PERFORMANCE AUDIT REPORT: Kansas' Nursing Home Inspections: A K-GOAL Audit Determining Whether They're Carried Out In a Reasonable Manner

Executive Summary with Conclusions and Recommendations

A Report to the Legislative Post Audit Committee

By the Legislative Division of Post Audit

State of Kansas

December 2001

Kansas law makes the Department of Health and Environment responsible for licensing and regulating adult care facilities. This audit focused on the Department's oversight of long-term care nursing facilities (referred to throughout this report as nursing homes) for the elderly and mentally ill.

To comply with State law and federal regulations, the Department must inspect each nursing home at least once every 15 months. Inspections are conducted to determine whether nursing homes are deficient in one or more practices required by State or federal regulations. Deficiencies are rated based on classification guidelines established by the Health Care Financing Administration in 1994, and are classified into one of 12 categories (A - L) according to their scope (the number of residents potentially or actually affected) and their severity (the harm or risk of harm to residents).

Question: Does the Department of Health and Environment's Nursing Home Inspection Program Ensure That All Nursing Homes Are Treated Consistently and Fairly?

For the 16-month-period through June 30, 2001, Department inspectors cited more than 5,000 deficiencies in Kansas nursing homes. Inspectors look at many issues when inspecting a nursing home, including residents' rights, quality of life, quality of care, and nursing services. Most deficiencies cited during this period were at the lower severity levels (A-F), however, about 15% were classified as "G-level" or above. Legislators and industry association officials we talked with said their primary concern was with deficiencies classified as "G" or higher.

Most Department staff think they receive adequate training on classifying deficiencies. About 85% of the respondents said that the training they received about how to recognize and classify deficiencies was adequate, and that the "G" and above deficiencies their inspection teams cited were properly classified.

Although most nursing home administrators think higher-level deficiencies are classified incorrectly, relatively few appeal the Department's findings. Less than half of the administrators who responded to our survey thought Department inspectors properly classified deficiencies, particularly those deficiencies classified as "G" or higher. Administrators who think inspection teams have incorrectly classified deficiencies can appeal that decision. Only about 6% of the deficiencies cited during a recent 8-month period were appealed to the regional manager. Nursing home administrators expressed several concerns about the Department's appeals process, saying it's difficult to get an impartial hearing, information they provide isn't considered during appeals, and they're afraid the Department will retaliate against them.

Significant regional differences exist in the number of deficiencies cited at nursing homes, but there's little solid evidence to explain why. For the 16-month-period through June 30, 2001, the average number of deficiencies cited per resurvey inspection ranged from a high of 12.4 deficiencies in the South Central region, to a low of 4.2 in the West region. Although many nursing home administrators think inspection teams aren't consistent, administrators in regions with the highest number of deficiencies cited were much more critical of the Department's inspectors than were their counterparts in other regions of the State. Department officials theorize that regional differences in the number of deficiencies cited may reflect real disparities in the conditions of nursing homes. When we accompanied inspection teams from each of the 6 regions, we saw a few situations that represented real or potential inconsistencies among inspectors.

Some Department practices may contribute to inconsistencies among inspection teams, or could be changed to better identify and address the inconsistencies that do exist. They include: the Department hasn't provided inspectors with clear guidance on when it's appropriate to discuss a concern with a nursing home instead of citing it as a written deficiency, a recent change in how training is conducted could exacerbate regional differences, and the Department could refocus at least some of its current quality assurance systems on evaluating whether inspectors are making the "correct" decisions.

Conclusion: Regulatory agencies exist to protect the public interest. In its role as regulator of nursing homes, the Department of Health and Environment must carry out its responsibility to ensure the well-being of the vulnerable residents of these facilities while remaining cognizant of the needs of the industry to operate in an efficient and fiscally prudent manner. Regulatory actions that are inappropriately stringent could damage the industry, and ultimately limit the choices available to elderly Kansans. From the documents we were able to review, it appeared that Department inspectors were correctly categorizing the problems they observed. And although there will never be absolute consistency in inspections because of the amount of judgment involved, we found the Department has designed a reasonable process for trying to ensure that inspections are accurate and consistent. Still, there are significant differences between regions in the number of deficiencies cited, and even during our limited observations while accompanying inspectors we saw a few situations where violations either were or could be treated differently by different inspection teams. While we didn't identify any fundamental flaws in the current inspection process, we think the Department can take additional steps to improve the consistent application and interpretation of regulations governing nursing homes.

Recommendation: We recommended that the Department of Health and Environment take several actions, including: re-evaluate its new-inspector training program, provide written guidance for its inspectors about when it is appropriate to express a concern to a nursing home administrator through verbal comments, expand the central office's review of inspection reports completed by staff from all 6 regions, and increase the number of observations that quality improvement staff make of inspection teams each year. During each observation, Department observers should formally assess and record how well the inspectors performed their required tasks, and not just whether those tasks were performed.

In its response, the Department of Health and Environment agreed with the report's recommendations.

APPENDIX A: Scope Statement

APPENDIX B: Agency Response

This audit was conducted by Joe Lawhon, John Curran, and Carol Porter. Cindy Lash was the audit manager. If you need any additional information about the audit's findings, please contact Mr. Lawhon at the Division's offices. Our address is: Legislative Division of Post Audit, 800 SW Jackson Street, Suite 1200, Topeka, Kansas 66612. You also may call us at (785) 296-3792, or contact us via the Internet at LPA@lpa.state.ks.us.