of our team and those of DHS surveyors were
similar in some respects and different in others.  For example, state
surveyors cited one of the homes (home A) for a high medication error
rate that was not found by our surveyors.  However, problems state
surveyors missed included unaddressed nutrition and weight loss,
failure to prevent pressure sores, and poor management of resident
incontinence--cases in which the homes had not intervened
appropriately.  (See fig.  8 for examples of such problems in home
A.)

   Figure 8:  Examples of Problems
   Our Surveyors Found That DHS
   Surveyors Missed in On-Site
   Review, Home A

   (See figure in printed
   edition.)

\a People who receive tube feeding generally should not lose weight,
according to medical experts, because the amount of caloric intake
can be monitored to maintain a stable weight. 

DHS surveyors classified home A's violations as posing potential for
more than minimal harm to residents and, according to standard
practice for deficiencies classified at this level, required the home
to produce a corrective action plan.  In contrast, we determined, on
the basis of the problems shown in figure 8, that this home had a
pattern of poor care and classified this home's care for unaddressed
nutrition and weight-loss problems, pressure sore problems, and
incontinence problems as conditions demonstrating actual harm. 

At home B, we noted that the state surveyors had found a considerable
number of problems, including some that were similar to those we
found.  For example, both teams found pressure sore treatment and
infection control deficiencies.  The state surveyors also found
problems we did not identify, including the home's failure to provide
oral hygiene to residents and to appropriately administer an
intravenous medication to one resident.  However, the state surveyors
overlooked quality-of-care problems that we detected and considered
serious.  Among those missed were problems in the category of
"failure to provide appropriate personal and preventive care." (See
fig.  9.)

   Figure 9:  Examples of Problems
   Our Surveyors Found That DHS
   Surveyors Missed in On-Site
   Review, Home B

   (See figure in printed
   edition.)

DHS surveyors classified home B's violations as resulting in actual
harm but determined that the harm was isolated rather than
systemic.\13 By defining the extent of the deficiencies as isolated,
DHS followed its standard practice--for a deficiency cited at this
level--of requiring the home to submit a corrective action plan.  In
contrast, by using a larger sample, we were able to establish a
frequency of cases demonstrating a pattern of actual harm. 


--------------------
\11 At a third home, we gathered information on survey procedures but
did not conduct a concurrent review of residents' records or facility
care. 

\12 The scope of our team's survey was limited to quality-of-care
issues, whereas the state surveyors had a broader scope of review
that included requirements in 14 other areas, such as administration
and dietary services. 

\13 The nursing home challenged the state's classification of the
identified deficiency and succeeded in having the finding reduced
from actual harm to potential for more than minimal harm. 


      HCFA'S SURVEY METHODOLOGY
      LIMITS IDENTIFICATION OF
      CARE PROBLEMS
---------------------------------------------------------- Letter :4.4

Several factors account for the different assessments of care between
the two survey teams.  First, in reviewing medical records to
identify areas with potential for poor care, our surveyors took
random samples of cases from several types of residents, including
the most vulnerable residents.  Second, the number of cases our
surveyors drew was large enough to estimate how common the problems
were in the homes.  Third, the information our surveyors collected
from medical record reviews, staff interviews, and data analyses was
entered into a structured format and compared with similar
information from more than 60 other homes nationwide.  This allowed
our surveyors to pinpoint areas where care seemed problematic and
review those cases thoroughly. 

HCFA policy establishes the procedures, or protocol, that state
surveyors must follow in conducting a home's standard survey. 
Selecting cases for review is an activity that occurs early in the
standard survey of a home to identify potential instances of poor
care.  At the beginning of a standard survey, the nursing home
administrator must supply surveyors with documents that specify,
among other things, a census of residents by medical condition, such
as numbers of individuals with pressure sores, indwelling catheters,
and physical restraints.  The state surveyors use this information to
select the majority of cases for particular scrutiny during the
survey.  They may add to the list of cases after observing residents
and talking with nursing home staff. 

HCFA's protocol for selecting cases does not call for taking a random
sample of sufficient size, however, and relies primarily on the use
of professional expertise and judgment, based on numerous criteria
that HCFA offers as guidance.  While professional judgment is an
essential component in identifying poor care, the nonrandom nature of
the sample and its insufficient size precludes the state surveyor
from easily determining the prevalence of the problems identified. 

The protocol our surveyors used for sampling allowed them to cast a
wider net.  Specifically, they took random samples of three groups of
residents to target cases in which poor care would be most likely to
surface.  The three groups sampled were classified as "new
admissions," "long stays" (residents more than 105 days into their
stay), and "sentinel events" (residents whose medical conditions put
them at the greatest risk for poor outcomes).  By stratifying the
sample and taking a random selection of a sufficient number of each
group, our surveyors could project the results of the samples to all
residents in the home, thus assessing the potential prevalence of
their initial review findings.\14 For each resident in the sample,
the survey team collected information from observations, chart
reviews, and staff interviews assessing 75 elements reflecting
quality-of-care outcomes.  Our surveyors then profiled these
findings--that is, they compared the data from the sampled cases with
data collected under the same sampling method at more than 60 nursing
homes in other states. 

