Nursing Homes: HCFA Should Strengthen Its Oversight of State Agencies to
Better Ensure Quality Care (Testimony, 11/04/1999, GAO/T-HEHS-00-27).
Pursuant to a congressional request, GAO discussed its study of the
Health Care Financing Administration's (HFCA) implementation of two of
its nursing home initiatives.
GAO noted that: (1) HCFA's mechanisms for assessing state agency survey
performance are limited in their scope and effectiveness and are not
being applied consistently across each of HCFA's 10 regional offices;
(2) as a result, HCFA does not have sufficient, consistent, and reliable
data to evaluate state agencies or to measure the success of its other
nursing home initiatives; (3) given the wide range in the frequencies
with which states identify serious deficiencies, HCFA cannot be certain
whether states with lower rates of deficiencies have better quality
homes or are failing to identify deficiencies that harm nursing home
residents; (4) this uncertainty results, in part, because HCFA makes
negligible use of independent inspections, known as comparative surveys,
that could surface information about whether states appropriately cite
deficiencies; (5) generally, only one to two comparative surveys per
state were conducted in the more than 17,000 nursing homes over the last
year; (6) nevertheless, two-thirds of these surveys found deficiencies
that were more serious than those found by state surveyors during their
reviews conducted typically 1 or 2 months earlier; (7) about 90 percent
of the inspections HCFA conducts nationwide are, instead, observational
surveys; (8) these surveys, in which HCFA surveyors accompany state
survey teams, are useful in helping HCFA to provide training to state
surveyors, but are limited as a method for evaluating state agencies'
performance; (9) beyond these surveys, HCFA also relies on a quality
improvement program that is largely based on states' self-reported
performance measures, which do not accurately or completely reflect
problems in state's performance; (10) these limitations in HCFA's
oversight methods are compounded by inconsistencies in how the methods
are applied by its regions; (11) for example, the regions vary in how
they select nursing home surveys to review and how they choose samples
of residents to review; (12) regions also commit differing amounts of
time to conduct observational surveys, ranging on average from 27 to 71
hours, which raises questions about whether the level of effort some
regions dedicate to observational surveys is sufficient to thoroughly
review state surveyors' performance; and (13) furthermore, for state
agencies whose performance has been found inadequate, HCFA has not
developed a sufficient array of alternatives to encourage agencies to
correct serious deficiencies in their processes.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: T-HEHS-00-27
TITLE: Nursing Homes: HCFA Should Strengthen Its Oversight of
State Agencies to Better Ensure Quality Care
DATE: 11/04/1999
SUBJECT: Negligence
Elderly persons
Nursing homes
Surveys
State programs
Federal/state relations
Elder care
Sanctions
Noncompliance
Safety standards
IDENTIFIER: Medicare Program
Medicaid Program
Medicare Choice Program
HCFA State Agency Quality Improvement Program
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* For Release on Delivery
Expected at 10:00 a.m.
Thursday, November 4, 1999
GAO/T-HEHS-00-27
nursing homes
Enhanced HCFA Oversight of State Programs Would Better Ensure Quality Care
Statement of William J. Scanlon, Director
Health Financing and Public Health Issues
Health, Education, and Human Services Division
[Image]
[Image]
Testimony
Before the Special Committee on Aging, U.S. Senate
United States General Accounting Office
GAO
[Image]
TC ": Nursing Homes: Enhanced HCFA Oversight of State Programs Would Better
Ensure Quality Care: " \l 3
Nursing Homes: Enhanced HCFA Oversight of State Programs Would Better Ensure
Quality Care
Mr. Chairman and Members of the Committee:
We appreciate the opportunity to participate in the Committee's hearing
focusing on HCFA's regional offices and their ability to oversee state
agencies they contract with to ensure that nursing homes comply with federal
quality standards. Today, I will discuss our study of HCFA's implementation
of two of its nursing home initiatives: one requiring enhanced federal
review of state agencies' survey processes, and the other addressing
remedies and sanctions to be applied when inadequate state performance is
identified.
