When CMS takes aim at the worst nursing homes, it often misses

This article is the first installment in “Chronic Conditions," a three-part series on CMS’ Special Focus Facility program. Part two published on Dec. 10 and part three published on Dec. 11.

Nursing homes are beset by pervasive, longstanding quality and safety issues. A little-known federal program that targets the worst of the worst is failing to foster lasting improvement.

Congress and President Bill Clinton created the Special Focus Facility program, or SFF, in 1998 to rehabilitate the most troubled nursing homes. The program identifies the skilled nursing facilities with the most severe problems and subjects them to more frequent inspections and enforcement actions until deficiencies are corrected — or not, in which case they can be banned from Medicare and Medicaid.

Yet the program's impact has been limited by budget cuts and an enforcement stance patient advocates see as too lenient.

One in three skilled nursing facilities has been cited by federal or state authorities for abuse, neglect or mistreatment, according to data from the Centers for Medicare and Medicaid Services. Even among the maximum 88 nursing homes selected for the Special Focus Facility program, it’s common for regression to swiftly follow progress.

“Overall, we do think that the program has led to improvements in many of the worst-performing nursing homes in this nation,” a CMS official said. “Certainly, we think it could be more effective with additional resources.”

CMS and states are underfunded and overwhelmed, and the SFF program’s shortcomings demonstrate the scale of the challenge.

The Senate Aging Committee reported that, as of March 2023, 28% of the nation's 15,000 nursing homes had not undergone a comprehensive annual inspection for at least 16 months as states fell behind the legally required schedule. A backlog still persists.

Absent new enforcement authorities and financing, or a transformation of the business of skilled nursing, poor quality nursing homes will continue to house and care for some of the nation’s most vulnerable people.

Consider Viviant Healthcare of Murfreesboro in Tennessee. Residents complained of abusive employees and unsafe conditions. CMS eventually intervened, but the nursing home failed to improve and later shuttered.

The SFF program is simply insufficient to the challenge, said David Grabowski, a professor of health policy at Harvard Medical School. “There's a fair number of nursing homes that deserve this increased scrutiny and attention, and I think the list of Special Focus facilities is probably too short,” he said.

The consequences include deteriorating safety and quality, burned-out employees and few ramifications for the people and corporations that own and operate the worst nursing homes — at a time when the need for long-term care is greater than ever.

CMS has intensified oversight and enforcement as part of President Joe Biden’s broader efforts to promote long-term care safety and quality, which include updates to SFF and greater transparency about nursing home ownership.

But the agency and state regulators also must balance accountability for bad nursing homes against preserving access to care for an aging population.

“The majority of nursing homes provide high-quality care to millions of residents each year,” Holly Harmon, senior vice president for quality, regulatory and clinical services at the American Health Care Association/National Center for Assisted Living, said in a statement.

Chronic issues of patient neglect and abuse plagued Viviant Healthcare of Murfreesboro when Tennessee surveyors arrived for an inspection in January 2023.

The investigation uncovered severe neglect, poor sanitation and mismanagement. The nursing home was deficient in maintaining adequate care plans, as well as isolation protocols to protect workers and residents from infectious diseases such as COVID-19, the state inspectors found.

Viviant Care Management, the nursing home’s Bristol, Tennessee-based for-profit owner, failed to pay vendors, which hampered administrators’ efforts to repair the facility. Patients told inspectors that employee misconduct fostered a hazardous environment. Residents had to deal with broken toilets, sinks that leaked and flooded hallways, the surveyors found.

"I must go in my briefs because the toilet hasn’t flushed since I have been here,” a resident told inspectors. “I haven’t worn a diaper since I was 2 years old. My bathroom should work."

Viviant’s Murfreesboro location eventually faced significant repercussions. The nursing home received 15 citations and was fined more than $240,000. On Dec. 12, 2023, CMS terminated the provider from Medicare and Medicaid. Two weeks later, the facility shut down, displacing 77 residents and putting 75 people out of work.

Like many others, this nursing home was eligible for SFF but remained on a waiting list for two years while its failings persisted.

'Band-Aid on a gaping wound'

The nursing home industry recognizes that unsafe and low-quality facilities exist. The sector also knows that operating a safe, high-quality skilled nursing facility is expensive.

