After Skyline, Ownership Transparency Could Emerge as Key Nursing Home Reform

There are generally two schools of thought on how to improve nursing home oversight and care: one focused on cutting red tape and bureaucratic burdens for skilled nursing facilities, and one focused on cracking down on bad actors in the field.

But to make genuine progress in improving quality, policymakers will have to go beyond those competing frameworks, Vanderbilt University School of Medicine professor David Stevenson wrote in a blog post for Health Affairs.

Specifically, the discussions on nursing home oversight, which have ranged from news reports to hearings in the Senate, need to include a focus on transparency in ownership, targeted or responsive regulation, and coordination in the SNF survey and certification process, he argued.


These areas were chosen specifically because of the likelihood they would be budget-neutral or necessitate “modest spending,” Stevenson noted.

Gaps in ownership data

The Centers for Medicare & Medicaid Services (CMS) does make some ownership data available on its website, but the records there are incomplete and hard to use, according to Stevenson. Some steps were taken to improve transparency in ownership after private equity investment and ownership complexity increased in the early 2000s, he acknowledged.

“Still, in the wake of scandals such as Skyline Healthcare, where a single owner acquired almost 100 facilities over a relatively short time period across multiple states before running them into the ground financially and putting vulnerable residents at risk in the process, it is clear that substantial gaps still exist,” Stevenson argued.


Specifically, the CMS data doesn’t allow consumers or regulators to examine owners’ previous record of quality, second layers of ownership for organizations in the data, or the corporate structure of the individual facilities, he noted.

The first step CMS should take is to make more complete data available, both to researchers and to state licensure agencies that assess applications from potential operators. It also should add the ability to compare the care across all the facilities of a given owner, Stevenson said, which would let consumers see if an owner has a track record of providing lower or higher-quality care.

“Beyond ownership, improving the ability to understand where nursing homes spend their resources and gaining a more accurate sense of their financial well-being are important elements of transparency,” he added.

Targeting and coordination

The Trump administration has asked Congress to grant the Department of Health and Human Services secretary the authority to reduce the required survey frequency for top-performing facilities, and reinvest resources for bolstering oversight for the poorly performing ones.

That proposal fits with the administration’s focus on deregulation, but the idea — an example of targeted regulation — is one that has both strengths and limitations, Stevenson argued.

In fact, the Special Focus Facilities (SFF) program — which came under scrutiny earlier this year after two senators released a list of facilities that are considered candidates for the program — has elements of responsive regulation, he said. Under the SFF, CMS and states identify the lowest-performing facilities and assign them more frequent inspections and quality improvement activities.

Still, Stevenson noted that while “improving this small, somewhat ineffective program has been a recent focus of federal policy makers,” it’s hard to visualize and implement a revised survey approach for better-performing SNFs.

“Advocates and others are justified in being skeptical that two key elements of a targeted approach would occur: that regulators could reliably identify better facilities deserving of less scrutiny; and that the oversight system would be sufficiently responsive to detect and respond if care faltered,” he wrote.

CMS has been working on strengthening its oversight of the state survey agencies, chief medical officer Kate Goodrich noted in a podcast interview with Skilled Nursing News.

“We know that there’s been some inconsistencies in how certain aspects of that survey process go, and how findings may be cited and so forth,” she told SNN. “We’ve been really, really focused on trying to improve that consistency and transparency around the process.”

Shortly after that interview, CMS administrator Seema Verma called for reducing the survey frequency for top SNF performers and reinvesting the resulting savings in oversight and quality improvement efforts for the low performers.

When it comes to coordination, “survey and certification process in many states is fraying at the seams,” Stevenson argued. While targeting oversight activities could theoretically address some of the issues of short resources and staffing challenges, a better approach might be to include complementary oversight, he said.

“In addition to state survey agencies, efforts to protect nursing home residents should better leverage the insights and expertise of stakeholders such as long-term care ombudsmen, adult protective services, and local law enforcement agencies,” Stevenson wrote.

The Department of Justice recently announced plans to pursue criminal charges in False Claims Act cases involving nursing homes, which the American Health Care Association argued would not improve care.

Still, at a July Senate Finance hearing, one of the recurring themes was that oversight and enforcement agencies could use existing SNF data to better protect residents, Stevenson noted.

“Indeed, an intentional benefit of nursing homes being so heavily regulated is that there is a plethora of data to characterize nursing home care and where it succeeds and fails, including complaints and incidents, survey deficiencies, and even Medicare claims when residents are sent to the emergency department,” he wrote.

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