The 1.6 million elderly and disabled residents of the nation's more than
17,000 nursing homes are among the sickest and most vulnerable populations
in the nation, often needing extensive assistance with basic activities of
daily living such as dressing, grooming, feeding, and using the bathroom. In
1999, these nursing homes are expected to receive nearly $39 billion in
federal payments from the Medicare and Medicaid programs. To help ensure
that they provide proper care to their residents, state agencies, under
contract with the federal government, perform detailed inspections at each
of the homes. The purpose of these state agency surveys is to ensure that
nursing homes comply with federal quality standards and that inadequate
resident care is identified and corrected. HCFA, in turn, is statutorily
required to make sure that each state agency has an effective survey process
in place.
The series of hearings this Committee has held over the past 15 months has
highlighted both the disturbingly high frequency of unacceptably poor care
that many nursing home residents receive as well as weaknesses in federal
and state programs charged with ensuring quality care. This has helped to
generate a renewed commitment by HCFA and many states to improve their
programs to ensure that nursing homes meet quality standards, including a
broad range of about 30 initiatives that HCFA has undertaken to strengthen
federal standards, oversight, and enforcement for nursing homes. In reports
issued at the Committee's request since July 1998, we have documented the
severity of care problems nationwide and inadequacies in the survey and
enforcement process that too often leave these problems unidentified or
uncorrected, and have made recommendations to strengthen HCFA's oversight of
nursing homes. This summer, we testified that the initial implementation of
some of HCFA's initiatives has been uneven among the states and will require
continued commitment by the Congress, HCFA, and the states.
The focus of today's hearing is HCFA regional offices' oversight of state
agencies that perform the surveys of nursing homes. The hearing addresses
issues fundamental to ensuring that homes meet federal care standards
protecting residents and ensuring that the states adhere to the new,
stronger federal policies resulting from HCFA's nursing home initiatives.
The information we are presenting here discusses HCFA's progress in
implementing two important initiatives to improve its state oversight. In a
report we are releasing today, we provide more detailed information.
In brief, we found that HCFA's mechanisms for assessing state agency survey
performance are limited in their scope and effectiveness and are not being
applied consistently across each of HCFA's 10 regional offices. As a result,
HCFA does not have sufficient, consistent, and reliable data to evaluate
state agencies or to measure the success of its other nursing home
initiatives. Given the wide range in the frequencies with which states
identify serious deficiencies, HCFA cannot be certain whether states with
lower rates of deficiencies have better quality homes or are failing to
identify deficiencies that harm nursing home residents.
This uncertainty results, in part, because HCFA makes negligible use of
independent inspections, known as comparative surveys, that could surface
information about whether states appropriately cite deficiencies. Generally,
only one to two comparative surveys per state were conducted in the more
than 17,000 nursing homes over the last year. Nevertheless, two-thirds of
these surveys found deficiencies that were more serious than those found by
state surveyors during their reviews conducted typically 1 or 2 months
earlier. About 90 percent of the inspections HCFA conducts nationwide are,
instead, observational surveys. These surveys, in which HCFA surveyors
accompany state survey teams, are useful in helping HCFA to provide training
to state surveyors, but are limited as a method for evaluating state
agencies' performance. HCFA's presence during these surveys is likely to
make state surveyors more attentive to their survey tasks than they would be
if they were not being observed-the Hawthorne effect. Beyond these surveys,
HCFA also relies on a quality improvement program that is largely based on
states' self-reported performance measures, which do not accurately or
completely reflect problems in the state's performance.
These limitations in HCFA's oversight methods are compounded by
inconsistencies in how the methods are applied by its regions. For example,
the regions vary in how they select nursing home surveys to review and how
they choose samples of residents to review. Regions also commit differing
amounts of time to conduct observational surveys, ranging on average from 27
to 71 hours, which raises questions about whether the level of effort some
regions dedicate to observational surveys is sufficient to thoroughly review
state surveyors' performance.
Furthermore, for state agencies whose performance has been found inadequate,
HCFA has not developed a sufficient array of alternatives to encourage
agencies to correct serious deficiencies in their processes. Our report
includes several recommendations to assist the HCFA Administrator in
improving the rigor, consistency, and effectiveness of HCFA's programs to
oversee state agencies responsible for certifying that nursing homes meet
federal standards for participation in Medicare and Medicaid.