The AHCA/NCAL and others point to low or negative margins, insufficient Medicare and Medicaid reimbursements and a severe staffing shortage as major challenges to overcome.

The pandemic made matters worse, and it caused inspections to fall further behind. One in nine nursing homes in 2022 hadn’t been inspected in more than two years yet continued to collect Medicare and Medicaid payments despite ongoing complaints of abuse and poor care, the Senate Aging Committee found.

“America’s nursing homes are in crisis. Nursing home residents across the country are receiving inadequate care, with many living in unsafe conditions in facilities that don’t meet health and safety standards and don’t have enough staff,” Aging Committee Chair Bob Casey (D-Pa.) said in statement.

“One major cause is a failure of oversight — we simply are not doing all that we can to monitor and identify facilities that are failing to meet the standards our seniors deserve,” Casey said.

The Special Focus Facility program was designed to enhance federal oversight of the lowest-performing nursing homes and guide them toward remediation. But SFF is hampered by backlogs and underfunding that impede its ability to effectively oversee facilities that consistently underperform, Casey said.

The program "is not living up to its potential,” Casey said. “The program, and really our nation’s entire long-term care oversight apparatus, desperately needs more funding, a broader scope and more investigators on the ground.”

When SFF debuted in 1998, it could accommodate 136 nursing homes at a time. But budget cuts in 2014 forced CMS to scale it back to 88, and the annual budget has since remained flat at $397 million. The Biden administration proposed making the spending mandatory under the federal budget, rather than subject to yearly appropriations, but Congress did not act on that proposal.

“It is critically important that CMS has additional resources for survey and certification efforts,” an agency official said.

States are responsible for routine inspections but contend with shortages of inspectors. The federal government funds 12 Quality Innovation Network-Quality Improvement Organizations, known as QIN-QIOs, to assist troubled nursing homes, but financial support for these entities has declined over time.

More than 400 skilled nursing facilities deemed to have serious deficiencies are on the waiting list to enter SFF.

“You can throw a rock at Care Compare and find a home that could be in the program,” said Sam Brooks, director of public policy at National Consumer Voice for Quality Long-Term Care. SFF is a “Band-Aid on a gaping wound,” he said.

Once a nursing home is assigned to SFF, it must undergo on-site inspections every six months. Depending on what they find, state agencies may recommend progressive enforcement actions from CMS, such as fines or payment suspensions.

A nursing home either “graduates” from the program or is terminated from Medicare and Medicaid. Either outcome opens up a slot for a skilled nursing facility on the waiting list. On average, nursing homes spend 18 months in SFF.

“We have over 15,000 nursing homes. Most of them come back into compliance quickly,” a CMS official said. About half of Special Focus facilities “significantly improve” within 30 months, another agency official said.

CMS terminated Medicare and Medicaid contracts with 15 nursing homes that were on the SFF list last year. Only two remained open as of April 2024.

“Every time you see a facility cited for poor performance or poor quality or bad outcomes in a nursing home, it’s because we are finding it and identifying it [and] taking action,” a CMS official said.

“The Special Focus Facilities program is supposed to stimulate improvements in quality of care for the facilities selected for the program," Harmon from AHCA/NCAL said. "In reality, the program does not provide any quality improvement assistance or additional resources to help these facilities get better. Rather, the program is designed to impose progressive enforcement on the facilities in the program."

In 2022, Biden announced a refresh of the SFF program to crack down on what he called “bad actors.” As part of those efforts, CMS announced increased oversight and penalties for nursing homes that fail to make long-term fixes.

The agency also sought to shed light on the individuals and corporations that own nursing homes, with an emphasis on for-profit companies and private equity investors, by introducing a public database last year.

Paired with other efforts, such as a regulation mandating staffing levels, CMS contends it is better positioned to oversee and enforce safety and quality rules and take on the poorest performers.

A Modern Healthcare analysis of the CMS ownership data found 10 for-profit entities hold ownership interests in 30% of the lowest-performing skilled nursing facilities.

Viviant Healthcare of Murfreesboro was one of 32 nursing homes connected to Samuel Goldner, CEO of Goldner Capital Management, through various limited liability companies and a family trust in 2023, according to the CMS database.

