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Enforcing Compliance with Federal Standards THE ISSUES Even with improved regulatory standards and a more effective survey process, it is unlikely that quality of care and quality of life for residents in marginal or substandard nursing homes will improve unless compliance with the standards is effectively enforced. The committee was made aware--at its public meetings, by many letters from individuals, from interviews conducted during its case studies, and by stories that appeared in the press and on television in several states during the course of this study--of the serious, even shocking, inadequacies of enforcement in many states. The problem appears to be national in scope. Although public attention is focused on the relatively few scandalous cases, a more serious issue appears to be the large numbers of marginal or substandard nursing homes that are chronically out of compliance when surveyed, may or may not be subject to mild sanctions, temporarily correct their deficiencies under a plan of correction, and then quickly lapse into noncompliance until the next annual survey. In one large city, the committee's staff was told by a federal regional official that the federal surveyors in that office estimated that about one-third of the nursing homes in 146
COMPLIANCE WITH FEDERAL STANDARDS / 1 47 that city were of marginal or less-than-marginal quality. This estimate was considered reasonable by a state regulatory official in the agency responsible for inspecting the nursing homes in that city. The extent of the problem undoubtedly varies widely among the states and within states. Although data on the nature and extent of the problems are not available, the anecdotal evidence is very persuasive: inadequate enforcement is a major problem. Enforcement issues can be grouped into four areas: (1) federal and state orientation and attitudes toward enforcement; (2) the federal rules and procedures; (3) state variations in enforcement authority, policies, and procedures; and (4) inadequate federal and state resources committed to enforcement. ENFORCEMENT ATTITUDES Federal procedures for dealing with facilities found to be out of compliance are oriented toward helping facilities to improve rather than enforcing the certification standards. This posture may be reasonable and beneficial in many cases, but it allows states to continue certifying facilities that provide poor or marginal care. Some poor facilities remain in operation over long periods to correct deficiencies, then meet standards for only short periods following the resurveys, and then repeat the same pattern of behavior. In other cases, facilities may be decertified, but then quickly correct the deficiencies and promptly be recertified.2 When the federal government became directly involved in nursing home regulation after 1965, few nursing homes could meet federal standards. Strict enforcement of federal standards would have barred most nursing homes from participating in the Medicare program and therefore would have prevented many Medicare patients from receiving needed services. The Department of Health, Education, and Welfare then decided to certify nursing homes that were only in "substantial compliance" with Medicare standards.
148 / NURSING HOME CARE Although nearly 6,000 facilities had applied for participation in Medicare by December 1966, only 740 were able to achieve compliance by July 1967. Another 3,210 were certified as being in "substantial compliance."3 From the beginning, then, the goal of enforcement in federal nursing home regulation was to allow some substandard facilities to participate in the program while encouraging them to achieve compliance, rather than to bar such facilities until they were in compliance. The emphasis of federal and state regulatory efforts was, and in many states still is, on upgrading substandard facilities rather than keeping them out of the program. The current survey policies and procedures encourage states to consult and coerce facilities into compliance, not to punish them. The state agency does not have the authority under federal regulations to punish a violation immediately. The survey agency must issue a notice to the operator of a substandard nursing home, giving the facility a period of time (usually 30 to 60 days) in which to correct deficiencies. The survey agency is instructed to try to resolve cases before referring them to the formal administrative or law enforcement system.4 The agency may apply formal sanctions only if the facility remains in violation beyond the deadline set for compliance. Consequently, the facility is not punished for violations directly, but rather for failing to carry out an administrative order to correct violations by a certain date. Resort to formal sanctions by a compliance- oriented agency therefore becomes the last step in a long series of follow-up visits and plans of correction designed to induce conformity on the part of substandard facilities. In practice, in the interest of eliminating the hazard as quickly as possible, nursing home regulators typically continue their efforts to gain compliance well after the point at which they could resort to formal sanctions.4 Substandard nursing homes apparently come into compliance long enough to be recertified, without penalty, but are again found out of compliance with the same or similar standards in one or more subsequent annual inspections.) Regulators in the
COMPLIANCE WITH FEDERAL STANDARDS / 149 six states in which the committee did case studies reported having chronic problems with 10 to 15 percent of their nursing homes, which they called "roller-coaster," "yo-yo," "in-and-out," or "borderline" nursing homes. The HCFA has estimated that 5 percent of SNFs will fail to meet one or more conditions on their current and next two certification surveys, and 14.6 percent of ICFs will fail the same test. One condition out of compliance is grounds for starting Recertification procedures.4 But the number of decertifications taking place does not match these estimates of numbers of facilities with conditions out of compliance. Even when the state licensure and certification agencies and the HCFA regional offices do decertify facilities, facilities still reenter the program easily. The federal Medicare regulations call for "reasonable assurance" that the deficiencies which led to termination will not recur. (The HCFA has proposed more specific reinstatement rules.5) Although it may have been necessary to work with facilities to bring them into compliance when federal regulations were new, the certification regulations have been in use for more than 10 years and the nursing home industry is much more sophisticated than it was. There is no longer a valid reason for facilities to operate with numerous and repeated deficiencies. The committee believes that current federal policies requiring consul- tation undermine state agency efforts to eliminate substandard providers and deter marginal facilities from repeating violations. Federal and state procedures for enforcement should be modified to reorient the program toward enforcement rather than consultation and to encour- age states to adopt a stronger enforcement posture. This can be done by (1) separating the consultant and surveyor roles, (2) making survey follow-up procedures more speci- fic, (3) making federal and state sanctions more comprehen- sive and applying them more rigorously, and (4) increasing both federal oversight and federal support of state enforcement activities. Each of these remedies implies changes in federal policy and a stronger federal role in the enforcement system. Some require statutory changes.