Analyzing data collected from the cases sampled, our survey team
compared a home's rate of poor outcomes against the rates determined
for the homes in other states.\15 For example, they found that, at
the two homes discussed, the rate of pressure sores was 27 percent
and 21 percent of each home's total residents, whereas the comparison
homes' average rate was roughly 8 percent.  Being able to compare
rates of medical conditions in a nursing home, such as the percentage
of residents with pressure sores, allows the surveyor to determine
whether the home is an outlier in comparison with other homes.  Our
surveyors then used this information to review residents' care
regarding specific conditions to determine whether the poor outcome
rates were due to unacceptable care or were justifiable because of
other factors. 

HCFA has just begun to implement a requirement for all nursing homes
participating in Medicare and Medicaid to transmit electronically
certain data they maintain on residents' health and functional
status.  Having this information in computerized form could provide
surveyors better access to residents' outcome data, thus potentially
enhancing surveyors' ability to select cases for review more
systematically and quickly.  Access to information in this form could
also facilitate assessing a home's performance with regard to
residents' outcomes against an established average or norm.  These
benefits will depend, however, on ensuring that these data are valid
and reliable reflections of residents' status and care. 


--------------------
\14 The methodology used by our surveyors could add to the time
necessary for state surveyors to complete a survey.  This survey
methodology examined quality-of-care outcomes only, whereas state
surveyors, following federal guidance, must review 14 additional
areas, such as social services, resident assessment, and transfer and
discharge activities. 

\15 To perform this profiling analysis, our surveyors used customized
software and a laptop computer. 


   HCFA'S ENFORCEMENT POLICIES
   INEFFECTIVE AT BRINGING HOMES
   CITED REPEATEDLY FOR SERIOUS
   PROBLEMS INTO COMPLIANCE
------------------------------------------------------------ Letter :5

Once surveyors find deficiencies through nursing home surveys, their
next step is to have the homes correct their deficiencies and return
to compliance with federal requirements.  Despite HCFA's goal to have
nursing homes sustain compliance with federal requirements over time,
our work in California showed that 1 in 11 California homes--serving
thousands of residents--were cited twice in a row for "actual harm"
violations.  Relatively few disciplinary actions were taken against
such homes because of HCFA's forgiving stance on enforcement.  HCFA's
termination policy is likewise generous--allowing California homes
terminated from the program for serious problems to be easily
reinstated--even though they often have serious care violations in
subsequent surveys.  Recognizing these and other weaknesses in the
current process, California's DHS has begun a "focused enforcement"
effort and has implemented procedures to strengthen its use of
available nursing home enforcement authority for facilities with the
poorest past performance records. 


      SUSTAINED COMPLIANCE GOAL
      NOT MET FOR CERTAIN HOMES
      SERVING THOUSANDS OF
      RESIDENTS
---------------------------------------------------------- Letter :5.1

OBRA 87 requires the HHS Secretary to ensure that the enforcement of
federal care requirements for nursing homes is adequate to protect
the health, safety, welfare, and rights of residents.  In the
background to its final regulations, HCFA stated that its system of
requirements implementing OBRA 87 reforms "was built on the
assumption that all requirements must be met and enforced" and that
its enforcement actions will encourage "sustained compliance." In
addition, HCFA noted that "our goal is to promote facility compliance
by ensuring that all deficient providers are appropriately
sanctioned."\16 However, our data suggest that current enforcement
efforts in California are not reaching the stated goal to ensure that
all requirements are met and deficient providers are appropriately
sanctioned, and also may not fulfill the OBRA 87 promise to protect
the health, safety, welfare, and rights of residents.  National data
indicate this problem is not limited to California. 

A significant number of homes in our analysis had repeated violations
in categories that HCFA classifies as "serious" or "most serious."
Specifically, 122 homes--representing over 17,000 resident beds--were
cited in both of their last two surveys for conditions causing actual
harm or conditions that put residents in immediate jeopardy or caused
death.\17 The repeated deficiencies included, among others, problems
with infection control, pressure sore treatment, and bladder
continence care.\18 Preliminary analysis of national data indicates
that repeating serious deficiencies is more common nationally than in
California.  One in nine nursing homes in the United
States--representing more than 232,000 resident beds--were cited in
both of their last two surveys for conditions that caused actual harm
or put residents in immediate jeopardy or caused death. 

