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Testimony on State Nursing Home Complaint Investigations by Mike Hash
Deputy Administrator, Health Care Financing Administration
U.S. Department of Health and Human Services

Chairman Grassley, Senator Breaux, distinguished Committee members, thank you for inviting me to discuss our continuing efforts to improve protections for nursing home residents. I would also like to thank the General Accounting Office (GAO) for its important evaluations of State responses to consumer complaints about nursing homes and of additional steps needed to strengthen enforcement of Federal quality standards. And I would like to thank the Office of the HHS Inspector General for its reports on nursing home issues, as well.

We have made substantial progress in improving nursing home resident protections. The GAO's new reports, Complaint Investigation Process Inadequate to Protect Residents and Additional Steps Needed to Strengthen Enforcement of Federal Quality Standards, look at States where problems are most serious over a time period before we had implemented most provisions of the nursing home enforcement initiative that we announced last July. We undertook our nursing home enforcement initiative in response to intolerable situations that have caused our most vulnerable citizens to suffer. The initiative includes several steps to:

• address preventable problems such as bedsores and malnutrition,
• crack down on repeat offenders,
• strengthen State inspections, and
• improve Federal oversight.

The new GAO reports again document intolerable situations, and make clear that we must take additional steps to protect nursing home residents. We must ensure that States improve responses to and tracking of consumer complaints. We must also improve consistency in handling terminations of facilities. These and other new steps must be incorporated into our proactive initiative to ensure that nursing homes comply with care and safety requirements.

We generally concur with the GAO's recommendations, and are already taking actions to address them. Specifically, we

• directed all State survey agencies to investigate any complaint alleging harm to a resident within 10 working days;
• reiterated to States that complaints alleging immediate jeopardy to residents must be investigated within two days;
• stressed to States that they must enter complaint information into our data system promptly;
• published a regulation last week allowing States to impose fines for each instance of a violation, and
• will now have Regional Office staff conduct surveys to verify nursing home resident complaints when necessary.

HCFA Administrator Nancy-Ann DeParle and I both met last week with the Board of Directors of the Association of Health Facility Survey Agencies, which represents State survey agencies, to discuss the problems with complaint investigations and stress the urgency of improving all enforcement efforts.

We will take additional steps to address problems identified by the GAO, and to ensure that nursing home residents are safe and receive quality care. We will continue to work with the States, Congress, residents and their families, resident advocacy groups, and nursing home providers to ensure that nursing home care and safety standards are met and the vulnerable residents are protected.

BACKGROUND

Protecting nursing home residents is a priority for this Administration and our agency. We are committed to working with States, which have the primary responsibility for conducting inspections and protecting resident safety. Some 1.6 million elderly and disabled Americans receive care in approximately 16,800 nursing homes across the United States. Through the Medicare and Medicaid programs, the federal government provides funding to the States to conduct on-site inspections of nursing homes participating in Medicare and Medicaid and to recommend sanctions against those homes that violate health and safety rules.

In July 1995 the Clinton Administration implemented the toughest nursing home regulations ever, and they brought about marked improvements. We monitored those protections as they were implemented to see what else needed to be done. We and the GAO found that many nursing homes were not meeting the requirements, and many States were not sufficiently monitoring and penalizing facilities that failed to provide adequate care and protection for residents. In July 1998, President Clinton announced a broad and aggressive initiative to improve State inspections and regulation enforcement. Those efforts are bringing about marked improvements as well.

The GAO reports examined events through December 1998. Since that time period we have implemented many aspects of our new enforcement initiative. We are grateful that Congress has provided essential funding for this initiative, and we look forward to working with you to secure the $60 million increase for this initiative in the President's fiscal 2000 budget, as well as our legislative proposal to require background checks of potential nursing home employees and establish a national registry.

STATE COMPLAINT INVESTIGATIONS

Consumer complaints are a valuable and unique source of information about the health and safety of nursing home residents. We have been concerned about problems with State survey agency responses to complaints, and in 1995 we developed complaint investigation protocols for States in order to foster improvement. However, the GAO report makes clear that these protocols are not sufficient.

