Skilled Nursing Facilities
Available Data Show Average Nursing Staff Time Changed Little after Medicare Payment Increase Gao ID: GAO-03-176 November 13, 2002The nation's 15,000 skilled nursing facilities (SNF) play an essential role in our health care system, providing Medicare-covered skilled nursing and rehabilitative care each year for 1.4 million Medicare patients who have recently been discharged from acute care hospitals. In recent years, many analysts and other observers, including members of Congress, have expressed concern about the level of nursing staff in SNFs and the impact of inadequate staffing on the quality of care. GAO's analysis of available data shows that, in the aggregate, SNFs' nurse staffing ratios changed little after the increase in the nursing component of the Medicare payment took effect. Overall, SNFs' average nursing time increased by 1.9 minutes per patient day, relative to their average in 2000 of about 3 and one-half hours of nursing time per patient day. For most SNFs, increases in staffing ratios were small. Further, GAO found that the share of SNF patients covered by Medicare was not a factor in whether facilities increased their nursing time. Similarly, SNFs that had a total revenues considerably in excess of costs before the added payments took effect did not increase their staffing substantially more than others.
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Director: Team: Phone:GAO-03-176, Skilled Nursing Facilities: Available Data Show Average Nursing Staff Time Changed Little after Medicare Payment Increase
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entitled 'Skilled Nursing Facilities: Available Data Show Average
Nursing Staff Time Changed Little after Medicare Payment Increase'
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GAO:
Report to Congressional Committees:
November 2002:
SKILLED NURSING FACILITIES:
Available Data Show Average Nursing Staff Time Changed Little after
Medicare Payment Increase:
Nursing Staff in Skilled Nursing Facilities:
GAO-03-176:
Contents:
Letter:
Results in Brief:
Background:
SNF Staffing Changed Little after Payment Increase Took Effect:
Conclusions:
Matter for Congressional Consideration:
Agency Comments and Our Evaluation:
Appendix I: Data Source and Data Verification Methods for
Nurse Staffing Ratio Analysis:
Appendix II: Average Change in Nursing Staff Time between
2000 and 2001, Grouped by Category of SNF:
Appendix III: Comments from the Centers for Medicare &
Medicaid Services:
Appendix IV: GAO Contacts and Staff Acknowledgments:
Related GAO Products:
Tables:
Table 1: Average SNF Staffing Time by Type of Nurse, 2000 and 2001:
Table 2: Average Change in Nursing Time between 2000 and 2001 for
Freestanding SNFs, Grouped by Medicare Patient Share:
Table 3: Average Change in Nursing Time between 2000 and 2001 for
Freestanding SNFs, Grouped by Total Margin:
Table 4: Average Change in Nursing Time between 2000 and 2001 for
Freestanding SNFs, Grouped by 2000 Staffing Ratios:
Table 5: Creation of Our Sample of SNFs:
Table 6: Distribution of SNFs across States (in Percentages):
Table 7: Exclusions from the Sample:
Abbreviations:
AAHSA: American Association of Homes and Services for the Aging:
AHCA: American Health Care Association:
AHA: American Hospital Association:
BBA: Balanced Budget Act of 1997:
BLS: Bureau of Labor Statistics:
BBRA: Medicare, Medicaid, and SCHIP Balanced Budget
Refinement Act of 1999:
BIPA: Medicare, Medicaid, and SCHIP Benefits Improvement and Protection
Act of 2000:
CMS: Centers for Medicare & Medicaid Services:
CNA: certified nurse aide:
FTE: full-time equivalent:
HCFA: Health Care Financing Administration:
LPN: licensed practical nurse:
LVN: licensed vocational nurse:
OSCAR: Online Survey Certification and Reporting System:
PPS: prospective payment system:
RN: registered nurse:
RUG: resource utilization group:
SNF: skilled nursing facility:
United States General Accounting Office:
Washington, DC 20548:
November 13, 2002:
The Honorable Max Baucus
Chairman
The Honorable Charles E. Grassley
Ranking Minority Member
Committee on Finance
United States Senate:
The Honorable William M. Thomas
Chairman
The Honorable Charles B. Rangel
Ranking Minority Member
Committee on Ways and Means
House of Representatives:
The nation‘s 15,000 skilled nursing facilities (SNF) play an essential
role in our health care system, providing Medicare-covered skilled
nursing and rehabilitative care each year for 1.4 million Medicare
patients who have recently been discharged from acute care hospitals.
In recent years, many analysts and other observers, including members
of the Congress, have expressed concern about the level of nursing
staff in SNFs and the impact of inadequate staffing on the quality of
care. In 2000, the Congress responded to these concerns with a
temporary increase in Medicare payment intended to encourage SNFs to
increase their nursing staff.
Medicare pays SNFs through a prospective payment system (PPS) in which
they receive a fixed amount for each day that a patient receives care.
This daily payment rate varies according to a patient‘s expected needs
for care, and is the sum of nursing, therapy, and routine cost
components.[Footnote 1] The Congress, through the Medicare, Medicaid,
and SCHIP Benefits Improvement and Protection Act of 2000
(BIPA),[Footnote 2] increased the nursing component of the PPS SNF rate
by 16.66 percent, effective April 1, 2001. This raised the overall SNF
payment rates by 4 to 12 percent, depending on the patient‘s expected
care needs. However, the law did not require facilities to spend this
additional money on nursing staff. This was not the only recent
legislative change to SNF payments. A year earlier, payment rates for
certain types of patients had been increased by 20 percent, and for
fiscal years 2001 and 2002, overall rates were boosted by 4
percent.[Footnote 3] The nursing component increase expired on October
1, 2002, and the Congress is considering whether to reinstate it.
BIPA directed us to assess the impact of the increase in the nursing
component on SNF nurse staffing ratios. The law also required that we
recommend whether the increased payments should continue.[Footnote 4]
Specifically, this report examines whether nurse staffing
ratios[Footnote 5]--overall and for categories of SNFs, such as for-
profit and not-for-profit facilities--rose after April 1, 2001, when
the payment increase took effect.
To address this issue, we used data from the Online Survey
Certification and Reporting System (OSCAR),[Footnote 6] maintained by
the Centers for Medicare & Medicaid Services (CMS),[Footnote 7] to
assess nurse staffing ratios. We examined all SNFs that at the time of
our analysis had OSCAR data on staffing levels available both before
and after the payment increase. There were slightly over 6,500 SNFs--
over one-third of all SNFs--for which these data were available. We
tested for differences between these 6,500 and the 13,454 SNFs that
were surveyed in calendar year 2000. We found no statistically
significant differences in terms of type of facility, size, ownership,
and the share of SNF patients paid for by Medicare. However, we found
statistically significant differences between these two groups of SNFs
in terms of the distribution by state. (See app. I, table 6.) To
improve the accuracy of the OSCAR data, we identified over 500 SNFs in
our sample that had apparent data entry or other data reporting
errors,[Footnote 8] compared those data to source documents, and made
corrections where appropriate. For 179 of these cases, we contacted
facilities to resolve data issues. These verification and correction
procedures resulted in useable data for about 5,000 SNFs. For each
facility, we compared the 2001[Footnote 9] nurse staffing ratio to the
staffing ratio in 2000. We were not able to incorporate data reported
after January 2002, in order to accommodate the schedule set by BIPA.