Background
[Image] On the basis of statutory requirements, HCFA defines standards that
nursing homes must meet to participate in the Medicare and Medicaid programs
and contracts with states to certify that homes meet these standards through
annual inspections and other types of reviews, including complaint
investigations. The annual inspection, which must be conducted no less than
every 15 months at each home, entails a team of state surveyors spending
several days on-site conducting a broad review to determine whether care and
services meet the assessed needs of residents. HCFA has established specific
protocols for state surveyors to use in conducting these comprehensive
reviews.
HCFA is statutorily required to establish an oversight program for
evaluating the adequacy and effectiveness of each state's nursing home
survey process, relying on its 122 surveyors in 10 regional offices to carry
out these oversight responsibilities. While HCFA's Center for Medicaid and
State Operations is the central HCFA division responsible for developing
guidance to states embodying national policies related to nursing home
oversight and enforcement, the regional officials who oversee the state
survey agencies are not formally subordinated to this Center. Rather, they
report to a Regional Administrator. The 10 regions are further organized
into 4 regional consortia, and both the regional consortia heads and the
Director of the Center for Medicaid and State Operations report directly to
HCFA's Administrator. In addition to developing overall policy guidance, the
Center's staff carry out their day-to-day role of coordinating regional
office oversight of the states through numerous less formal interactions
with regional officials, including meetings and conference calls between
managers and staff from the Center and the regions. If a disagreement
between the Center and a regional office cannot be informally settled at a
lower level, it can only be resolved at the level of the HCFA Administrator.
The Omnibus Budget Reconciliation Act of 1987 requires HCFA's surveyors to
conduct federal monitoring surveys in at least 5 percent of the nursing
homes in each state each year within 2 months of the state's completion of
its survey. HCFA uses a mix of two types of on-site reviews to fulfill this
5-percent mandate: (1) comparative surveys, in which a team of federal
surveyors conducts a complete, independent survey of a nursing home after
the state has finished its survey and compares the state's survey results
with its own, and (2) observational surveys, in which federal surveyors
accompany and observe the state surveyors as they perform a variety of
survey tasks, give state surveyors verbal feedback, and later provide a
written rating of the state surveyors' performance to state managers. HCFA
introduced revisions in its federal monitoring program in October 1998 that
require a minimum of 1 to 3 comparative surveys in each state each year and
that also developed a standard set of procedures all regions are expected to
follow in conducting an observational survey. In addition to the comparative
and observational surveys, HCFA has other sources of information available
for evaluating state agency performance, including a quality improvement
program that requires state agencies to establish performance measures and
develop action plans addressing deficiencies in the state's survey process.
If HCFA determines that a state agency's survey performance is inadequate,
it can impose appropriate remedies or sanctions against the state agency.
Among several remedies and sanctions HCFA can use currently are requiring
the state to submit a written plan of correction explaining how it plans to
eliminate the identified deficiencies; reducing federal funds for state
survey and certification activities; and ultimately, terminating HCFA's
contract with the state.
To assess HCFA's oversight activities, we obtained data about federal
monitoring surveys and other oversight efforts from HCFA and each of its 10
regions, interviewed officials at HCFA headquarters and 3 of its regions,
and met with state surveyors from four states (Florida, Missouri, Tennessee,
and Washington).
HCFA Makes Negligible Use of Comparative Surveys to Assess State Agencies'
Performance
[Image] An effective HCFA program for assessing state agencies' performance
in certifying that nursing homes meet federal standards for quality care is
especially important given concerns that some state agencies miss serious
care problems. Our work in California found that surveyors missed some
problems that affect the health and safety of residents. In addition, HCFA
data show significant variations in the extent to which state surveyors
identify serious deficiencies. For example, state survey agencies in
Washington, Idaho, North Dakota, and Kansas identified serious deficiencies
resulting in harm to residents in more than half their surveys-more than 4
times the rate of serious deficiencies found by survey agencies in Maine,
Colorado, Tennessee, and Oklahoma. With such a range, HCFA needs to know to
what extent such data accurately portray the quality of care provided or the
adequacy of state performance in the survey process.
However, HCFA makes negligible use of comparative surveys-independent
re-surveys of homes-which are its most effective technique for determining
whether state surveyors miss deficiencies. HCFA requires that only 1 or 2 of
these surveys be completed each year in most of the states. Yet, more than
two-thirds of the 64 comparative surveys HCFA conducted between October 1998
and August 1999 identified more serious deficiencies than the state
identified.