Relatively few disciplinary actions have been taken against homes
cited for repeated harm violations.  Before OBRA 87, the only
sanction available to HCFA and the states to impose against such
noncompliant homes, short of termination, was to deny federal
payments for new admissions.  Because this sanction afforded HCFA and
the states an opportunity to defer the decision to terminate, it was
considered an "intermediate" sanction.  OBRA 87 provided for
additional intermediate sanctions, such as denial of payment for all
admissions, civil monetary penalties, and on-site oversight by the
state ("state monitoring").\19

Nevertheless, between July 1995 and May 1998, nearly three-quarters
of those 122 homes--cited in at least 2 consecutive years for serious
deficiencies--had no federal intermediate sanctions that actually
took effect. 


--------------------
\16 59 FR 56116-56117. 

\17 Sixty-six percent of these homes are classified in figure 2 in
the category "caused death or serious harm," and 34 percent are
classified as "caused less serious harm."

\18 A much greater number--1,083 homes--were also out of compliance
with federal nursing home requirements in both of their last two
surveys; however, they were not cited in two consecutive surveys for
deficiencies classified in the actual harm or immediate jeopardy
categories. 

\19 Other sanctions include third-party management of a home for a
temporary period ("temporary management"); requirement for a home to
follow a corrective action plan developed by HCFA, the survey agency,
or a temporary manager--with HCFA or survey agency approval--rather
than by the facility itself ("directed plan of correction"); and
mandatory training of a home's staff on a particular issue ("directed
in-service training"). 


      HCFA'S FORGIVING ENFORCEMENT
      STANCE HELPS EXPLAIN HOW
      SOME HOMES CAN REPEATEDLY
      HARM RESIDENTS WITHOUT
      FACING SANCTIONS
---------------------------------------------------------- Letter :5.2

Our review of federal actions taken against California's noncompliant
homes indicates that HCFA's policies, as implemented by California's
DHS, have not led to sustained compliance, either for some homes
immediately referred for sanctioning\20 or for others given a grace
period to correct their deficiencies.  In addition, HCFA has
reinstated California homes terminated for serious deficiencies that
became problem homes soon after reinstatement. 


--------------------
\20 OBRA 87 and HCFA's implementing regulations refer to certain
actions as "remedies" that HCFA has also called intermediate
sanctions, such as civil monetary penalties, denial of payment for
new or for all admissions, and temporary management.  In this report,
we use the term "sanction."


         OVERSIGHT OF HOMES
         IMMEDIATELY REFERRED FOR
         SANCTIONING NOT ADEQUATE
         TO ENSURE SUSTAINED
         COMPLIANCE
-------------------------------------------------------- Letter :5.2.1

HCFA guidance instructs state agencies to immediately refer for
federal sanctioning homes that meet HCFA criteria for posing the
greatest danger to residents.  The immediate referral contrasts with
the practice of first granting homes a grace period to correct cited
deficiencies.  To qualify for immediate referral, homes must be cited
for violations in the immediate jeopardy category or be rated as a
"poor performer." HCFA's definition of poor performer itself is
circumscribed such that the definition applies to relatively few
homes.  A home must have been cited on its current standard survey
for substandard quality of care and have been cited in one of its two
previous standard surveys for substandard quality of care or
immediate jeopardy violations.  Homes cited for cases of actual harm
to residents--if assessed at the isolated level--do not satisfy
HCFA's criteria for the substandard quality-of-care classification. 
Since July 1995, when the federal enforcement scheme established in
OBRA 87 took effect, about 25 California homes have been designated
as poor performers and 59 homes have been cited for immediate
jeopardy deficiencies.  HCFA guidance permits the state to broaden
the definition of poor performer, but California has chosen not to do
so.\21

Even homes immediately referred for sanctioning do not necessarily
receive sanctions that take effect.  Among California homes HCFA
considers to have the most serious deficiencies that immediately
jeopardize resident health and safety, only about half had any
sanctions that actually took effect.  If homes come into substantial
compliance before sanctioning is scheduled to take effect, HCFA
rescinds the sanction. 

In principle, sanctions imposed against a home remain in effect until
the home corrects the deficiencies cited and until state surveyors
find, after an on-site review (called a "revisit") that the home has
resumed substantial compliance status.  HCFA's guidance on revisits
allows states to forgo an on-site visit and accept a home's report of
resumed compliance status if the home's deficiencies are not more
serious than the "potential for harm" range and do not constitute
substandard care.  HCFA officials told us this policy was put into
place because of resource constraints.  In California, however, this
policy has been applied even to some of the immediate referral homes
that continue to have deficiencies that put them out of substantial
compliance upon revisit.  Thus, our review of certain enforcement
cases showed that HCFA failed to ensure that homes with a record of
posing the greatest danger to residents had, in fact, resumed
substantial compliance. 

For example, in the case of one home immediately referred for
sanctioning, DHS surveyors made a few on-site reviews, but HCFA twice
accepted the home's self-reported statement of compliance without
requesting DHS to revisit and independently verify that the home had
fully corrected its deficiencies.\22

Specifically, in an October 1996 survey, DHS cited the home for
immediate jeopardy and actual harm violations, including improper
pressure sore treatment, medication errors, insufficient nursing
staff, and an inadequate infection control program.  By early
November 1996, however, surveyors had found in an on-site review that
the problems had abated but had not fully ceased.  A week later, the
home reported itself to HCFA as resuming substantial compliance. 
HCFA accepted this report without further on-site review. 

