How to fix a broken nursing home

This article is the third installment in “Chronic Conditions,” a three-part series on CMS’ Special Focus Facility program. Part one published on Dec. 9 and part two published on Dec. 10.

Over the course of four years, Willows Post Acute went from being one of the worst nursing homes in the United States to achieving a five-star quality rating.

Nursing homes such as Willows Post Acute that land on the Centers for Medicare and Medicaid Services’ Special Focus Facility list are generally presented with two options: Get their act together and improve, or face exclusion from the Medicare and Medicaid programs.

For most nursing homes, the threat of financial penalties hasn't been enough to motivate them to make sustained long-term improvements. But a small share of troubled skilled nursing facilities turn things around through new leadership, better working conditions and other interventions. Just nine of the 238 nursing homes in the Special Focus Facility program, or SFF, from January 2021 through March 2024 were rated five stars.

The revolving roster of 88 Special Focus facilities is subject to more frequent onsite inspections from state surveyors, and facilities can be progressively fined by CMS or required to carry out correction plans.

To graduate from the program, a nursing home must demonstrate marked improvement in patient care and staffing, as well as pass consecutive state inspections with only minimal safety and quality citations.

No limit is set for the amount of time in the program, but facilities that linger rack up fines and risk being booted from their primary sources of reimbursement.

Since 2021, nursing homes that exited SFF — either by graduating or being terminated from Medicare and Medicaid — spent an estimated average of 22 months in turnaround. Thirteen languished for more than three years.

Bailey Park Community Living Center in Humboldt, Tennessee, owned by Community Eldercare Services, for example, was on the SFF list for five years before being terminated from Medicare and Medicaid this April. Viviant Healthcare of Murfreesboro, Tennessee, and Fallbrook Rehabilitation and Care Center in Houston also struggled to improve.

“CMS’ Special Focus Facility program has been a positive step toward ensuring that the facilities with the most egregious health and safety records are known to the public and given special consideration by investigators,” Senate Aging Committee Chair Bob Casey (D-Pa.) said in a statement. “However, unsafe conditions persist in many more facilities than are currently covered by the SFF program.”

Nursing homes that graduate from the SFF program don’t always sustain progress: 14 of the 126 facilities in the program sometime between January 2021 and March 2024 were back on the waiting list to rejoin it as of April 2024.

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

While the 88 nursing homes that are in the SFF program at any given time make up a tiny fraction of the 15,000 skilled nursing facilities nationwide, the violations that land them there give a black eye to the industry.

Enacting major changes to get safety and quality up to standards is challenging, especially considering the precarious finances that characterize the nursing home sector.

According to a survey by the American Health Care Association/National Center for Assisted Living, 45% of skilled nursing facilities are losing money this year. The trade group primarily blames low Medicaid reimbursements.

Last year, Medicaid covered 62% of nursing home costs, Medicare 13% and private insurers 25%, according to data from the health policy research organization KFF.

CMS does not provide extra money to Special Focus facilities. They are expected to use their resources to fix their own problems.

“The Special Focus Facilities program is supposed to stimulate improvements in quality of care for the facilities selected for the program,” said Holly Harmon, senior vice president for quality, regulatory and clinical services at AHCA/NCAL. “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.”

The keys to rejuvenating a poorly performing skilled nursing facility are owners and managers willing to devote the time and money necessary to get the job done, said Marilyn Rantz, project director of the Quality Improvement Program for Missouri.

Started in 1999 by the University of Michigan Sinclair School of Nursing and the Missouri Department of Health and Senior Services, the Quality Improvement Program for Missouri provides free services to help nursing homes avoid resident hospitalizations and improve their care quality.

“The commitment to good quality has to come from the home itself — the people who work there and the organizations that run those homes,” Rantz said.

Ownership commitment

The 79-bed Willows Post Acute, in Willows, California, entered the SFF program in 2019. In February 2020, Los Angeles-based New Generation Health took over 19 facilities in California, Nevada and Washington, including Willows Post Acute, from Genesis HealthCare, one of the largest post-acute care providers.