To supplement this analysis, we also examined staffing ratio changes
from 1999 to 2000. In addition to analyzing these data, we interviewed
representatives of three industry associations, CMS officials, and
several independent researchers. Although OSCAR data allowed us to
compare staffing ratios before and after the 16.66 percent payment
increase took effect, our analysis was limited in several ways. OSCAR
data pertain to a limited period--2 weeks for staffing and 1 day for
the number of patients. Further, staffing cannot be examined separately
for Medicare patients, who represent about 11 percent of total SNF
patients; Medicaid patients, who represent over 66 percent of total SNF
patients; or patients whose care is paid for by other sources, who
represent about 23 percent of total SNF patients. For more details on
our data and methods, see appendix I. We performed our work from
November 2001 through October 2002 in accordance with generally
accepted government auditing standards.
Results in Brief:
Our analysis of available data shows that, in the aggregate, SNFs‘
nurse staffing ratios changed little after the increase in the nursing
component of the Medicare payment rate took effect. Overall, SNFs‘
average nursing time increased by 1.9 minutes per patient day, relative
to their average in 2000 of about 3 and one-half hours of nursing time
per patient day. There was a small shift in the mix of nursing time
that SNFs provided, with slightly less registered nurse (RN) time
coupled with slightly more licensed practical nurse (LPN) and nurse
aide time. For most types of SNFs, increases in staffing ratios were
small. Further, we found that the share of SNF patients covered by
Medicare was not a factor in whether facilities increased their nursing
time. Similarly, SNFs that had total revenues considerably in excess of
costs before the added payments took effect did not increase their
staffing substantially more than others. Although facilities with
relatively low staffing ratios in 2000 increased their staffing ratios
in 2001, highly staffed SNFs decreased their staffing ratios. We
observed a similar pattern of staffing changes between 1999 and 2000,
before the increased nursing component payment was implemented. This
indicates that the nursing component payment increase was likely not a
factor in the added nursing time among lower-staffed facilities.
However, unlike most facilities, SNFs in four states increased their
staffing by 15 to 27 minutes per patient day; three of these states--
Arkansas, North Dakota, and Oklahoma--had made Medicaid payment or
policy changes aimed at raising or maintaining facilities‘ nursing
staff.
Our analysis of available data on SNF nursing staff indicates that, in
the aggregate, SNFs did not have significantly higher nursing staff
time after the increase to the nursing component of Medicare‘s payment.
We believe that the Congress should consider our finding that
increasing the Medicare payment rate was not effective in raising nurse
staffing as it determines whether to reinstate the increase to the
nursing component of the Medicare SNF rate.
In written comments on a draft of this report, CMS stated that our
findings are consistent with its expectations as well as its
understanding of other research in this area. Industry representatives
provided oral comments in response to a draft of this report. Saying
that our statements were too strong given the limitations of the study,
they objected to our conclusions and matter for congressional
consideration in the draft report. In conducting our study, we
recognized the limitations of the data and the analyses we could
perform and, when possible, performed tests to determine whether they
affected our results. Taking account of these tests as well as the
consistency of our results, we determined that the evidence was
sufficient to conclude that the increased payment did not result in
higher nursing staff time. However, we modified our conclusions to
reiterate the limitations of our study. We rephrased the matter for
congressional consideration to reflect the fact that the increase has
lapsed since we drafted this report.
Background:
Medicare covers SNF care for beneficiaries who need daily skilled
nursing care or therapy for conditions related to a hospital stay of at
least 3 consecutive calendar days, if the hospital discharge occurred
within a specific period--generally, no more than 30 days--prior to
admission to the SNF. For qualified beneficiaries, Medicare will pay
for medically necessary SNF services, including room and board; nursing
care; and ancillary services, such as drugs, laboratory tests, and
physical therapy, for up to 100 days per spell of illness.[Footnote 10]
In 2002, beneficiaries are responsible for a $101.50 daily copayment
after the 20th day of SNF care, regardless of the cost of services
received.
Eighty-eight percent of SNFs are freestanding--that is, not attached to
a hospital. The remainder are hospital-based.[Footnote 11] SNFs differ
by type of ownership: 66 percent of SNFs are for-profit entities, 28
percent of SNFs are not-for-profit, and a small fraction of SNFs--about
5 percent--are government-owned.[Footnote 12] About three-fifths of
SNFs are owned or operated by chains--corporations operating multiple
facilities.
To be a SNF, a facility must meet federal standards to participate in
the Medicare program.[Footnote 13] SNFs provide skilled care to
Medicare patients and usually also provide care to Medicaid and private
pay patients. Medicare pays for a relatively small portion of patients
cared for in SNFs--about 11 percent. Over 66 percent of SNF patients
have their care paid for by Medicaid, and another 23 percent have their
care paid for by other sources or pay for the care themselves.
Medicare Payment for SNF Care:
In the Balanced Budget Act of 1997 (BBA), the Congress established the
PPS for SNFs.[Footnote 14] Under the PPS, SNFs receive a daily payment
that covers almost all services provided to Medicare beneficiaries
during a SNF stay, which is adjusted for geographic differences in
labor costs and differences in the resource needs of patients.
Adjustments for resource needs are based on a patient classification
system that assigns each patient to 1 of 44 payment groups, known as
resource utilization groups (RUG).[Footnote 15] For each group, the
daily payment rate is the sum of the payments for three components: (1)
the nursing component, which includes costs related to nursing as well
as to medical social services and nontherapy ancillary services, (2)
the therapy component, which includes costs related to occupational,
physical, and speech therapy, and (3) the routine cost component, which
includes costs for capital, maintenance, and food. The routine cost
component is the same for all patient groups, while the nursing and
therapy components vary according to the expected needs of each group.
Before the 16.66 percent increase provided by BIPA took effect, the
nursing component varied from 26 percent to 74 percent of the daily
payment rate, depending on the patient‘s RUG.[Footnote 16] In 2001,
Medicare expenditures on SNF care were $13.3 billion. The 16.66 percent
increase in the nursing component raised Medicare payments about $1
billion annually--about 8 percent of Medicare‘s total annual spending
on SNF care.