About 6 months later (May 1997), in the home's next standard survey,
DHS found violations that warranted designating the home a poor
performer.  On a revisit to check compliance in July 1997, surveyors
found new but less serious deficiencies.  In August 1997, however,
when the home reported itself in compliance, HCFA accepted the report
without further verification.  Between October 1996 and August 1997,
HCFA imposed several sanctions but lifted them each time it accepted
the home's unverified report of resumed compliance.\23


--------------------
\21 For example, California could include in the poor performer
definition a home's record of violations cited in the course of
complaint investigations.  Unlike standard surveys, complaint
investigations are generally unexpected and provide surveyors a
unique opportunity to gauge care issues in a home's everyday
environment.  Because these investigations can uncover serious
quality-of-care problems, regulators would get a more complete
picture of a home's compliance history if the results of complaint
investigations were included in the "poor performer" determination. 

\22 A home reports itself to HCFA as being in compliance by sending
HCFA a letter called a "credible allegation of compliance."

\23 In the October 1996 survey, HCFA imposed a civil monetary penalty
that went into effect October 3 and was stopped from further accrual
on November 8 when HCFA determined federal requirements had been met,
based on the survey that had found lower-level deficiencies.  In the
May 1997 standard survey, HCFA imposed a civil monetary penalty to
take effect in May 1997 and a denial of payment for new admissions
sanction to take effect in July 1997, both of which HCFA stopped in
August 1997 when the home reported that it was in compliance. 


         WIDELY GRANTED GRACE
         PERIODS LEAD TO AMNESTY
         FOR SERIOUS VIOLATORS
-------------------------------------------------------- Letter :5.2.2

According to HCFA guidance, noncompliant homes that are not
classified in the immediate jeopardy or poor performer categories do
not meet HCFA's criteria for immediate referral for sanctioning, even
though residents may have suffered actual harm.  Following this
guidance, California's DHS first notifies these homes of the
sanctions it will recommend imposing unless the home resumes
compliance.  DHS revisits the homes where residents have suffered
actual harm or worse to ensure that compliance has been achieved.  In
practice, on the basis of HCFA's guidance, the state will forward
notification of the recommended sanctions to HCFA only if the home
fails to correct the deficiencies cited within a 30- to 45-day grace
period allowed by HCFA.  Although California's DHS regulators have
the option of referring the home immediately for disciplinary action,
the accepted practice under HCFA's guidance is to first allow the
home to return to compliance status within the specified grace
period. 

HCFA policy permits granting a grace period to this group of
noncompliant homes, regardless of their past performance.  Between
July 1995 and May 1998, California's DHS gave about 98 percent of
noncompliant homes\24 a grace period to correct deficiencies.  For
nearly the same period (July 1995 to April 1998), the rate of
noncompliant homes receiving a grace period nationwide was 99
percent, indicating that the practice of granting a grace period to
nearly all noncompliant homes is common across all states. 

Moreover, data we analyzed on actions taken against California homes
cited repeatedly for harming residents suggest that DHS does not take
into account a home's compliance history when determining whether to
impose intermediate sanctions.  Of the 122 homes in our analysis
cited repeatedly for harming residents, 73 percent were not federally
sanctioned.  In the case of such homes--cited in consecutive surveys
for actual harm or immediate jeopardy violations--granting a grace
period with no further disciplinary action appears to be a highly
questionable practice.  Table 2 illustrates a home with the same
violations cited 4 years in a row--thus not sustaining compliance
from one standard survey to the next--and still receiving a grace
period to correct its deficiencies after each survey. 



                                         Table 2
                         
                          Example of Home Awarded Grace Periods
                            Year After Year, Despite Repeated
                                      Noncompliance

Date          Selected deficiencies cited                                 Action taken
------------  ----------------------------------------------------------  ---------------
August 1994   Pressure sores:                                             Home submits
standard                                                                  corrective
survey        A resident was admitted following the surgical repair of a  action plan and
              broken hip in an acute-care institution. While in the       is subsequently
              nursing home, she developed a pressure sore at the          found in
              incision site on her hip. It progressed to a stage IV       substantial
              (most severe) pressure sore. At the time of the survey,     compliance.\a
              she was being treated for the probability of bone
              infection (osteomyelitis) of that hip caused by the
              pressure sore. Later, another lesion developed on the
              opposite extremity. The home did not provide care to
              prevent either the development or progression of the sore.
              This second pressure sore also progressed to a bone
              infection.

