Nursing Homes: Stronger Complaint and Enforcement Practices Needed to
Better Assure Adequate Care (Testimony, 03/22/99, GAO/T-HEHS-99-89).

Pursuant to a congressional request, GAO discussed the effectiveness of
complaint and enforcement practices to protect nursing home residents,
and to ensure that homes participating in Medicare and Medicaid comply
with federal standards, focusing on the: (1) effectiveness of states'
complaint practices in protecting residents; (2) Health Care Financing
Administration's (HCFA) role in establishing standards and conducting
oversight of states' complaint practices and in using information about
the results of complaint investigations to ensure compliance with
nursing home standards; and (3) assessment of HCFA's use of sanction
authority for homes that failed to maintain compliance with these
standards.

GAO noted that: (1) neither complaint investigations nor enforcement
practices are being used effectively to ensure adequate care for nursing
home residents; (2) as a result, allegations or incidents of serious
problems often go uninvestigated and uncorrected; (3) GAO's work in
selected states reveals that, for serious complaints alleging harm to
residents, the combination of inadequate state practices and limited
HCFA guidance and oversight have often resulted in: (a) policies or
practices that may limit the number of complaints filed; (b) serious
complaints alleging harmful situations not being investigated promptly;
and (c) incomplete reporting on nursing homes' compliance history and
states' complaint investigation performance; (4) further, regarding
enforcement actions, HCFA has not yet realized its main goal--to help
ensure that homes maintain compliance with federal health care
standards; (5) GAO found that too often there is a yo-yo pattern where
homes cycle in and out of compliance; (6) more than one-fourth of the
more than 17,000 nursing homes nationwide had serious
deficiencies--including inadequate prevention of pressure sores, failure
to prevent accidents, and failure to assess residents' needs and provide
appropriate care--that caused actual harm to residents or placed them at
risk of death or serious injury; (7) although most homes corrected
deficiencies identified in an initial survey, 40 percent of these homes
with serious deficiencies were repeat violators; (8) in most cases,
sanctions initiated by HCFA never took effect; (9) the threat of
sanctions appeared to have little effect on deterring homes from falling
out of compliance because homes could continue to avoid the sanctions'
effect as long as they kept temporarily correcting their deficiencies;
and (10) HCFA has taken a number of recent actions to improve nursing
home oversight in an attempt to resolve problems pointed out in earlier
studies.

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

 REPORTNUM:  T-HEHS-99-89
     TITLE:  Nursing Homes: Stronger Complaint and Enforcement Practices 
             Needed to Better Assure Adequate Care
      DATE:  03/22/99
   SUBJECT:  Safety standards
             Nursing homes
             Patient care services
             Noncompliance
             State programs
             Elderly persons
             Elder care
             Sanctions
             Federal/state relations
IDENTIFIER:  Medicare Program
             Medicaid Program
             California
             Michigan
             Maryland
             Pennsylvania
             Washington
             
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Cover
================================================================ COVER


Before the Senate Special Committee on Aging

For Release on Delivery
Expected at 1:00 p.m.
Monday, March 22, 1999

NURSING HOMES - STRONGER COMPLAINT
AND ENFORCEMENT PRACTICES NEEDED
TO BETTER ENSURE ADEQUATE CARE

Statement of William J.  Scanlon, Director
Health Financing and Public Health Issues
Health, Education, and Human Services Division

GAO/T-HEHS-99-89

GAO/HEHS-99-89T


(101813)


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

  HCFA - Health Care Financing Administration
  HHS - Department of Health and Human Services

NURSING HOMES:  STRONGER COMPLAINT
AND ENFORCEMENT PRACTICES NEEDED
TO BETTER ENSURE ADEQUATE CARE
============================================================ Chapter 0

Mr.  Chairman and Members of the Committee: 

Thank you for inviting me to discuss our findings on the
effectiveness of complaint and enforcement practices, which are an
integral part of the federal-state process to protect nursing home
residents and to ensure that homes participating in Medicare and
Medicaid comply with federal standards.  The nearly 1.6 million
elderly and disabled residents living in nursing homes are among the
sickest and most vulnerable populations in the nation.  They
frequently depend on extensive assistance in the basic activities of
daily living such as dressing, grooming, feeding, and using the
bathroom, and many require skilled nursing or rehabilitative care. 