For example, in one of its comparative surveys, surveyors from HCFA's Kansas
City region found 24 deficiencies in a Missouri nursing home that state
surveyors did not identify during their survey conducted about 6 weeks
earlier. One of these deficiencies identified six residents whose
nutritional status was not being adequately assessed by the nursing home,
resulting in significant weight loss in several cases. One resident lost 19
percent of his weight between June and October 1998. His weight at the time
of HCFA's survey was 93 pounds, which HCFA indicated was significantly below
the resident's minimally acceptable body weight of 108 pounds. Fewer than 4
months after his admission to the nursing home, this resident also had
developed two moderately severe pressure sores, which the home was
inappropriately treating with a cream the manufacturer stated was not
intended to heal pressure sores but rather to prevent irritation to the
skin. According to HCFA surveyors, these deficiencies affecting multiple
residents should have been evident at the time of the state's survey, but
the state surveyors did not cite them.
Because of the time that typically elapses between a state's survey and
HCFA's comparative survey, HCFA often cannot be certain whether
HCFA-identified deficiencies are the result of poor state agency
performance, such as state surveyors' failure to identify deficiencies, or
to changed conditions in the nursing home following the state survey.
Typically, these surveys occur 1 month after the state completes its survey
but sometimes occur as much as 2 months later. In August 1999, HCFA
instructed its regions to start comparative surveys within 2 to 4 weeks
after the state's survey, but even this delay could result in problems
comparing results. State and federal surveyors told us that comparative
surveys are more effective and reliable in assessing state performance if
they start immediately after the state has completed its survey, even as
soon as the day after the state's exit from the home.
Rather than making more extensive use of comparative surveys, HCFA instead
conducts 90 percent of its surveys as "observational" surveys, in which its
regional surveyors accompany and observe state surveyors as they conduct all
or a portion of their survey. These observational surveys may help HCFA to
identify state agency training needs, but several problems inhibit their
ability to give a clear and accurate picture of a state's survey capability.
Perhaps most importantly, HCFA's presence may make state surveyors more
attentive to their survey tasks than they would be if they were not being
observed. This is an example of the Hawthorne effect, in which individuals
tend to improve their performance when they are aware they are being
studied. As a result, observational surveys do not necessarily provide a
valid assessment of typical state surveyor performance.
Another HCFA oversight mechanism, which predates HCFA's recent nursing home
initiatives, also has significant shortcomings. Under the State Agency
Quality Improvement Program, each state does a yearly self-assessment and
informs HCFA as to whether it is in compliance with seven survey
requirements, such as investigating complaints effectively. As an oversight
program, its effectiveness is limited because HCFA does not validate the
information included in the states' self-assessment as was required under
this program's predecessor, and thus has no assurance that the states
surface all serious problems or that they correct all the problems they have
identified. For instance, in our prior work we found that some states were
not promptly reviewing complaints filed against nursing homes, yet they had
not identified this problem to HCFA as part of their quality improvement
program. In addition, HCFA has no policy regarding consequences for states
that do not provide accurate information through this program. Furthermore,
although the program also addresses some state agency performance standards
that must be reviewed by HCFA's staff, these standards do not include some
important aspects of a state agency's performance, such as determining
whether the timing of a state agency's surveys can be predicted by the
nursing homes.
HCFA Regions Are Inconsistent in How They Conduct Oversight Activities
[Image] In addition to these weaknesses in its oversight mechanisms, HCFA
regions are uneven in the way they implement them, resulting in limited
assurance that states are being held equally accountable to federal
standards, including the recent initiatives. Although HCFA established the
current federal monitoring surveys to develop a uniform national approach
for regions to follow, the regions use different methods for selecting
surveys to review and for conducting reviews. Examples follow:
* Some regions comply with HCFA guidance on comparative surveys by
selecting homes with no established pattern of deficiencies, while
other regions focus on homes that the state has already identified as
having serious deficiencies. By doing the latter, HCFA is unlikely to
identify situations in which state surveyors underreport serious
deficiencies. Furthermore, HCFA's broad guidance for selecting
observational surveys does not ensure that its reviews assess as many
state surveyors as possible to maximize the training effect.
* In conducting comparative surveys, the regions vary in how they select
resident samples, with some regions selecting a sample that includes
some overlap with the state's sample and other regions making no
attempt to do so.