New Generation Health bought the leasehold rights, real estate and operations for $79 million, including $74 million in debt. The company removed management and brought in a new leadership team, including administrator Don Wessels, a longtime executive in the industry.

“Your primary focus must be understanding that systems and the resident experience is your best defense,” Wessels said. “Don't focus on money or on the regulations. Focus one day at a time on maintaining consistent systems and a positive culture among your staff.”

Willows Post Acute was riddled with problems.

“I started by identifying the most egregious, highest scope and severity issues to address in order to clear the facility and move forward,” Wessels said.

In 2018 and 2019, state inspectors cited the facility for dozens of deficiencies, including spoiled and undercooked food, festering pressure wounds, preventable patient falls, grimy and contaminated surfaces and a lack of emergency planning.

In one incident, a resident suffocated to death after employees didn’t follow practice standards when changing her tracheostomy tube, according to California regulators.

Wessels implemented a risk identification and resolution system to address issues on a daily basis, he said.

Employees meet each morning and afternoon to review patient needs and discuss how they got resolved. And, unlike before, each new resident is questioned about their needs within the first 24 hours. Nothing like those procedures was in place under the previous management team, Wessels said.

Willows also employed tools designed to help nursing homes improve, including SNFClinic, a privately owned electronic training resource. The program costs $3,000 to set up and $900 a month to maintain, and is subsidized with the proceeds from fines nursing homes pay for violating state and federal rules.

Willows assigned SNFClinic in-services to all employees weekly at first and now as needed. The courses cover topics ranging from managing immunization records to providing wound care, Wessels said.

The nursing home also used SimpleLTC software, which analyzes quality measures to identify shortcomings and guide improvements. The basic version is free, while versions with more features — such as advanced quality analytics tools and a five-star road map planner — cost up to $259 a month.

Willows Post Acute graduated from SFF in April 2022 and had a five-star rating as of this April. Net patient revenue, or the amount the facility made in caring for patients, increased from $7.2 million in 2019 to $10.9 million in 2023, according to the most recent CMS data.

Helping hands

Consultants and trade associations such as Deloitte, Baker Tilly and LeadingAge often are hired by nursing homes with deep pockets trying to meet regulatory requirements. Some no-cost help is available.

The federal government has funded 12 Quality Innovation Network-Quality Improvement Organizations, or QIN-QIOs, since 2014. These entities employ consultants and clinicians who work with Medicare providers, but their assistance is limited to training and advice.

Superior Health Quality Alliance, a QIN-QIO that serves Michigan, Minnesota and Wisconsin, gives nursing homes individual and group management coaching, on-site education on infection control and personal protective equipment training, CEO Tania Daniels said.

The organization also hosts e-learning events, in-person workshops, conferences and onsite training for post-acute facility administrators, Daniels said.

Staffing is key

Oxford Valley Health acquired 194-bed Desert Peak Care Center in Phoenix months after the nursing home entered SFF in December 2021. Its previous owner, Plano, Texas-based Preferred Care, had filed for Chapter 11 bankruptcy reorganization.

Things weren’t going well for the nursing home, which saw its operating margin decline to 2.5% in 2021 from 7.9% in 2020, according to CMS data.

“It took us many months in the red,” said Steven Rieder, chief operating officer of Toms River, New Jersey-based Oxford Valley Health, which owns three other facilities in Arizona and Nevada. “There were a lot of painful months because health plans wait until the change of ownership is complete before they start paying.”

The new owners invested more than $250,000 into Desert Peak, Rieder said. It spent tens of thousands of dollars on new doors with electronic locks, televisions in each patient room and upgrades to rooms, corridors and the plumbing system, he said.

Oxford Valley also had to invest in the facility’s workforce. “The staffing was horrendous,” Rieder said.

“Seventy-five percent of their workforce was contract labor, around 30 to 40 nurses a day, which is terrible not just from a cost perspective but also from a care perspective, because the residents are not seeing the same staff members on a day-to-day basis,” Rieder said.

