Bloomberg Law
May 13, 2022, 9:35 AM

Cash Influx Aimed at Tackling Nursing Home Inspection Woes

Tony Pugh
Tony Pugh

The Biden administration’s call to boost funding for nursing home inspections should improve state and federal oversight, but the extra money alone isn’t likely to fix longstanding problems that have undermined the process for years, resident advocates say.

The Centers for Medicare & Medicaid Services is responsible for inspecting and certifying that most of the nation’s 15,000-plus nursing homes meet federal health and safety guidelines required to participate in both programs. The agency contracts with state “survey” agencies to inspect facilities at least once every 15 months and after complaints and incidents of noncompliance.

The Covid-19 deaths of more than 200,000 nursing home residents and staff have only magnified the urgency of that mission. But the annual appropriation for inspection and certification activities at nursing homes and other medical facilities has remained at just over $397 million since fiscal year 2015, the agency reports. President Joe Biden‘s budget calls for hiking that amount by nearly $97 million to $494.3 million in FY 2023.

“At this funding level, CMS projects that survey agencies will be in a better position to identify deficiencies” in nursing homes that, if left unaddressed, can reach the most severe levels of noncompliance: “actual harm” and “immediate jeopardy” for Medicare and Medicaid beneficiaries, according to the agency’s funding request.

But federal watchdog agencies and patient advocates have said that’s already happening in nursing homes because state survey agencies have a long history of under-reporting serious violations, or “deficiencies,” at the facilities.

“That, to me, is far and away the No. 1 issue,” Richard Mollot, executive director of the Long Term Care Community Coalition, said. “Yes, survey agencies need more money. And yes, that would help in a number of ways. They tend to be understaffed, and the staff tend to not have great salaries.

“But, fundamentally, if you’re not changing the approach and if you’re not ensuring that the state agency is acting as an advocate for residents,” problems with unreported and underreported deficiencies are likely to continue.

Longstanding Woes

In 2008, the Government Accounting Office found that weak investigative skills by surveyors and their inability to properly analyze the data they collected contributed to significant understatement of serious care problems at nursing homes. A follow-up study in 2009 noted that “workforce shortages and training inadequacies affected states’ ability to complete thorough surveys, contributing to understatement of nursing home deficiencies.”

Similar problems with staffing at survey agencies continue today. A January 2022 study by the Health and Human Services Office of Inspector General, which called for better federal oversight of state survey agencies, also found that many states weren’t “conducting high-priority complaint surveys or standard surveys within required timeframes.”

Most states blamed staffing shortages for the problem and the “inability to attract and retain surveyors, often due to not being able to offer high enough salaries to compete in local markets,” the 2022 OIG study found.

“It’s hard for them to hire surveyors because it’s not a great salary and it’s a hard job. You’ve got to travel and do on-site inspections. And nurses, who are the primary category of surveyors, can have higher paying jobs doing something else that’s probably easier. So it’s a difficult position to fill,” said Toby Edelman, a senior policy attorney with the Center for Medicare Advocacy.

‘Backlog of Complaints’

Hiking the CMS inspection budget to nearly $500 million would address a “backlog of complaints” and rising costs in the inspection and certification program due to a growing number of beneficiaries, the agency’s budget request said.

Of the $494 million sought from Congress, nearly $322 million would go for the Medicare portion of nursing home inspections in FY 2023, up from nearly $309 million in FY 2022.

The extra money would fund an estimated 83,000 initial, recertification, and complaint surveys at nursing homes in FY 2023, up from a projected 80,000 in FY 2022. In FY 2023, long-term care facilities, like nursing homes, will make up more than 90% of the CMS’ complaint surveys, the agency estimates.

In addition, the CMS projects that states will need to conduct about 3,000 infection-control inspections at nursing homes in FY 2023. The Coronavirus Aid, Relief, and Economic Security (CARES) Act provides at least $100 million to help meet increased inspection costs due to Covid-19.

But that funding expires at the end of FY 2023 and the CMS expects states will “need to maintain this workload and retain the level of their trained workforce, even after the CARES Act funding is exhausted,” the agency noted in its funding request.

Evaluating Survey Agencies

The CMS evaluates state survey agencies each year on a number of measures to determine whether they’re meeting their responsibilities. The agency can impose a number of remedies, including corrective action plans and financial penalties for poor performance.

But “given that survey agencies have been underfunded for years despite growing workloads, further restricting funds would be counterproductive towards ensuring the health and safety among nursing home residents,” CMS Administrator Chiquita Brooks-LaSure said in a December 2021 letter to the HHS OIG in response to its study.

Instead, the agency tries to work with struggling survey agencies to correct problems by offering training, sharing best practices, and even providing “a one-time monetary adjustment” to agencies with persistent problems “to establish key benchmarks to drive performance,” Brooks-LaSure said.

In her letter, Brooks-LaSure said that in 2015, 16 states failed the quality measure for adequate documentation of deficiencies. “However, after CMS worked directly with individual states, fewer started failing this measure, and in 2019 all states met the measure requirements.”

The January HHS OIG report called for the CMS to improve its oversight of survey agencies that do a poor job with nursing home inspections.

It recommended that the agency: actively monitor states’ corrective action plans; establish guidelines for progressive enforcement actions; engage with senior state officials earlier and more frequently to address problems; and revise the State Operations Manual to reflect current CMS oversight practices.

The CMS agreed with all the recommendations.

To contact the reporter on this story: Tony Pugh in Washington at

To contact the editors responsible for this story: Brent Bierman at; Karl Hardy at