We therefore have taken two new actions. First, we directed all State survey agencies to investigate any complaint alleging actual harm to a resident within 10 working days. We also stressed that States must promptly enter complaint information into our data system. We will monitor State reporting of complaint information more closely to make sure they comply.

Second, we initiated a Complaint Improvement Project to identify key elements of the complaint process, address resident and consumer concerns about the process, and develop standards for prioritizing complaints and determining appropriate time frames for investigations. We will work to address concerns of residents, their families, consumer representatives, and representatives of the Administration on Aging's Ombudsman program in this project.

SPECIFIC GAO RECOMMENDATIONS

As stated above, we generally concur with the recommendations in the GAO reports, and are taking action to address them. We agree that:

• we need stricter standards for prompt investigation of serious complaints;
• we need more stringent Federal oversight of State complaint investigations;
• Federal officials must have access to complaint investigation results;
• fines must be more certain and the appeals process must be faster;
• termination of repeat offenders from Medicare and Medicaid must be used more consistently and effectively;
• States must do a better job of telling us when homes are cited for a deficiency that contribute to a resident's death; and
• we must develop better management information systems to integrate results of complaint investigations, track deficiencies, and monitor enforcement actions.

Standards for Prompt Investigation

The GAO found that States categorize serious complaints alleging situations that harm residents as less than a complaint about immediate jeopardy to residents. The GAO also found that States do not always investigate these complaints promptly, or at all. Its report calls for new standards for prompt investigation that include maximum allowable time frames for investigating serious complaints and for complaints that are deferred until the next survey schedule.

Therefore, effective immediately, any complaint that alleges actual harm to an individual in a certified facility must be investigated within 10 working days of its receipt. We also stressed to States that all complaint data must be entered in a timely fashion into our On-line Survey, Certification and Reporting data system (OSCAR). We will develop more standards and long-term improvements as we further analyze complaint investigation processes. We believe that States have the resources they need to meet these new standards. If additional resources are needed, however, we will re-examine our priorities, or the Administration will work with Congress to make sure the funds are there to do the job right.

Our new Complaint Improvement Project will help us to understand the key elements of the complaint investigation and resolution process. We believe these key elements include:

• informing consumers of their right to make complaints and how to do so;
• the complaint intake process, including how complaints are received, classified and scheduled for investigation;
• the investigation process, including the training, knowledge, attitudes, and case load of investigators;
• the resolution process, for determining whether a complaint is substantiated;
• the administrative hearing process, including back-log of cases;
• the compliance or response process for addressing substantiated complaints, including the range and actual use of remedies and back-log of actions; and,
• interactions between complaint investigations and licensure and certification systems, the legal system, and facility-level grievance or continuous quality improvement processes.

Using this analysis, we will develop Federal minimum standards and produce a manual for States describing each element of a model complaint investigation process, how States should implement the process, and necessary training and staffing levels.

In addition, we will specify measures we can use to strengthen Federal monitoring and audits of State performance, including the elements that should be included in a Federal complaint investigation reporting system and database. And we will explore other changes needed to strengthen Federal oversight, enhance the responsiveness of the complaint investigation process, and ensure the welfare of beneficiaries.

Oversight of State Complaint Investigations

We agree with the GAO that investigations need to be watched more closely by the Federal government, and that States are not sufficiently setting priorities for investigating complaints. Importantly, as mentioned above, we will now have Regional Office staff conduct surveys to verify nursing home resident complaints when necessary. This means that a complaint from a resident now can directly trigger a standard survey by Federal surveyors.

We are improving Federal oversight of State complaint investigations. We are now outlining actions we will take when States do not meet their survey responsibilities. We will specifically evaluate how well States respond to consumer complaints and how promptly and thoroughly they report investigation results to us to determine whether they meet their survey responsibilities. And, as part of our Complaint Improvement Project, we will identify the most effective ways for us to monitor State processing of complaints.

HCFA regional offices are now required to maintain logs of complaint information reported by the States. If we confirm that these logs are not being maintained, as reported by the GAO, we will take immediate steps to correct this omission.

