SNF - GAO Report on SNF Enforcement

The Patient Protection and Affordable Care Act of 2010 (PPACA), the health care reform legislation enacted earlier this year, provides a new opportunity to strengthen and improve federal oversight mechanisms for nursing homes. Implementation of new statutory requirements for public reporting of nursing home ownership information and for Ethics and Compliance Programs in all facilities can build on prior efforts to ensure facility accountability.

Poor quality of care and quality of life for nursing home residents have been criticized for decades. Congress enacted the Nursing Home Reform Law in 1987[1] not only to strengthen the standards of care that must be met by facilities in order to be eligible to receive Medicare and Medicaid reimbursements, but also to ensure that facilities fully and consistently meet the standards of care and not "yo-yo" in and out of compliance. Multiple efforts by the Federal Government to improve nursing home quality since 1987 have led to important changes and improvements, but fall far short of achieving the Congressional goals of full and sustained compliance by all facilities and assuring high quality of care and quality of life for all residents.

A March 2010 report by the Government Accountability Office (GAO) on the Special Focus Facility Program of the Centers for Medicare & Medicaid Services (CMS) illustrates a significant cause of this failure – the continuing reluctance of government officials to use the full authority they have to sanction facilities that provide poor care.

The GAO report identifies three separate mechanisms to improve quality, which will be discussed below. It also identifies facilities that are subject to all three mechanisms but nevertheless remain among the worst facilities in the country. Advocates are concerned that if the oversight systems are unable to improve the worst facilities, they are unlikely to address less serious, but important, quality concerns in other facilities.

Government officials are understandably and appropriately reluctant to close facilities and move residents, but they have other enforcement tools that they could more effectively use against facilities and corporations that provide the poorest care.

The GAO's Poorly Performing Nursing Homes: Special Focus Facilities Are Often Improving, but CMS's Program Could Be Strengthened[2] describes the operations of the Special Focus Facilities (SFF) Program and related government efforts to deal with the worst performing facilities.

The SFF Program, created by President Clinton's Nursing Home Initiative in July 1998 to provide more frequent surveys of facilities that are identified as providing the worst care, has been modified and strengthened over the last few years. Recent changes include publishing the names of SFFs on CMS's Nursing Home Compare website and notifying the governing board, owner, operator, and administrator of their facility's status as an SFF. The SFF Program provides greater oversight of SFFs (two surveys each year, instead of one) and stronger enforcement against 136 SFFs nationwide that provide exceptionally poor care. Reporting last summer that many more facilities are poorly performing than are selected for the SFF Program, the GAO encouraged the expansion of the SFF Program,[3] but CMS lacks sufficient resources to expand the Program.

In its new report, the GAO finds that the SFF Program has led to some improvement in some facilities that are publicly identified as SFFs. CMS also reports that SFFs that improved their performance sustained their improvement for six and 12 months and were less likely to be cited for serious deficiencies than comparable facilities that were not SFFs.[4] Problems remain, nevertheless, including still-limited enforcement actions against SFFs and the fact that many SFFs that were found to have improved their performance enough to "graduate" from the SFF program (24 of 181 facilities, 13%) did not actually meet graduation criteria.

Although CMS's SFF policy requires termination from Medicare and/or Medicaid participation of SFFs that fail either to meet certain quality standards or to show "very promising progress,"[5] the agency's reluctance to terminate facilities has led to the creation of a new option, Systems Improvement Agreements (SIAs). This option gives one last chance to SFFs that have not "graduated." SIAs require facilities to get technical assistance from an outside entity to help them improve their performance.

The results of the 10 SIAs implemented to date do not reflect much improvement. The GAO reports that of the 10 SFFs nationwide that have had these agreements:

In much the same way that CMS' SFF policy requires terminations, the Department of Health and Human Services' Office of Inspector General (OIG) is required to exclude health care providers convicted of certain program-related crimes, patient abuse, health care fraud, and controlled substances[8] and has authority to exclude health care providers under other circumstances, including providing care "of a quality which fails to meet professionally recognized standards of health care."[9] Like CMS, however, OIG is reluctant to exclude nursing home corporations from participation in the Medicare and Medicaid programs, in part because of the impact on residents, and in part because it does not want to assume the responsibility of directly operating hundreds of nursing facilities. These corporations are "too big to fail." As a result, OIG uses Corporate Integrity Agreements (CIAs) instead of exclusion to impose another level of oversight on corporations. Like SIAs, CIAs require facilities to get technical assistance from an outside entity to help them improve their performance, but CIAs are far more common than SIAs. By June 2008, 35 nursing home corporations, with 1104 nursing facilities, had signed quality-of-care CIAs with OIG.[10]

The effects of CIAs on nursing home quality are not promising. In an April 2009 report, OIG evaluated 15 nursing home corporations whose CIAs began between June 2000 and December 2005. While OIG reported that "[a]ll 15 corporations enhanced quality of care structures and processes while under their CIAs and cited positive effects of the CIAs,"[11] it said that it could not evaluate the impact of CIAs on nursing home quality. However, its own analysis of substandard quality of care (SQC)[12] deficiencies in corporations with CIAs showed that 12 of the 15 corporations generally had more SQC deficiencies than other facilities in their states, before, during, and after their CIAs.[13] For example, the corporation with 341 facilities had more SQC deficiencies in 2007, during the fourth year of its CIA, than it had in the previous eight years, including the five years before it operated under a CIA and the three previous years, when it had a CIA.

The GAO reports that "three corporations with quality of care CIAs . . . had homes that were also in the SFF Program, and two of these SFFs had SIAs."[14] In other words, despite the use of three separate mechanisms, each intended to improve quality – the SFF Program, SIA, and CIA – at least two facilities remain among 136 facilities nationwide that provide the worst care to residents. (An unidentified but additional number of facilities subject to CIAs are also in the SFF Program, but they do not have SIAs.)

