Recommendation: To address significant shortcomings in the current system for financing and conducting surveys of Medicare and Medicaid facilities, and to help ensure that those facilities that have not been surveyed in at least 6 years are in compliance with federal quality standards, the CMS Administrator should increase the survey priority assigned to such facilities in the annual instructions given to state survey agencies with the goal of surveying them as quickly as possible.

Agency Affected: Department of Health and Human Services: Centers for Medicare and Medicaid Services

Status: Open

Comments: We shared our analysis with CMS showing that there was little change in the number of facilities that had not been surveyed in 6 years or more. CMS officials agreed to examine this issue. However, CMS officials did tell us that the agency had instituted a requirement for a 7.0 year maximum survey interval for all types of facilities. Previously, there was no maximum survey interval for all facility types, only a 6-year average. As a result, it was possible for states to meet the average but not survey some facilities for 10 years or more. Because, CMS believes that the FY 2010 survey budget only funded about 80 percent of the cost of surveying all providers within statutory and policy mandated intervals, officials expect that a number of states still will not meet the 7-year maximum survey interval.

Recommendation: To address significant shortcomings in the current system for financing and conducting surveys of Medicare and Medicaid facilities, and to help ensure that those facilities that have not been surveyed in at least 6 years are in compliance with federal quality standards, the CMS Administrator should monitor the progress made by state survey agencies that have a significant number of such facilities.

Agency Affected: Department of Health and Human Services: Centers for Medicare and Medicaid Services

Status: Closed - Implemented

Comments: CMS officials told us that, in 2009, the agency began to require states that had failed to meet established survey frequency standards to a significant extent for certain facility types to submit a plan of correction acceptable to the CMS regional offices. The regional offices must, in turn, notify CMS central office that they have received and approved such state plans. These actions should help to increase the survey frequency of facilities that have not been surveyed in some time, thereby decreasing the risk for quality problems at these facilities.

Recommendation: To address significant shortcomings in the current system for financing and conducting surveys of Medicare and Medicaid facilities, and to ensure that Congress has adequate information on the impact of funding on facility oversight, the CMS Administrator should inform Congress of the projected cost of surveying all facilities that lack statutorily mandated survey frequencies a minimum of at least once every 3 years.

Agency Affected: Department of Health and Human Services: Centers for Medicare and Medicaid Services

Status: Open

Comments: CMS officials told us they rescheduled the implementation of this recommendation for the end of FY 2012.

Recommendation: To address significant shortcomings in the current system for financing and conducting surveys of Medicare and Medicaid facilities, and to ensure that Congress has adequate information on the impact of funding on facility oversight, the CMS Administrator should include information in the President's budget request on projected state complaints and the cost of completing the associated workload.

Agency Affected: Department of Health and Human Services: Centers for Medicare and Medicaid Services

Status: Open

Comments: CMS officials told us due to the need to implement ACA mandatory provisions, they will likely need to reschedule this effort to FY2013.

Recommendation: To address significant shortcomings in the current system for financing and conducting surveys of Medicare and Medicaid facilities, and to help address state survey funding inequities, the CMS Administrator should use available tools to adjust the annual baseline Medicare allocations provided to each state.

Agency Affected: Department of Health and Human Services: Centers for Medicare and Medicaid Services

Status: Closed - Implemented

Comments: To ensure that health care facilities participating in the Medicare and Medicaid programs provide high-quality care in a safe environment, the Centers for Medicare & Medicaid Services (CMS) contracts with state survey agencies to conduct periodic inspections known as surveys, among other activities. In general, survey activities are funded through a combination of Medicare, Medicaid, and non-Medicaid state funds. Typically, almost 60 percent of federal spending on survey activities comes from the Medicare Trust Funds, with the remaining 40 percent funded by the federal Medicaid share. Prior to each federal fiscal year, CMS notifies states of their projected Medicare budget allocations and later notifies states of any changes in their Medicare allocations. At the end of the federal fiscal year, CMS may provide supplemental funds to states that spent more than their initial Medicare allocations by redistributing funds from states that spent less than their allocations. In 2009, we reported that CMS had developed a new budget analysis tool in 2005, recognizing that its previous method for allocating Medicare funds for state survey activities resulted in over- and underfunding relative to state survey requirements. However, the tool has had a limited impact. First, CMS officials chose not to use the tool to recalculate states' baseline allocations to avoid shifts that could result in layoffs of trained staff. Second, the amount of funding to be redistributed to states at the end of the fiscal year has shrunk in recent years. We recommended that the CMS Administrator use available tools to adjust the annual baseline Medicare allocations provided to each state to help address state survey funding inequities. In response to our recommendation, CMS told us that it continues to provide proportionately more resources each year to those states that are less well funded given their workload. In addition, in fiscal year 2010, CMS instituted a policy of reducing a state's allocation if it underspends its allocation by 3 percent or $500,000 for two or more consecutive years; to date, CMS has reduced one state's allocation as a result of this policy and reallocated the funds to two other states that have consistently spent more than their allocations. CMS's recent policy and actions have resulted in more equitable funding for states relative to their survey workload.