September     Pressure sores:                                             Home submits
1995                                                                      corrective
standard      In the case of several residents, the home failed to        action plan and
survey        assess skin conditions as potential pressure sores, thus    is subsequently
              failing to implement appropriate pressure sore treatment.   found in
              Personnel also failed to properly treat sores once they     substantial
              were identified. In one case, for example, the home did     compliance.
              not properly treat a resident during a 6-month period for
              a pressure sore that developed from clear skin into an
              open area on the resident's knee and quickly worsened to a
              larger, more severe sore.

October 1996  Pressure sores:                                             Home submits
standard                                                                  corrective
survey        Nurses were found to have neglected treating pressure       action plan and
              sores for 16 percent of residents sampled. The nurses did   is subsequently
              not follow the plans established for treating the sores     found in
              and did not clean the sores in a clean, safe way.           substantial
                                                                          compliance.

December      Pressure sores:                                             Home submits
1997                                                                      corrective
standard      An incontinent resident at risk for pressure sores was      action plan and
survey        found lying in urine-soaked linens nine separate times      is subsequently
              during a 4-day survey.                                      found in
                                                                          substantial
              Another resident was admitted to the home with clear skin,  compliance.
              except for a sore on his left heel. The sore worsened over
              a 3-month period, but the home did not intervene.
              Ultimately, because of the sore's severity, the physician
              recommended that the leg be amputated below the knee.

              Twenty percent of sampled residents without pressure sores
              when admitted did not receive appropriate preventive care.
              An additional 10 percent of residents sampled were not
              given proper treatment of existing sores or care to
              prevent new ones.
-----------------------------------------------------------------------------------------
\a This enforcement action was taken before the implementation of
OBRA 87 enforcement provisions. 


--------------------
\24 Table 1 shows HCFA's deficiency classification system and
associated compliance status. 


         HCFA REINSTATES MOST
         TERMINATED HOMES
-------------------------------------------------------- Letter :5.2.3

Although HCFA has the authority to terminate homes from participation
in Medicare and Medicaid if they fail to resume compliance,
termination rarely occurs and is not as final as the term implies. 
In the recent past, California's terminated homes have rarely closed
for good.  Of the 16 homes terminated in the 1995 to 1998 time
period, 14 have been reinstated.  Eleven have been reinstated under
the same ownership they had before termination.  Of the 14 reinstated
homes, at least six have been cited since their reinstatement with
new deficiencies that harmed residents, such as failure to prevent
avoidable accidents, failure to prevent avoidable weight loss, and
improper treatment of pressure sores. 

A home that reapplies for participation is required to have two
consecutive on-site reviews--called reasonable assurance
surveys--within 6 months to determine whether it is in substantial
compliance with federal regulations before its eligibility to bill
federal programs can be reinstated.  However, HCFA has not always
ensured that homes are in substantial compliance before
reinstatement.  For example, one home terminated on April 15, 1997,
had two reasonable assurance surveys on April 25 and May 28, 1997. 
Although the nursing home was not in substantial compliance at the
time of the second survey, HCFA considered the deficiencies minor
enough to reinstate the home on June 5, 1997.  The consequence of
termination--stopping reimbursement for the home's Medicare and
Medicaid beneficiaries--was in effect for no longer than 3 weeks.\25

About 3 months after reinstatement, however, the home was cited for
harming residents.  DHS surveyors investigating a complaint found
immediate jeopardy violations as a result of a dangerously low number
of nursing home staff.  In addition, surveyors cited the facility for
providing substandard care.  Residents who could not move
independently, some with pressure sores, were left sitting in urine
and feces for long periods of time; some residents were not getting
proper care for urinary tract infections; and surveyors cited the
home's infection control program as inadequate. 


--------------------
\25 Under Medicare and Medicaid rules, terminated nursing homes may
be paid for care of residents in the home from the date of
termination up to 30 days after the termination takes effect. 


      CALIFORNIA DHS PILOTS
      ALTERNATIVE ENFORCEMENT
      PROCEDURES TARGETING A SMALL
      GROUP OF MOST SERIOUSLY
      DEFICIENT HOMES
---------------------------------------------------------- Letter :5.3

By 1997, California DHS officials recognized that the state, in
combination with HCFA's regional office, had not dealt effectively
with persistently and seriously noncompliant nursing homes using the
OBRA 87 enforcement process.  The process discouraged immediate
application of enforcement actions.  It allowed nursing homes to come
back into compliance for a short period of time, escaping enforcement
action altogether.  In many instances, though, homes did not sustain
compliance for a significant period of time.  Therefore, in July 1998
and with HCFA's agreement, DHS began a "focused enforcement" process
that combines state and federal authority and action, targeting
providers with the worst compliance records for special attention. 