As part of the Nursing Home Quality Initiative, we made it clear that States will lose Federal funding if they fail to adequately protect residents. States must adequately respond to complaints, or we can and will contract with other entities to conduct surveys and enforce regulations.

Federal Access to Complaint Investigation Results

The GAO found that States are not reliably reporting results of complaint investigations to us, and that these findings are therefore not taken into account when considering other actions. States are currently required to report this information, and we are taking action to ensure that they comply.

We have directed the States to immediately enter all current and backlogged complaints into the OSCAR data system regardless of whether the complaint is entered into a State licensure system. We will closely monitor States to ensure that the information currently required is actually entered into HCFA's database. We will include reporting of complaints as a new performance evaluation element for States. And we will revise the current complaint form so it provides the information needed to facilitate Federal monitoring of State performance, prioritization, and timeliness.

Improving Effectiveness of Fines

The GAO found that fines are not always an effective enforcement tool. We agree that appeals must be processed more quickly so fines can be collected more quickly. Fines need to be imposed for each instance of a violation. And they need to be imposed for serious problems even if the problems are quickly corrected.

We support the President's efforts to speed appeals and collections by the Health and Human Services Departmental Appeals Board, which operates separately from HCFA. Providers are entitled to a hearing before fines can be collected. Increased enforcement efforts have resulted in a large number of cases awaiting appeal hearings. The President's fiscal year 2000 budget proposal would double the number of Administrative Law Judges that can hear appeals cases in order to speed the appeals process and ensure that fines and other sanctions are adjudicated in a timely manner.

As announced last July, we have developed a new regulation to enable States to impose fines for each instance of a violation regardless of the amount of time the facility was out of compliance with requirements. This regulation was published in the Federal Register on March 18, 1999, and is effective 60 days after publication. This additional enforcement option will give States greater flexibility to assess penalties quickly.

Strengthening Use of Terminations

Terminating homes from Medicare and Medicaid is an essential last resort enforcement tool for facilities that fail to correct problems and provide adequate care and safety to residents. We agree with the GAO, and current policy now requires, that Medicaid payments to terminated facilities continue for up to 30 days after a facility is terminated if and only if the home and State Medicaid agency are making reasonable efforts to find another nursing home for those residents. (Medicare also makes funds available but does not explicitly require a State's effort to transfer residents.)

We will study transfer procedures in the 30 involuntary terminations that took place last fiscal year. We will explore whether States applied oversight and payment policies appropriately and consistently, if not why not, and whether facilities closed and transferred residents, stayed open and paid for care of residents not transferred, were sold to third parties, etc.

We are concerned, however, that there could be unintended consequences from the GAO's recommendation to use longer "reasonable assurance periods"in all cases before allowing homes that have been terminated to reenter Medicare. Current guidance to State inspectors includes several examples to assist in setting reasonable assurance periods, but there must be flexibility in determining appropriate reasonable assurance periods. Excessive reasonable assurance periods may not be in the best interest of the nursing home residents, particularly in regions with limited access to care.

It is important to note that reasonable assurance periods are rarely used. More than 95 percent of nursing homes given initial notice of termination correct problems and remain open. Last year only 30 of the more than 8300 facilities given initial notice of termination were in fact terminated. It is also important to note that reasonable assurance periods apply only under Medicare. The requirement was removed from the Medicaid statute in 1987. Most nursing homes participate in both Medicare and Medicaid. Therefore, reasonable assurance periods now can result in a facility being certified for Medicaid but not for Medicare until a reasonable assurance period is satisfied. We are prepared to work with Congress to restore reasonable assurance to the Medicaid program so the two programs are consistent.

We will subject terminated facilities to extra scrutiny and stiffer sanctions for problems if and when they are allowed to reenter Medicare and Medicaid. Current Federal regulations allow consideration of a facility's prior history of noncompliance. However, past problems have not been routinely reviewed when assessing new sanctions. And previously terminated nursing homes have been able to re-enter Medicare or Medicaid with a "clean slate." As such, they have been treated less aggressively than problem-prone facilities that have not been terminated, and this has created a perverse advantage to termination that will no longer exist.