The increase in the nursing component is one of several temporary
changes made to the PPS payment rates since the PPS was implemented in
1998. The Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act
of 1999 (BBRA) raised the daily payment rates by 20 percent for 15
high-cost RUGs beginning in April 2000.[Footnote 17] BBRA also
increased the daily rate for all RUGs by 4 percent for fiscal years
2001 and 2002.[Footnote 18] BIPA upped the daily payment rates by 6.7
percent for 14 RUGs, effective April 2001.[Footnote 19] This increase
was budget neutral; that is, it modified BBRA‘s 20 percent increase for
15 RUGs by taking the funds directed at 3 rehabilitation RUGs and
applying those funds to all 14 rehabilitation RUGs.[Footnote 20] Two of
these temporary payment changes, the 20 percent and 6.7 percent
increases, will remain in effect until CMS refines the RUG system. CMS
has announced that, although it is examining possible refinements, the
system will not be changed for the 2003 payment year.[Footnote 21]
SNF Staffing:
In providing care to their patients, SNFs employ over 850,000 licensed
nurses and nurse aides nationwide.[Footnote 22] Licensed nurses include
RNs and LPNs.[Footnote 23] RNs generally manage patients‘ nursing care
and perform more complex procedures, such as starting intravenous
fluids. LPNs provide routine bedside care, such as taking vital signs
and supervising nurse aides. Aides generally have more contact with
patients than other members of the SNF staff. Their responsibilities
may include assisting individuals with eating, dressing, bathing, and
toileting, under the supervision of licensed nursing and medical staff.
Several studies have shown that nursing staff levels are linked to
quality of care.[Footnote 24] The Social Security Act, which
established and governs the Medicare program, requires that SNFs have
sufficient nursing staff to provide nursing and related services to
attain or maintain the highest practicable physical, mental, and
psychosocial well-being of each patient, as determined by patient
assessments and individual plans of care.[Footnote 25] More
specifically, SNFs must have an RN on duty for at least 8 consecutive
hours a day for 7 days per week, and must have 24 hours of licensed
nurse coverage per day.[Footnote 26] SNFs also must designate an RN to
serve as the director of nursing on a full-time basis, and must
designate a licensed nurse to serve as a charge nurse on each tour of
duty.[Footnote 27]
SNF staffing varies by type of facility and by state. Hospital-based
SNFs tend to have higher staffing ratios than other SNFs. In 2001,
hospital-based SNFs provided 5.5 hours of nursing time per patient day,
compared with 3.1 hours among freestanding SNFs. Hospital-based SNFs
also rely more heavily on licensed nursing staff than do freestanding
facilities, which rely more on nurse aides. Staffing also differs by
state--from 2 hours and 54 minutes per patient day in South Dakota in
2000 to 4 hours and 58 minutes per patient day in Alaska.
Many states have established their own nursing staff requirements for
state licensure, which vary considerably. Some states require a minimum
number of nursing hours per patient per day, while others require a
minimum number of nursing staff relative to patients. Some states‘
requirements apply only to licensed nurses, while others apply to nurse
aides as well. Some states also require an RN to be present 24 hours
per day, 7 days per week. As of 1999, 37 states had nursing staff
requirements that differed from federal requirements. Since 1998, many
states have raised their minimum staffing requirements or have
implemented other changes aimed at increasing staffing in nursing
homes, such as increasing workers‘ wages or raising reimbursement rates
for providers whose staffing exceeds minimum requirements.
While states have set minimum requirements for nursing staff, there are
indications of an emerging shortage of nursing staff, particularly RNs,
in a variety of health care settings.[Footnote 28] The unemployment
rate for RNs in 2000 was about 1 percent--very low by historical
standards. As a result, SNFs must compete with other providers, such as
hospitals, for a limited supply of nursing staff. According to
associations representing the industry, nursing homes have had
difficulty recruiting and retaining staff. The American Health Care
Association (AHCA)[Footnote 29] reported vacancy rates for nursing
staff in nursing homes for 2001 ranging from 11.9 percent for aides to
18.5 percent for staff RNs.[Footnote 30] Labor shortages are generally
expected to result in increased compensation--wages and benefits--as
employers seek to recruit new workers and retain existing staff. Our
analysis of Bureau of Labor Statistics (BLS) data shows that, from 1999
to 2000, average wages for nurses and aides employed by the nursing
home industry increased by 6.3 percent, compared to 2.9 percent among
workers in private industry and state and local government.[Footnote
31] Industry officials, citing a survey they commissioned, told us that
wages have risen more rapidly since 2000.[Footnote 32]
SNF Staffing Changed Little after Payment Increase Took Effect:
In general, SNF staffing changed little after April 1, 2001, when the
increase in the nursing component of the PPS payment took effect. There
was no substantial change in SNFs‘ overall staffing ratios, though
their mix of nursing hours shifted somewhat: SNFs provided slightly
less RN time and slightly more LPN and nurse aide time in 2001. For
most categories of SNFs--such as freestanding SNFs and SNFs not owned
by chains--increases in staffing ratios were small. Although SNFs with
relatively low staffing ratios in 2000 increased their staffing ratios
in 2001, SNFs with relatively high staffing ratios decreased their
staffing. Our analysis indicates that the nursing component payment
increase was unlikely to have been a factor in these staffing changes.
Unlike most facilities nationwide, SNFs in four states increased their
staffing by 15 or more minutes per patient day, following payment or
policy changes in three of the states aimed at increasing or
maintaining SNF nursing staff.
SNF Staffing Changed Little after Payment Increase, Though Mix of
Staffing Shifted Somewhat:
No substantial change in SNFs‘ overall staffing ratios occurred after
the nursing component payment was increased. Between 2000 and
2001,[Footnote 33] SNFs‘ average amount of nursing time changed little,
remaining slightly under 3 and one-half hours per patient day.[Footnote
34] Although there was an increase of 1.9 minutes per patient day, it
was not statistically significant.[Footnote 35] (See table 1.)
According to our calculations, this change was less than the estimated
average increase, across all SNF patients, of about 10 minutes per
patient day that could have resulted if SNFs had devoted the entire
nursing component increase to more nursing time.[Footnote 36]
There was a small shift in the mix of nursing time that SNFs provided.
On average, RN time decreased by 1.7 minutes per patient day. This was
coupled with slight increases in LPN and nurse aide time, which rose by
0.7 and 2.9 minutes per patient day, respectively.
Table 1: Average SNF Staffing Time by Type of Nurse, 2000 and 2001:
[See PDF for image]
Source: GAO analysis of CMS‘s OSCAR data.