The federal government, which will pay nearly $39 billion for nursing
home care in 1999, plays a major role in ensuring that residents
receive adequate quality of care.  On the basis of statutory
requirements, the Health Care Financing Administration (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 complaint
investigations.  The federal government has the authority to impose
sanctions, such as fines, if homes are found not to meet these
standards. 

In hearings before this Committee last year, we reported that
unacceptable care was a problem in many California nursing homes,
including one in three where state surveyors found serious or
potentially life threatening care problems.  We also concluded that
federal and state oversight was not sufficient to guarantee the
safety and welfare of nursing home residents.\1 The information I am
presenting today updates and expands upon the information presented
last year with the results of our work on two recently completed
projects conducted for this committee and several other requesters. 
In a report issued today, we examine the effectiveness of states'
complaint practices in protecting residents.\2 In this report, we
also assess HCFA's role in establishing standards and conducting
oversight of states' complaint practices and in using information
about the results of complaint investigations to ensure compliance
with nursing home standards.  In the second report, issued last week,
we analyze national data on the existence of serious deficiencies in
nursing home compliance with Medicare and Medicaid standards. 
Further, we assess HCFA's use of sanction authority for homes that
failed to maintain compliance with these standards.\3

In brief, we found that neither complaint investigations nor
enforcement practices are being used effectively to ensure adequate
care for nursing home residents.  As a result, allegations or
incidents of serious problems, such as inadequate prevention of
pressure sores, failure to prevent accidents, and failure to assess
residents' needs and provide appropriate care, often go
uninvestigated and uncorrected.  Our work in selected states revealed
that, for serious complaints alleging harm to residents, the
combination of inadequate state practices and limited HCFA guidance
and oversight have often resulted in

  -- policies or practices that may limit the number of complaints
     filed,

  -- serious complaints alleging harmful situations not being
     investigated promptly, and

  -- incomplete reporting on nursing homes' compliance history and
     states' complaint investigation performance. 

Further, regarding enforcement actions, HCFA has not yet realized its
main goal--to help ensure that homes maintain compliance with federal
health care standards.  We found that too often a yo-yo pattern
develops in which homes cycle in and out of compliance.  More than
one-fourth of the more than 17,000 nursing homes nationwide had
serious deficiencies that caused actual harm to residents or placed
them at risk of death or serious injury.  Although most homes
corrected deficiencies identified in an initial survey, 40 percent of
these homes with serious deficiencies were repeat violators.  In most
cases, sanctions initiated by HCFA never took effect.  The threat of
sanctions appeared to have little effect on deterring homes from
falling out of compliance because homes could continue to avoid the
sanctions' effect as long as they temporarily corrected their
deficiencies. 

HCFA has recently taken a number of actions to improve nursing home
oversight in an attempt to resolve problems pointed out in earlier
studies.  These initiatives include varying the scheduling of annual
surveys to lessen their predictability and more vigorously
prosecuting egregious violations.  We are making several additional
recommendations to HCFA that should strengthen its standards for and
oversight of states' complaint practices and improve the deterrent
effect of enforcement actions, including the use of fines and
terminations.  We are also recommending that HCFA improve its
management information systems to more completely include complaint
investigation results and to be able to more effectively identify and
respond to homes with recurring problems.  Last week, the
Administrator generally concurred with these recommendations and
announced new initiatives to address these issues. 


--------------------
\1 See California Nursing Homes:  Federal and State Oversight
Inadequate to Protect Residents in Homes With Serious Care Violations
(GAO/T-HEHS-98-219, July 28, 1998) and California Nursing Homes: 
Care Problems Persist Despite Federal and State Oversight
(GAO/HEHS-98-202, July 27, 1998). 

\2 See Nursing Homes:  Complaint Investigation Processes Often
Inadequate to Protect Residents (GAO/HEHS-99-80, Mar.  22, 1999).  We
examined Maryland, Michigan, and Washington as well as 11 other
states reviewed by state auditors--Iowa, Kansas, Kentucky, Louisiana,
New York, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, and
Wisconsin. 