Recommendation: To address significant shortcomings in the current system for financing and conducting surveys of Medicare and Medicaid facilities, and to improve CMS's ability to differentiate between funding and management issues and help ensure the quality of surveys, the CMS Administrator should identify appropriate methodologies to help evaluate the efficiency and effectiveness of state survey activities. One such methodology may be the new Quality Indicator Survey, developed to help ensure the consistency, efficiency, and effectiveness of state nursing home surveys. Explore the feasibility of using a similar methodology to survey other Medicare and Medicaid facilities.

Agency Affected: Department of Health and Human Services: Centers for Medicare and Medicaid Services

Status: Open

Comments: CMS officials told us the Quality Indicator Survey (QIS) is scheduled for continued, gradual expansion. However, fulfillment is impeded by the the inability of the ROs to conduct oversight surveys effectively using the new QIS system due to incompatibilities introduced in the new PC refresh and not yet resolved. Other aspects of the recommendation will not be implemented due to staff limitations in CMSO. CMS officials told us that as of May 2010, CMS is continuing to implement QIS nationally. As of the end of 2010, there will be sixteen States that are implementing the QIS survey process. CMS officials told us that there is no plan at this time and resources to expand QIS to other facilities. The team will follow up next year. (TH. 9/6/11)

Recommendation: To address significant shortcomings in the current system for financing and conducting surveys of Medicare and Medicaid facilities, and to improve CMS's ability to differentiate between funding and management issues and help ensure the quality of surveys, the CMS Administrator should provide Congress with an estimate of the cost of implementing, over 3 years, the Quality Indicator Survey methodology for nursing homes.

Agency Affected: Department of Health and Human Services: Centers for Medicare and Medicaid Services

Status: Open

Comments: CMS officials told us as part of the routine budgeting process, CMS has provided cost estimates for the next phase of QIS implementation in FY 2011 and FY 2012. Due to continued adjustments in the design of both training and the conversion of research code to production code, CMS has postponed the final estimate of full national implementation until the end of FY 2011 after release and implementation of the production code versions in the ASPEN suite.

Recommendation: To address significant shortcomings in the current system for financing and conducting surveys of Medicare and Medicaid facilities, and to improve the oversight of state expenditures, the CMS Administrator should collect information about current state shares, including the methodologies used to determine them and the date that they were last reviewed.

Agency Affected: Department of Health and Human Services: Centers for Medicare and Medicaid Services

Status: Closed - Implemented

Comments: According to a CMS memo (Admin Info: 09-32), a CMS regional office workgroup developed a standard operating procedure to guide each region in conducting its review of states' cost allocations. Changes to cost allocations resulting from these reviews will become effective when the results for all states are known and have been analyzed for national impact, which may occur on a rolling basis by provider type. According to the schedule in the memo, ROs were to complete their reviews of nursing home cost allocations by June 30, 2009. Reviews of state cost allocations for the remaining providers and suppliers (e.g., home health agencies, end-stage renal disease facilities, and hospitals) are to be completed by July 31, 2010.

Recommendation: To address significant shortcomings in the current system for financing and conducting surveys of Medicare and Medicaid facilities, and to improve the oversight of state expenditures, the CMS Administrator should regularly review state shares to ensure that they are accurate, explore ways to obtain information from states on non-Medicaid expenditures where such information is relevant for ensuring that costs are actually shared on an equitable basis, and consider ways to simplify the process of determining state shares.

Agency Affected: Department of Health and Human Services: Centers for Medicare and Medicaid Services

Status: Closed - Implemented

Comments: According to a CMS memo (Admin Info: 09-32), a CMS regional office workgroup developed a standard operating procedure to guide each region in conducting its review of states' cost allocations. Changes to cost allocations resulting from these reviews will become effective when the results for all states are known and have been analyzed for national impact, which may occur on a rolling basis by provider type. According to the schedule in the memo, ROs were to complete their reviews of nursing home cost allocations by June 30, 2009. Reviews of state cost allocations for the remaining providers and suppliers (e.g., home health agencies, end-stage renal disease facilities, and hospitals) are to be completed by July 31, 2010.

Recommendation: Over the longer term, the CMS Administrator should undertake a broad-based reexamination of the current approach for funding and conducting surveys of Medicare and Medicaid participating facilities. This reexamination should consider issues such as (1) the source and availability of funding, including possible imposition of user fees, and (2) ways of ensuring an adequate survey workforce with sufficient compensation to attract and retain qualified staff.

Agency Affected: Department of Health and Human Services: Centers for Medicare and Medicaid Services

Status: Open

Comments: CMS officials told us that the first part of the recommendation is completed and reflected in the president's proposed FY 2010 budget (including proposed user fees). For the second part, CMS updated the agency's standard operating procedure (SOP) for RO determination of State-federal cost-sharing. In 2009 to 2010 the ROs applied the SOP to all states. CMS analysis of the results led to a conclusion that there was too much variation between Regions. CMS officials told us that they intend to seek a contractor's assistance and reinstate the effort in 2011 and 2012. CMS officials told us that they will forward the contractor's report once it is received