[End of table]
For most categories of SNFs, changes in staffing ratios were small. For
example, freestanding facilities, which account for about 90 percent of
SNFs nationwide, increased their nursing time by 2.1 minutes per
patient day on average. Nonchain SNFs had an increase of 3.9 minutes
per patient day. Hospital-based facilities and those owned by chains
had nominal changes in nursing time. The changes in staffing for for-
profit, not-for-profit, and government-owned facilities also were
small. (See app. II.):
The share of a SNF‘s patients who were covered by Medicare was not a
factor in whether facilities increased their nursing time. SNFs that
relied more on Medicare would have received a larger increase in
revenue due to the nursing component change, and might have been better
able than others to raise staffing ratios. However, we found that
freestanding SNFs in which Medicare paid for a relatively large share
of patients[Footnote 37] increased their nursing time by 1.3 minutes
per patient day--less than SNFs with somewhat smaller shares of
Medicare patients, and not substantially more than SNFs with the
smallest share of Medicare patients.[Footnote 38] (See table 2.):
Table 2: Average Change in Nursing Time between 2000 and 2001 for
Freestanding SNFs, Grouped by Medicare Patient Share:
Medicare patient share in 2000 (percentage)[A]: Less than 3.8; Change
in minutes of nursing time per patient day[B]: 0.8 minutes.
Medicare patient share in 2000 (percentage)[A]: 3.8 to 7.1; Change in
minutes of nursing time per patient day[B]: 3.6 minutes.
Medicare patient share in 2000 (percentage)[A]: 7.2 to 11.4; Change in
minutes of nursing time per patient day[B]: 2.9 minutes.
Medicare patient share in 2000 (percentage)[A]: 11.5 and higher; Change
in minutes of nursing time per patient day[B]: 1.3 minutes.
Note: The 2001 data are from May through December 2001, after the
nursing component payment increase took effect.
[A] The four groups of SNFs are roughly equal in size.
[B] Between any two groups of SNFs (rows), there were no statistically
significant differences in the change in minutes. For the two middle
groups of SNFs, the change in minutes between 2000 and 2001 was
significant at the .05 level.
Source: GAO analysis of CMS‘s OSCAR data.
[End of table]
Similarly, SNFs‘ financial status was not an important factor affecting
changes in nursing time. Although SNFs with higher total margins in
2000[Footnote 39]--that is, those with revenues substantially in excess
of costs--might have been best able to afford increases in nursing
staff, those with the highest total margins did not raise their
staffing substantially more than others. Changes in nursing time were
minimal, regardless of SNFs‘ financial status in 2000. For SNFs in the
three groups with the highest margins, increases were about 3 to 4
minutes per day, compared to 2 minutes per day for those with the
lowest margins. (See table 3.):
Table 3: Average Change in Nursing Time between 2000 and 2001 for
Freestanding SNFs, Grouped by Total Margin:
Total margins in 2000 (range)[A]: Less than -3.4; Change in minutes of
nursing time per patient day[B]: 2.1 minutes.
Total margins in 2000 (range)[A]: -3.4 to 2.2; Change in minutes of
nursing time per patient day[B]: 2.9 minutes.
Total margins in 2000 (range)[A]: 2.3 to 7.4; Change in minutes of
nursing time per patient day[B]: 4.2 minutes.
Total margins in 2000 (range)[A]: 7.5 and higher; Change in minutes of
nursing time per patient day[B]: 3.7 minutes.
Note: The 2001 data are from May through December 2001, after the
nursing component payment increase took effect.
[A] Total margins are expressed as percentages and are based on a SNF‘s
cost reporting year, which corresponds to its fiscal year that begins
during the federal fiscal year. The four groups of SNFs are roughly
equal in size.
[B] Between any two groups of SNFs (rows), there were no statistically
significant differences in the change in minutes. For each group of
SNFs, however, the change in minutes between 2000 and 2001 was
significant at the .05 level, except for the lowest group (with total
margins less than -3.4 percent).
Source: GAO analysis of CMS‘s OSCAR data and 2000 Medicare cost
reports.
[End of table]
Lower-Staffed SNFs Added More Nursing Time, but the Increased Medicare
Nursing Payment Likely Was Not the Cause:
SNFs with relatively low initial staffing ratios--which may have had
the greatest need for more staff--increased their staffing ratios
substantially, while SNFs that initially were more highly staffed had a
comparable decrease in staffing. Among freestanding SNFs that had the
lowest staffing ratios in 2000, staffing time increased by 18.9 minutes
per patient day.[Footnote 40] (See table 4.) Nearly all of the
increase--over 15 minutes--was due to an increase in nurse aide time.
LPN time increased by 3.2 minutes and RN time by 11 seconds on average.
Among facilities with the highest staffing ratios in 2000, staffing
decreased by 17.7 minutes.[Footnote 41] For these SNFs, as for those
with the lowest staffing ratios, most of the overall change occurred
among nurse aides: aide time decreased by over 10 minutes in 2001,
while LPN and RN time decreased by 2.7 and 4.6 minutes, respectively.
Despite the staffing increases among lower-staffed facilities, our
analysis indicates that these staffing changes may not have resulted
from the nursing component payment increase. We found that similar
staffing changes occurred between 1999 and 2000--prior to the nursing
component increase. Low-staffed facilities increased their staffing by
15.2 minutes per patient day in 2000, while high-staffed facilities
decreased their staffing by 19.8 minutes.[Footnote 42] The changes that
occurred during the two periods were similar, suggesting that the
payment increase probably did not cause the change in the latter
period.
Table 4: Average Change in Nursing Time between 2000 and 2001 for
Freestanding SNFs, Grouped by 2000 Staffing RatiosA:
Staffing ratio in 2000 (range)[A]: Less than 2 hours, 42 minutes;
Change in minutes of nursing time per patient day[B]: 18.9 minutes.
Staffing ratio in 2000 (range)[A]: 2 hours, 42 minutes to; 3 hours, 1
minute; Change in minutes of nursing time per patient day[B]: 7.6
minutes.
Staffing ratio in 2000 (range)[A]: 3 hours, 2 minutes to; 3 hours, 25
minutes; Change in minutes of nursing time per patient day[B]: 0.9
minutes.
Staffing ratio in 2000 (range)[A]: 3 hours, 26 minutes and higher;
Change in minutes of nursing time per patient day[B]: - 17.7 minutes.
Note: The 2001 data are from May through December 2001, after the
nursing component payment increase took effect.
[A] The four groups of SNFs are roughly equal in size.
[B] Between any two groups of SNFs (rows) the differences in the
changes in minutes were statistically significant. For each group of
SNFs, except the group with 3 hours, 2 minutes to 3 hours, 25 minutes
of nursing time, the change in minutes was significant at the .05
level.
Source: GAO analysis of CMS‘s OSCAR data.
[End of table]
In Several States, Staffing Ratios Rose Substantially:
Unlike most facilities nationwide, SNFs in four states--Arkansas,
Nebraska, North Dakota, and Oklahoma--increased their staffing by 15 to
27 minutes per patient day, on average.[Footnote 43] These increases
could be related to state policies: according to state officials, three
of the states had made Medicaid payment or policy changes aimed at
increasing or maintaining facilities‘ nursing staff. North Dakota
authorized a payment rate increase, effective July 2001, that could be
used for staff pay raises or improved benefits. Oklahoma increased its
minimum requirements for staffing ratios in both September 2000 and
September 2001, provided added funds to offset the costs of those
increases, and raised the minimum wage for nursing staff such as RNs,
LPNs, and aides. Arkansas switched to a full cost-based reimbursement
system for Medicaid services in January 2001, in part to provide
facilities with stronger incentives to increase staffing; the state had
previously relied on minimum nurse staffing ratios. In Nebraska, no new
state policies specific to nursing staff in SNFs were put in place
during 2000 or 2001.
