Special Focus Facilities: Poor Care for Residents, Limited Enforcement Consequences for Facilities

Nursing facilities that are identified as among those providing the poorest quality care to their residents face limited, if any, enforcement actions.  This Report looks at these nursing facilities.

Background

In cooperation with states, the Centers for Medicare & Medicaid Services (CMS), identifies nursing facilities that have a history of serious noncompliance.  These facilities – which are called Special Focus Facilities (SFFs)[1]  – are among the worst performing facilities in the country.  Nursing facilities identified as SFFs have an additional standard survey each year and are expected, within 18-24 months, to “graduate” from the SFF program, to be terminated, or to remain (if they have made substantial improvement or are expected to be sold).  Each month, CMS identifies new SFFs and identifies which current SFFs have not improved, have improved, or have been terminated.

The Nursing Home Reform Law governs the standards of care (called Requirements of Participation) that Medicare and Medicaid facilities must meet in order to be eligible for reimbursement under the federal payment programs; the survey process used to determine compliance with federal standards of care; and remedies or penalties that may be imposed for noncompliance.[2]  

CMS categorizes deficiencies that are cited as a result of unannounced surveys according to their scope (how many residents are affected) and severity (how serious the noncompliance is).  Nationwide, in 2014, only 0.9% of deficiencies were cited as immediate jeopardy (the highest category of noncompliance) and 2.2%, as harm (the second highest level of noncompliance).[3]  Most deficiencies are identified as causing residents no-harm.[4]  The remaining deficiencies are identified as causing residents no-harm or as substantial compliance.[5]   CMS imposes penalties primarily for jeopardy- and harm-level deficiencies.  Among the remedies that CMS may impose are civil money penalties (CMPs), either per day or per instance CMPs. 

Per day CMPs for jeopardy-level deficiencies range from $6394 to $20,965; per instance CMPs for jeopardy-level deficiencies range from $2097 to $20,965.[6]  The difference between the two types of CMPs is that per day CMPs increase with the number of days a facility is cited as being out of compliance with federal standards of care, while per instance CMPs reflect a flat fine unrelated to the duration of noncompliance.

CMS’s website Nursing Home Compare reports ratings for each nursing facility that participates in Medicare or Medicaid, or both, on three domains: health survey (based on unannounced annual and complaint surveys that are conducted by state survey agencies); nurse staffing data (based, since May 2018, on payroll-based information[7]); and quality measures (based primarily on self-reported and unaudited resident assessment information provided by facilities).  CMS assigns star ratings to each of the three domains and an overall score, which starts with the health survey rating and revises the overall rating downward or upward to reflect, respectively, one-star and five-star ratings on the staffing and quality measure domains.  Ratings in each domain and in the overall rating range from one to five stars, with one star reflecting the lowest performance and five stars, the highest performance.

Nursing Home Compare reports two of the federal penalties –  CMPs[8] and denials of payment for new admissions (DPNAs).[9]  When facilities appeal CMPs, the CMPs are not reported on Nursing Home Compare unless and until they are upheld and final. 

The federal Nursing Home Reform Law requires nursing facilities to have RNs on site eight hours per day, seven days per week.[10]  Nursing Home Compare includes an icon to identify facilities that report seven or more days in the quarter without a registered nurse on site, fail to report auditable data, or fail to report nurse staffing data.[11]  CMS reports that 6% of facilities nationwide had inadequate RN coverage in the fourth quarter of calendar year 2017, as so defined. 

The Data Below

The June 21, 2018 list of newly-identified SFFs (that is, nursing facilities that have been included on the list of SFFs for one to three months) includes 13 nursing facilities in nine states; the July 19, 2018 report added five facilities in five states.[12]  The Center looked at Nursing Home Compare to identify how many jeopardy-level and harm-level deficiencies the 18 SFFs had in the current and prior survey cycles, whether any CMPs or DPNAs were imposed in the prior three years, whether the SFFs lacked mandated RN coverage or had other problems in staffing data, and their quality measure ratings. 

The chart below reports the number of jeopardy and harm deficiencies in the current survey cycle and immediately prior year.  Two years’ data are reported because the survey star rating is based on two years of survey results, as frozen for a year in November 2017.[13]  The chart separately identifies jeopardy and harm deficiencies cited in 2018.  As noted above, Nursing Home Compare reports only final CMPs; CMPs that are on appeal are not included.  This practice may result in the under-reporting of additional CMPs that CMS has imposed against these SFFs.  The chart also reports CMPs and DPNAs that were imposed in the prior three years.

Nursing Home Compare reports the following information about these 18 facilities. 

