One of the best predictors of quality is past performance. If an operator provides poor care in its facilities, it is likely to provide poor care in any additional facilities that it may purchase or operate. As a result, one of the most effective ways of improving quality of care for nursing home residents is preventing poor operators from getting authority to own or operate additional facilities.
At present, the Centers for Medicare & Medicaid Services (CMS) takes a limited view of its role in certification. First, it relies almost entirely on states to determine whether nursing facilities should be certified to receive federal reimbursement from the Medicare and Medicaid programs. There are only two specific requirements for federal certification: (1) disclosing ownership and changes of ownership and (2) having a quality assurance and performance improvement program (QAPI). The federal certification system currently treats state licensure as sufficient. Essentially, if a facility is eligible for state licensure, it receives federal certification.
States have an important role in determining eligibility for licensure, but states’ effectiveness may be hampered by an owner’s dominance in the state. An owner with many facilities in a state may evade strong state action just because it already owns or operates many facilities in the state. As the Center for Medicare Advocacy has shown, many factors enable operators to increase the number of facilities they operate, despite the poor care their facilities provide. The political pressure of large operators cannot be ignored.
A second concern about the federal certification process is that CMS looks at each nursing facility individually and does not consider an owner’s or operator’s performance record in facilities it already owns or operates. President Biden’s Nursing Home Reform Agenda, announced in 2022, calls for better enforcement in a variety of ways, including “increased accountability” and expansion of enforcement authority for “chain owners of substandard facilities.” Although President Biden suggests that additional legislative authority is needed, Law Professor Nina Kohn forcefully argues in “Using What We Have: How Existing Legal Authorities Can Help Fix America’s Nursing Home Crisis” that the Nursing Home Reform Law (1987) gives CMS the authority to deny certification to facilities governed or managed by entities with poor records. See Alert on Kohn’s article.
The Center for Medicare Advocacy proposes that CMS implement its longstanding statutory authority (42 U.S.C. §§1395i-3(f)(a), 1396r(f)(1), Medicare and Medicaid, respectively), to ensure that federal policy “promotes the effective and efficient use of public moneys” by considering the nursing home care provided by facilities with common ownership or management when it makes federal certification decisions.
CMS should develop regulations to establish criteria for federal certification. Federal criteria should include review of facilities under common ownership/management and financial stability and experience, among other factors. CMS should deny certification when poor quality of care is pervasive in a company’s existing facilities and should consider providing less than full certification or provisional certification for troubled owners/operators. In addition, federal rules should require CMS to engage in ongoing oversight, including more rapid enforcement, if it certifies a facility that is affiliated with a company that has a record of poorly performing facilities.
Another provision of the President’s reform agenda calls for increasing transparency of ownership information. Since June 2023, CMS has implemented this provision and posted nursing home affiliation on Care Compare and aggregate nursing home health, staffing, and quality data on a new database, data.cms.gov. that can be linked through each certified facility’s homepage on Care Compare.
The affiliated entity data provide strong evidence of problems across affiliated facilities. They also show that poor performers, whose records should be considered in certification decisions, can be readily identified. Here are two examples.
Petersen Health Care, affiliated entity #399 (as of Feb. 14, 2024), has 62 affiliated facilities in two states.
One facility is a Special Focus Facility (SFF) and five facilities are SFF candidates. Twenty-two of the 62 facilities (35.5%) have an abuse icon.
The 62 facilities have an average overall 5-star rating of 1.5 stars; an average health inspection rating of 2 stars; an average staffing rating of 1.6 stars; and an average quality measure rating of 2.2 stars.
The facilities average 3.1 total nurse hours per resident day (HPRD), including 0.4 HPRD of registered nurse time.
The 62 affiliated facilities have 112 fines, averaging 1.8 fines per facility. The fines total $6,194,894.83 and average $99,917.66 per facility. The affiliated facilities also have 71 denials of payment for new admissions (DPNA), averaging 1.1 DPNA per facility.
Care Initiatives, affiliated entity ID #106 (as of Feb. 15, 2023) has 43 facilities in 1 state (Iowa).
Care Initiatives has 43 facilities, all in Iowa. Three facilities are candidates for the Special Focus Facility program. Five facilities (11.6%) have an abuse icon.
83.7% of the facilities are classified as non-profit, 16.3%, as for-profit.
The average overall 5-star rating 2.1 stars; the average health rating is 2.1 stars; the average staffing rating is 2.2 stars; the average quality measure rating is 3.1 stars.
The 43 facilities average 3.1 hours per resident day (HPRD) of total nurse hours, including an average of 0.6 HPRD of registered nurse time.
The 43 facilities had 97 fines, averaging 2.3 fines per facility. The fines total $2,572,337.04, averaging $59,821.79 per facility. The facilities also had 20 denials of payment for new admissions (DPNA) averaging 0.5 DPNAs per facility.
Conclusion
CMS cannot rely solely on states’ licensure decisions to determine a nursing facility’s eligibility for federal certification. Additional federal standards are needed. CMS should promulgate regulations setting out criteria for federal certification, deny certification for owners and operators whose records indicate pervasive noncompliance, establish limited or provisional certification, and monitor facilities more closely. Limiting the ability of poor performers to own and operate additional nursing facilities would dramatically improve nursing home quality of care.
February 22, 2024 – T. Edelman