Conclusions:
The change to the nursing component of the SNF PPS payment rate was one
of several increases to the rates since the PPS was implemented in
1998. This temporary increase, enacted in the context of payment and
workforce uncertainty, was intended to encourage SNFs to increase their
nursing staff, although they were not required to spend the added
payments on staff. In our analysis of the best available data, we did
not find a significant overall increase in nurse staffing ratios
following the change in the nursing component of the Medicare payment
rate. Although the payment change could have paid for about 10 added
minutes of nursing time per patient day for all SNF patients, we found
that on average SNFs increased their staffing ratios by less than 2
minutes per patient day. Nurse staffing ratios fell in some SNFs during
this period and increased in others by roughly an equal amount--the
same pattern that occurred before the payment increase took effect. Our
analysis--overall and for different types of SNFs--shows that
increasing the nursing component of the Medicare payment rate was not
effective in raising nurse staffing.
Matter for Congressional Consideration:
Our analysis of available data on SNF nursing staff indicates that, in
the aggregate, SNFs did not have significantly higher nursing staff
time after the increase to the nursing component of Medicare‘s payment.
We believe that the Congress should consider our finding that
increasing the Medicare payment rate was not effective in raising nurse
staffing as it determines whether to reinstate the increase to the
nursing component of the Medicare SNF rate.
Agency Comments and Our Evaluation:
We received written comments on a draft of this report from CMS and
oral comments from representatives of the American Association of Homes
and Services for the Aging (AAHSA), which represents not-for-profit
nursing facilities; AHCA, which represents for-profit and not-for-
profit nursing facilities; and the American Hospital Association (AHA),
which represents hospitals.
CMS:
CMS said that our findings are consistent with its expectations as well
as its understanding of other research in this area. CMS also stated
that our report is a useful contribution to the ongoing examination of
SNF care under the PPS. CMS‘s comments appear in appendix III.
Industry Associations:
Representatives from the three associations who reviewed the draft
report shared several concerns. First, indicating that our statements
were too strong given the limitations of the study, they objected to
the report‘s conclusions and matter for congressional consideration.
Second, they noted that the draft should have included information
about the context in which SNFs were operating at the time of the
Medicare payment increase, specifically, the nursing shortage and SNF
staff recruitment and retention difficulties. Finally, they noted that
SNFs could have used the increased Medicare payments to raise wages or
improve benefits rather than hire additional nursing staff.
The industry representatives expressed several concerns about the
limitations of our data and analysis. The AAHSA representatives noted
that, for individual SNFs, the accuracy of OSCAR is questionable; they
agreed, however, that the average staffing ratios we reported for
different types of SNFs looked reasonable and were consistent with
their expectations. The AHA representatives said that, while OSCAR data
are adequate for examining staffing ratios, we should nonetheless have
used other sources of nurse staffing data--such as payroll records and
Medicaid cost reports--before making such a strong statement to the
Congress. The AHCA representatives noted that, due to the limitations
of OSCAR data, our analyses of staffing ratios reflect staffing for all
SNF patients rather than staffing specifically for SNF patients whose
stays are covered by Medicare. They stressed that the small increase in
staffing for patients overall could have represented a much larger
increase for Medicare-covered SNF patients. In addition,
representatives from both AHCA and AHA were concerned that our period
of study after the payment increase--May through December 2001--was too
short to determine whether SNFs were responding to the added payments.
They also cited delays in SNFs being paid under the increased rates as
an explanation for our findings. The AHCA representatives further noted
that the lack of change in staffing was not surprising, given the short
period, and that the payment increase was temporary, applied to only
one payer, and affected only about 10 to 12 percent of SNFs‘ business.
AAHSA representatives noted that, to be meaningful, staffing ratios
must be adjusted for acuity--the severity of patients‘ conditions.
Representatives from all three groups also stated that the report
lacked sufficient information on contextual factors that could have
affected SNF staffing ratios during our period of study. They said that
we should have provided information on the nursing shortage as well as
on SNF staff recruitment and retention difficulties. They further
stated that SNFs‘ difficulties in recruiting and retaining staff could
explain why we found little change in nurse staffing ratios. The AAHSA
representatives were concerned that the report omitted information on
the economic slowdown‘s effect on state budgets and Medicaid payment
rates, which could have discouraged SNFs from hiring during the period
of the increased nursing component. Finally, both AAHSA and AHA
representatives commented that the report gave too little attention to
state minimum staffing requirements, indicating that SNFs would be more
responsive to those requirements than to the Medicare payment increase.
The AAHSA representatives noted that facilities may have increased
their nursing staff to meet state minimum staffing requirements prior
to the Medicare increase. The AHA representatives stated that we may
not have found staffing increases because, when states require a
minimum level of staff, facilities tend to staff only to that minimum.
They also commented that state requirements may have had a greater
effect on staffing than the nursing component increase, which was
temporary and had only been in effect for a limited time.
Representatives from all three groups noted that facilities could have
opted to raise wages, improve benefits, or take other steps to recruit
or retain staff, rather than hire additional nurses or aides. AHA added
that we did not consider whether, prior to the rate increase, nurse
staffing was adequate; if it was, SNFs may have chosen to spend the
added Medicare payments on retention rather than on hiring. In
addition, AASHA and AHCA representatives noted that we did not address
what would happen to nursing staff and margins if the payment increase
were not in place. The AAHSA representatives stated that, without the
increase, staffing might have decreased. AHCA representatives noted
that we should have considered the implications for SNF margins of not
continuing the payment increase.
Our Response:
As noted throughout the draft report, in conducting our study we
considered the limitations of the data and the analyses we could
perform. We therefore tested whether these limitations affected our
results. Taking account of those tests and the consistency of our
findings across categories of SNFs, we determined that the available
evidence was sufficient to conclude that the increased payment did not
result in higher nursing staff time. Our evidence consistently shows
that staffing ratios changed little after the nursing component payment
increase was implemented. However, we modified our conclusions to
reiterate the limitations of our study.
Regarding the representatives‘ specific concerns about the limitations
of our data and analysis:
* In the draft report, we detailed our efforts to correct OSCAR data
errors. We have no evidence that OSCAR data are biased in the aggregate
or that errors in OSCAR data would have understated the change in nurse
staffing ratios.