\3 See Nursing Homes:  Additional Steps Needed to Strengthen
Enforcement of Federal Quality Standards (GAO/HEHS-99-46, Mar.  18,
1999).  The scope of this review included analysis of HCFA's
nationwide database of periodic inspections and detailed work in four
statesCalifornia, Michigan, Pennsylvania, and Texas. 


   SOME STATES' COMPLAINT
   PRACTICES ARE LIMITED IN THEIR
   ABILITY TO PROTECT RESIDENTS
---------------------------------------------------------- Chapter 0:1

Investigations of complaints filed against nursing homes can provide
a valuable opportunity for determining if the health and safety of
nursing home residents are threatened.  Complaint investigations are
typically less predictable than annual surveys and can target
specific areas of potential problems identified by residents, their
families, concerned public, and even the facility itself.  However,
we found that complaint investigation practices do not consistently
achieve their full potential. 


      SOME STATES' POLICIES OR
      PRACTICES LIMIT THE FILING
      OF COMPLAINTS OR QUICK
      RESPONSE
-------------------------------------------------------- Chapter 0:1.1

Some states have practices that may limit the number of complaints
that are filed and investigated.  For example, both Maryland and
Michigan encourage callers to submit their complaints in writing.  In
contrast, Washington readily accepts and acts on phone complaints
without encouraging a written follow-up.  This practice would appear
to contribute to Washington's much higher volume of complaints than
in either Maryland or Michigan. 

When a complaint is received, the state agency ascertains its
potential seriousness.  HCFA requires states to investigate
complaints that may immediately jeopardize a resident's health,
safety, or life within 2 workdays of receipt.  For other serious
complaints, states are permitted to establish their own categories
and time frames for investigation.  Some states permit relatively
long periods of time to pass between the receipt of these complaints
and their investigation.  For example,

  -- Michigan's statute allows 30 days, but Michigan's operating
     practice in 1998 allowed 45 days;

  -- Tennessee allows 60 days; and

  -- Kansas allows 180 days. 

Other states, however, such as Maryland, Pennsylvania, and
Washington, have additional priority levels that categorize other
serious complaints to be investigated within shorter time frames,
such as 10 workdays. 


      SOME STATES ASSIGN LOW
      PRIORITY LEVELS TO SERIOUS
      COMPLAINTS
-------------------------------------------------------- Chapter 0:1.2

We found that some states classify few complaints in high-priority
levels that would require a prompt investigation.  For example, in
the 1-year period from July 1997 to June 1998, Maryland did not
classify any complaints as having the potential to immediately
jeopardize residents and thereby requiring a visit within 2 workdays. 
Maryland most frequently classified complaints as not requiring a
visit until the next on-site inspectionwhich could be as long as a
year or more away.  Similarly, Michigan categorized nearly all of its
complaints between July 1997 and June 1998 as not requiring a visit
for 45 days or until the next annual survey.  In contrast, Washington
determined that 9 out of 10 complaints should be investigated within
either 2 or 10 workdays. 

Several states have explicit procedures or operating practices that
do not place serious complaints in high-priority categories for
investigation.  A Maryland official, for example, acknowledged
reducing the priority of some complaints since the agency recognized
that it could not meet shorter time frames because of insufficient
staff.  Michigan gave some complaints low priority if the resident
was no longer at the nursing home when the complaint was
received--even if the resident had died or been transferred to a
hospital or another nursing home because of care problems.  For
example, in one such complaint in Michigan, it was alleged in July
1998 that a resident died because the home did not properly manage
his insulin injections or perform blood sugar tests.  The state had
recently investigated the home and determined that previous problems
with treatment of diabetic residents had been corrected.  However,
the state did not investigate the complaint until this month as part
of the most recent annual survey--nearly 8 months after the complaint
was received--and state investigators did not identify any problems
with treatment of diabetic residents.  We question why the state
agency did not investigate this complaint sooner given that the
resident died and the home had previous deficiencies related to
diabetic care.  Michigan also delayed investigating certain
non-immediate jeopardy complaints against nursing homes undergoing a
federal enforcement action.  Officials told us that they adopted this
practice to avoid potential confusion that might result from having
two enforcement actions pending simultaneously.  This practice,
however, could unreasonably delay the investigation of serious
complaints at nursing homes already identified as violating federal
standards. 

