An Audit Report on Administration of Nursing Facility Contracts at the Department of Aging and Disability Services and the Health and Human Services Commission
April 2005
Report Number 05-033
Overall Conclusion
To ensure that residents in Medicaid-certified nursing facilities are adequately protected and receive quality services, the Department of Aging and Disability Services (Department) should:
- More promptly investigate high-priority complaints and incident reports as required by state and federal law.
- Ensure that its nursing facility inspectors consistently cite and sanction nursing facilities when they identify deficiencies.
- Strengthen its monitoring of nursing facilities' financial stability and registered nurse staffing levels.
The Health and Human Services Commission (Commission) recouped $13.5 million in fiscal year 2003 from nursing facilities that incorrectly reported the level of effort necessary to meet residents' actual needs. (The Medicaid payments that nursing facilities receive are based on the level of effort they report for each Medicaid resident.) However, the Commission could recoup more by focusing its resources on the highest-risk nursing facilities. The Commission also could reduce facilities' reporting errors in this area by more frequently imposing sanctions on facilities that systematically overstate the level of effort necessary to meet residents' needs. In addition, the process the Commission uses to review nursing facilities' annual cost reports (which provide the data used to calculate base payment rates for nursing facilities) is adequate.
Both the Department and the Commission should better secure access to the primary automated system used to record and track information regarding nursing facilities. However, nothing came to our attention to indicate that there had been any instances of unauthorized access to this system.
In conducting this audit, we also identified other significant issues for consideration. Although there are no state or federal requirements in the following areas, measurements in these areas could be important indicators of the quality of care that nursing facility residents receive:
- Approximately 62 percent of Medicaid-certified nursing facilities in Texas do not meet the lowest minimum certified nurse aide staffing level suggested by the U.S. Centers for Medicare and Medicaid Services (CMS). According to CMS, its suggested minimum certified nurse aide staffing level is the level that would be necessary to reduce the risk of diminished quality of care.
- In their 2003 cost reports, Medicaid-certified nursing facilities in Texas reported that their overall staff turnover rates exceeded 100 percent. Studies have noted that high turnover can adversely affect nursing facilities' quality of care and financial stability.
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