Nursing Homes:

Opportunities Exist to Facilitate the Use of the Temporary Management Sanction

GAO-10-37R: Published: Nov 20, 2009. Publicly Released: Dec 22, 2009.

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The nation's 1.4 million nursing home residents are a highly vulnerable population of elderly and disabled individuals for whom remaining at home is no longer feasible. The federal government plays a key role in ensuring that nursing home residents receive appropriate care by setting quality requirements that nursing homes must meet to participate in the Medicare and Medicaid programs and by contracting with states to conduct routine inspections--called standard surveys--and complaint investigations. To encourage compliance with quality requirements, Congress has authorized certain enforcement actions, known as sanctions, such as civil money penalties or termination from participating in the Medicare and Medicaid programs. The Centers for Medicare & Medicaid Services (CMS) is responsible for imposing federal sanctions, typically on the basis of states' recommendations. One sanction--temporarily replacing a home's management--has been used infrequently. According to CMS guidance, temporary management may be used instead of termination in cases where nursing homes place residents at risk of death or serious injury--referred to as immediate jeopardy--or place residents at widespread risk of actual harm. CMS requires that a nursing home remove any immediate jeopardy within a short time frame of 23 calendar days after the survey or complaint investigation in which it was cited, with or without the assistance of temporary management. Otherwise, CMS will terminate the home from Medicare and Medicaid. In some cases, the nursing home's owner may choose to sell the home to a new owner while the home is still under temporary management. Congress was interested in information on why the temporary management sanction has been used infrequently to address nursing home quality problems and asked us to study this issue. Specifically, we focused on (1) CMS and states' experience with the use of federal temporary management and its effectiveness in achieving compliance in the short and longer term; and (2) obstacles to the use of federal temporary management and how such obstacles could be addressed. Congress also asked us to examine whether changes in ownership occurred when nursing homes were under federal temporary management and to identify obstacles to such ownership changes.

Based on responses from officials in the 10 states and seven CMS regional offices that used the federal temporary management sanction from fiscal years 2003 through 2008, the sanction was used with success in the short term in homes where there was some combination of immediate jeopardy, a history of noncompliance with CMS quality requirements, or the failure of other sanctions to bring about compliance. However, some homes continued to have compliance problems in the longer term, that is, since the conclusion of temporary management. Officials from 46 states and seven CMS regional offices identified several obstacles to using federal temporary management, including time constraints, a lack of qualified temporary managers, and inadequate funding to pay for a temporary manager. Specifically, officials from 24 states and five CMS regional offices characterized the 23 days as a short time frame in which to hire a temporary manager and remove immediate jeopardy before automatic termination from participation in Medicare and Medicaid, therefore making it difficult to use the sanction. Additionally, officials from 25 of the 46 states told us they did not maintain a list of potential temporary managers, which could impede their ability to identify qualified candidates on a timely basis. State and CMS regional officials also identified ways for CMS to address some of the obstacles to using the sanction, such as developing lists of qualified temporary managers and providing additional information that addresses best practices and when and how to use the sanction. In addition, several officials suggested the need for an approach to help ensure the longer-term success of temporary management.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: June 2011 - CMS discussed the recommendation with states and in March 2011 issued civil money penalty regulation permitting CMP moneys to be used for the "Development and maintenance of temporary management or receivership capability such as but not limited to, recruitment, training, retention or other system infrastructure expenses." However, as specified in Sec 488.415(c), a temporary manager's salary must be paid by the facility. (See 42 CFR 488.433(e).) In August 2011, agency officials also said they continue to facilitate State-Federal workgroup meetings to examine whether the temporary management sanction makes sense and, if so, whether it could be strengthened. CMS anticipated having an update on the issue in the next few months.

    Recommendation: To address obstacles to the use of the federal temporary management sanction, the Administrator of CMS should work with states to create and maintain a list or lists of qualified temporary managers on either a regional or national basis.

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

  2. Status: Open

    Comments: June 2013 - In March 2011, CMS issued civil money penalty regulation permitting CMP moneys to be used for the "Development and maintenance of temporary management or receivership capability such as but not limited to, recruitment, training, retention or other system infrastructure expenses. However, as specified in Sect. 488.415(c), a temporary manager's salary must be paid by the facility." (See 42 CFR Sect. 488.433(e).) The regulation was effective January 1, 2012. In June 2012, CMS officials stated that the agency continues to investigate the various uses of CMP monies and the potential to use CMPs to recruit, train and supervise temporary managers is one of several options under consideration. In June 2013, CMS officials told us they have been making an aggressive effort to work with the Regional Offices and States on the appropriate use of all sanctions in general, including the use of Temporary Management. The officials said they had most recently been working on the consistent application of the imposition of CMPs and are moving forward to work on best practices and processes for the application and imposition of all sanctions including Temporary Management. In July 2014, CMS said the recommendation was in process and CMS was drafting an internal enforcement action plan to discuss enforcement remedies including temporary management. In drafting the action plan, CMS officials told us they collected feedback from CMS staff regarding best practices for the use of a temporary manager and identified concerns with the imposition of the remedy. The officials also told us CMS had reviewed the temporary management regulatory policies and planned to update its temporary management guidance as needed to provide clarity and ensure consistent instructions for its use.

    Recommendation: To address obstacles to the use of the federal temporary management sanction, the Administrator of CMS should work with states to develop additional information that identifies best practices for states and regional offices, including when and how to use the sanction, the essential qualifications for temporary managers, and alternative funding sources available for temporary management, such as civil money penalties funds.

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

  3. Status: Open

    Comments: June 2013 - In September 2010 the agency said they planned to use findings from enforcement data to develop a strategic enforcement plan by November 2011, develop an internal policy issue paper and recommendations by November 2011, and issue a policy letter and/or revise the State Operations Manual by May 2012. In May 2011, CMS agreed this was an important recommendation, but due to the Affordable Care Act implementation, the agency said they temporarily deferred planned work until 2012. In June 2012 officials said that the agency continues to investigate the various uses of CMP monies and the potential to use CMPs to recruit, train and supervise temporary managers is one of several options under consideration. In June 2013, CMS officials told us they have been making an aggressive effort to work with the Regional Offices and States on the appropriate use of all sanctions in general, including the use of Temporary Management. The officials said they had most recently been working on the consistent application of the imposition of CMPs and are moving forward to work on best practices and processes for the application and imposition of all sanctions including Temporary Management. In July 2014, CMS said the recommendation was in process and CMS was drafting an internal enforcement action plan to discuss enforcement remedies including temporary management. In drafting the action plan, CMS officials told us they collected feedback from CMS Regional Office staff regarding best practices for the use of a temporary manager and identified concerns with the imposition of the remedy. CMS also told us it had reviewed the temporary management regulatory policies and planned to update its temporary management guidance as needed to provide clarity and ensure consistent instructions for its use.

    Recommendation: To help ensure the longer-term compliance of nursing homes that have successfully returned to substantial compliance under temporary management, the Administrator of CMS should develop guidance for states to enhance their oversight of such homes, such as implementing reactivation of temporary management if the home does not maintain substantial compliance over the 2 years following the conclusion of the sanction.

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

 

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