As a start, DHS has identified about 34 homes with the worst
compliance histories--generally two in each of its districts. 
Officials intend to conduct standard surveys of these homes about
every 6 months rather than every 9 to 15 months.  In addition, DHS
intends to conduct more complete on-site reviews of facilities for
all complaints received about these homes.  DHS and HCFA told us that
they do not intend to accept such homes' self-reports of compliance
without a revisit.  DHS officials told us that the agency is
developing procedures--consistent with HCFA regulations implementing
OBRA 87 reforms--to ensure that, where appropriate, the state will
immediately recommend and HCFA will impose civil monetary penalties
and other strong sanctions to bring such homes into compliance and
keep them compliant.  For focused enforcement homes unable to sustain
compliance, state officials plan to revoke their state licenses and
recommend termination from the Medicare and Medicaid programs.  In
addition, DHS plans to screen the compliance history of facilities by
owner--both in California and nationally--before granting new
licenses to operate nursing homes in the state.  State officials told
us that they will require all facilities with the same owner to be in
substantial compliance before any new licenses are granted. 


   CONCLUSIONS
------------------------------------------------------------ Letter :6

The responsibility to protect nursing home residents, among the most
vulnerable members of our society, rests with nursing homes and with
HCFA and the states.  In a number of cases, this responsibility has
not been met in California.  We and state surveyors found cases in
which residents who needed help were not provided basic care--not
helped to eat or drink; not kept dry and clean; not repositioned to
prevent pressure sores; not monitored for the development of urinary
tract infections; and not given pain medication when needed.  When
such basic care is not provided, residents may suffer unnecessarily. 

As serious as the identified care problems are, weaknesses in federal
and state oversight of nursing homes raise the possibility that many
care problems escape the scrutiny of surveyors.  Homes can prepare
for surveyors' annual visits because of the visits' predictable
timing.  Homes can also adjust resident records to improve the
overall impression of the home's care.  In addition, DHS surveyors
may overlook significant findings because the federal survey protocol
they follow does not rely on an adequate sample for detecting
potential problems and their prevalence.  Together, these factors can
mask significant care problems from the view of federal and state
regulators. 

Furthermore, HCFA needs to reconsider its enforcement approach toward
homes with serious, recurring violations.  Federal policies allowing
a grace period to correct deficiencies and to accept a home's report
of compliance without an on-site review can be useful policies, given
resource constraints, when applied to homes with less serious
problems.  However, even with resource constraints, HCFA and DHS need
to ensure that their enforcement efforts are directed to homes with
serious and recurring violations and that policies developed for
homes with less serious problems are not applied to them. 

Under current policies and practices, noncompliant homes that DHS
identifies as having harmed or put residents in immediate danger have
little incentive to sustain compliance, once achieved, because they
may face no consequences for their next episode of noncompliance. 
Our findings regarding homes that repeatedly harmed residents or were
reinstated after termination suggest that the goal of sustained
compliance has not been met.  Failure to bring such homes into
compliance limits the ability of federal and state regulators to
protect the welfare and safety of residents. 


   RECOMMENDATIONS
------------------------------------------------------------ Letter :7

In order to better protect the health, safety, welfare, and rights of
nursing home residents and ensure that nursing homes sustain
compliance with federal requirements, we recommend that the HCFA
Administrator revise federal guidance and ensure state agency
compliance through taking the following actions: 

  -- Stagger or otherwise vary the scheduling of standard surveys to
     effectively reduce the predictability of surveyors' visits; the
     variation could include segmenting the standard survey into more
     than one review throughout the 12- to 15-month period, which
     would provide more opportunities for surveyors to observe
     problematic homes and initiate broader reviews when warranted. 

  -- Revise federal survey procedures to instruct surveyors to take
     stratified random samples of resident cases and review
     sufficient numbers and types of resident cases so that surveyors
     can better detect problems and assess their prevalence. 

  -- Eliminate the grace period for homes cited for repeated serious
     violations and impose sanctions promptly, as permitted under
     existing regulations. 

  -- Require that for problem homes with recurring serious
     violations, state surveyors substantiate, by means of an on-site
     review, every report to HCFA of a home's resumed compliance
     status. 


   AGENCY COMMENTS AND OUR
   RESPONSE
------------------------------------------------------------ Letter :8

We sought comments on a draft of this report from HCFA and DHS (whose
written comments are reproduced in appendixes II and III), experts on
nursing home care, and representatives from the nursing home
industry.  The reviewers generally agreed that the findings were
troubling and that improvements were needed in the federal survey and
enforcement process to better protect residents' health and safety. 
Reviewers also suggested technical changes, which we included in the
report as appropriate. 

HCFA officials informed us that they are planning to make significant
modifications in their survey and enforcement processes, which they
believe will address our recommendations.  HCFA concurred with the
recommendation to eliminate the grace period for homes with repeated
serious violations and agreed that having a more scientifically
selected and larger case review sample would improve the ability of
surveyors to detect poor care in nursing homes.  HCFA also agreed to
change its revisit policy for homes that are seriously noncompliant. 

