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Highlights

Pursuant to a congressional request, GAO provided information on the Health Care Financing Administration's (HCFA) oversight programs of state agencies' nursing home survey process, focusing on the: (1) effectiveness of HCFA's approaches to assessing state agency performance; (2) extent to which HCFA's regional offices vary in their application of these approaches; and (3) the corrective actions available to HCFA when it identifies poor state agency performance.

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Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Health Care Financing Administration 1. To ensure that states effectively meet federal standards for certifying nursing homes and to consistently implement the more stringent requirements of HCFA's recent initiatives, HCFA needs to strengthen its oversight of state survey agencies' activities. To accomplish this, the Administrator, HCFA, should improve the scope and rigor of HCFA's oversight process by: (1) increasing the proportion of federal monitoring surveys conducted as comparative surveys to ensure that a sufficient number are completed in each state to assess whether the state appropriately identifies serious deficiencies; (2) ensuring that comparative surveys are initiated closer to the time the state agency completes the home's annual standard survey; (3) requiring regions to provide more timely written feedback to the states after the completion of federal monitoring surveys; and (4) improving the data system for observational surveys so that it is an effective management tool for HCFA to properly assess the findings of observational surveys.
Closed - Implemented
CMS awarded a contract in the fall of 2003 for the conduct of approximately 170 additional comparative surveys each year, bringing the annual total performed by both federal surveyors and the contractor to about 330. As of July 2004, 15 surveyors have been hired and trained and were participating in trial comparative surveys with federal surveyors. Although these trial surveys identified the need for additional training, CMS expects to begin the additional comparative surveys by the fall of 2004. With regard to other elements of this recommendation, CMS has (1) successfully reduced the time between the state and the comparative surveys, (2) instructed the regions to timely report the results of observational surveys to the state agencies, and (3) improved the FOSS data system to make it more responsive to surveyors' needs.
Health Care Financing Administration 2. To ensure that states effectively meet federal standards for certifying nursing homes and to consistently implement the more stringent requirements of HCFA's recent initiatives, HCFA needs to strengthen its oversight of state survey agencies' activities. To accomplish this, the Administrator, HCFA, should improve the consistency in how HCFA holds state survey agencies accountable by standardizing procedures for selecting state surveys and conducting federal monitoring surveys, including: (1) ensuring that the regions target surveys for review that will provide a comprehensive assessment of state surveyor performance; and (2) requiring federal surveyors to include as many of the same residents as possible in their comparative survey sample as the state included in its sample (here HCFA surveyors have determined that the state sample selection process was appropriate).
Closed - Implemented
In 2000, CMS (formerly HCFA) introduced clear guidance setting out seven specific standards, review protocols, and a reporting mechanism for assessing state performance. In 2001, CMS assessed each state's performance against the standards in the first of what will be an annual review. CMS previously instructed federal surveyors conducting comparative surveys to include in their sample all of the residents that the State Agency included in its sample. CMS, however, did not, and has no plans to address, GAO's observation that individual state surveys should be selected for federal review in a manner that ensures that regions observe as many state surveyors as possible.
Health Care Financing Administration 3. To ensure that states effectively meet federal standards for certifying nursing homes and to consistently implement the more stringent requirements of HCFA's recent initiatives, HCFA needs to strengthen its oversight of state survey agencies' activities. To accomplish this, the Administrator, HCFA, should further explore the feasibility of appropriate alternative remedies or sanctions for those states that prove unable or unwilling to meet HCFA's performance standards.
Closed - Implemented
HCFA revised its guidelines on assessing state performance standards in December 1999, including new sanctions of placing the state agency on notice that it is not in compliance, and meeting with high-level state officials to attempt to improve state performance. However, the report concluded that the potential effectiveness of these sanctions is doubtful because HCFA still does not conduct sufficient number of comparative surveys to effectively assess state performance and the new sanctions are likely to be ineffective in improving state performance. HCFA continues to consider whether to conduct an increased share of comparative surveys.

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