We will therefore make explicit in our instructions to States that previously terminated facilities are automatically subject to immediate sanctions if problems recur. States and our regional offices track termination information, and we will work to ensure that this information is used systematically when subsequent enforcement actions are considered. We will further consider applying this policy to previously terminated homes that re-enter under new ownership.

Improving the Referral Process

The GAO report cites appalling cases which document our concern that States have not been consistently referring cases for sanction, even when violations resulted in a resident's death. We are therefore requiring States to refer all cases that result in harm to residents. We also now will require States to report to us when they do not recommend sanctions in cases where regulations have been violated and a nursing home resident died.

Current guidelines do authorize referral and imposition of fines for egregious violations, such as those that contribute to a resident's death, even if the problem has been corrected. Also, as mentioned above, we last week published a regulation making nursing homes subject to additional penalties or fines for each specific incident, such as an instance of abuse or neglect, that contributes to a resident's death. Under this new regulation, even if the nursing home corrects the violation quickly, it would still face fines when a resident suffers harm due to a serious violation.

Improving Management Information Systems

We are already undertaking a major redesign of our data systems that will allow us to integrate results of complaint investigations, track the status and history of deficiencies, and monitor enforcement actions adequately. We will release software this summer that will make it easier to track the status and history of deficiencies at the State level. This software will also automate the current requirement for State collection of ownership information. We will make further improvements as soon as our Year 2000 computer work allows.

It is important to note that many States investigate complaints for regulations that exceed Federal requirements and we have no authority to require them to report these data. As we redesign our management information system we will work to make sure that these data are fully integrated with other information on facility performance.

HHS INSPECTOR GENERAL FINDINGS

The HHS Inspector General has produced six reports on nursing home enforcement issues which echo our own concerns and underscore the need for our ongoing efforts to help States improve enforcement efforts. Many of the Inspector General's recommendations are already incorporated into the nursing home initiative announced by the President in July 1998, including:

• making surveys more timely and effective;
• changing survey schedules to make surveys more unpredictable;
• increasing the number of night and weekend surveys;
• increasing the number of surveys in facilities with chronic quality of care problems;
• focusing on specific problems such as pressure sores, dehydration, and malnutrition; and
• providing additional training to State surveyors.

We have research underway that will help us respond to the Inspector General recommendation for staffing standards for registered nurses and certified nurse Assistants in nursing homes. Last September we awarded a contract to Abt Associates to assist us in a comprehensive study of nursing home staffing, with results due back to us this fall.

We strongly support the Administration on Aging's Ombudsman Program, which is absolutely critical in maintaining quality of care in nursing homes. Ombudsmen make regular visits to nursing homes, act as advocates for residents, and help in enforcing nursing home standards and ensuring that all nursing home residents are treated with dignity and compassion. We agree with the Inspector General that this program should have more visibility, including criteria for frequency and length of regular visits to facilities. It also needs guidelines for complaint response and resolution times, further refinements to its data reporting system, and more volunteers.

Though progress has been made in improving the quality of care in nursing homes, we need to continually build upon it. To this end, HCFA is willing to work with the Administration on Aging to increase their effectiveness and to facilitate communications between the Administration on Aging and State survey agencies to better serve nursing home residents.

ENFORCEMENT INITIATIVE PROGRESS

We have made solid progress since the President announced our nursing home enforcement initiative last July. We have taken several steps to improve inspections by States, who have the primary responsibility for conducting on-site inspections and recommending sanctions for care and safety violations. These steps will help ensure faster sanctions when problems are found, increase oversight for the worst offenders in each State, and enhance the quality of care by targeting preventable problems.

We have expanded the definition of facilities subject to immediate enforcement action without an opportunity to correct problems before sanctions are imposed. New guidance to States will make clear that a facility should automatically get such "grace periods" only if violations do not cause actual harm to residents and if the facility does not have a history of recurring problems.

We have identified facilities with the worst compliance records in each State, and each State has chosen two of these "special focus facilities" for frequent inspection and intense monitoring, and monthly status reports. Through closer scrutiny and immediate sanctions, we will work to prevent "yo-yo"compliance, in which problems are fixed only temporarily and are cited again in subsequent surveys.