* In the draft report we noted that neither payroll records nor
Medicaid cost reports were feasible sources of staffing data for this
study. We have no reason to think that our results would have been
different if we had used those data sources because a HCFA study found
that those other sources yielded comparable aggregate staffing levels
to those in OSCAR.[Footnote 44] We believe that the data from OSCAR
were appropriate for examining staffing ratio changes because OSCAR is
the only nationally uniform data source that allowed us to compare
staffing ratios before and after the payment increase.
* In the draft report, we stated that while nurse staffing ratios apply
to all SNF patients and not just Medicare patients, we found no
relationship between changes in staffing ratios and the percentage of a
SNF‘s patients paid for by Medicare. Specifically, staffing increases
were no larger in SNFs with a greater percentage of Medicare patients
than in those with a smaller percentage of Medicare patients.
* The staffing changes in SNFs surveyed in the months just after the
payment increase was implemented differed little from staffing changes
of those SNFs surveyed later in 2001. Because we found no relationship
between SNFs‘ staffing ratio changes and the amount of time that had
passed since the payment increase (which ranged from 1 to 9 months), we
believe that our period of study was sufficiently long to determine
whether SNFs were responding to the payment increase. We have added
information on this analysis to the report.
* We agree that adjusting for patients‘ acuity is particularly
important for comparing staffing among different facilities; however,
acuity averaged over all facilities varies little over short
periods.[Footnote 45] Moreover, unless patients‘ acuity declined after
the nursing component increase--and we have no evidence that it did--
adjusting for acuity would not have affected our finding that nursing
staff time changed little.
Regarding representatives‘ concerns that we did not include sufficient
information on external factors affecting SNFs:
* We added information to the report on issues related to the nursing
workforce.
* Hiring difficulties would not have prevented SNFs from expanding the
hours of their existing nursing staff or using temporary nurses and
aides from staffing agencies--which would have been reflected in
staffing ratios.
* With respect to the possible influence of a weak economy on Medicaid
payments and SNF staffing levels, we noted in the draft report that the
pattern of nursing staff changes from 2000 to 2001 was similar to the
pattern from 1999 to 2000--a period when the economy was considerably
stronger.
* If SNFs increased nursing staff in response to new state requirements
during 2001, our study would have attributed these increases to the
Medicare payment change.
Regarding the representatives‘ statements about alternate ways SNFs
could have used the increased Medicare payments:
* To the extent that SNFs used the added Medicare payments for higher
wages or benefits, they may have reduced staff vacancies, which in turn
may have resulted in higher staffing ratios. However, we found little
change in nurse staffing ratios after the Medicare payment increase.
Regarding the representatives‘ statements about the adequacy of SNF
staffing:
* Because staffing adequacy was not within the scope of our study, we
did not consider whether staffing was adequate prior to the rate
increase, or whether this influenced SNFs‘ hiring decisions. The
Congress directed CMS to address this issue, which it did in two
reports. The first report, published in 2000, suggested that staffing
might not be adequate in a significant number of SNFs. This was
reaffirmed in CMS‘s recent report.[Footnote 46]
CMS, AAHSA, AHCA, and AHA also provided technical comments, which we
incorporated as appropriate.
We are sending copies of this report to the Administrator of CMS,
interested congressional committees, and other interested parties. We
will also provide copies to others upon request. In addition, the
report is available at no charge on the GAO Web site at http://
www.gao.gov.
If you or your staffs have any questions, please call me at (202) 512-
7114. Other GAO contacts and staff acknowledgments are listed in
appendix IV.
Laura A. Dummit
Director, Health Care--Medicare Payment Issues:
Signed by Laura A. Dummit
[End of section]
Appendix I: Data Source and Data Verification Methods for Nurse
Staffing
Ratio Analysis:
This appendix describes the selection of the data source for our
analysis, the characteristics of that data source, and procedures used
to verify data accuracy and make adjustments.
Data Sources Considered:
To assess the impact on nurse staffing ratios of the April 1, 2001,
increase in the nursing component of the SNF payment, we needed a
nationally uniform data source that included the number of patients and
the number of nursing staff (full-time equivalents (FTE)) or nursing
hours, for two periods--before April 1, 2001, to establish a baseline,
and after April 1, 2001. We considered several sources of nursing staff
data, including SNF payroll data, Medicaid cost reports, and CMS‘s
OSCAR system.
We determined that payroll records could not be used for several
reasons. CMS has collected and analyzed nursing home payroll data in
several states and has found that it is difficult to ensure that the
staffing data refer to hours worked (as required for an analysis of
nurse staffing ratios) rather than hours paid, which includes time such
as vacation and sick leave.[Footnote 47] CMS also found that although
current nursing home payroll records were usually available, older
records were difficult to obtain; consequently, it is unlikely that we
would have been able to get records prior to the rate increase.
Finally, payroll records do not include information on the number of
patients and would have had to be supplemented with other data.
Similarly, Medicaid cost reports were not an appropriate source of
data. While these reports by SNFs to state Medicaid agencies contain
data on both patients and nursing staff, Medicaid cost reports do not
permit a comparison of staffing ratios before and after the 16.66
percent increase in the nursing component because these reports cover a
12-month period that cannot be subdivided. Furthermore, these reports
do not contain nationally uniform staffing data because the categories
and definitions differ from state to state. Finally, the 2001 reports
were not available in time for our analysis.
OSCAR is the only uniform data source that contains data on both
patients and nursing staff. Moreover, OSCAR data are collected at least
every 15 months, allowing us to compare staffing ratios before and
after the 16.66 percent increase in the nursing component.
OSCAR Data:
The states and the federal government share responsibility for
monitoring compliance with federal standards in the nation‘s roughly
15,000 SNFs. To be certified for participation in Medicare, Medicaid,
or both, a SNF must have had an initial survey as well as subsequent,
periodic surveys to establish compliance. On average, SNFs are surveyed
every 12 to 15 months by state agencies under contract to CMS. In a
standard survey,[Footnote 48] a team of state surveyors spends several
days at the SNF, conducting a broad review of care and services to
ensure that the facility complies with federal standards and meets the
assessed needs of the patients. Data on facility characteristics,
patient characteristics, and staffing levels are collected on standard
forms. These forms are filled out by each facility at the beginning of
the survey and are certified by the facility as being accurate. After
the survey is completed, the state agency enters the data from these
forms into OSCAR, which stores data from the most current and previous
three surveys.
Although OSCAR was the most suitable data source available for our
analysis, it has several limitations. First, OSCAR provides a 2-week
snapshot of staffing and a 1 day snapshot of patients at the time of
the survey, so it may not accurately depict the facility‘s staffing and
number of patients over a longer period. Second, staffing is reported
across the entire facility, while the number of patients are reported
only for Medicare-and Medicaid-certified beds. OSCAR, like other data
sources, does not distinguish between staffing for Medicare patients
and staffing for other patient groups. Finally, the Health Care
Financing Administration (HCFA) reported that OSCAR data are unreliable
at the individual SNF level.[Footnote 49] However, the agency‘s recent
analysis has concluded that the OSCAR-based staffing measures appear
’reasonably accurate“ at the aggregate level (e.g., across states).