150 / NURSING HOME CARE FEDERAL RULES AND PROCEDURES Consultation The law and regulations now require survey agencies to advise facilities on how to improve their performance. The state survey agencies organize the consultation work in several ways: In some states, surveyors are the consultants; in others, separate units are staffed with various professionals who serve as consultants to nursing homes.) There is potential conflict between the consulting and regulatory roles of a survey agency.6 The compliance- oriented consulting role, combined with professional attitudes of surveyors trained in the helping professions such as nursing and social work, can lead surveyors to be too understanding and lenient toward substandard providers. Compliance-oriented enforcement may allow surveyors to work with a facility for long-range improvements, but the dilemma of compliance-oriented enforcement is that threats of punishment are not credible if they are not used predictably under specified circumstances.7 Without a credible threat of sanctions, many marginal or poor facilities never improve. In many states, surveyors are responsible both for consulting with and disciplining providers, despite the potential conflict in these roles. Some states, notably Washington, New York, and Connecticut, use separate consultant teams. They consider this procedure successful.8 Survey Follow-up Procedures Current federal guidelines for survey follow-up procedures are inadequate because they do not specify how plans of correction should be evaluated, how correction actions should be measured, or when more stringent enforcement actions should be initiated. Guidelines on consultation do not specify methods or extent of consultation to be given. Guidelines on plans of correc- tion, follow-up visits, and the initiation of enforcement
COMPLIANCE WITH FEDERAL STANDARDS / 151 are procedurally precise, but do not discuss content of plans or circumstances of visits and what specific circumstances should prompt imposition of sanctions.4 Most states lack internal guidelines on these matters.9 Plans of Correction The post-survey phase of nursing home certification has been much less studied and is far less sophisticated than the annual survey process, but detecting deficiencies--as difficult as that may be--is only the first step in achieving compliance.8 State post-survey procedures vary widely. States may be more or less stringent in accepting plans of correction and in agreeing that adequate corrections have been made. They may give the facilities more or less time to make the corrections.~9 Under federal guidelines, the survey agency has 10 days after a nursing home inspection visit to issue its statement of deficiencies. These are listed and documen- ted on a HCFA form. The provider is supposed to respond within 10 days with a plan of correction for every clefi- ciency that is written on the statement of deficiencies. The plan of correction is supposed to list the actions the provider proposes to take, including expected dates of correction or completion dates for deficiencies already corrected, or to outline any disagreements the provider may have with the survey findings.4 Plans of correction are obviously crucial because they specify the actions to be taken by the facility to remedy the specific deficiencies for which it was cited. The state survey agency must decide if the proposed corrective actions are appropriate to remedy the deficiencies and the proposed correction dates are reasonable. An internal HCFA study showed that the failure to follow post-survey procedures is related to the survival of poor providers. The study found that in 126 problem facilities identified by the regional offices (most of them repeat violators) 60 had incidents of improper actions, including unmet deadlines, deviations from plan of correction procedures, and improper use of automatic cancellation clauses.5
152 / NURSING HO3lE CARE The HCFA also determined that in the cases reviewed, formal enforcement was regularly not taken when warranted. Despite the importance of survey follow-up and plans of correction, the federal criteria for acceptable plans of correction are general. According to the State Operations Manual (Section 2340), "the plan must be specific (stating exactly how the provider or supplier intends to effect corrective action), and realistic. It should include expected completion dates and be signed by the Administrator or other authorized official of the health care entity." Although the procedures for obtaining a plan of correction are specific, the directions concerning the actual content of the plan are quite vague.4 States have different procedures for reviewing correction plans. In some, survey agency supervisors conduct the review; in others, plans are reviewed by surveyors. In some states, it is not uncommon to send correction plans back for revision; in most, this is rarely done. In the case of Medicare or Medicare/Medicaid facilities, the HCFA's regional office staff also reviews the acceptability of correction plans.~9 Follow-up visits and procedures also vary by state. The number of follow-up visits made by state agencies in 1983 ranged from none to 2,280. Follow-up visits average about one per facility survey, lasting about 1-1/2 to 2 days. Most (30) survey agency directors think that a single onsite follow-up visit is sufficient.9 Given the range in facility size, numbers of deficiencies cited, and variation in scope and duration of correction plans, a broader range in the numbers of follow-up visits to facilities, and in their duration, is warranted. Only a few survey agencies have explicit guidelines for evaluating the correction plans submitted by the facilities, although sanctions may be imposed. Also, higher-level sanctions are usually based on a finding of noncompliance with a correction plan. Specific guidelines on evaluating a correction plan should be available to surveyors. Surveyors also must be trained to document deficiencies and evaluate plans to make the guidelines effective.