CMS's approach to enforcement has historically focused on individual facilities. President Clinton's 1998 Nursing Home Initiative included a proposal for legislative change to address noncompliance on a chain-wide level. CMS told the GAO that one barrier to implementation of this initiative was CMS's inability to identify facilities belonging to nursing home chains.[15] Section 6101 of PPACA, which requires disclosure of ownership and additional parties, will give CMS (and the public) better and more comprehensive ownership information.

CMS should also more fully and effectively use the enforcement tools it has. Under progressive enforcement called for by the SFF Program, CMS should impose more sanctions and larger civil money penalties against SFFs that fail to achieve substantial compliance with program requirements. Now that the SFF Program is mandated by law,[16] CMS should promulgate regulations to strengthen the actions that states and CMS can take against SFFs. For example, it could consider imposing staffing ratios on SFFs, requiring temporary management paid for by the facility, and prohibiting the owners and managers of SFFs that fail to graduate from being eligible to receive Medicare and Medicaid reimbursement.

Enforcement actions by CMS and OIG should be more public. The GAO's March report described the public identification of SFFs on CMS's website Nursing Home Compare as a factor that may have influenced the more rapid improvement of SFFs in recent years.[17]

Moreover, PPACA creates new opportunities to learn from past experience with quality programs and to strengthen these programs for the future. PPACA, for example, includes a requirement at §6102 for all nursing facilities to have Ethics and Compliance Programs by 2013, one year after CMS publishes final regulations for such programs. These Programs are modeled on the voluntary compliance programs and CIAs used by OIG. Regulations implementing these new statutory programs should impose new requirements on facilities. CMS should require facilities, not only to address deficiencies identified by survey agencies, but also to undertake programs and projects to improve care, based on evaluations of their own quality measures. And all of the activities of Ethics and Compliance Programs should be made public.

Although enforcement of nursing home quality standards has not fully achieved Congressional goals, implementation of PPACA provides an opportunity to correct the shortcomings in prior enforcement efforts.

[1] 42 U.S.C. §§1395i-3(a)-(h), 1396r(a)-(h), Medicare and Medicaid, respectively.

[2] GAO-10-197 (March 2010), http://www.gao.gov/new.items/d10197.pdf.

[3] GAO, Nursing Homes: CMS’s Special Focus Facility Methodology Should Better Target the Most Poorly Performing Homes, Which Tended to Be Chain Affiliated and For-Profit, GAO-09-689 (Aug. 28, 2009), http://www.gao.gov/new.items/d09689.pdf.

[4] See March 9, 2010 letter from Andrea Palm, Acting Assistant Secretary for Legislation, to John E. Dicken, Director, Health Care, GAO, at 53-57 (Appendix V to GAO’s March 2010 report), http://www.gao.gov/new.items/d10197.pdf.

[5] The requirement for graduation is not having a deficiency above level F (widespread deficiency, with the potential for more than minimal harm) in two standard surveys and any intervening complaint surveys. SFFs must graduate, be terminated, or get an extension. CMS, "Special Focus Facility ("SFF") Initiative, http://www.cms.gov/CertificationandComplianc/Downloads/SFFList.pdf.

[6] CMS created a Five-Star Quality Rating System that rates facilities. "Above average," the rating achieved by one SFF with a SIA, is the second highest rating; "below average" is the second lowest; "much below average," the lowest. See http://www.cms.gov/CertificationandComplianc/13_FSQRS.asp.

[7] GAO, Poorly Performing Nursing Home: Special Focus Facilities Are Often Improving, but CMS’s Program Could Be Strengthened 31-32, GAO-10-197 (March 2010), http://www.gao.gov/new.items/d10197.pdf.

[8] 42 U.S.C. §1320a-7(a).

[9] 42 U.S.C. §1320a-7(b)(6)(B).

[10] GAO, Poorly Performing Nursing Homes: Special Focus Facilities Are Often Improving, but CMS’s Program Could Be Strengthened 34, GAO-10-197 (March 2010), http://www.gao.gov/new.items/d10197.pdf. OIG also imposes CIAs for financial fraud.

[11] OIG, Nursing Home Corporations under Quality of Care Corporate Integrity Agreements 8, OEI-06-06-00570 (April 2009), http://www.oig.hhs.gov/oei/reports/oei-06-06-00570.pdf.

[12] "Substandard quality of care means one or more deficiencies related to participation requirements under 483.13, Resident behavior and facility practices, 483.15, Quality of life, or ++483.25, Quality of care of this chapter, which constitute either immediate jeopardy to resident health or safety; a pattern of or widespread actual harm that is not immediate jeopardy; or a widespread potential for more than minimal harm, but less than immediate jeopardy, with no actual harm." 42 C.F.R. §488.301.

[13] OIG, Nursing Home Corporations under Quality of Care Corporate Integrity Agreements 8, OEI-06-06-00570, Appendix D, Table 9, page 42 (April 2009), http://www.oig.hhs.gov/oei/reports/oei-06-06-00570.pdf.

[14] GAO, Poorly Performing Nursing Homes: Special Focus Facilities Are Often Improving, but CMS’s Program Could Be Strengthened 35, GAO-10-197 (March 2010), http://www.gao.gov/new.items/d10197.pdf.

[15] Id. 35.

[16] PPACA §6103, amending 42 U.S.C. §§1395i-3(f)(8), 1396r(f)(8), Medicare and Medicaid, respectively.

[17] GAO, Poorly Performing Nursing Homes: Special Focus Facilities Are Often Improving, but CMS’s Program Could Be Strengthened 28, GAO-10-197 (March 2010), http://www.gao.gov/new.items/d10197.pdf.