Neither CMS nor the states attempt to verify the accuracy of the
staffing data regularly.
Limitations to Our Analysis:
In addition to limitations inherent in OSCAR data, our analysis was
limited in several ways. First, our sample included only SNFs for which
OSCAR data were available both before and after the 16.66 percent
increase in the nursing component took effect. Second, our analysis of
staffing ratios after the increase took effect was limited to data
collected from May through December 2001. As a result, we only reviewed
data for 8 months after the payment increase was implemented, although
our results do not appear to be affected by any seasonal trends in
staffing.[Footnote 50] We were not able to review data for a later
period when facilities might have used the payment increase
differently.[Footnote 51] Finally, due to data entry lags, when we drew
our sample in January 2002, OSCAR did not include data from some
facilities surveyed from May through December 2001.[Footnote 52]
Creation of the Sample:
To determine the change in nurse staffing ratios, we selected all
facilities surveyed from May through December 2001 that also had a
survey during 2000, which could serve as the comparison. This sample
contained OSCAR data for 6,522 facilities. (See table 5.) Although not
a statistical sample that can be projected to all SNFs using
statistical principles, the sample is unlikely to be biased because it
was selected on the basis of survey month. Our sampling procedure, in
which selection depended solely on the time of survey, was unlikely to
yield a sample with characteristics that differ substantially from
those of the entire population of SNFs. We found no significant
differences between these 6,522 SNFs and the 13,454 SNFs that were
surveyed in calendar year 2000, in terms of various characteristics--
the proportion that are hospital-based, the proportion that are for-
profit, the share of a facility‘s patients that are paid for by
Medicare, and the capacity of the facilities. However, our sample was
not distributed across states like the population of SNFs. (See table
6.) This may be because state agencies differ in the amount of time
required to complete entry of survey data into OSCAR. In addition, we
excluded from our sample 449 SNFs that, based on their 2000 Medicare
claims data, had received payments from Medicare that were not
determined under the PPS. The resulting sample had 6,073 facilities--
over one-third of all SNFs.
Table 5: Creation of Our Sample of SNFs:
Total SNFs in 2000 OSCAR file (no duplicates); Number of SNFs:
13,454.
Total SNFs in 2001 OSCAR file; Number of SNFs: 14,760.
SNFs surveyed from May 2001 through December 2001; Number of SNFs:
6,775.
SNFs also with survey in calendar year 2000; Number of SNFs: 6,522.
SNFs that had received Medicare payments not determined under the
PPS; Number of SNFs: ; -449.
Original sample; Number of SNFs: 6,073.
Source: GAO analysis of CMS‘s OSCAR data and Medicare claims data.
[End of table]
Table 6: Distribution of SNFs across States (in Percentages):
Alabama; All SNFs with OSCAR data in
calendar year 2000 (n=13,454): 1.34; Sample SNFs[A]: 1.84.
Alaska; All SNFs with OSCAR data in
calendar year 2000 (n=13,454): 0.10; Sample SNFs[A]: 0.08.
Arizona; All SNFs with OSCAR data in
calendar year 2000 (n=13,454): 0.99; Sample SNFs[A]: 0.86.
Arkansas; All SNFs with OSCAR data in
calendar year 2000 (n=13,454): 1.40; Sample SNFs[A]: 1.15.
California; All SNFs with OSCAR data in
calendar year 2000 (n=13,454): 7.50; Sample SNFs[A]: 7.65.
Colorado; All SNFs with OSCAR data in
calendar year 2000 (n=13,454): 1.32; Sample SNFs[A]: 1.27.
Connecticut; All SNFs with OSCAR data in
calendar year 2000 (n=13,454): 1.77; Sample SNFs[A]: 2.02.
Delaware; All SNFs with OSCAR data in
calendar year 2000 (n=13,454): 0.27; Sample SNFs[A]: 0.28.
District of Columbia; All SNFs with OSCAR data in
calendar year 2000 (n=13,454): 0.13; Sample SNFs[A]: 0.11.
Florida; All SNFs with OSCAR data in
calendar year 2000 (n=13,454): 5.01; Sample SNFs[A]: 5.24.
Georgia; All SNFs with OSCAR data in
calendar year 2000 (n=13,454): 2.19; Sample SNFs[A]: 2.81.
Hawaii; All SNFs with OSCAR data in
calendar year 2000 (n=13,454): 0.27; Sample SNFs[A]: 0.25.
Idaho; All SNFs with OSCAR data in
calendar year 2000 (n=13,454): 0.54; Sample SNFs[A]: 0.69.
Illinois; All SNFs with OSCAR data in
calendar year 2000 (n=13,454): 4.60; Sample SNFs[A]: 4.35.
Indiana; All SNFs with OSCAR data in
calendar year 2000 (n=13,454): 3.43; Sample SNFs[A]: 3.77.
Iowa; All SNFs with OSCAR data in
calendar year 2000 (n=13,454): 2.00; Sample SNFs[A]: 2.18.
Kansas; All SNFs with OSCAR data in
calendar year 2000 (n=13,454): 1.86; Sample SNFs[A]: 1.59.
Kentucky; All SNFs with OSCAR data in
calendar year 2000 (n=13,454): 2.01; Sample SNFs[A]: 2.13.
Louisiana; All SNFs with OSCAR data in
calendar year 2000 (n=13,454): 1.79; Sample SNFs[A]: 1.79.
Maine; All SNFs with OSCAR data in
calendar year 2000 (n=13,454): 0.85; Sample SNFs[A]: 0.95.
Maryland; All SNFs with OSCAR data in
calendar year 2000 (n=13,454): 1.68; Sample SNFs[A]: 0.61.
Massachusetts; All SNFs with OSCAR data in
calendar year 2000 (n=13,454): 3.20; Sample SNFs[A]: 2.59.
Michigan; All SNFs with OSCAR data in
calendar year 2000 (n=13,454): 2.80; Sample SNFs[A]: 3.51.
Minnesota; All SNFs with OSCAR data in
calendar year 2000 (n=13,454): 2.75; Sample SNFs[A]: 2.81.
Mississippi; All SNFs with OSCAR data in
calendar year 2000 (n=13,454): 0.97; Sample SNFs[A]: 1.18.
Missouri; All SNFs with OSCAR data in
calendar year 2000 (n=13,454): 3.26; Sample SNFs[A]: 2.61.
Montana; All SNFs with OSCAR data in
calendar year 2000 (n=13,454): 0.65; Sample SNFs[A]: 0.58.
Nebraska; All SNFs with OSCAR data in
calendar year 2000 (n=13,454): 1.05; Sample SNFs[A]: 1.23.
