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www.medicareadvocacy.orgCopyright © Center for Medicare Advocacy, Inc.

CENTER FOR MEDICARE ADVOCACY, INC.

ONTARIO HEALTH COALITION

March 31, 2009

______________

www.medicareadvocacy.org


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OVERVIEW OF PRESENTATION

Nursing home industry in USA Public oversight of nursing home industry

• Nursing Home Reform Law (federal law, 1987) Nurse staffing Tension between market-based and regulatory

approaches to assuring high quality of care and high quality of life for residents• Advocates for residents want regulation• Nursing home industry wants market-based approaches


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NURSING HOME INDUSTRY IN USA

Historically, old age homes, county poor houses

Industry expanded with introduction of federal funding (Medicare for old and disabled people, Medicaid for poor people) in 1960s


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Change over time, increasing for-profit ownership

Now, two-thirds of facilities are for-profit; one-quarter are not-for-profit; rest are government-owned

More than half of facilities nationwide are owned by chains, often, multi-state chains


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Most nursing homes are free-standing, not part of hospitals (hospital-based)• Charlene Harrington, et al, Nursing Facilities,

Staffing, Residents and Facility Deficiencies, 2001 through 2007 (Sep. 2008), http://www.nccnhr.org/uploads/File/Harrington_01-07_OSCAR_complete_2008.pdf

http://www.nccnhr.org/uploads/File/Harrington_01-07_OSCAR_complete_2008.pdf

http://www.nccnhr.org/uploads/File/Harrington_01-07_OSCAR_complete_2008.pdf


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Recent trend: creation of multiple corporations for a single facility, separating management, property, etc.• Joseph E. Casson, et al, “Protecting Nursing Home

Companies: Limiting Liability Through Corporate Restructuring,” Journal of Health Law, Vol. 36 (Fall 2003), http://www.proskauer.com/news_publications/published_articles/content/2003_12_02/_res/id=sa_File/Journal%20Casson%203.pdf

http://www.proskauer.com/news_publications/published_articles/content/2003_12_02/_res/id=sa_File/Journal%20Casson%203.pdf




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Recent trend: take-over of chains by private equity firms, e.g., • Beverly Enterprises – Fillmore Capital

Partners

• HCR Manor Care – The Carlyle Group

• Tandem Health Care – JER Partners and Formation Capital


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PRIVATE EQUITY FIRMS

Quality of care declines following take-over• Charles Duhigg, “At Many Homes, More Profit

and Less Nursing,” The New York Times (Sep. 23, 2007), http://www.nytimes.com/2007/09/23/business/23nursing.html?_r=1&scp=19&sq=Charles%20Duhigg&st=cse.

http://www.nytimes.com/2007/09/23/business/23nursing.html?_r=1&scp=19&sq=Charles%20Duhigg&st=cse




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PRIVATE EQUITY FIRMS

Manor Care CEO was to get $118-186 million when the private equity firm bought his company• The Center for Medicare Advocacy calculated how

many RNs and aides could be hired with the money• $118M: 5346 CNAs (19 per Manor Care facility)• $186M: 8427 CNAs (30.3 per Manor Care facility)• $118M: 2198 RNs (7.9 per Manor Care facility)• $186M: 3464 RNS (12.5 per Manor Care facility)

• Center for Medicare Advocacy, “SNF CEO’s Windfall Could Have Provided More Staff and Services” (July 2007), http://www.medicareadvocacy.org/Commentary_SNFCEOsWindfall.htm

http://www.medicareadvocacy.org/Commentary_SNFCEOsWindfall.htm

http://www.medicareadvocacy.org/Commentary_SNFCEOsWindfall.htm


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2001-PRESENT

Nursing home industry losing ground to home health and home and community-based alternatives, including assisted living

Industry has attempted to shift to higher-paying Medicare beneficiaries


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PUBLIC OVERSIGHT

State oversight of all facilities under state licensing law

State oversight was historically ineffective


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PUBLIC OVERSIGHT

Federal oversight depends on nursing facilities’ (generally) voluntary participation in federal payment programs (Medicare, Medicaid), resulting in certification• 99.9% facilities participate in one or both

programs: 3.2% Medicare only, 2.2% Medicaid only, 94.5% both (Harrington, Table 6, page 17)


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REAGAN ADMINISTRATION

Considered elimination of “residents’ rights” as facility condition of participation in Medicare/Medicaid (never officially proposed; leaked draft)

Proposed regulations for surveys, 47 Federal Register 23,403 (May 27, 1982)• Less-than-annual surveys• Self-surveys• Deemed status for nursing facilities accredited by the

