Wisconsin Legislative Audit Bureau
98-2 An Evaluation of Nursing Home Regulation, Department of Health and Family Services and Board on Aging and Long Term Care
Both the federal government and the State exercise significant regulatory authority over Wisconsin's 430 nursing homes because of the vulnerability of their approximately 43,000 residents, and because public funds reimburse most care provided to those residents. The Department of Health and Family Services inspects nursing homes, investigates complaints, and imposes corrective actions and penalties when it notes violations of state licensure regulations or federal regulations governing participation in the Medicare and Medical Assistance programs. In addition, the Board on Aging and Long Term Care assists residents, families, and nursing home staff in the resolution of concerns and complaints through ombudsmen who report problems to the Department and perform other consumer education and advocacy roles.
A number of concerns have been raised about the adequacy of the regulatory effort in Wisconsin. Some observers believe the Department maintains an inadequate presence in nursing homes, issues too few citations, and does not fully utilize its authority to impose penalties. Others believe state rules are too weak and too confusing to residents, families, and other lay people interested in nursing home quality to provide the basis for effective enforcement. Finally, some observers are concerned that ombudsmen are not adequately participating in quality assurance efforts.
The Department's Bureau of Quality Assurance, within the Division of Supportive Living, is responsible for regulating nursing homes. The Bureau's fiscal year (FY) 1997-98 budget for regulating nursing homes is $13.4 million, and it employs 255 staff, including 100.75 full-time equivalent staff known as surveyors, who inspect nursing homes. These surveyors conduct routine inspections, known as surveys, to determine compliance with state and federal regulations and to investigate complaints. The Department conducted 2,328 surveys in FY 1995-96 and FY 1996-97. During the same two years, the Department cited 751 violations of state regulations, of which 2.7 percent involved a substantial probability of death or serious harm to residents, and 5,642 violations of federal regulations, 6.9 percent of which involved harm to residents.
The Board on Aging and Long Term Care has an annual budget of $975,300 in
Evidence suggests nursing home regulation in Wisconsin is working reasonably well:
federal regulations were recently revised to place more emphasis on meeting residents'
Currently, federal regulations provide an adequate basis for nursing home quality
assurance. Comprehensive reform of federal nursing home requirements was legislated in
1987. The last set of regulations codifying these reforms went into effect in July 1995.
It extensively changed the process by which the regulations are enforced by shifting the
focus of the surveyors' efforts from nursing home attributes, such as services and
resources provided, to the
The state administrative code, however, is outdated and in need of revision. For
example, the current minimum staffing requirement was adopted in 1974, when the state's
nursing home population included a higher proportion of relatively
Although it is clearly advisable to update staffing requirements, many factors other than the number and types of staff affect the quality of care in a given home. These include staff experience and turnover, the involvement of families, the effectiveness of supervisors and management, and the physical layout of the facility. Consequently, numeric staffing requirements have limitations for quality assurance purposes and cannot mandate adequate staffing in all homes without mandating inefficient overstaffing in some homes. Another type of regulation, known as an outcome-based staffing standard, is being considered for inclusion in the revised state administrative code. This standard requires sufficient staffing to meet residents' needs without prescribing specific numbers or types of staff. Although outcome-based staffing requirements can, in principle, ensure quality care in all situations, enforcement is complicated because it requires surveyors to document that residents' needs are not met and to determine that understaffing is a contributing cause.