* The regions also, on average, spend very different amounts of time to
conduct an observational survey. While the average time spent on these
surveys is 52 hours, the regions range from an average of 27 hours to
71 hours to conduct these surveys, thus raising questions about the
level of effort some regions devote to gauging state performance. Table
1 provides additional detail on the variation in regional resources
available and in the time spent to complete observational surveys.
Table 1: Variation in Resources Available and in Time to Complete
Observational Surveys
Ratio of
Ratio of state observational Average no. of hours
Region to federal surveys required in per observational
surveyors 1999 to federal survey (Oct. 1998 -
surveyors July 1999)
Boston 14 to 1 5 to 1 27
New York 33 to 1 7 to 1 31
Philadelphia 16 to 1 6 to 1 49
Atlanta 33 to 1 7 to 1 61
Chicago 31 to 1 8 to 1 71
Dallas 60 to 1 10 to 1 38
Kansas City 30 to 1 6 to 1 51
Denver 18 to 1 4 to 1 59
San Francisco 27 to 1 8 to 1 54
Seattle 16 to 1 3 to 1 52
Nationwide 28 to 1 7 to 1 52
In addition, HCFA regional officials make different use of the State Agency
Quality Improvement Program for overseeing state agency performance. Some
regions supplement information provided by the states through the quality
improvement program by extensively analyzing available survey performance
data, while other regions do not believe there is a need to use these
supplemental data to assess state survey performance. For example, HCFA's
Atlanta region recently started a program to conduct in-depth analyses of
each state agency in its region using available survey data. Through these
analyses, the region determined that the annual state surveys of nursing
homes in four of its eight states are highly predictable, contrary to HCFA
policy. It also found that in four of the six states where it has completed
reviews, more than half of the time state surveyors did not conduct revisits
of nursing homes, to determine whether identified deficiencies had been
corrected, within the 55 days recommended by HCFA.
In testimony before your Committee this summer, we also noted that the HCFA
regions do not consistently monitor state implementation of new, stronger
policies resulting from HCFA's nursing home initiatives. When we asked the
regional offices how they were monitoring states' implementation of these
initiatives, their responses ranged from no monitoring of most of the
implemented initiatives to requiring states to submit special monthly
reports on how they were implementing several of the initiatives. These
uneven monitoring practices, combined with the limitations we found in
HCFA's more formalized monitoring approaches, result in HCFA not being
sufficiently informed about what the states are doing to implement these
initiatives.
HCFA's Options for Addressing Poorly Performing State Agencies Are
Inadequate
[Image] Even if HCFA identifies inadequate state agency performance, it
currently does not have an adequate array of effective remedies or sanctions
to ensure corrections. Most commonly, HCFA provides training to surveyors or
survey teams. HCFA may also require the state to submit a plan of
correction, provide technical assistance, and assume responsibility for
developing the state's survey schedule. If these remedies fail, HCFA has two
sanctions available that it may then apply-reducing a state's survey and
certification funding or terminating its survey contract. Because of the
extreme nature of these sanctions, HCFA has only once reduced state funding
and has never terminated a state's contract.
To support reducing the state's survey and certification funding, HCFA
requires evidence showing a pattern of inadequate state performance, which
its current oversight structure does not effectively provide. In essence,
HCFA must show that a state agency demonstrates a pattern of failing to
identify serious deficiencies. However, because HCFA conducts so few
comparative surveys, and observational surveys are not intended to identify
all missed deficiencies, it is not currently possible for HCFA to establish
that a state consistently fails to identify serious deficiencies.
As part of its nursing home initiatives, HCFA established a task force in
late 1998 to expand and clarify the definition of inadequate state survey
performance and to suggest additional remedies and sanctions for state
agencies that perform poorly. The task force has preliminarily proposed two
additional sanctions for HCFA's use: (1) placing a state agency on notice
that it is not in compliance with its Medicaid plan regarding nursing home
survey performance and (2) requiring HCFA officials to meet with the
governor and other high-level state officials. Although HCFA refers to these
two proposed actions as sanctions, they are not as severe as what are
normally thought of as sanctions and may not be forceful enough to compel a
state to improve its performance. Regarding placing the state agency on
notice, we were told that it means that HCFA expects its regions to work
collaboratively with state agencies to urge compliance with the requirements
in their state Medicaid plans. Furthermore, although the proposed sanction
requiring HCFA officials to meet with the governor or other state officials
can raise problems to a higher level in state government and possibly secure
greater state support to improve performance, it is not clear what effect
this sanction would have in compelling a state agency to improve its
performance. HCFA intends to have these two new sanctions in place by the
end of 1999. HCFA also plans to issue additional state survey agency
performance standards and measures, and indicated that over the next 18
months it will determine whether the expanded remedies and sanctions have
been effective in improving state agency performance. At that time, HCFA
will determine whether additional remedies or sanctions should be developed.