Joint Commission on the Accreditation of Hospitals (now called Joint Commission)


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CONGRESSIONAL RESPONSE

Two legislative moratoria preventing deregulation

Agreement with Health Care Financing Administration (HCFA) (as second moratorium was about to expire) to fund study by Institute of Medicine (IoM) (part of National Academy of Sciences)


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INSTITUTE OF MEDICINE (1986)

Report recommended changes to entire federal oversight system for nursing homes• Requirements of Participation for facilities

• Survey process

• Enforcement system


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INSTITUTE OF MEDICINE

Nurse staffing• Recognized nurse staffing as a major factor

determining quality of care and quality of life• But did not recommend specific staffing ratios because

of “the complexities of case mix”• Called for standardized resident assessment data and

empirical studies to determine appropriate staffing levels

• Urged facilities to “place their highest priority on the recruitment, retention, and support of adequate numbers of professional nurses” with training in gerontology and geriatrics


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INSTITUTE OF MEDICINE

IoM staff challenged staff of National Citizens’ Coalition for Nursing Home Reform (NCCNHR) to work for enactment of the recommendations as federal law

NCCNHR formed Campaign for Quality Care (CQC) (members were health care professionals, advocates, nursing home industry) to identify IoM recommendations that should become law


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CAMPAIGN FOR QUALITY CARE

CQC met frequently for a year to discuss IoM recommendations

Most work was done on Requirements (based on good provider practices, good state practices)

Survey was non-controversial Enforcement had least agreement Honorary Chair: Actor Kirk Douglas


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NURSING HOME REFORM LAW (1987)

Based on IoM recommendations and CQC Defined Secretary’s responsibility broadly:

to assure adequate federal standards, and enforcement of those standards, related to health, safety, welfare, and rights of residents

Addressed Requirements for facilities, survey, and enforcement


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NURSING HOME REFORM LAW

Big changes in Requirements for facilities, e.g., • Nurse aides must be trained and competent before

providing care (half the states did not require any training in 1987)

• Recognition of residents’ quality of life

• Facilities must provide care and services so that each resident attains and maintains his or her highest practicable level of physical, mental, and psycho-social well-being

• Not a minimum standard of care


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Biggest missing piece: nurse staffing standard• Reform Law says (regardless of facility size or

acuity of residents)• an RN on the day shift • licensed nurses around the clock • “sufficient staff” to meet residents’ needs42 U.S.C. §§1395i-3(b)(4)(C)(i), 1396r(b)(4)(C)(i),

Medicare and Medicaid, respectively


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Survey requirements• Multi-disciplinary teams

• Surveyors are trained and tested

• Unannounced surveys on 9-15 month schedule (12-month average)


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Enforcement• Range of intermediate sanctions (e.g., civil

money penalties, monitors, temporary management, etc.) must be enacted, but their use in most situations is permissive, not mandatory

• Requirement to impose more significant remedies for uncorrected or repeated deficiencies


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Requirements for facilities became effective October 1990

Federal enforcement regulations, due 1988, were not issued until 1994

Implementation of Law has been prolonged, delayed, and, with respect to enforcement, ineffective (too tolerant of poor care)


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JULY 1998

President Clinton’s Nursing Home Initiative (24 points)

HCFA released report to Congress on accreditation, regulatory incentives, and non-regulatory quality initiatives

Senator Grassley (Senate Special Committee on Aging) began series of hearings on nursing home issues (enforcement, bankruptcy, staffing, etc.)


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CONGRESS, JULY 1998-DECEMBER 2000

Senate Special Committee on Aging held multiple hearings• “Betrayal: The Quality of Care in California’s Nursing Homes” (July 27-28, 1998),

http://aging.senate.gov/hearing_detail.cfm?id=276917& • “Residents at Risk: Weaknesses Persist in Nursing Home Complaint Investigation and

