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OIG Report Details Problems with CMS Oversight of State Survey Agencies

January 25, 2022

Last week, the Office of Inspector General for the U.S. Department of Health and Human Services (OIG) released a report, CMS Should Take Further Action to Address States with Poor Performance in Conducting Nursing Home Surveys (OEI-06-19-00460), detailing problems with the Center for Medicare & Medicaid Services’ (CMS) oversight of state survey agencies.  The report looked at the years 2015-2018 for all fifty states plus Puerto Rico and the District of Columbia. OIG found that over half of state survey agencies repeatedly failed to meet federal performance measures, with some states never meeting certain standards. The OIG made several recommendations, with which CMS mostly agreed.

Per agreements with the federal government, each state is required to oversee nursing homes, which includes annual surveys along with complaint investigations. CMS is charged with monitoring each state’s performance in several areas, including timing and quality of surveys and how a state uses enforcement and remedies. CMS has created a performance standard system (State Performance Standards System) to conduct these evaluations. When states fail to meet these standards, CMS has a variety of remedies it may use to address these failures, including training and corrective action plans. Additionally, CMS has the option to use financial sanctions and escalating the issue to state officials, including the governor.

To conduct its investigation, OIG reviewed performance evaluations, CMS’s use of remedies, and spoke with CMS’ central office and regional offices to conduct its investigation.

Key findings from the report include:

  • Over half of states failed to meet the same performance measure or measures over 3 or 4 years.
  • The most common type of state performance failure was timeliness of surveys.
  • CMS relied on corrective actions plans to address performance failures, but many of these plans were missing from CMS files and lacked detail. As a result, these plans did not lead to improvements in many states.
  • CMS heavily relied on remedies such as training and technical assistance to survey agencies.
  • When CMS did impose financial penalties, it frequently offset these penalties by increasing funding in other areas.
  • CMS rarely escalated issues of poor performance to senior state officials and infrequently imposed formal sanctions.
  • 8 out of 10 regional offices used performance benchmarks to incentivize state compliance, which involved withholding federal match funds for survey and enforcement until states met certain benchmarks.  OIG found this to be effective in at least one state.

OIG noted that CMS attributed many of the timeliness failures to lack of staffing at the state survey agencies.

The OIG report made several recommendations:

  • Actively monitor the use and effectiveness of States’ corrective action plans and other remedies, with a focus on making the remedies specific and outcome oriented.
  • Establish guidelines for progressive enforcement actions, including the use of sanctions, when persistent or egregious performance problems emerge.
  • Engage with senior State officials earlier and more frequently to address State performance problems.
  • Disseminate results of State performance reviews more widely to ensure that stakeholders become aware of problems.
  • Revise the State Operations Manual to reflect current CMS practices in overseeing State survey performance.

CMS Administrator, Chiquita Brooks-Lasure, in a letter dated December 3, 2021, concurred with all the recommendations made by the OIG report, although noted that she believed CMS was already sufficiently disseminating results of performance reviews. OIG did note that CMS did release this information, but it could more easily accessed.

A timely and strong enforcement system is critical for assessing whether residents are receiving the care and services to which they are entitled under the Nursing Home Reform Law.   The Consumer Voice is encouraged that CMS is willing to take steps to address the issues in the OIG report but remain concerned that there is much more work to be done to ensure residents are protected.  Congress and CMS must allocate the necessary funding for the survey and enforcement system in order to ensure that nursing homes fully comply with federal standards.

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