In reviewing complaints from the states visited, we identified
several complaints that raise questions about why they were not
considered as involving potential immediate jeopardy and thereby
requiring a visit within 2 workdays.  Examples of these allegations
include the following: 

  -- A resident was found dead with her head trapped between the
     mattress and the side rail of the bed with her body lying on the
     floor.  The state categorized this complaint as one needing to
     be investigated within 45 days.  The state investigated this
     complaint within 13 days and determined that 11 of 24 sampled
     beds had similar side rail problems. 

  -- An alert resident who was placed in a nursing home for a 20-day
     rehabilitation stay to recover from hip surgery was transferred
     in less than 3 weeks to a hospital because of an "unprecedented
     rapid decline [in his condition]." A member of the ambulance
     crew transporting the resident to the hospital reported that the
     resident "had dried .  .  .  blood in his fingernails and on his
     hands .  .  .  sores all over his body .  .  .  smelled like
     feces .  .  .  and (was) unable to walk or take care of himself. 
     .  ..  I personally feel he was not being properly cared for."
     The state eventually determined that the nursing home had harmed
     the resident, but only after categorizing this complaint as not
     needing an investigation until the next on-site inspection which
     was more than 4 months after receipt of the complaint. 


      SOME STATES NOT CONDUCTING
      COMPLAINT INVESTIGATIONS IN
      TIMELY MANNER
-------------------------------------------------------- Chapter 0:1.3

Further, we found that states often did not conduct investigations
within the time frames they assigned complaints, even though some
states frequently placed complaints in priority categories that would
increase the time available to investigate them.  Some of these
complaints, despite alleging serious risk to resident health and
safety, remained uninvestigated for several months after the deadline
for investigation.  For example, Maryland met its time frames for
only 21 percent of complaints assigned to the 10-workday category and
69 percent of complaints assigned to the 45-workday category. 
Michigan met its time frames in about one-fourth of cases. 
Washington, which assigned most complaints to the category requiring
a visit within 10 workdays, met its time frames in slightly more than
half (55 percent) of all complaints. 

During our visits to Maryland, Michigan, and Washington, we asked the
states to provide copies of all complaints in the Baltimore, Detroit,
and Seattle areas that had not yet been investigated and that
exceeded the assigned time frame.  The Baltimore and Detroit
metropolitan areas had over 100 such complaints, and the Seattle area
had 40.  For example, in Baltimore we identified a nursing home that
had three complaints alleging neglect or abuse that had not yet been
investigated and had been pending for at least 3 or 4 months.  These
allegations included a resident who was not fed for nearly 2 days and
was hospitalized with dehydration, pressure sores, and an infection;
a resident whose condition deteriorated, including losing 10 percent
of her body weight in 2 months, and who suffered from poor hygiene;
and a resident who was improperly transferred and suffered two
fractured legs.  In Detroit, a nursing home had four pending
complaints that had not been investigated for between 2 and 8 months
and that alleged neglect and abuse of residents.  These allegations
included a resident who died after the home allegedly failed to send
her to the hospital promptly and who the hospital's physician
determined was dehydrated and malnourished; a resident with an
uncared-for cut that became infected and resulted in heel amputation;
an unattended resident who was found outside the home with injuries
from a fall; and a resident who was verbally abused by a staff
member. 

Failure by states to investigate complaints promptly can delay the
identification of serious problems in nursing homes and postpone
needed corrective actions.  As a result of delayed investigations,
situations in which residents are harmed are permitted to continue
for extended periods.  For example, we found a complaint in Michigan
alleging inadequate care for pressure sores and fractures due to
falls that was not investigated for over 7 months.  When the state
did investigate, it found that the nursing home had a pattern of
deficiencies of inadequate care that actually harmed residents. 