COMPLIANCE WITH FEDERAL STANDARDS / 153 Initiation of Formal Enforcement A major finding in the IOM case studies is that state survey agencies lack formal enforcement procedures and guidelines. They also lack explicit criteria for making decisions at important stages in the enforcement process. The survey of state agencies found that only 20 of the 47 states reporting have written guidelines for when and how to take formal enforcement actions.9 Generally, onsite post-survey revisits are made to facilities to check the progress of the correction plan. If the deficiency is a minor paper compliance item, such as amended bylaws or written policies, the facility may be allowed to mail the corrected documents for verification in lieu of an onsite visit.4 In most cases, however, onsite revisits are made to verify correction of deficiencies, generally within 60 to 90 days of the initial survey.9 Revisits must be made by a qualified surveyor or agency consultant. Some states have a practice of making more than one revisit to verify immediate correction of acute situations and later to verify correction of the remaining deficiencies. Thirty states believe that one onsite follow-up visit is adequate in most cases, 13 think there should be more than one visit if there are multiple deadlines for corrections, and 3 said none were needed in most cases because corrections could be adequately verified by telephone or mail. (One did not reply.~9 If all deficiencies are corrected at the time of the revisit, the surveyor is required to complete a post-certification revisit report that indicates to the HCFA or the state Medicaid agency or both that the facility is in full compliance.4 If there are still uncorrected deficiencies, the surveyor fills out a summary of the uncorrected deficiencies on a HCFA form that reports whether the provider made acceptable progress or showed effort or made inadequate or no progress, and provides details. In the last-mentioned case, the surveyor is urged by the State Operations Manual (Section 3306) to find out why and, if possible, through consultation, to work out a new plan of
154 / NURSING lEfOME CARE correction. If the provider continues to fail or refuses to correct a deficiency, the surveyor must determine if the deficiency poses a clear hazard to resident health and safety. If so, the surveyor is supposed to recommend termination of the Medicaid agreement, the only federal sanction.4 Although the federal regulations outline the procedures for following up on a survey, they do not specify what constitutes a clear hazard to health and safety. Nor do the regulations set limits on the duration and number of plans of correction. Without federal guidelines on these matters, it can be difficult for a surveyor to judge when initiation of Recertification is warranted. In the six states studied by the committee, those active in enforce- ment were more likely to have detailed enforcement procedures. Specific procedures were developed in Texas because the survey and Medicaid agencies found themselves losing too many court cases on the grounds of inconsistent procedures.) Guidelines on when to initiate sanctions are necessary for effective state enforcement. Surveyors need specific guidelines on when deficiencies found in the standard survey warrant further investigation, when violations should be cited, and what findings in the extended survey should be followed by sanctions. Specified enforcement procedures would encourage states to be less tolerant of substandard providers, and to be more consistent in initiating enforcement activity and in setting precedents for future activities. Written procedures are needed for both federal and state sanctions. Guidelines for use should accompany any new sanctions that are put into place. States also should have legal and administrative staff who specialize in nursing home enforcement issues to assist them in applying sanctions. More-specific guidelines on consultation, plans of correction, follow-up visits, and initiation of enforce- ment are needed to direct state agencies to be less tolerant of substandard homes that are chronic or repeat violators. Stronger and more specific federal guidelines would facilitate stricter state enforcement. More intensive reviews of correction plans would not only ensure that plans are reasonable and carried out properly,
COMPLIANCE WITH FEDERAL STANDARDS / 155 but that standardized documentation on progress of corrections is completed. This would permit prompt penalization of facilities that do not correct ~ ~ ~ e ~ ace 1clencles. Recommendation 5-1: The HCFA should revise its guiclelines for the post-survey process. Revisions should inclucle · specifying that survey agency personnel not be used as consultants to providers with compliance problems; · specifying how to evaluate plans of correction anal what constitutes an acceptable plan of correction; · specifying the circumstances under which onsite follow-up visits may be waivecl; · s peel f ying circu msta nces und er which f ormal enforcement action should be initiated, and how actions should be taken; cant ~ requiring that states have formal enforcement proced ures anal r'~echanisr'~s. Sanctions Current federal sanctions are inadequate. Until very recently, if a state found a facility out of compliance with regulations, its only option under the federal program was to threaten to