This spring we will implement a wide range of initiatives to detect and prevent bed sores, dehydration, and malnutrition. We are working with outside experts to develop a systematic, data driven process to identify problems and provide focus for in-depth on-site assessments. We will take interim steps this year, and expect to complete the new system by the end of 2000. We are also working with the American Dietetic Association, clinicians, consumers and nursing homes to share best practices for preventing these problems. And we will begin a national campaign to educate consumers and nursing home staff about the risks of malnutrition and dehydration and nursing home residents' rights to quality care this year.

We will this summer implement a new survey protocol we developed with a national abuse and neglect forum for evaluating nursing homes' abuse and neglect prevention processes. We will launch a national consumer education campaign on preventing and detecting abuse this year.

We will provide training and guidance to States this Spring on enforcement, use of quality indicators in surveys, medication review during surveys, and prevention of pressures sores, dehydration, weight loss, and abuse.

We also have:

• made clear that States will lose federal funding if they fail to adequately perform surveys and protect residents because we can and will contract with other entities, if necessary, to make sure those functions are performed properly;
• established a new monitoring system for evaluating State survey teams' adherence to Federally mandated procedures and policies;
• formally reminded States that they must enforce sanctions for serious violations and may not lift them until an on-site visit verifies that problems are fixed;
• required States to sanction facilities found guilty more than once for violations that harm residents, with no option to avoid penalties by correcting problems during a grace period;
• required States to conduct more frequent inspections for nursing homes with repeated serious violations while not decreasing their inspections for other facilities;
• required States to stagger surveys and conduct a set amount on weekends, early mornings and evenings, when quality and safety and staffing problems often occur;
• instructed States to look at an entire chain's performance when serious problems are identified in any facility that is part of a chain, and begun developing further guidelines for sanctioning facilities within problem chains;
• developed new regulations to enable States to impose civil money penalties for each serious incident and supplement current rules that link penalties only to the number of days that a facility was out of compliance with regulations; and

We have taken additional steps to help consumers choose facilities, help facilities improve care, and help our law enforcement partners prosecute the most egregious cases. We have:

• created a new Internet site, Nursing Home Compare, at www.medicare.gov, which allows consumers to compare survey results and safety records when choosing a nursing home, and which has so far had more than 826,000 page views;
• posted best practice guidelines at cms.hhs.gov/medicaid/siq/siqhmpg.htm on how to care for residents at risk of weight loss and dehydration;
• begun planning national campaigns to educate residents, families, nursing homes and the public at large about the risks of malnutrition and dehydration, nursing home residents' rights to quality care, and the prevention of resident abuse and neglect;
• begun a study on nursing home staffing that will consider the potential costs and benefits of establishing minimum staffing levels; and
• worked with the Department of Justice to prosecute egregious cases where residents have been harmed, and to improve referral of egregious cases for potential prosecution.

Budget

The Clinton Administration's fiscal year 2000 budget includes proposals to:

• require nursing homes to conduct criminal background checks of prospective employees;
• establish a national registry of nursing-home workers who have abused or neglected residents or misappropriated residents' property; and
• allow more types of nursing-home workers with proper training to help residents eat and drink during busy mealtimes.

The cost of background checks and querying the national registry will be financed through user fees. The Administration will put forward additional proposals as needed for additional legislative authority to further improve nursing home quality and safety.

We are grateful that Congress provided us with a total fiscal 1999 survey and certification budget of $171 million for our increased nursing home enforcement efforts, including $4 million earmarked for the new initiative. We thank you, Mr. Chairman, for your continued support in meeting the resource needs required by our increased oversight efforts. We are requesting an additional $60.1 million for fiscal year 2000 to enable us and other HHS components to fully implement all provisions of the Nursing Home Initiative. This includes $35 million for HCFA to strengthen State inspection and enforcement efforts, $15.6 million in mandatory Medicaid money to supplement State inspection and enforcement efforts, and $9.5 million to ensure adequate resources for timely judicial hearings and court litigation.

CONCLUSION