HCFA Should Strengthen Its Oversight of State Programs
[Image] HCFA has taken many positive steps-including 30 wide-ranging
initiatives-that demonstrate its commitment to improving the quality of care
that nursing home residents receive. These steps include a major effort to
enhance its oversight of state agencies, but the limited scope and rigor of
its various state performance monitoring mechanisms, and their uneven
application across the regions, do not give HCFA a systematic, consistent
means of assessing state survey performance. Specifically, the negligible
use of comparative surveys, combined with delays in starting them, does not
provide HCFA with sufficient evidence to determine whether states are
appropriately assessing nursing homes' compliance with federal standards.
Furthermore, inconsistencies among the regional offices in their oversight
of state agency performance hamper HCFA's ability to ensure that all state
agencies are being held equally accountable for their performance. Even
though HCFA is strengthening its oversight mechanisms to be able to
establish a pattern of unacceptable state survey performance, it has not
developed effective alternatives for ensuring that states meet federal
standards.
Our report issued today contains several specific recommendations to HCFA to
strengthen its oversight of state survey agencies' activities. These
recommendations are intended to help HCFA ensure that states meet federal
standards for certifying that nursing homes provide adequate care and
consistently implement the more stringent standards required by HCFA's
recent initiatives. Our recommendations include that the HCFA Administrator
* Improve the scope and rigor of HCFA's oversight process by increasing
the use of comparative surveys and ensuring that they are initiated
more promptly after states' surveys.
* Improve the consistency of HCFA oversight across regional offices by
standardizing procedures for selecting and conducting federal
monitoring surveys.
* Further explore the feasibility of appropriate, alternative remedies or
sanctions for those states that prove unable or unwilling to meet
HCFA's performance standards.
In reviewing a draft of our report, HCFA reaffirmed that enhanced oversight
of state programs is critical to improving the quality of care in nursing
homes and generally agreed with our recommendations. Although HCFA indicated
that it needs to further evaluate the appropriate course of action, it is
clear that HCFA's continued efforts and initiatives, in concert with the
Committee's ongoing oversight, have the potential to make a decided
difference in the quality of care for the nation's nursing home residents.
[Image] Mr. Chairman, this concludes my statement. I will be happy to answer
any questions that you or other Members of the Committee may have.
GAO Contacts and Acknowledgments
[Image] For further contacts regarding this testimony, please call William
J. Scanlon or Kathryn G. Allen at (202) 512-7114. Individuals making key
contributions to this testimony included John Dicken, Jack Brennan, and Mary
Ann Curran.
TC "Appendix: RELATED GAO PRODUCTS: " \l 3
Related GAO Products
Nursing Home Oversight: Industry Examples Do Not Demonstrate That Regulatory
Actions Were Unreasonable (GAO/HEHS-99-154R, Aug. 13, 1999).
Nursing Homes: HCFA Initiatives to Improve Care Are Under Way but Will
Require Continued Commitment (GAO/T-HEHS-99-155, June 30, 1999).
Nursing Homes: Proposal to Enhance Oversight of Poorly Performing Homes Has
Merit (GAO/HEHS-99-157, June 30, 1999).
Nursing Homes: Complaint Investigation Processes in Maryland
(GAO/T-HEHS-99-146, June 15, 1999).
Nursing Homes: Complaint Investigation Processes Often Inadequate to Protect
Residents (GAO/HEHS-99-80, Mar. 22, 1999).
Nursing Homes: Additional Steps Needed to Strengthen Enforcement of Federal
Quality Standards (GAO/HEHS-99-46, Mar. 18, 1999).
California Nursing Homes: Care Problems Persist Despite Federal and State
Oversight (GAO/HEHS-98-202, July 27, 1998).
(201005)
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