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OCR for page 146
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
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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.
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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
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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.
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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
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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
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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.
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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
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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,
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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
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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
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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
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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
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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
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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).
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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
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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
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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
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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.
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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.
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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
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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.
Representative terms from entire chapter:
survey agency