terminate the provider's Medicaid contract.4 Termination of a contract essentially puts a provider out of business. Because of the undesirability of closing facilities and relocating residents, states rarely terminate contracts.) Federal survey and enforcement criteria do not take historical offenses into account. Facilities are recertified on the basis of evidence of facility compliance collected at the time of the survey or on follow-up visits. Records of owners and operators and administrators are not considered. Sanctions are not applied for repeat deficiencies. Each of the case study states reported that 10 to 15 percent of their providers are constantly found to be out of compliance; they file and comply with correction plans, then are found to be out of compliance at the following survey. Even facilities
156 / NURSING HOME CARE with repeated major deficiencies are recertified if they meet their correction plans within 60 to 90 days. Recertification of decertified facilities or providers is done without regard to a history of noncompliance. Most terminated providers reenter the certification program a short time after Recertification. The available federal sanctions are Recertification and termination of the provider contract. Facilities also may be issued a temporary certification with an automatic cancellation clause. Early in 1985, the HCFA proposed additional federal rules allowing suspension of payments for new admissions, but (as of October 1985) this regulation has not been put into effect. Decertification and! Termination of the Provider Agreement If the survey agency finds that a provider is out of compliance with one or more conditions of participation is jeopardizing the health and safety of its residents, or has "limited capacity . . . to furnish adequate level or quality of care," it begins the process of Recertification. Furthermore, if the provider has a Medicare contract, the state survey agency recommends to the federal regional office that the provider's Medicare contract be terminated. If the provider holds only a Medicaid contract, the state agency recommends to the state Medicaid agency that the provider's contract be terminated, and provides supporting documentation. The decision to terminate Medicare contracts rests with the federal office. The decision to terminate Medicaid contracts rests with the state Medicaid agency. Decertification of providers is rare. It is an action of last resort, to be taken only when a provider demonstrates no intention of coming into compliance or the inability to do so. A facility has many opportunities during the lengthy process of Recertification to come into compliance, however briefly, and thus be recertified. From 1980 to 1984, the HCFA recorded the termination of 159 nursing home Medicare and Medicaid contracts.~° Thirteen of the state agency directors report that their state decertified facilities in 1983.9 The number of
COMPLIANCE WITH FEDERAL STANDARDS / 157 decertifications in those states ranged from 1 to 55 and totaled 129. Voluntary Decertification Facilities also may voluntarily terminate their Medicare or Medicaid contracts. This is usually done because the facility is unable or unwilling to correct deficiencies, or the facility is dissatisfied with reimbursement, or there is a change of ownership and the new owner does not wish to participate, or because the facility closes.5 According to the HCFA data, there were 967 voluntary Medicare contract cancellations between 1980 and 1984. In many of the cases recorded by the HCFA, the facility may have voluntarily terminated its Medicare contract while retaining its Medicaid contract. National data on the number of voluntary Medicaid contract cancellations are not available. Termination Without Decertif ication The federal regulations provide a number of grounds for terminating a provider contract in addition to failure to comply with the federal health and safety standards (42 CFR Part 489, Subpart E, in the case of Medicare providers; 42 CFR Part 442, Subpart B. in the case of Medicaid providers). These include failure to meet civil rights requirements, failure to provide financial information needed to determine payments, submission of false information, nondisclosure of ownership or of information on an individual convicted of a program-related crime (for example, Medicaid fraud). Automatic Cancellation Clause If a state agency determines that a provider has any deficiencies, the agency must issue a certification with an automatic cancellation date upon which the provider's certification will expire if the facility fails to correct the deficiencies by the given date. The date of automatic