   APPLICATION OF SANCTIONS DOES
   NOT ENSURE NURSING HOMES
   MAINTAIN COMPLIANCE
---------------------------------------------------------- Chapter 0:2

On the basis of of our analysis of nationwide survey data, we found
that more than one in four nursing homes had serious and often
repeated deficiencies that resulted in immediate jeopardy or actual
harm to residents.  While HCFA's initiation of actions typically
brought homes into at least temporary compliance, they were often
ineffective in ensuring that homes maintained compliance over time
with federal standards. 


      MANY NURSING HOMES INCUR
      REPEATED SERIOUS
      DEFICIENCIES
-------------------------------------------------------- Chapter 0:2.1

Surveys conducted since the July 1995 implementation of stronger
enforcement tools showed that, each year, more than 4,700 homes had
deficiencies that caused actual harm to residents or placed them at
risk of death or serious injury.  The most frequent violations
causing actual harm included inadequate prevention of pressure sores,
failure to prevent accidents, and failure to assess residents' needs
and provide appropriate care.  Although most homes were found to have
corrected the identified deficiencies, subsequent surveys showed that
problems often returned.  About 40 percent of the homes that had such
problems in their first survey during the period we examined (July
1995 to October 1998) had them again in their last survey during the
period. 


      SANCTIONS OFTEN DO NOT TAKE
      EFFECT OR RESULT IN ONLY
      TEMPORARY CORRECTIONS
-------------------------------------------------------- Chapter 0:2.2

Our work in four states and four HCFA regions showed that
HCFA-initiated sanctions against noncompliant nursing homes did not
take effect in a majority of cases and generally did not ensure that
the homes maintained compliance with standards.\4 Our review of 74
homes that states had referred to HCFA for federal enforcement
action, as a result of serious or uncorrected deficiencies, showed
that the threat of sanctions often helped bring the homes back into
temporary compliance but provided little incentive to keep them from
slipping back out of compliance.  On the basis of state
recommendations, HCFA most commonly initiated three sanctions for
these homes:  denial of payments for new admissions, civil monetary
penalties, and termination.\5

States had referred these homes to HCFA for possible sanctions an
average of about three times each.  Because many homes corrected
their deficiencies before the effective date of the sanction, HCFA
often rescinded the sanction before it took effect.  For example,
sanctions did not take effect in 55 percent of cases where denial of
payments was recommended; 68 percent of cases of civil monetary
penalties; and 72 percent of cases of termination.\6

However, the threat of sanctions only temporarily induced homes to
correct identified deficiencies, as many were again out of compliance
by the time the next inspection was conducted.  Of the 74 homes we
reviewed that faced possible sanctions, 69 were again referred for
sanctions after being found out of compliance once moresome went
through this process as many as 6 or 7 times.  For example, twice in
1995, and again in 1996 and 1997, Michigan cited one home for causing
actual harm to residents.  Deficiencies included failure to prevent
the development of pressure sores in several residents and failure to
prevent accidents, which resulted in a broken arm for one resident
and a broken leg for another.  In another example, Texas surveyors
cited one nursing home for placing residents in immediate jeopardy
and actual harm twice in 1995including failure to prevent choking
hazards, provide proper incontinent care, and prevent or heal
pressure sores.  On the next annual survey, surveyors again found
quality of care deficiencies that caused harm to residents, including
failure to provide adequate nutrition. 

This yo-yo pattern of compliance and noncompliance could be found
even among homes that were terminated from Medicare, Medicaid, or
both.  Termination is usually thought of as the most severe sanction
and is generally used only as a last resort.\7

Once a home is terminated, however, it can generally apply for
reinstatement if it corrects its deficiencies and has demonstrated
"reasonable assurance" that they will not recur.  Of the 74 homes we
analyzed, 13 were terminated at some point; however, the pattern of
noncompliance returned for 3 of 6 homes that were reinstated.  For
example, a Texas nursing home was terminated from Medicare for a
number of violations that included widespread deficiencies causing
actual harm to residents.  About 6 months after the home was
terminated, it was readmitted under the same ownership.  Within 5
months, state surveyors again identified a series of deficiencies
involving harm to residents, including failure to prevent avoidable
pressure sores or ensure that residents received adequate nutrition. 