HCFA agreed in principle that quality of care needs to be monitored
outside the bounds of an annual, standard survey and acknowledged
that certain factors can affect the predictability of surveys.  These
factors include the time of day and day of week the survey begins as
well as the timing of surveys for homes in a given locale.  Based on
its analysis of certain OSCAR data, however, HCFA disagreed that
states are not varying their survey schedules.  We believe that
basing a conclusion about the predictability of the annual survey
primarily on analysis of OSCAR data is problematic, given weaknesses
we identified in the classification of surveys entered into the
database.  Given these questions we raised, HCFA agreed to review the
validity of the OSCAR data.  HCFA also raised concerns--as did
DHS--that segmenting the survey into two or more reviews would make
it less effective and more expensive.  We believe that segmenting the
survey could largely eliminate concern about predictability and, by
increasing the frequency of surveyors' visits to homes, could provide
more opportunity to observe problematic homes and initiate broader
reviews when warranted.  These advantages should be evaluated
relative to the potential disadvantages that concern HCFA. 

DHS officials generally agreed with our findings and recommendations. 
They attributed many of the problems in the current survey and
enforcement process to federal policy directives that, they maintain,
have weakened states' ability to oversee quality of care and quality
of life in nursing homes.  In its comments, DHS has also suggested a
number of additional changes it believes would improve the federal
survey and enforcement process.  These include adding a waiting
period before homes terminated from Medicare and Medicaid could be
reinstated in the programs, changing HCFA's definitions of scope of
violations and of substandard care to more realistically reflect the
seriousness of poor care, changing HCFA's revisit policy for homes
that are not in substantial compliance, developing a peer review of
survey and enforcement practices in different regions, improving the
database used for enforcement tracking, and more fully funding survey
and enforcement activities for the state. 

Some reviewers questioned whether the scope of our clinical review of
1993 records and concurrent review of nursing homes was sufficient to
permit drawing conclusions about the current condition of all
California nursing homes.  These aspects of our methodology--while
important--were not the primary basis for reaching our conclusions. 
The most comprehensive and compelling evidence we analyzed was recent
standard survey reports of California's own surveyors, the statewide
database DHS maintains on complaint investigations, and the
nationwide database HCFA maintains on nursing home deficiencies.  In
response to these comments, we modified the report to better clarify
our methodology and the primary basis for our findings. 


---------------------------------------------------------- Letter :8.1

As agreed with your offices, unless you publicly announce its
contents earlier, we plan no further distribution of this report
until July 28, 1998.  At that time, we will make copies of this
report available to interested parties upon request. 

Please contact me or Kathryn Allen, Associate Director, at (202)
512-7114 if you or your staff have any further questions.  This
report was prepared by Jack Brennan, Scott Berger, Mary Ann Curran,
C.  Robert DeRoy, Gloria Eldridge, and Hannah Fein, under the
direction of Sheila Avruch. 

William J.  Scanlon
Director, Health Financing
 and Systems Issues


OBJECTIVES, SCOPE, AND METHODOLOGY
=========================================================== Appendix I

Concerned about the life-threatening potential of the recent
allegations, you asked us to determine whether the allegations had
any merit and whether the monitoring of California's nursing homes
has been adequate to protect residents.  More specifically, we
assessed (1) whether, as alleged, residents who died in 1993 from
certain causes had received unacceptable care that could have
endangered their health and safety, and whether serious care problems
currently exist; (2) the adequacy of federal and state efforts in
monitoring nursing home care through annual surveys; and (3) the
effectiveness of federal and state efforts to enforce sustained
compliance with federal nursing home requirements. 

We reviewed the medical records of a sample of the 3,113 residents
alleged to have died avoidable deaths in 1993 in 971 California
nursing homes from malnutrition, dehydration, urinary tract infection
(UTI), bowel obstruction, or bedsores (pressure sores).  We met with
those making the allegations, and from them we obtained copies of the
death certificates of the 3,113 residents.  To select our sample, we
eliminated residents with UTI who did not also suffer from septicemia
(the presence of bacteria and toxins in the blood), because if these
conditions are not present, UTI is generally not lethal.  We assumed
that if care was a problem in a home, more than one resident would
have been affected.  We therefore excluded death certificates for
residents of homes with (1) fewer than five such deaths and (2) for
such deaths, a deaths-to-total-beds ratio of less than 5 percent. 
That left a universe of 546 residents at 72 homes.  In addition, we
eliminated residents who died in counties having few nursing homes. 
After these exclusions, our universe became 446 residents at 59
homes, from which we selected a preliminary sample of 75 residents
from 15 homes.  Fourteen of these homes were freestanding and one was
a hospital-based nursing home.  Because we selected from residents of
homes with five or more such deaths in certain counties, our results
cannot be generalized to the universe of all residents in California
nursing homes who died of the same causes in 1993. 