158 / NURSING HO3IIE CARE cancellation can be up to 60 days following the final date given in the provider's plan of correction. If the provider has corrected the facility's deficiencies, or if the provider "can document effort and progress to correct" the deficiencies by the date of the automatic cancellation clause, the cancellation is rescinded and the provider is given a routine 12-month certification. If the provider does not correct or make progress on correcting the deficiencies by the given date, the agency must initiate termination proceedings. Of the 28 state certification agency directors who responded to questions regarding the cancellation clause, 7 states said they used the procedure often and 21 said they seldom or never used it. Twelve respondents said they thought the provision is an effective enforcement tool; 16 said it was ineffective. Several said that the ability to issue the clause is useful as a threat, whether or not they actually use it.9 According to HCFA guidelines, cancellation clauses should accompany all certifications to providers in which a plan of correction is requested. States, however, either use the cancel- lation clause as a sort of intermediate sanction or do not use it at all. Only a few states reported that they used the automatic cancellation clause as routinely as instructed. Suspension of Payment The Omnibus Budget Reconciliation Act of 1981 provided authority to the Secretary of Health and Human Services to deny Medicare payments for new admissions to providers who are out of compliance with conditions of participation, as long as the deficiencies do not pose an immediate threat to the health and safety of the residents in the facility. The act assigns similar authority over Medicaid-only facilities to state agencies. On February 21, 1985, the HCFA proposed regulations to implement the law and published them for review and comment. The proposed regulations would allow the HCFA or the state Medicaid agencies to suspend Medicare or
COMPLIANCE WITH FEDERAL STANDARDS / 159 Medicaid payments for new admissions to a facility. If a state agency finds that a facility has deficiencies on the condition level that do not pose immediate threats to the residents' health and safety, but "are serious enough to require more emphasis than just a plan of correction," it may recommend suspension of payments for new Medicare and Medicaid admissions to the facility for a period of up to 11 months. During a period of suspension of payments, the facility continues to receive payments for existing Medicare and Medicaid residents. The HCFA's New York regional office hasp on the basis of a federal court order, used the federal authority to ban admissions to facilities. It reported that this mechanism is effective in coercing compliance with certification regulations. However, the statute and the proposed HCFA regulation on suspension of admission require that a formal hearing take place before the sanction takes effect, making the proposed sanction more difficult and slower to implement than Recertification. Until these regulations become final, a surveyor finding that a facility is consistently or repeatedly violating the certification standards may only decertify the facility and recommend termination of the provider's contract. For reasons previously cited, surveyors and state agencies hesitate to do this. Clearly, effective intermediate sanctions are needed. Enforcement also could be more effective if the HCFA changed its procedures for hearings and appeals. It should develop regulations that would allow states to implement sanctions prior to hearings and appeals. The appeals process on sanctions should be made less permissive. This will require statutory change. Frivolous appeals could be discouraged by (1) clarifying the lack of a facility's right to a stay, pending judicial review of Recertification decisions; (2) not making states prove that the violation is still outstanding at the time of the hearing in order to continue applying the sanctions; and (3) not reimbursing provider legal fees for unsuccessful appeals of survey-related cases. Currently, agencies cannot implement sanctions until the appeals process is exhausted. And many courts grant stays on Recertification actions to facilities that have appealed
160 / NURSING HOME CARE the action, until the close of the appeal hearing. Thus a facility that the HCFA or the state agency has recommended for Recertification may continue to operate for months or even years. Furthermore, if the facility has come into compliance by the time the appeal hearing is held, courts often reverse the Recertification decision. .7 This practice has the effect of greatly extending the time a facility has to correct violations. Because Recertification proceedings only take place in the most severe situations, facilities should not be allowed to use this tactic to extend the time they are allowed to eliminate deficiencies. Appeals initiated for the purpose of delaying correction of deficiencies should be discouraged by making it clear that serious violations do not merit stays, that sanctions will be based on the deficiency in performance found at the time of the survey and not on later events, and that reimbursement for legal and other costs of unsuccessful appeals will be denied. Finally, federal regulations should allow states to take into account prior years' survey findings as well as the most recent survey findings in applying sanctions. This is necessary to solve the problem of the chronically substandard facility. States also must have a method of weighting offenses as to seriousness, defining repeat violations, matching sanctions to violations, and determining liability for offenses to effectively sanction repeat offenders. Statutory authority will be necessary to enable the HCFA to prescribe procedures to be followed by the states in dealing with chronic or repeat violators of the regulations. A repeat violation is defined as any major violation of a standard under a resident-care-related condition of participation if any other standard under the same condition was found out of compliance on the previous visit. The repeat violation may be found at either the follow-up visit, a complaint investigation, or at the subsequent annual survey visit. (If the latter, the facility's correction of the violation following the first visit should not prohibit the state agency from counting the first violation as an initial offense.) Any