Enforcement” (March 22, 1999), http://aging.senate.gov/hearing_detail.cfm?id=272290&• “The Nursing Home Initiative: The Results at Year One” (June 30, 1999),

http://aging.senate.gov/hearing_detail.cfm?id=272299&• “Forum: Consumers Assess the Nursing Home Initiative” (Sep. 23, 1999),

http://aging.senate.gov/hearing_detail.cfm?id=272304&• “Forum: Nursing Home Residents Short-Changed by Staff Shortages” (Nov. 3, 1999),

http://aging.senate.gov/hearing_detail.cfm?id=272305&• “HCFA Regional Offices: Inconsistent, Uneven, Unfair” (Nov. 4, 1999),

http://aging.senate.gov/hearing_detail.cfm?id=272306& • “Nursing Home Residents: Short-Changed by Staff Shortages, Part II” (July 22, 2000),

http://aging.senate.gov/hearing_detail.cfm?id=272279&• “Nursing Home Bankruptcies: What Caused Them?” (Sep. 5, 2000),

http://aging.senate.gov/hearing_detail.cfm?id=272282&• “The Nursing Home Initiative: A Two-Year Progress Report” (Sep. 28, 2000),

http://aging.senate.gov/hearing_detail.cfm?id=272287&








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CONGRESS, 2001-PRESENT

Considerably less Congressional involvement• Senate Finance Committee hearing: “Nursing Home Quality

Revisited: The Good, the Bad, and the Ugly” (July 2003), http://finance.senate.gov/sitepages/hearing071703.htm

Hearings about private equity firms (Nov. 15, 2007)• “Trends in Ownership and Quality,” House Ways and Means

Committee, http://waysandmeans.house.gov/hearings.asp?formmode=detail&hearing=601

• “Nursing Home Transparency and Improvement,” Senate Special Committee on Aging, http://aging.senate.gov/hearing_detail.cfm?id=300437&

But no legislation has been enacted as a result


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NURSE STAFFING

Nursing Home Reform Law required study of nurse staffing

Requirement was forgotten and ignored for years

Finally, study done


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NURSE STAFFING REPORT

Appropriateness of Minimum Nurse Staffing Ratios in Nursing Homes• Phase I (Summer 2000)

• Phase II (Winter 2001)• Found 97% of facilities failed to meet 1 or more staffing

requirements (1.15-1.3 hours licensed staff; 2.4-2.8 hours aide) to prevent avoidable harm to residents

• Simulation found 91% lacked sufficient nursing staff to meet 5 key care processes required by Nursing Home Reform Law (dressing/grooming; exercise; feeding assistance; changing wet clothes and repositioning; toileting)


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STAFFING RECOMMENDATIONS OF EXPERTS

Direct care staffing standard: 4.13 hours per resident day

Plus administrative nurse staffing Plus mealtime staffing

• Charlene Harrington, et al, “Experts Recommend Minimum Nurse Staffing Standards for Nursing Facilities in the United States,” The Gerontologist, Vol. 40, No. 1, 5-16 (2000).


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NURSE STAFFING REPORTCLINTON ADMINISTRATION

Clinton (Sep. 16, 2000 Radio Address) called for • one billion dollar grant program to boost

staffing levels, improve recruitment and retention, and train caregivers

• establishing minimum staffing requirements within 2 years

• using civil money penalties to improve staffing


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NURSE STAFFING REPORTBUSH ADMINISTRATION

Bush Administration said evidence in Phase II report was insufficient to support change in law or regulation

Staffing initiatives• Feeding assistants (staff with 8 hours of

training to feed residents)

• Nursing facilities to post staffing information, by shift


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INCREASED REIMBURSEMENT FOR STAFFING

Medicare and Medicaid reimbursement increased from $24.8 billion in 1990 to $51.0 billion in 1998• Congress increased rates (by 16.6%) for nurse

staffing component of Medicare rate in 2000 (component includes social services, non-therapy ancillary services, as well as nurse staffing)


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BUT LITTLE CHANGE IN STAFFING LEVELS

1991-1998: staffing levels remained largely unchanged 2000 rate increase did not increase staffing

• Government Accountability Office (GAO), Skilled Nursing Facilities: Available Data Show Average Nursing Staff Time Changed Little after Medicare Payment Increase, GAO-03-176 (Nov. 2002), http://www.gao.gov/new.items/d03176.pdf, found

• Medicare rates were increased 4-12% (on top of prior increases)• Staffing remained virtually stagnant (1.9 minutes increase in nurse

staffing, but less RN, more LPN and aide time)• Staffing increased (15-27 minutes per resident) in 4 states that

explicitly required staff increases• GAO concluded, “increasing the Medicare payment rate was not

effective in raising nurse staffing” (page 4)


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ASSURING HIGH QUALITY

Approaches:• “Mandatory and external

• “Strengthen the regulatory process• “Improve information systems for quality monitoring• “Strengthen the caregiving workforce

• “Voluntary and external• “Providing consumers with more information• “Strengthening consumer advocacy• “Increasing Medicare and Medicaid reimbursement

• “Voluntary and internal• “Developing and implementing practice guidelines• “Changing the culture of nursing facilities”Joshua Weiner, “An Assessment of Strategies for Improving Quality of Care in