--------------------
\4 The four states were California, Michigan, Pennsylvania, and
Texas, which--combined--account for 23 percent of nursing homes
nationwide.  The HCFA regions we reviewed included San Francisco,
Chicago, Philadelphia, and Dallas, which are responsible for
overseeing states with 55 percent of nursing homes nationwide. 
Within these four states, we chose a judgmental sample of 74 nursing
homes that had deficiencies of sufficient severity that states had
referred the homes to HCFA for 241 separate federal enforcement
actions. 

\5 Other sanctions, including increased state monitoring, appointment
of a temporary manager to oversee the home while it corrects its
deficiencies, and state-directed plans of correction, have been
infrequently used. 

\6 The relatively small number of civil monetary penalties that have
taken effect is a reflection of the large number of fines under
appeal.  As appeals are settled, a higher proportion of the fines
imposed may take effect. 

\7 When a home is terminated, it loses any income from Medicare and
Medicaid payments, which for many homes represents a substantial part
of operating revenues.  Residents who receive support from Medicare
or Medicaid must be moved to other facilities. 


   FURTHER HCFA OVERSIGHT AND
   ENFORCEMENT NEEDED
---------------------------------------------------------- Chapter 0:3

Given these weaknesses in many states' complaint practices and the
current inadequacy of enforcement actions to maintain homes'
compliance with federal standards, one would expect HCFA to be more
proactive in overseeing states and enforcing sanctions when nursing
homes do not maintain compliance with its standards.  HCFA, however,
has exercised limited oversight or guidance of states' complaint
practices.  In addition, while HCFA has some tools to address the
cycle of repeated noncompliance among some homes, it has not used
them effectively. 


      HCFA OVERSIGHT OF COMPLAINTS
      IS LIMITED
-------------------------------------------------------- Chapter 0:3.1

Although federal funds finance over 70 percent of complaint
investigations nationwide, HCFA plays a minimal role in providing
states with direction or oversight regarding these investigations. 
HCFA has left it largely to the states to determine which complaints
are so serious that they must be investigated within the federally
mandated 2 workdays.  Until last week, HCFA had no formal
requirements for the prompt investigation of serious complaints that
could harm residents but were not classified as potentially placing
residents in immediate jeopardy.  Moreover, HCFA's oversight of state
agencies that certify federally qualified nursing homes has not
focused on complaint investigations.  We found that

  -- a HCFA initiative to strengthen federal requirements for
     complaint investigations was discontinued in 1995, and resulting
     guidance developed for states' optional use had not been widely
     adopted. 

  -- federal monitoring reviews of state nursing home inspections
     primarily focus on the annual standard survey of nursing homes,
     with very few conducted of complaint investigations. 

  -- since 1998, HCFA has required state agencies to develop their
     own performance measures and quality improvement plans for their
     complaint investigations, but for several of the states we
     reviewed complaint processes were addressed superficially or not
     at all. 

In response to our findings and concerns raised by advocates for
nursing home residents, HCFA announced last week several initiatives
intended to strengthen its standards for and oversight of states. 
For example, HCFA will now require states to investigate complaints
alleging actual harm to residents within 10 workdays. 


      HCFA POLICY LIMITS
      ENFORCEMENT SANCTIONS'
      EFFECTIVENESS
-------------------------------------------------------- Chapter 0:3.2

Regarding enforcement actions, the manner in which some sanctions
have been implemented limits their effectiveness.  For example, civil
monetary penalties have a potentially strong deterrent effect because
they cannot be avoided simply by taking corrective action, and the
longer the deficiency remains, the larger the penalty can be. 
However, the effectiveness of civil monetary penalties has been
hampered by a growing backlog of appeals.  Nationwide, a lack of
hearing examiners has created a growing backlog, with over 700 cases
awaiting decision as of February 1999 and some cases dating back to
1996.  HHS estimated that each year at least twice as many appeals
would be received as would be settled and has requested additional
funds for fiscal year 2000.  This appeals backlog creates a
bottleneck for timely collections.  As of September 1998, only 37 of
the 115 monetary penalties imposed on the 74 homes we reviewed had
been collected.  This backlog of appealed civil monetary penalties
encourages HCFA to settle appealed cases, often reducing the size of
the fine, and delays the imposition of the fine even if it is
ultimately upheld after appeal.  As a result, it is not surprising
that some nursing home owners routinely appeal imposed penalties. 
For example, we found that one large Texas chain appealed 62 of the
76 civil monetary penalties imposed on its nursing homes between July
1995 and April 1998.  These 62 potential penalties totaled $4.1
million. 