COMPLIANCE WITlI FEDERAL STANDARDS / 161 conditions that deal directly with the health and safety of residents should be included in this definition. Major violations of standards under a resident-care-related condition could include, for example, a facility's failure to employ a qualified dietetic supervisor one year, and then a failure to prepare and serve prescribed therapeutic diets the following year. Or a facility could be cited for poor resident care planning under the nursing services condition on an annual survey, correct the problem, and then be cited for poor administration of drugs on a follow-up or complaint visit. Procedures for punishing repeat offenses should include (1) the authority to apply stricter sanctions, such as more-severe fines, based on repeat offenses; (2) requiring states to consider the past record of an owner, administrator, or operator in their own and in other states prior to granting Medicaid certification; and (3) requiring states to obtain satisfactory assurances prior to granting a recerti- fication that violations that led to a termination will not recur. In determining the past record of owners for consideration in certification decisions, states should use the definition of ownership applied under current Medicaid fraud statutes: any party having 5 percent or more interest in the facility, land, or deed. The current Minnesota statutes covering nursing homes are a good example. The Minnesota statute states that a controlling person means (1) any public body, governmental agency, business entity, officer, nursing home administrator, or director whose responsibilities include the direction of the management or policies of the home; and (2) any person who, directly or indirectly, beneficially owns any interest in any corporation, partnership or other business association which is a controlling person, any interest in the land or structure, interest in any mortgage, contract for deed, or other obligation secured in whole or part by the land or structure, or interest in any lease or sublease of the land, structure, or facilities.~3
162 / NURSING HOME CARE STATE RULES AND PROCEDURES State Sanctions Many states have authority to use various intermediate sanctions under their state licensing laws. States license nursing homes under their police power to protect the health, safety, and welfare of the public. The federal courts have upheld state authority to sanction nursing homes under state licensing regulations.2~4 The availability and use of intermediate sanctions vary widely by state. Although the median state has eight sanctions available, each state tends to use a subset of those sanctions, usually in a particular sequence that is graduated in severity. Since intermediate sanctions are authorized by state legislatures, the sanctions differ from state to state. There are no nationally consistent intermediate sanctions or enforcement procedures. The intermediate sanctions available to states, and their use in 1983, are shown in Table 5-1. Although regulators interviewed by the committee in about 10 states estimate that at least 10 or 15 percent of the facilities they regulate are marginal or constantly going in and out of compliance, the number of sanctions reported is relatively small. In 1983, a total of 2,000 actions were taken against some 15,000 facilities. Most of the actions (85%) were taken in 13 states. (This statistic probably means that some states are more enforcement-oriented than others, not that facilities in the 13 states are consistently poorer providers than facilities in the other 37.) The survey of state licensure and certification agencies found that the use of sanctions in a state is associated with (1) higher state appropriations for the survey agency, presence of special enforcement training for surveyors, more available sanctions, and higher state licensure nursing standards; and (2) survey procedures that required greater numbers of facility visits a year.9 It may be that increased resources available to a state survey agency lead to the increased detection of deficiencies, and this, in turn leads to more sanctions. Or it may be that states in which the
COMPLIANCE WITH FEDERAL STANDARDS / 163 TABLE 5-1 State Sanctions and Use in 1983 Sanction Number of States Total Number Number of Reporting Use of of Actions States With Sanctions in 1983 Taken Civil or admini- 26 13 900 strative fines Court-appointed 21 8 12 receiver State-appointed monitor 3 Suspension of all 32 15 96 admissions Consideration of 25 10 105 past record in CON approval Court injunctions 37 9 13 against substandard operation State-initiated 36 14 27 relocation of residents Reduced Medicaid 9 1 10 rates for interior performance Conditional/ 35 14 268 provisional . . . ,lcenslng Probationary 15 5 154 license Criminal penalties 30 5 376 for patient abuse License revocation 44 15 59 Involuntary 40 13 129 decertif ication Withholding of 19 3 272 payments SOURCE: Survey of State Licensure and Certification Agencies (see Appendix C).