Nursing Homes,” The Gerontologist, Vol. 43, Special Issue II (2003)


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MARKET VS. REGULATION

For this presentation, focus on market vs. regulation

An enduring controversy• Reagan Administration: deregulation (although

Nursing Home Reform Law was enacted)

• Clinton Administration: regulation

• Bush Administration: market-based approaches


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2001-PRESENT

Nursing Home Initiative (Nov. 2001)• Public reporting of performance measures

• Technical assistance to facilities through Quality Improvement Organizations

Revisions to State Operations Manual (surveyor guidance)

Quality-based purchasing demonstration


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NURSING HOME INDUSTRY

For this presentation, industry = trade association leadership, not workers

Industry consistently promotes market-based approach to regulation; quality improvement; technical assistance; outcome measures; customer satisfaction


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American Health Care Association (AHCA) (trade association of primarily for-profit facilities)• 2000 Issue Brief called for collaborative

system, spending civil fine money to improve care for residents, preventing the labeling of chains, etc.)

• Similar position each year


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American Association of Homes and Services for the Aging (AAHSA) (trade association of not-for-profit facilities)• Broken and Beyond Repair: Recommendations

to Reform the Survey and Certification System (June 2008), http://aahsa.org

• Calls for “a new oversight model”


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Voluntary initiatives• Quest for Quality (1982)

• Quality First (announced July 2002), http://www.qualityfirstnursinghomes.com/

• Advancing Excellence (Sep. 2006-present), http://nhqualitycampaign.org/


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QUALITY FIRST

Announced July 16, 2002 by 3 national nursing home trade associations (AAHSA; AHCA; Alliance for Quality Nursing Home Care [chain nursing homes]


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QUALITY FIRST

Covenant to commit to 7 core principles• Continuous quality assurance and quality improvement

• Public disclosure and accountability

• Patient/resident and family rights

• Workforce excellence

• Public input and community involvement

• Ethical practices

• Financial stewardship


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QUALITY FIRST

Expected outcomes by 2006:• Continued improvement in compliance with federal

regulations• Demonstrable progress in promoting financial integrity• Demonstrable progress in clinical outcomes• Measurement improvements in CMS quality

improvement measures• High satisfaction on consumer satisfaction surveys• Demonstrable improvement in employee retention and

turnover rates


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QUALITY FIRST

Established and paid for National Commission for Quality Long-Term Care, http://www.qualitylongtermcarecommission.org/ • Co-chaired by former Republican Speaker of

the House of Representatives Newt Gingrich and former Nebraska Senator Bob Kerrey

• Hosted several meetings; issued several reports


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ADVANCING EXCELLENCE IN AMERICA’S NURSING HOMES

Voluntary campaign 8 “measurable goals”

• Reducing high risk pressure ulcers• Reducing use of daily physical restraints• Improving pain management for long-stay residents• Improving pain management for short-stay residents• Establishing individual facility targets for improvement• Assessing resident and family satisfaction with quality

of care• Increasing staff retention• Improving consistent assignment of nursing home staff


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ADVANCING EXCELLENCE

Center for Medicare Advocacy, “The ‘New” Nursing Home Quality Campaign: déjà vu All Over Again” (Sep. 21, 2006), http://medicareadvocacy.org/SNF_QualityCampaign.htm


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Claims to represent residents, equating dollars spent on care with care of residents• AHCA, “American Health Care Association Kicks Off

Quality-Focused Ad Campaign; Inside-the-Beltway Ads Highlight Improved Quality of Care for America’s Seniors and Disabled” (Sep. 12, 2008), http://www.ahcancal.org/News/news_releases/Pages/12Sep2008.aspx

Same initiatives, repackaged• Now industry claims that helping the industry helps the

economy, financial stimulus


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AN ENDURING ISSUE

Reagan Administration: de-regulation Clinton Administration: regulation Bush Administration: market Obama Administration:


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NOW

Nursing home industry proposing to Capitol Hill staff• Less than annual surveys for “top tier” (which

it does not define)

• Back to 1982


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NOW

The financial collapse was caused, in part, by the absence of regulatory oversight of financial institutions. I hope the United States does not make the same mistake by continuing the de-regulation of the nursing home industry. It’s time for re-regulation.


CENTER FOR MEDICARE ADVOCACY, INC.

Toby S. EdelmanCenter for Medicare Advocacy

1025 Connecticut Avenue, N.W.Suite 709

Washington, DC 20036

(202) 293-5760, extension 104(202) 293-5764 (fax)

[email protected]

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