Under contract with the Centers for Medicare & Medicaid Services (CMS), states conduct standard and complaint surveys to determine whether health care providers, including nursing facilities, are providing care to patients in compliance with federal standards of care. CMS Regional Offices evaluate states’ performance according to the State Performance Standards System (SPSS), which was revised in 2006 to evaluate performance along three dimensions – frequency, quality, and enforcement & remedy.
Evaluating state performance during Fiscal Years 2015-2018 for the 12 (of 19) performance measures that focused solely on nursing facilities, the HHS Office of Inspector General (OIG) finds widespread noncompliance by states with federal requirements for nursing home surveys and limited oversight and enforcement by CMS. OIG describes its related reports about states’ conduct of surveys and makes recommendations to CMS for improved federal oversight of states’ nursing home survey performance.
OIG reports that Congress annually appropriates funding for surveys for nursing facilities participating in the Medicare program and provides a 75% federal match for Medicaid surveys. Since 2014, CMS’s survey and certification budget has remained “flat,” at about $397 million annually, although CMS “increased its allotment to States by about 4 percent during this same time period, from $341 million in FY 2015 to $354 million in FY 2018.” After OIG’s four-year review period, and during the coronavirus pandemic, Congress appropriated an additional $100 million for COVID-19-related survey and certification activities through the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Contrast the $354 million total survey budget (for providers in addition to nursing facilities) with the tens of billions of dollars spent by Medicare and Medicaid to pay for nursing home care – Medicare spent $31.5 billion in 2019, Medicaid spent $56.6 billion in 2017.
OIG finds that more than half of the states “repeatedly failed to meet requirements for conducting nursing home surveys.” Most states failed at least one nursing home performance measure in the four-year period (the total number of nursing home measures ranged from 11 in FY 2017 to eight in FY 2018) and 28 states missed the same performance measure over three or four consecutive years, including 13 states that missed multiple measures in three or four consecutive years.
The most common performance measure that states failed was the timeliness of nursing home surveys, with 41% of state failures related to two timeliness measures:
- 23% of timeliness failures reflected failure to survey high-priority complaints within 10 days; 17 states failed this performance measure in all four years
- 18% of timeliness failures reflected failure to conduct standard surveys at least every 15 months (with a statewide average of 12 months between standard surveys); six states failed this performance measure in all four years.
CMS and states agree that shortages of surveyors and other staff “were root causes for many of the performance problems and that CMS has few options to address these problems.”
CMS’s oversight begins with the requirement that facilities develop corrective action plans to address failures in performance. However, 10% of corrective action plans (12 states) “were missing from CMS files and many [plans] lacked substantive detail” about how states would correct their survey problems. Some plans repeated the same promised actions from year to year. CMS uses training and technical assistance to help states correct performance failures. It may impose financial penalties for states’ failures to meet timeliness requirements for standard surveys, but “frequently offset these penalties with one-time funding adjustments.” In FY2017, for example, CMS imposed penalties of $1.2 million, but offset the penalties by $1.1 million. CMS may use performance benchmarks as incentives, which allow states to improve their performance to recoup deductions, and may speak with state officials about performance concerns. However, CMS has “rarely imposed formal sanctions and has never initiated action to terminate a State survey agency agreement.”
Recommendations for CMS
OIG recommends that CMS “actively monitor the use and effectiveness of States’ corrective action plans and other remedies,” “establish guidelines for progressive enforcement actions,” “engage with senior State officials earlier and more frequently to address State performance problems,” and “disseminate results of State performance reviews more widely to ensure that stakeholders become aware of problems.” CMS generally concurred with the recommendations.
What Advocates Can Do
Read the SPSS results for your state and use the information in your advocacy. The most recent States’ SPSS results are available at CMS, “Release of Fiscal Year (FY) 2020 State Performance Standards System (SPSS) Findings, FY 2021 SPSS Guidance, and FY 2019 Results,” Admin Info: 21-08-ALL (Sep. 15, 2021), https://www.cms.gov/files/document/admin-info-letter-21-08-all.pdf.
This memorandum describes the performance standards that were calculated for FY 2020 and reports, by region, each state’s performance on each of the measures for all provider categories for FYs 2017, 2018, and 2019. For example, for F2: Nursing Homes – 12.9-Mo. Avg/15.9 Month Max Interval (Statewide Average Interval/No. of Facilities that exceeded Maximum Survey Interval), Connecticut passed the performance standard for each year; Massachusetts failed in each year.
Call on Congress to increase the budget for survey activities. CMS and states cannot ensure that facilities fully comply with federal standards of care with such limited funding that Congress must vote on each year.
January 20, 2022 – T. Edelman, M. Edelman
 HHS Office of Inspector General (OIG), CMS Should Take Further Action To Address States With Poor Performance in Conducting Nursing Home Surveys, OEI-06-19-00460 (Jan. 2022), https://oig.hhs.gov/oei/reports/OEI-06-19-00460.pdf [hereafter OIG, Nursing Home Surveys]
 For example, in nine state-specific reports issued between 2015 and 2017, OIG finds that states failed to verify that nursing facilities had corrected deficiencies. Id. 5, 37 footnote 47 (Arizona, A-09-16-02013; Florida, A-04-17-08052; Kansas, A-07-17-03218; Missouri, A-07-16-03217; Nebraska, A-07-17-03224; New York, A-02-15-01024; North Carolina, A-04-17-02500; Oregon, A-09-16-02007; and Washington, A-09-13-02039).
 OIG, Nursing Home Survey, supra note 1, at 2
 Medicare Payment Advisory Commission (MedPAC), Health Care Spending and the Medicare Program (A Data Book), p. 14, Chart 1-12 (Jul. 2021), https://www.medpac.gov/wp-content/uploads/import_data/scrape_files/docs/default-source/data-book/july2021_medpac_databook_sec.pdf
 Medicaid and CHIP Payment and Access Commission (MACPAC), MACStats: Medicaid and CHIP Data Book. p. 53, Exhibit 17 (Total Medicaid Benefit Spending by State and Category, FY 2018 (millions)) (Dec. 2019), https://www.macpac.gov/wp-content/uploads/2015/12/MACStats-Medicaid-and-CHIP-Data-Book-December-2019.pdf
 OIG, Nursing Home Surveys, supra note 1, at 8
 Id. 9.
 Id. 10-11.
 Id. 18.
 Id. 11-12.
 Id. 12.
 Id. 14.
 Id. 16.
 Id. 18-20.