Does ADHS’ Substandard Performance Regulating Long-term Care Facilities During the Ducey Administration Call for a System Overhaul or Just More Accountability?

Arizona has a hybrid public/private assurance model for regulating the care at nursing homes and assisted living facilities and homes. Facilities in both categories have the option of having the state health department surveyors come out for an annual inspection to evaluate their adherence to state licensing rules or hire a 3^rd party contractor (that they pay for) to come out for a certification visit.  That paperwork can then be turned in to the state in lieu of a state survey. That’s called “deemed status” licensure ARS 36-425. Note: Nursing homes who bill Medicare/Medicaid can’t do accreditation in lieu of state licensure inspections because of the contracts they have with CMS.

Complaint investigations (which often provide valuable information to identify poor or dangerous care) have always been the responsibility of ADHS – and those complaint investigations can’t be outsourced to 3^rd parties.

CMS’s Assurance Role

In addition to the ADHS-driven regulatory process, the Centers for Medicare & Medicaid Services (CMS) has an assurance process for facilities that care for Medicare or Medicaid members for which they are the payer. CMS doesn’t regulate the facilities per-se (CMS doesn’t have the authority to issue a state license), but they do want to make sure they’re paying for quality care. CMS has their own care standards which they call Requirements of Participation.

Note: CMS is often the primary payer for care in nursing homes – but they don’t pay for assisted living services.

CMS doesn’t come out to Arizona to verify whether a facility is adhering to their standards. Instead, they contract with state health department inspectors (ADHS) to verify whether a facility is adhering to their requirements of participation standards. ADHS has a contract with CMS to do annual inspections to verify whether a facility is adhering to CMS’ standards.

Not all nursing homes take Medicare/Medicaid funds – and facilities that don’t take CMS money don’t need to comply. Because CMS doesn’t pay for care in assisted living centers and homes, they don’t get inspected by ADHS for CMS standards (just the state licensing requirements).

What Would SB1293 Do?

A legislator is proposing a measure SB1293 which would also outsource complaint investigations. The bill would charge ADHS with contracting with a 3^rd party certification organization to do all the annual inspections and complaint investigations. It’s unclear to what standard the 3^rd party would hold the facility to (state licensing rules?). ADHS would use their licensing fees to hire the 3^rd party.

Here are the specific provisions in SB1293:

• By July 1, 2024, ADHS would contract with a 3^rd party to conduct all inspections, complaint investigations and survey duties for assisted living & skilled nursing facilities.
• The contracted 3^rd party would inspect each facility twice per year and conduct supplemental inspections in response to complaints. All inspections would be unannounced.
• It would also take away the deemed-status provision currently in law that allows facilities to hire their own certification entity and turn that in for deemed status licensure (a good thing).
• Facilities would also be required to post a sign in each patient’s or resident’s room with information about how to make a complaint regarding abuse or neglect (a good thing).
• The 3^rd party ADHS hires would be required to file an annual report regarding the condition of all long-term care facilities, inspection and survey results and the disposition of complaint investigations.

Why the Effort to Overhaul the System?

There’s a great deal of frustration among legislators and the public regarding ADHS’ performance regulating nursing homes during the Ducey Administration (specifically, while Cara Christ was Director and Colby Bower was running Licensing).

See: Auditor General’s Office Produces Scathing Review of ADHS’ Nursing Home Complaint Investigations During the Director Christ Era

A 2019 Arizona Auditor General Report found, among many other things, that ADHS (during the Director Christ era) failed to investigate, or timely investigate or resolve many long-term care facility complaints. The report laid out 4 key areas where performance improvement was needed. The state legislature even followed through, giving the agency an additional $1.6M to hire staff, however, Christ/Bower used very little of that money and made very little progress correcting the problems found.

In fact, a follow-up report issued in 2022 concluded that the agency had not implemented any of the required changes, and also found these disturbing findings:

• Between 7/1/19 and 4/21/21 ADHS (under the leadership of former Director Christ and Assistant Director Colby Bower) lowered the priority level of 98% of their open high priority complaints, giving them months more time to investigate and giving the appearance they were making improvements (high risk complaints need to be done in 10 days vs months for the others).
• ADHS leadership CLOSED 79% of those former high priority complaints without ever doing an investigation.
• ADHS leadership CLOSED 82% of high priority facility self-reports after changing them to medium and then closing without an investigation.
• In the second half of 2019 (before the 1st auditor general report) ADHS had classified 42% of nursing home complaints as high risk. After the report was published – the % of complaints classified as high risk dropped to only 4% (July – Dec. 2020).
• ADHS did not post complaints on AZCARECHECK (the public disclosure site) unless there was an investigation…  but because they closed out most complaints without an investigation, thousands of those complaints never made it to their website- further greatly limiting the ability of family members to make informed decisions.

Is SB1293 the Answer to ADHS’ Substandard Performance During the Ducey Administration?

It’s easy to see why legislators would be frustrated with ADHS’ performance during the Ducey/Christ Administration. After all, assuring adequate care for Arizona’s most vulnerable persons is among state government’s most important responsibilities. It’s also easy to see why it’s attractive to some legislators to outsource the work to 3^rd parties after they observed several years of substandard performance by the executive branch.

CMS pays for about 60% of Arizona’s federal and state survey process. As such, overhauling the statute would also require CMS to approve the changes that SB1293 would make. Note: No other state has done a total privatization of the survey process.

The question becomes: Is the system irreparably broken and in need of a complete overhaul or is a better answer to hold ADHS accountable for their regulatory responsibilities?

I would argue that the primary problem isn’t the existing statutory framework for regulating long term care facilities. Rather, poor senior agency leadership and the failure of the Governor’s office to hold ADHS accountable for making the corrections identified in the 2019 Auditor General’s report that is the primary problem.

So, What’s a Better Solution? 

I suggest the Legislature exercise vigorous oversight authority of the executive branch (ADHS) charging the Department with quarterly reports of their progress followed by an in-depth Arizona Auditor General’s Office to assess the agency’s progress.

 

If ADHS performance doesn’t improve, perhaps the reforms in SB1293 need to be implemented…  but it would be inefficient to make drastic statutory changes when all that was needed was better agency leadership.