Goldner Capital Management filed for Chapter 11 bankruptcy in October and the Goldner ownership group closed or sold 22 nursing homes beforehand. CMS data show Goldner was still affiliated with at least three nursing homes as of April, but those records may not reflect sales or closures since then. 

Thirteen of those Goldner-affiliated nursing homes were designated as Special Focus facilities or candidates as of July 2023.

Among those were eight that CMS barred from Medicare and Medicaid between April 2023 and February 2024, and which subsequently closed.

Goldner did not respond to multiple requests for comment.

Those terminations marked a rare moment of accountability for owners of consistently poor-performing nursing homes.

CMS may also have signaled it is taking a tougher stance against owners and for-profit companies that have largely escaped consequences because the opaque corporate structures they employ enable them to evade accountability, said Teresa Teeple, who runs the Tennessee Office of the State Long-Term Care Ombudsman, which is independent of the state government.

Nursing home ownership groups often establish complex networks of LLCs, real estate investment trusts and other entities. One entity may own the land and buildings and another the operations, while more hold stakes in the companies that make up the network.

This strategy shields the owners, investors and corporations from financial and regulatory risk, and can conceal who is ultimately responsible when things go wrong.

CMS cannot take direct action against troublesome ownership groups themselves, an agency official said.

“By statute, we have a facility-limited authority,” the CMS official said. “There is some common ownership across the Special Focus facilities. It doesn’t change how we are able to enforce it.”

As of April 2024, 65 of 86 Special Focus facilities failed to meet improvement criteria in the most recent inspections.

Even those that do get better often briefly meet minimum standards and graduate from SFF, then regress once they are no longer under the spotlight, said Annie Rhodes, a Virginia Commonwealth University professor who researches nursing home oversight

“We made it more difficult for facilities to graduate because we saw this regression,” a CMS official said. “We do monitor whether facilities have regressed and have been cited for certain types of noncompliance at certain levels afterwards.”

This cyclical problem highlights a major flaw: SFF is not adequately addressing the root causes of poor care, such as financing, chronic understaffing and owners who underinvest in their facilities.

“We give them extra attention, but it's not clear to me that we're actually putting them on a path to becoming a strong-performing facility,” Harvard’s Grabowski said.

Bethany Nursing and Rehab Center in Lakewood, Colorado, a 170-bed facility owned by Salt Lake City-based for-profit Eduro Healthcare, successfully exited the Special Focus Facility program in 2020. Since then, it accumulated at least 64 citations and $213,000 in fines. Bethany Nursing and Rehab Center became an SFF candidate again in November 2023.

Endura Healthcare, a subsidiary of the Ensign Group, bought the facility in December 2023 and renamed it Oakwood Care and Rehabilitation. The nursing home was still an SFF candidate as of April 2024.

Infinity Park Post-Acute and Rehabilitation Center in Overland Park, Kansas, owned by Brooklyn, New York-based for-profit Plainview Healthcare Partners, rotated in and out of the SFF program from 2020 to 2023, racking up 116 citations and nearly $395,000 in fines.

The nursing home became an SFF candidate again in May 2023 and remained on the waiting list for the SFF program until April 2024. It has since closed.

“Some of these facilities we have seen yo-yo in and out of compliance,” a CMS official said.

“When they drop off [SFF], it does not necessarily mean that they have improved,” said Linda Elizaitis, president of CMS Compliance Group, which advises long-term care providers. “Their [deficiency] points may have dropped. They may have had a couple of good surveys. It doesn’t mean that they are wonderful now.”

The nursing home industry argues that Medicare and Medicaid don’t pay enough and leaves skilled nursing facilities too financially insecure to invest in overhauls. Regulators and patient advocates, however, believe these businesses, mainly for-profit, should shoulder the cost of living up to safety and quality standards.

“Certainly, the [SFF] program needs more funding to expand it. But ultimately, it shouldn’t be the responsibility of the government or any of the [Quality Improvement Organization] interventions to show a nursing home how to run itself,” said Brooks from National Consumer Voice for Quality Long-Term Care.

While many nursing homes struggle under these circumstances, some succeed.

For example, Willows Post Acute in Willows, California, was able to transform from a Special Focus Facility to a five-star facility after its for-profit owners, Los Angeles-based New Generation Health, hired a new leadership team and bolstered its staff.