164 / NURSING HO3lE CARE enforcement climate is favorable are more likely to provide their regulators with more resources and legal authority. Directors of state survey agencies tended to give favorable ratings to the sanctions they use. Thirty-seven stated that particular sanctions seemed to be effective because they affect the income of the provider (20), · can be implemented quickly (7), · give the provider unwanted publicity (5), and · can be used to remove the operator (4~. Nineteen states listed obstacles to the successful use of sanctions. These included · administrative and legal time delays in implementation (11), · administrative problems (3), · fear of harm to residents (transfer trauma, service cutbacks to pay fines, and so on) (4), and · insufficient impact on the provider's income (2~. Because current state sanctions are operated under state licensure programs, no two states impose the same sanctions or follow the same procedures. If the states are to conduct an effective and uniform enforcement program, it will be necessary for all states (and the federal government) to have the same set of intermediate sanctions and apply them in the same way. This change in enforcement policy and procedures will require federal statutory authority. Intermediate sanctions must be available to the federal government as well as to the states. The HCFA needs sanctions to apply to facilities it certifies directly (state-owned facilities) and facilities it finds out of compliance in look-behind surveys. States need uniform sanctions to be applied in the same way to all facilities and to maintain consistency and credibility in the regulatory process. At a minimum, both the federal and the state governments should have the authority to ban admissions to facilities, to impose civil fines upon facilities, to put a facility into receivership, and, in
COMPLIANCE WITH FEDERAL STANDARDS / 165 the case of an emergency, to close a facility and transfer its residents to other facilities. Intermediate sanctions should be authorized under the Medicaid program (as well as under state licensure authority) and implemented under a set of federal guidelines. This change would increase uniformity in enforcement activity and link intermediate sanctions directly to certification. Authorizing the same sanctions for both the federal government and the states will ensure that states have the same sanction to use in enforcing adherence to Medicare and Medicaid nursing home standards. With appropriate federal guidelines on the use of sanctions, consistency among states will be increased and precedents within and among states will be set. Procedures for implementing the sanctions should be specified by the HCFA. Intermediate sanctions adopted by the federal government and the states should operate so that they can be invoked promptly and be serious enough to the provider to deter violations as well as encourage immediate response. Procedures for implementing sanctions should include explanations of what sorts of deficiencies trigger the sanction, a method for ranking the seriousness of violations and corresponding punishment, timing of sanctions and appeals, and specific rules for designating responsibility for the violation and liability for punishment. For example, violations of residents' rights could be related to specific fines, increasing in amount based on the number of residents affected, the seriousness of the violation, the duration, and whether other rights have previously been violated. The fines could be implementable within a specified number of days, and applied to the controlling operator of the facility. The particular sanctions recommended below are in use by a number of states as licensing sanctions. In the 32 states that currently have authority to suspend admissions to facilities, some have authority to suspend all admissions, and some can suspend only Medicaid admissions or payments for new Medicaid admissions. Suspension of admissions can work well because it combines a loss of new funds with adverse publicity. The sanction is also useful because it continues as long as the violation continues, but does not adversely affect current residents. The economic impact accumulates, but the loss of funds does
166 / NURSING HOME CARE not include current residents. Additionally, with the exception of truly life-threatening situations, allowing current residents to remain in the facility recognizes that the injury of substandard care may be outweighed by the injury of being uprooted and transferred. Most suspensions of admissions last only 2 to 4 weeks.~4 For a suspension of admissions to be effective, it should include admissions for all residents, and it should be implementable prior to hearings and appeals. Civil fines are used by 26 states, 19 of which consider their fining system effective. In some states, civil penalty systems have performed up to expectations; in others, fines have rarely been used, or have been plagued by administrative problems.~4 Fines are a valuable enforcement tool because they can be applied to minor violations early and often, thus deterring facilities from making more serious transgressions. They also can be used for serious but isolated incidents.7~4 Such desirable versatility requires that violations be ranked according to seriousness and duration, and fines of appropriate size matched appropriately. It is sometimes argued that fines are inappropriate sanctions since they may come from resident care funds. Any sanction, however, may have that effect. It is possible to monitor quality of care through financial audits and the survey process, to guard against this problem. For a fining system to be effective, it is essential that the administrative and legal delays be avoided by prompt, short hearings, that the fines be graduated according to seriousness, duration, and repetition of the violations, and that fines be used to deter further violations. All fines should be large enough to be more costly than the money saved by the violation. Fining systems should be versatile enough to allow correction of less-serious violations, but immediately punish life-threatening violations. Receivership is used by 17 states. Six of the states considered it effective. Receivership can be a useful enforcement tool. It enables the state to prevent an owner or administrator from continuing to operate a seriously deficient facility but does not force the
COMPLIANCE WITH FEDERAL STANDARDS / 167 facility to close and relocate residents. Receivership allows states to force dramatic upgrading of very poor quality facilities. Receivership can also be implemented quickly.~4 An effective receivership program requires that the state licensure agency maintain a list of potential receivers, and a fund for paying them. Receivers should be experienced private parties who are assigned to operate the facility for a limited time. They should be paid for their services from an independent fund, and allowed reimbursement sufficient to cover required improvements in the facility.~4 Additionally, residents, friends, families, interested community groups, and employees must be kept fully informed of the conditions leading to the receivership, and the scope and terms of the receivership order, including, for example, whether the receiver will transfer the residents or maintain the facility for possible purchase. If the receiver has indicated that he or she will not consider becoming the permanent operator of the facility, that should be clearly established. Coordination with the community is essential to successful receivership. If the purpose of receivership is to transfer residents, the receiver and the state should have a concrete and detailed transfer plan in place at the inception of the receivership, and residents, families, advocates, and the community should be consulted in developing this plan. Honest and full information to employees--and, as appropriate, their unions--also is essential. Fully informed employees are better able to assist in supporting the residents' needs. Although the facility may be reducing the number of employees over the receivership period, it would be harmful if employees left en masse. The receiver should develop a specific plan for relocation or job assistance for the employees. The employees' unions should be involved in this plan. Receivership arrangements should be of short duration. Most state receivership statutes establish a time limit for operation of a receivership. The receiver should establish intermediate deadlines to accomplish particular objectives.