Special Focus Facilities, Newly-Added, as of June 21, 2018 and July 19, 2018

The 18 newly-identified SFFs can be described as follows:

Deficiencies

• 12 SFFs were cited with jeopardy-level deficiencies
• 4 SFFs were cited only with harm-level deficiencies
• 2 SFFs were cited with neither jeopardy-level nor harm-level deficiencies

Penalties

• The 18 SFFs had CMPs totaling $992,325 and 12 DPNAs over a 3-year period
  • 12 SFFs had CMPs imposed ranging from 1 CMP ($8453) to 6 CMPs totaling $233,517 over a 3-year period
    • 6 of the SFFs had CMPs over $100,000 ($123,708, $120,619, $116,896, $233,517, $142,433, $110,708)
    • 5 of the SFFs with CMPs also had DPNAs imposed; 7 did not
  • 1 SFF had DPNA but no CMP
  • 5 SFFs had neither CMPs nor DPNAs imposed

Nurse staffing

• 3 SFFs did not submit staffing data, reported large numbers of days with no RN coverage, or submitted data that could not be verified
  • 1 of these SFFs had both CMPs and DPNAs imposed
  • 2 of these SFFs had only CMPs

Quality measure domain

• 6 SFFs had 4 stars on the quality measures domain
• 1 SFF had 5 stars on the quality measure domain

Discussion

What do we learn about these facilities from Nursing Home Compare?

1. The SFFs provide exceptionally poor care, as reflected by the high numbers of jeopardy and harm deficiencies cited in the current and immediately prior years.  These 18 SFFs, together, were cited with 66 jeopardy deficiencies and 23 harm deficiencies over a two-year period.
    
2. Enforcement actions are relatively minor.  While 12 of the 18 SFFs had CMPs imposed in the three prior years, the average CMP for the 12 facilities that had at least one CMP imposed was $27,562 per year per facility.  If the total CMPs for the 3-year period ($992,325) are attributed to all 18 SFFs, the average CMP per year for each SFF is $18,375. 

Moreover, five of the 18 SFFs (28%) had neither CMPs nor DPNA imposed in the prior three years.

Enforcement actions are declining.In 2016, the Obama Administration issued guidance to impose per day CMPs as the default.[14]In 2018, the Trump Administration replaced the Obama guidance with new guidance calling for per instance CMPs as the default.[15]The result, already, is fewer per day CMPs and more per instance CMPs.[16]

In Fiscal Year (FY) 2016, under the Obama Administration, there were 1,728 per day CMPs (averaging $53,846) and 942 per instance CMPs (averaging $3,162).To date in FY 2018, 563 per day CMPs (averaging $71,635.77) and 1,262 per instance CMPs (averaging $9,576.83) have been imposed.[17]CMS will impose lower total CMPs going forward.

3. Three SFFs reported high numbers of days without any registered nurse (RN) coverage, failed to report nurse staffing data, or failed to submit auditable nurse staffing data.  Nearly 17% of newly-identified SFFs fall into this category.

   Nurse staffing levels are lower than reported on Nursing Home Compare.  The New York Times recently reported that the new staff reporting system documents that on at least one day in the last quarter of 2017, 25% of nursing facilities reported at least one day without an RN on site.[18]  The Times finds that nurse staffing levels have been overstated for many years and that the new system, while better than the prior self-reported system, does not reflect facilities’ erratic and fluctuating staffing levels.
    

4. Six SFFs report resident assessment information that results in four stars in the quality measure domain (defined as above average performance) and 1 SFF reports  resident assessment information that results in five stars in the quality measure domain (defined as much above average performance).  Since facilities that are among the poorest quality facilities in the country do not provide high quality care, the self-reported quality measure domain is highly misleading, if not fraudulent.

   The New York Times reported in 2014 that nursing homes game the Five-Star Rating System by reporting assessment information that gives them high ratings in the quality measure domain.[19]

   An analysis of the first five years of the Five Star Rating System, prepared for CMS by Abt Associates, found that the percentage of facilities receiving four or five stars on the quality measure domain increased from 35.2% in 2009 to 50.5% in 2013, while the percentage of facilities receiving one star in the quality measure domain declined from 22.7% to 10.5% over the same five-year period.[20]

Conclusion

Facilities that are identified as among the most poorly performing facilities in the country provide extremely poor care and may fail to have sufficient numbers of RNs, but they face limited, if any, fines.  Going forward, nursing facilities are likely to have even lower fines. 

CMS needs to strengthen the SFF program to take more effective action against facilities that provide poor care.  It also needs to revise Nursing Home Compare to more accurately reflect nurse staffing levels at all nursing facilities nationwide and to discontinue using the quality measure domain in rating facilities.