To review the medical records, we used two registered nurses with
advanced degrees in gerontological nursing and with expertise in
clinical nursing home care and data abstraction.  To guide them,
another registered nurse on our staff developed a detailed structured
data collection instrument.\26 The nurses' work was reviewed by the
registered nurse on our staff, who has experience working in nursing
homes and judging whether care met acceptable clinical standards. 
This second review focused on a critical examination of all cases
where the first team of registered nurses identified residents as
having unacceptable care, in order to exclude any cases that might be
questionable rather than unacceptable.  The registered nurse on our
staff also discussed some of the cases with physicians and additional
registered nurses specializing in geriatric care to further clarify
whether care was acceptable.  We excluded all questionable cases from
the unacceptable care group.  Because of the time needed to
thoroughly review each resident's complete clinical history (some
were more than 600 pages), the nurses reviewed 62 of the 75 records
initially selected from 1993. 

To determine the extent of deficiencies identified by state surveyors
in California nursing homes since July 1995, and to identify
enforcement actions taken in response to the deficiencies, we used
two databases.  The first, HCFA's On-Line Survey, Certification, and
Reporting (OSCAR) System, contains information about violations of
federal requirements that a home has received in its last four
surveys.  The second, the Automated Certification and Licensing
Administrative Information Management System (ACLAIMS) database, is
maintained by California's DHS and contains information on each
home's violations of state requirements.  In addition, we used data
that HCFA's San Francisco regional office maintains separately from
OSCAR on federal sanctions imposed. 

In OSCAR, we identified 1,445 California homes that had survey data
after July 1, 1995--the date the new OBRA 87 scope and severity
system went into effect.  If a nursing home at a particular address
had more than one provider number, we included in our analysis only
one of the provider numbers to represent that home.  Of the 1,445
California homes, 1,370 of those homes (95 percent) had at least two
surveys entered into the OSCAR database since July 1995.  Information
in the OSCAR database is constantly being updated.  We downloaded
OSCAR data on February 26, 1998, to get a fixed database for our
analysis of 1,370 homes.  We also continued to work with OSCAR
on-line as necessary, for example, to download survey reports on
particular homes.  The nursing homes we analyzed included Medicare
and Medicaid dually certified facilities, Medicare-only facilities,
Medicaid-only facilities, and both freestanding and hospital-based
facilities.  To develop information shown in figures 2 and 3, we
combined information from both the OSCAR and ACLAIMS databases. 

We did not conduct a thorough assessment of the validity or
reliability of either OSCAR or ACLAIMS.  We did determine, however,
that OSCAR excludes data that could be useful in obtaining a complete
picture of a nursing home's history of deficiencies.  For example,
serious violations of state requirements discovered during complaint
investigations are not routinely shown as federal deficiencies in
OSCAR.  Other information, such as the seriousness and extent of
identified deficiencies, were missing from OSCAR in some cases.  We
found instances of missing information in 282 of the 1,370 homes in
our analysis.  The effect of these omissions from the database, we
believe, is an understatement of documented deficiencies in OSCAR. 

To assess the effectiveness of the survey process, we accompanied
California state surveyors on annual standard surveys conducted at
two homes.  To do this, we arranged for a team of registered nurses
to accompany the DHS surveyors and conduct concurrent surveys using a
protocol developed under a HCFA research contract designed
specifically to identify quality-of-care problems.  These nurses work
with Andrew M.  Kramer, M.D., of the University of Colorado's Center
on Aging Research Section of the Health Sciences Center, who
developed the survey protocol for HCFA.  Before conducting the
concurrent surveys at these homes, we accompanied a state survey team
to a third home to gather information on survey procedures. 

To better understand survey deficiencies, complaints, and
enforcement, we reviewed selected records.  We determined the types
of problems being identified by surveyors by obtaining and analyzing
annual standard surveys for 18 homes we visited.  We also obtained
and analyzed information about the number and type of complaints
investigated by two district offices.  To better understand
enforcement efforts, we reviewed selected enforcement files and
enforcement data kept by HCFA. 

We also interviewed responsible officials from HCFA headquarters in
Baltimore and HCFA's San Francisco regional office.  We met with
officials from California DHS in Sacramento and two district offices;
the California Association of Health Facilities; the American Health
Care Association; the American Association of Homes and Services for
the Aging; the California Association of Homes and Services for the
Aging; the California Advocates for Nursing Home Reform; California's
Office of Ombudsman; nursing home administrators and directors of
nursing; geriatricians and registered nurses with expertise in
nursing home issues; and families of nursing home residents. 



(See figure in printed edition.)Appendix II

--------------------
\26 The protocol was developed primarily from two documents--American
Health Care Association, The Long Term Care Survey (no date); and
Andrew M.  Kramer and others, Pilot Test of a Staged Quality of Care
Survey Using Quality Indicator Profiles (Sept.  1995).  The protocol
was then refined through consultation with experts and a GAO
methodologist and pretested using an initial chart review. 


COMMENTS FROM THE HEALTH CARE
FINANCING ADMINISTRATION
=========================================================== Appendix I



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(See figure in printed edition.)Appendix III
COMMENTS FROM CALIFORNIA'S
DEPARTMENT OF HEALTH SERVICES
=========================================================== Appendix I



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