Oxford Valley Health halved its temporary workforce during its first two months in charge and brought a director of nursing and nurse practitioner on board, Rieder said. They are responsible for addressing safety incidents and creating quality assurance and performance plans for issues such as falls and malnutrition, he said.

Desert Peak no longer uses contract labor and modified its compensation plans for workers, Rieder said. Clinical employees got raises, and they can opt to be paid daily and earn higher wages for less desirable shifts, Rieder said. The company also instituted hiring and referral bonuses and introduced 401k plans.

Desert Peak graduated from the SFF program in December 2023.

Understaffing is one the biggest contributors to poor nursing home care, said David Grabowski, professor of healthcare policy at Harvard Medical School.

Nursing home patients benefit from consistent care by workers who see them regularly, and understaffing encourages employees to cut corners, Grabowski said.

Patients may be connected to feeding tubes when there aren’t enough workers to feed them, or physicians may prescribe antipsychotics or other medications that aren’t clinically necessary when the workforce is too small to manage residents with behavioral conditions, Grabowski said.

Staffing problems were the main reason Hamilton Grove Healthcare and Rehabilitation Center ended up in SFF in April 2021, said Steve Lampert, an administrator at the 218-bed nursing home in Hamilton Township, New Jersey.

Hamilton Grove spent tens of thousands of dollars on recruiters and sought employees via online job listings and social media advertisements, he said. On the retention front, the nursing home instituted practices designed to make workers feel more appreciated, he said.

“We did surveys of the entire staff to hear how they felt things could be positively impacted,” Lampert said. “Then we took what they said and ran with it, whether it was financial incentives or just emotional incentives.”

For example, managers praise high-performing workers in written cards, enter employees who carry out infection-control measures into in-house raffles and organize parties for different groups of employees, Lampert said.

Hamilton Grove Healthcare and Rehabilitation Center graduated from SFF in August 2022.

The last resort

CMS has been reluctant to take extreme measures against nursing homes failing badly enough to qualify for SFF. Despite evidence of unsafe conditions and poor quality care, cutting off Medicare and Medicaid reimbursements would bring financial ruin to most skilled nursing facilities.

“We do take the issue of termination seriously. It is one that we consider for the Special Focus facilities when there are significant concerns and ongoing concerns that do not appear to be corrected,” a CMS official said.

When nursing homes close, residents are left to find new accommodations, local access to care diminishes and an employer ceases to exist.

“If it’s the only nursing home in a particular area or serving a particular population, that’s something that we want to be sensitive to,” the CMS official said. In those cases, the agency will consider alternative penalties, such as denying reimbursements for new residents, she said.

“If you're closing a nursing home in a really rural area, or a part of the state where there's not many other nursing homes, that’s a big deal,” said Alice Bonner, senior advisor for aging at the Institute for Healthcare Improvement. “A lot of low-income people are going to lose their jobs. [Certified nursing assistants] are largely women, single parents and on public assistance.”

Between January 2023 and April 2024, CMS listed 23 SFF nursing homes as being terminated from Medicare and Medicaid.

“A punitive oversight approach will not improve care — it hasn’t for decades,” said AHCA/NCAL's Harmon. “Solely punishing providers does not help the residents, fails to address the underlying issues and takes away precious resources needed to make improvements. Improving oversight where regulators are responsible to work together with facilities to enhance quality care should be our focus.”

But regulators must take care not to be too forgiving, Bonner said. “There should be a statute of limitations if you're a Special Focus Facility beyond a year or two years,” she said.

Safety and quality should trump other considerations, said Sam Brooks, director of public policy with the National Consumer Voice for Quality Long-Term Care.

CMS “would rather let residents suffer and die in poor care homes than shut a home down and be seen as uprooting residents,” Brooks said. “Of course, we don’t want every home shut down, but when you have this sporadic, in-and-out compliance, when do you say, ‘enough is enough?’”

Tim Broderick, Diane Eastabrook and Kara Hartnett contributed to this story.