Enforcement of the federal
Effective enforcement of any regulation also depends upon the surveyors' presence in
the nursing homes. With the exception of investigations into reports of nurse aide
misconduct, as described in Audit Bureau report
Effective regulation further requires that surveyors consistently issue appropriate
citations for the violations they observe. We could not directly determine whether
surveyors in Wisconsin were appropriately issuing citations because they must use
substantial situation-specific judgment, and because citation patterns have been changing
within Wisconsin and in other states as surveyors gain familiarity with the federally
required process that changed most recently in July 1995. For example, there were changes
in the level of severity identified for federal citations issued by the Department. In
Based on comparisons with other states, it is difficult to conclude whether Wisconsin's surveyors are appropriately enforcing the federal regulations because other states' practices have been inconsistent over time, nursing home quality may differ among the states, and changes in citation rates may differ over time as a result of changing conditions within homes. However, significant differences in the rate at which homes are cited among the Department's five regions are not likely to be the result of differences in the quality of the homes surveyed. For example, during the first nine months of 1997, one of the two units of Milwaukee surveyors found no deficiencies in 28.8 percent of the homes it surveyed, while the other unit found no deficiencies in only 2.3 percent of the homes it surveyed. Among other units in the state, comparable rates ranged from 2.8 percent to 37.9 percent. Although the Department has undertaken some measures to standardize surveyor decisions, we have included recommendations that it conduct further analysis of these regional differences and provide training as appropriate to ensure surveyors statewide issue citations consistently.
After citations are issued, the next step in the enforcement process is the imposition of remedies and penalties. For those nursing homes with only isolated violations that are corrected promptly, penalties appear to be effective. However, the existence of unresponsive nursing homes, which are repeatedly cited with many or serious violations, indicates weakness in the regulatory system. Unresponsive nursing homes could be defined as those with a relatively large number of violations in two or more consecutive periods, or those with more than one serious citation in each of two or more consecutive periods. When we compared the 10 percent of the nursing homes that received the most citations for each year from FY 1993-94 through FY 1996-97, we found that 29 homes ranked among the most-cited 10 percent in two or more consecutive years. During the same four-year period, 13 nursing homes were cited for multiple serious violations in two or more consecutive years.
Federal penalties are intended to encourage compliance by allowing nursing homes to avoid all penalties if they correct problems promptly. As a result, federal financial penalties are rarely imposed. During FY 1995-96 and FY 1996-97, 356 nursing homes were cited with violations of federal regulations but corrected them and, therefore, incurred no penalty. However, federal penalties are imposed when nursing homes do not correct cited violations, and they are applied with more severity in cases of unresponsive homes. Possible federal penalties include:
Repeated federal violations of a serious nature can lead to a nursing home's designation as a "poor performer," which makes the home subject to federal penalties for future violations regardless of correction. However, a nursing home cannot be designated a poor performer unless the repeated violations are very severe and are widespread. Since July 1995, when this penalty structure went into effect, only two nursing homes in this state have been designated as poor performers.
In contrast to federal financial penalties, state financial penalties are intended to punish rule violators and are, therefore, considered for every state rule violation. State statutes, however, give the Department wide discretion in determining the amounts of state forfeitures required of cited nursing homes, taking into account the homes' good-faith efforts to correct problems. No financial penalty is assessed for some state violations.
Although the state penalty structure is intended to punish rule violators consistently, it has weaknesses that may be limiting its effectiveness with unresponsive nursing homes. First, many believe the financial penalties provided by state statutes are too small to be significant incentives for homes to remain in compliance with regulations. The maximum amounts have not been adjusted since 1977. If they were adjusted simply to reflect inflation, the maximum penalty would increase from $5,000 to $20,870 for class A violations, which are the most serious category; from $1,000 to $4,174 for class B violations; and from $100 to $417 for class C violations, the least serious category.
Second, the Department's statutory authority for taking strong action against unresponsive homes has ambiguities that result in more lenient application than the Legislature may have intended. For nursing homes that have repeated violations above a certain level of seriousness, statutes allow the Department to assess triple forfeitures for the second violation. In practice, the Department has decided against assessing enhanced penalties in cases in which it cited repeat violations of the same rule but determined that the circumstances surrounding the two violations were different. During FY 1995-96 and FY 1996-97, triple forfeitures were assessed only 38 times, even though repeat violations of the same section of code occurred 77 times.