The SFF program and state surveyors are under-resourced relative to their responsibilities. This, coupled with slow response rates to high-priority complaints, has weakened accountability, said Rhodes from Virginia Commonwealth University.

In 2022, the Health and Human Services Department Office of Inspector General reported that many states lacked enforcement strategies, and that CMS does little beyond providing technical assistance and the occasional fine, which the agency often credits back through reimbursements once improvements are made. Only Louisiana met all federal standards during between 2015 and 2019, the OIG found.

Most significantly, 40% of states failed to timely respond to high-priority complaints, such as abuse and neglect. For example, Massachusetts was only able to respond to 19% of high-priority complaints within the required 10-day window in 2018. In Arizona, the share was 32%.

Yet CMS rarely imposed sanctions against states, the OIG found.

“I get really concerned about it, especially with complaints, because they are one of the few ad hoc quality mechanisms that are built into the nursing home monitoring system. Especially for residents and advocates, it’s the only quality check that they can do for themselves,” Rhodes said.

“We support oversight, transparency and accountability of nursing homes, but the current survey system is broken,” AHCA/NCAL’s Harmon said. “A punitive oversight approach will not improve care — it hasn’t for decades. Solely punishing providers does not help the residents, fails to address the underlying issues and takes away precious resources needed to make improvements.”

For-profit nursing homes are disproportionately represented on the SFF list, and their owners on average spend less on patient care than nonprofit or government-owned skilled nursing facilities, according to a Modern Healthcare analysis of cost reports.

Private equity-backed nursing homes had 3% fewer front-line workers and 10% higher patient mortality rates compared with other nursing homes between 2015 and 2020, the National Bureau of Economic Research reported in 2021.

Between 2013 and 2022, nursing homes owned by private equity investors or real estate investment trusts had lower staffing levels and lower star ratings on average, relative to nursing homes with different ownership structures, according to a report HHS published last year.

Despite reporting higher average operating costs to CMS —including so-called related party payments between affiliated entities for services such as management and real estate — these for-profit nursing homes ownership groups commonly invest less in direct patient care than nonprofit companies, according to a National Bureau of Economic Research report published in March 2024.

“You can tell the facilities that are run by the accountants. You can see that the person is being monetized. When it is corporate and it is money-driven, you don’t see people doing the right thing,” said Linda Kerdoff, program director at Pro Seniors, a long-term care ombudsman in Ohio.

A balancing act

Despite widespread evidence of unsafe and poor-quality nursing home care, CMS has proven reluctant to take sweeping action.

CMS and state regulators must weigh terminating bad nursing homes from Medicare and Medicaid against depriving communities of access to long-term care, especially in rural and other underserved regions.

The authorities are also aware that shuttering nursing homes eliminates jobs, which can hit hard for the low-income and disproportionately non-white workforce that staffs them.

To patient advocates, this balancing act merely perpetuates a nursing home system that harms patients and enriches the least-responsible owners rather than guarantees safe, high-quality skilled nursing care, said Brooks from National Consumer Voice for Quality Long-Term Care.

Such misplaced priorities are "what creates that recidivism,” Brooks said. “A lot of these homes are owned simply to suck money out of them. They don’t want to provide high-quality care and they don’t want to provide staffing. Until you turn that spigot off, these homes are just going to go up and down.”

Uncertain future

The actions against the Goldner-affiliated nursing homes, including Viviant Healthcare of Murfreesboro and Fallbrook Rehabilitation and Care Center in Houston, could be a harbinger of future enforcement, although what President-elect Donald Trump has planned for CMS and long-term care is unknown.

Under Biden, CMS toughened SFF last year by raising the standards Special Focus facilities must meet to graduate.

The agency also resolved to cut off Medicare and Medicaid payments to SFF nursing homes cited for immediate jeopardy deficiencies in any two consecutive surveys, established harsher penalties for nursing homes that fail to demonstrate improvement, lengthened the post-SFF monitoring period to three years and vowed tougher enforcement of safety and quality rules for nursing homes that exit SFF only to backslide.

The agency now also instructs states to consider staffing levels when assessing candidates for SFF, with lower-staffed facilities more likely to be chosen.

“CMS is getting tougher,” said Teeple, the Tennessee ombudsman. “But we still have a long way to go.”