Medicare Quality of Care:

Oversight of Kidney Dialysis Facilities Needs Improvement

HEHS-00-114: Published: Jun 23, 2000. Publicly Released: Jun 26, 2000.

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Leslie G. Aronovitz
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Pursuant to a congressional request, GAO reviewed the Health Care Financing Administration's (HCFA) processes to ensure that dialysis facilities meet quality-of-care standards, focusing on: (1) the extent to which on-site inspections of dialysis facilities are performed and problems are identified; (2) whether an effective process exists to ensure that dialysis facilities correct problems; and (3) what steps are being taken to use available monitoring resources as effectively as possible.

GAO noted that: (1) over the past 7 years, the number of HCFA-funded inspections of dialysis facilities has declined significantly; (2) these unannounced inspections, commonly called surveys, which are HCFA's primary tool for ensuring that facilities meet standards protecting patients' health and safety, were conducted at only 11 percent of the dialysis facilities eligible for recertification in 1999, compared with 52 percent in 1993; (3) when such surveys were conducted they, showed that noncompliance is a problem; (4) to enable more frequent surveys, HCFA has requested a threefold increase in funding for on-site inspections in its budget request for fiscal year 2001; (5) this funding level would support a survey of all dialysis facilities every 3 years; (6) while increasing on-site surveys will likely encourage more facilities to improve conditions, the enforcement system provides little assurance that corrections will be sustained; (7) essentially, HCFA's only current enforcement tool is to terminate a facility from the Medicare program if it does not correct its deficiencies; (8) the threat of termination brings nearly all facilities into compliance for a while, but they do not necessarily stay that way; (9) in every state GAO visited, GAO found instances in which facilities that had corrected their problems were found to have serious problems shortly afterward; (10) Congress has authorized HCFA to use other enforcement tools, such as the denial of payment for Medicare services, but HCFA maintains that this authority would have limited effectiveness and applicability; (11) HCFA is planning to use clinical and outcome data more extensively in deciding which facilities to survey and monitor more closely; (12) although the information HCFA intends to use may help in that regard, it has limitations as well; and (13) these data are designed to give a picture of the care being provided to end-stage renal disease (ESRD) patients generally, but they are often not current, detailed, or reliable enough to detect specific facilities that are providing substandard services.

Matter for Congressional Consideration

  1. Status: Closed - Not Implemented

    Comments: Legislation has not been introduced or considered by authorizing committees. However, CMS officials have proposed a legislative change that would establish generic alternative sanctions for all provider types.

    Matter: To improve ESRD facilities' incentives to maintain compliance with Medicare's conditions of participation, Congress should consider authorizing HCFA to assess monetary penalties on ESRD facilities like those it is authorized to assess on nursing homes that have severe or repeated serious deficiencies.

Recommendations for Executive Action

  1. Status: Closed - Not Implemented

    Comments: CMS officials recognize that they have the authority to deny payments to dialysis facilities that furnish treatments not in compliance with dialyzer reuse standards. However, they assert that alternative payment sanctions would be difficult to implement because a state surveyor would not be able to determine which specific treatments were delivered during a period of noncompliance. GAO maintains that procedures to exercise CMS authority should be developed and retroactive payment denials could be imposed for dialysis treatments received by a facilities' patient population in a given period of noncompliance.

    Recommendation: The Administrator, HCFA, should strengthen HCFA's oversight of ESRD facilities by developing procedures on how and when to use HCFA's existing authority to impose partial or complete payment reductions for ESRD facilities that do not meet Medicare quality standards for dialyzer reuse.

    Agency Affected: Department of Health and Human Services: Health Care Financing Administration

  2. Status: Closed - Implemented

    Comments: On July 18, 2001, CMS sent a memo to all the regional offices clarifying responsibilities and authorities for sharing information between state agencies and ESRD networks.

    Recommendation: The Administrator, HCFA, should strengthen HCFA's oversight of ESRD facilities by establishing procedures to facilitate better and more routine cooperation and information sharing between ESRD networks and state survey agencies, particularly in targeting facilities for on-site surveys.

    Agency Affected: Department of Health and Human Services: Health Care Financing Administration

  3. Status: Closed - Implemented

    Comments: HCFA has completed its pilot test and analysis to show that data it uses does have predictive value in detecting facilities with compliance problems. It is basing implementation on the results of these evaluations.

    Recommendation: The Administrator, HCFA, should strengthen HCFA's oversight of ESRD facilities by evaluating the results of HCFA's project for using clinical outcome data to select facilities for on-site review before it recommends that states use such data as a key factor in the selection process. A central component of the evaluation should be determining the extent to which the data are sufficient to predict which facilities have a higher likelihood of not complying with Medicare's conditions of participation.

    Agency Affected: Department of Health and Human Services: Health Care Financing Administration


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