GAO Releases Report on Poor Perfoming Nursing Homes

In 1998, CMS created the Special Focus Facility initiative or program designed to target or focus attention on improving the poorest performing facilities (performance defined by survey/compliance history).  Each state selects up to 15 of the poorest performing facilities until the program reaches its cap or maximum of 136 facilities.  The requirements from CMS to the states with regard to these identified facilities include more frequent surveys (double the number of average performing facilities), increased penalties, fines and enforcement action to hopefully create more direct movement to improvement and program termination or decertification if improvement is not made within eighteen to twenty-four months.  The GAO was enlisted to assess how states identify the poor performing facilities, to evaluate the effectiveness of state and regional CMS enforcement of the guidelines, and to identify if other strategies are used to improve performance.  The GAO reviewed CMS data from 2005 to 2009 of the facilities in the SFF and selected others and conducted interviews with various officials in fourteen selected states (states selected based on the number of SFF facilities).

What the GAO found was that states often failed to select SFFs from the available data supporting the poorest performers.  In other words, the states only selected SFFs from the five worst performing facilities about 57% of the time.  Factors influencing state selection included whether a particular facility had a change of ownership and such as change was perceived by the state as a movement toward improvement.  In addition, states often selected from possible candidate lists which included current SFFs, limiting the number of potential facilities to target or to address.  In effect, the GAO noted that what should have been “cleansed” candidate lists by virtue of SFFs improving or getting decertified from program participation, ended up being lists that contained facilities with a consistent year over year track record of poor performance.  The GAO further noted that the bulk of facilities in the SFF group are chain or for-profit owned, typically larger in bed size than the remainder of the average to better performing facilities.

In terms of program integrity, the GAO discovered that some states did not follow the SFF requirements.  For example. while survey frequency was better than a few years ago when 26 states failed to comply with twice yearly requirements, certain states (8) still failed to comply with the frequency guidelines.  Additionally, imposition of remedies and enforcement actions varied widely as a result of vague and inconsistent interpretations from CMS.  For example, the report notes that one facility was assessed no Civil Monetary Penalties (CMP) for repeat violations even though established criterion provided for fines of $825 per day.  In another instance, a facility with similar compliance problems to the facility that received no CMPs was assessed CMPs that increased from $300 to $600 per day for non-compliance.  The GAO notes that most facilities did improve beyond the SFF designation although some remained in the SFF program designation substantially longer than the 18 month window for improvement.  The report cites 17% of SFF facilities remained in the program (as of February 2009)  for longer than twenty-five months. 

Per the GAO, some states have undertaken additional or supplemental initiatives and actions to improve SFF performance.  These actions include requiring a facility to employ quality consultants, charging facilities for additional survey costs, providing training and technical assistance to the facilities and allowing one facility per state to work with a CMS designated contractor to identify core causes of repeat non-compliance.

The following recommendations are contained in the report.

  • Expand the program’s public disclosure strategy by directing states to notify facilities that they have been selected as SFF candidates and are “at-risk” of being selected as an SFF.
  • Revise the SFF candidate list by removing homes that are already SFFs so that states have the largest possible number of potential facilities to choose from.
  • Ensure that states impose more stringent enforcement including the highest levels of CMPs permissible and termination as warranted.  Clarify SFF sanctions and monitor to ensure sanctions are applied as required.
  • Provide regional CMS offices with descriptions that should be a part of their Systems Improvement Agreements (SIA) and monitor any lessons learned from their use.
  • Coordinate more directly with HSS and the OIG regarding their experiences with Corporate Integrity Agreements. See a related post I wrote regarding OIG and Compliance Requirements for Boards of Directors at
  • To offset the costs of the program and to provide an additional incentive for SFFs to improve, the GAO recommends that CMS obtain legal authority to imposed additional fees to a facility for increased surveys.

Below I’ve pulled out (from the report) some key SFF facility demographics.  The data represents only facilities within the SFF program.

  • Average number of beds (size): 131
  • Average occupancy: 78.6%
  • Payer Mix:
    • Medicare: 12%
    • Medicaid: 70.8%
    • Other: 17.2%
  • Ownership::
    • For-Profit: 81.2%
    • Non-Profit: 15%
    • Government: 3.8%
    • Chain Affiliated (for profit): 54.9%
    • Chain Affiliated (non profit): 9%
  • Nursing Staff Hours Per Day: 3.48
    • Registered Nurses: .31
    • Licensed Practical Nurses: 1.04
    • Certified Nursing Assistants: 2.39
  • Five Star Rating: 97% at 2 stars or below (74% at 1 star)
    • Health Inspection Component at 1 Star: 92.5%

The full report is available at this link:



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