168 / NURSING HOME CARE Authority to close a nursing home and relocate residents in an emergency situation should be available to all state survey agencies. In extreme situations, such as fire, closing and relocation are clearly necessary, and should be a state-assisted effort. Thirty-six state agencies now have this authority. Recommend ation 5-2: The Med icaid authority should be amended to authorize a specified set of intermediate sanctions for use by states and by the federal government in enforcing compliance with nursing home conditions of participation and standards. The HCFA should then develop and issue detailed! regulations and guidelines to be followed by the states and by the HCFA in using these sanctions. The sanctions should include ban on admissions, civil fines, · . ~ recelversnlp, · emergency authority to close facilities and transfer resid ents. Recommendation 5-3: The Medicaid statute should be amended to provide authority to impose sanctions on chronic or repeat violators of certification regulations. The HCFA should clevelop detailed! procedures to be followed by the states to `leal with such facilities. Procedures should include, but not be limited to, · the authority to impose more severe sanctions, · a requirement to consider a provider's previous record before certifying or recertifying and · the responsibility to obtain satisfactory assurances prior to recertifying, that the deficiencies that led to a termination will not recur. Recommendation 5-4: The Meclicaid statute should be amended to make the appeals process on sanctions, particularly Recertification, less permissive. The HCFA should issue regulations and guidelines to in~plen~ent this new authority.
COMPLIANCE WITH FEDERAL STANDARDS / 169 ENFORCEMENT RESOURCES Federal funds allocated to federal and state enforcement activities are inadequate. The federal role in improving the enforcement of nursing home standards should include not only developing new guidelines, procedures, and sanctions, but increasing federal enforcement activities, federal support for state enforcement resources, and federal oversight and support of state enforcement activities. The HCFA should have its own financial and legal resources for enforcement. Support of state programs should include both money and training. The HCFA also should increase data collection on enforcement resources and activities. Enforcement is not currently recognized as a legitimate category of certification expenditures. Special funds are not set aside at the federal level for regional legal staff or legal actions. Regional offices have not allowed states to hire lawyers or other enforcement personnel or pursue hearings and appeals with certification funds.) Survey agency staffs rarely include specialists trained in investigation and enforcement, although some states use separate teams of special investigators. Only 15 states have staff attorneys in their licensure agencies who are specifically designated to deal with enforcement issues. Only three have special investigators. When states take court action, 13 have staff attorneys to represent theme 31 have departmental attorneys available; 3 have none. Surveyor training in enforcement is important. Health professionals are helpers by nature and training, and they are reluctant to invoke sanctions against violators except in extreme cases.6 Federal training of surveyors in enforcement is minimal. The 1-week federal training course devotes only '~art of 1 day to documentation and witness preparation. Thirty-three states conduct their own enforcement training. Programs vary from 1 to 96 hours, and average around 7.5 hours. Those who conduct specialized enforcement training find it to be effective. Without enforcement training, surveyors may not be able to
170 / NURSING HOME CARE document deficiencies in ways that will hold up in formal enforcement proceedings or act as effective witnesses. There is no federal training support for state officials involved in nursing home certification other than surveyors. Officials involved in nursing home regulatory enforcement outside the licensure and certification agency often are ill-prepared to handle intricacies of nursing home law. Finally, data on surveyor decision-making, the imposi- tion of sanctions, and the duration of sanctions are not kept by most states or by the HCFA. Thirteen states apparently did not have the information to respond to questions in the committee's survey of state health facility licensing and certification agency directors on actions taken in 1980. A few agencies could not give information on actions taken in 1983. The availability of national data on enforcement is necessary to maintain consistent and fair enforcement among the states, to allow states to compare and evaluate enforcement activities, and to allow states to trace the compliance histories of multistate providers--information that is essential to deal effectively with repeat offenders. Recommendation 5-5: The HCFA should strengthen state en forcen~ent ca pabilities by · requiring states to commit adequate resources to enforcement activities, including legal anc! other en force me n I- re la ted s ta ff; · requiring survey and certification survey agency staffs to inclucle enforcer,~ent-related specialists, such as lawyers, auditors, and investigators, to work as part of special survey teams for problem situations and to help support enforcement decision-,,~aking; · including more training in investigatory techniques, witness preparation, and the legal systen' in the basic surveyor training course; and ~ provid ing fed eral training su pport for state survey agency and welfare agency attorneys in nursing home enforcement matters.