Because only a few nursing homes have serious violations in consecutive surveys, strengthening the triple forfeiture provision would not affect the large majority of nursing homes in Wisconsin. To strengthen state penalties, the Legislature could consider:
Furthermore, in the last step of the regulatory process, appeals of cited violations and assessed penalties can lead to substantial reductions in the amounts paid by nursing homes that violate state rules. When a nursing home objects to a citation, the first step is for the nursing home to request an informal dispute resolution conference. This conference, part of the required federal survey process, provides the nursing home with an opportunity to present all evidence pertaining to the alleged violation. We found that although the Department has changed a large proportion of its citations as a result of these conferences, the majority of changes were of no consequence to the enforcement action taken. However, nursing homes also appeal a large number of the citations issued and penalties assessed. Appeals of most federal citations and penalties are outside the control of the Department, but nursing homes that appeal state citations and forfeitures frequently obtain significant reductions through settlement conferences with the Department's legal staff.
Nursing homes can separately appeal the statements of deficiency, which include citations issued as the result of a survey, and the forfeitures themselves. Department attorneys schedule informal settlement conferences for each appeal, to attempt to resolve the appeal without litigation. In FY 1995-96 and FY 1996-97, nursing homes appealed 192, or 60.6 percent, of the 317 state statements of deficiency issued, and 153, or 67.7 percent, of the 226 state forfeitures assessed. As a result of settlement conferences initiated by its attorneys, 23.8 percent of the appealed statements of deficiency were withdrawn by the Department and 4.8 percent were changed in some way, such as by withdrawing at least one citation. The Department agreed to reduce or withdraw 67.0 percent of the appealed forfeitures as a result of settlement conferences.
Although citations and assessed penalties have been considered and discussed at several levels within the Department by the time they are appealed, and although nursing homes have had an opportunity to present evidence that might contradict the surveyors' findings before the settlement conference, it appears that the Department's legal staff is concerned that these citations and penalties might be overturned on appeal if they are not settled informally through negotiation. To obtain greater consistency, we suggest the Department examine the reasons for the discrepancy between the actions recommended by the regulatory staff and those taken by the legal staff.
Because surveyors cannot constantly be present in every nursing home, effective
regulatory enforcement also depends, in large part, upon the ability and willingness of
residents and their families to take appropriate action when they experience or observe
incidents of poor-quality care. Both the Department and the ombudsmen could be doing more
to enable residents, families, and others interested in
Second, the Department could communicate more effectively with complainants. Federal
regulations require that information on how to contact ombudsmen and departmental
officials be posted in each nursing home, and both state and federal regulations require
that residents have access to regulatory agencies and client advocates. Although the
Department has directed surveyors to speak with all complainants before or during a
complaint investigation, this is not consistently done. Form letters acknowledging receipt
of complaints do not describe the
Although ombudsmen employed by the Board on Aging and Long Term Care are expected to
provide assistance to the surveyors by monitoring conditions in nursing homes, reporting
questionable conditions in a timely and useful manner, observing the surveys themselves,
and providing assistance to nursing home staff, residents, and their families that might
serve to prevent or correct some problems without departmental action, the number of
ombudsmen has limited their ability to perform all the roles assigned to them in federal
and state statutes. The ombudsmen are responsible for monitoring approximately 2,300
facilities, including nursing homes,
Ombudsmen report less activity in their other roles of monitoring
The Board and ombudsmen attribute their inability to carry out all the missions
assigned to them to an insufficient number of staff. A national standard set by the
federal Institute of Medicine recommends 1 ombudsmen for every 2,000
The Board and ombudsmen have adopted some practices to alleviate the effects of low
staff numbers, including focusing the efforts of each ombudsman on five or six nursing
homes in which the ombudsman suspects
In addition, the Department and the Board are undertaking some efforts to improve cooperation and coordination by expanding a memorandum of agreement to establish:
We include an additional suggestion that the Board and the Department encourage more direct communication between surveyors and ombudsmen.
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