Since July 1998, HCFA has taken or proposed several initiatives to
improve nursing home oversight.  These initiatives include varying
the scheduling of annual surveys to reduce the predictability of
surveyors' visits, revising the definition of a poorly performing
facility to broaden the criteria for taking immediate enforcement
action, and prosecuting egregious violations of care standards. 
While these are important steps, it is too early to gauge their
effect in resolving earlier identified problems.  HCFA's initiatives
do not, however, address some weaknesses identified in our most
recent work.  For example: 

  -- HCFA does not require states to refer homes for sanction in all
     cases where identified deficiencies contributed to the death of
     a resident.  We identified examples where investigation of a
     resident's death found that the deficient practice had ceased at
     the time of the investigation, thus resulting in a finding of
     actual harm.  Under HCFA policy, states are not required to
     refer homes with this level of deficiency for sanction. 

  -- The problem with terminations is twofold.  First, HCFA should
     require that nursing homes better demonstrate reasonable
     assurance that violations will not recur before deciding to
     reinstate a terminated home.  Second, HCFA policy prevents state
     agencies from considering a reinstated home's prior record. 
     This policy effectively gives the home a "clean slate" and
     produces the disturbing outcome that termination could actually
     be advantageous to a home with a poor compliance history. 


      HCFA'S MANAGEMENT
      INFORMATION SYSTEMS ARE
      INADEQUATE
-------------------------------------------------------- Chapter 0:3.3

Finally, our work points to weaknesses in HCFA's management
information systems that have limited its effectiveness in addressing
both nursing home complaints and enforcement.  HCFA reporting systems
for nursing homes' compliance history and complaint investigations do
not collect timely, consistent, and complete information.  Having
full and accurate information on a nursing home's compliance and
enforcement history, including the results of complaint
investigations, would improve HCFA's ability to identify nursing
homes in need of further enforcement sanctions.  Further information
system weaknesses pertain to the inability to centrally track
enforcement actions or to identify nursing homes under common
ownership. 


   CONCLUSIONS AND RECOMMENDATIONS
---------------------------------------------------------- Chapter 0:4

As the Congress, HCFA, and the states seek to better ensure adequate
quality of care for nursing home residents, our work has demonstrated
that key components of complaint investigations and enforcement
actions need to be strengthened to better protect the growing number
of elderly and disabled Americans who rely on nursing homes for their
careone of the nation's most vulnerable populations.  Absent such
improvements, many federal and state policies and practices continue
to result in serious complaints--which allege harm to residents--not
being investigated for weeks or months.  In addition, HCFA's
ineffective use of common enforcement sanctions, such as fines,
denial of payments, and termination, leads to nursing homes
temporarily correcting deficiencies that recur all too often. 

Our reports contain several specific recommendations to HCFA.  The
Administrator has already concurred and has started taking steps to
act on them.  Broadly, these recommendations call for HCFA to

  -- develop additional standards for the prompt investigation of
     serious complaints and strengthen its oversight of state
     complaint investigations;

  -- improve the effectiveness of enforcement actions, including
     reducing the backlog of appeals of civil monetary penalties; and
     strengthen policies regarding terminated homes, such as
     requiring reasonable assurance periods of sufficient duration
     and maintaining the home's pretermination history; and

  -- develop better management information systems to integrate the
     results of complaint investigations, track the status and
     history of deficiencies, and monitor enforcement actions. 


-------------------------------------------------------- Chapter 0:4.1

Mr.  Chairman, this concludes my statement.  I will be happy to
answer any questions that you or other Members of the Committee may
have. 


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