Nevada; All SNFs with OSCAR data in
calendar year 2000 (n=13,454): 0.33; Sample SNFs[A]: 0.21.
New Hampshire; All SNFs with OSCAR data in
calendar year 2000 (n=13,454): 0.38; Sample SNFs[A]: 0.32.
New Jersey; All SNFs with OSCAR data in
calendar year 2000 (n=13,454): 2.42; Sample SNFs[A]: 1.98.
New Mexico; All SNFs with OSCAR data in
calendar year 2000 (n=13,454): 0.46; Sample SNFs[A]: 0.43.
New York; All SNFs with OSCAR data in
calendar year 2000 (n=13,454): 4.39; Sample SNFs[A]: 3.31.
North Carolina; All SNFs with OSCAR data in
calendar year 2000 (n=13,454): 2.83; Sample SNFs[A]: 3.13.
North Dakota; All SNFs with OSCAR data in
calendar year 2000 (n=13,454): 0.63; Sample SNFs[A]: 0.81.
Ohio; All SNFs with OSCAR data in
calendar year 2000 (n=13,454): 5.72; Sample SNFs[A]: 5.80.
Oklahoma; All SNFs with OSCAR data in
calendar year 2000 (n=13,454): 1.46; Sample SNFs[A]: 0.52.
Oregon; All SNFs with OSCAR data in
calendar year 2000 (n=13,454): 0.88; Sample SNFs[A]: 1.07.
Pennsylvania; All SNFs with OSCAR data in
calendar year 2000 (n=13,454): 5.34; Sample SNFs[A]: 5.78.
Rhode Island; All SNFs with OSCAR data in
calendar year 2000 (n=13,454): 0.62; Sample SNFs[A]: 0.64.
South Carolina; All SNFs with OSCAR data in
calendar year 2000 (n=13,454): 1.22; Sample SNFs[A]: 1.29.
South Dakota; All SNFs with OSCAR data in
calendar year 2000 (n=13,454): 0.64; Sample SNFs[A]: 0.66.
Tennessee; All SNFs with OSCAR data in
calendar year 2000 (n=13,454): 1.84; Sample SNFs[A]: 1.98.
Texas; All SNFs with OSCAR data in
calendar year 2000 (n=13,454): 7.20; Sample SNFs[A]: 7.41.
Utah; All SNFs with OSCAR data in
calendar year 2000 (n=13,454): 0.57; Sample SNFs[A]: 0.74.
Vermont; All SNFs with OSCAR data in
calendar year 2000 (n=13,454): 0.28; Sample SNFs[A]: 0.31.
Virginia; All SNFs with OSCAR data in
calendar year 2000 (n=13,454): 1.61; Sample SNFs[A]: 1.72.
Washington; All SNFs with OSCAR data in
calendar year 2000 (n=13,454): 1.86; Sample SNFs[A]: 2.12.
West Virginia; All SNFs with OSCAR data in
calendar year 2000 (n=13,454): 0.81; Sample SNFs[A]: 0.37.
Wisconsin; All SNFs with OSCAR data in
calendar year 2000 (n=13,454): 2.53; Sample SNFs[A]: 3.01.
Wyoming; All SNFs with OSCAR data in
calendar year 2000 (n=13,454): 0.24; Sample SNFs[A]: 0.26.
Note: These percentages do not add to 100 because we did not include
the small percentage of SNFs located in Puerto Rico, Guam, and the
United States Virgin Islands.
[A] The sample includes all SNFs with OSCAR data for both calendar year
2000 and May to December 2001.
Source: GAO analysis of CMS‘s OSCAR data.
[End of table]
Validating and Correcting OSCAR Data:
To assess the accuracy of the OSCAR data in our sample, we applied
decision rules developed by CMS for its study of minimum nurse staffing
ratios to identify facilities with data that appeared to represent data
entry or other reporting errors.[Footnote 53] In addition, we
identified facilities in our sample that had changes in their nurse
staffing ratios greater than 100 percent, but that did not report 100
percent changes in both total patients and total beds. Using these
rules, we identified 570 facilities for review. For 536 of these
facilities, we obtained the original forms completed by SNF staff and
used for entering data into OSCAR, from the state survey agencies. We
compared the data on the forms to the OSCAR entries and identified 159
facilities with data entry errors. For these facilities, we corrected
the data, although 12 continued to be outliers and were excluded. For
179 facilities, we telephoned the SNF to verify its data; 65 facilities
confirmed that OSCAR correctly reported their data. Based on the
information gathered in these calls, we were able to correct the data
for an additional 47 facilities. We also excluded 35 facilities for
which we could not correct the data. In addition, we excluded 915 SNFs
with more total beds than certified beds because they may have
inaccurate staffing ratios.[Footnote 54] Other facilities were excluded
because we did not receive their forms, we were unable to call the
SNFs, or we did not receive replies from them. After these exclusions,
our final sample contained 4,981 SNFs. (See table 7.):
Table 7: Exclusions from the Sample:
Original sample; Number of SNFs: 6,073.
Facilities with edited data that were still identified as outliers;
Number of SNFs: 12.
Facilities for which we could not correct the data; Number of SNFs: 35.
Facilities that had closed; Number of SNFs: 3.
Facilities with more total beds than certified beds; Number of SNFs:
915[A].
Facilities for which we did not receive forms; Number of SNFs: 34.
Facilities that we were unable to call; Number of SNFs: 81.
Facilities that did not reply; Number of SNFs: 12.
Final sample; Number of SNFs: 4,981.
[A] These SNFs were excluded because they may have inaccurate staffing
ratios. Facilities are instructed to report only patients in certified
beds. As a result, the number of patients reported in OSCAR for these
facilities may not reflect the number of patients who received care
from nursing staff.
Source: GAO analysis of CMS‘s OSCAR data.
[End of table]
Nurse Staffing Ratios:
We calculated nurse staffing ratios--hours per patient day--for each
facility by dividing the total nursing hours[Footnote 55] by the
estimated number of patient days.[Footnote 56] We calculated nurse
staffing ratios for all nursing staff as well as for each category of
staff: RNs, LPNs, and aides. We also calculated the change in these
ratios for each facility in our sample. We analyzed these changes in
nurse staffing ratios overall and for several categories of SNFs,
including for-profit, not-for-profit, and government-owned facilities.
We also analyzed these changes based on each facility‘s prior year
staffing ratio. Finally, we supplemented the staffing data with cost
and payment data from Medicare cost reports for 2000 and related the
changes in nurse staffing ratios to each SNF‘s total margin--a measure
of its financial status. We tested whether staffing ratio changes from
2000 to 2001 were statistically significant--that is, statistically
distinguishable from zero. In addition, for the analyses of SNFs‘ prior
year staffing and their financial status, we tested whether, between
any two groups of SNFs, the difference in their staffing ratio changes
was statistically significant.
[End of section]
Appendix II: Average Change in Nursing Staff Time between 2000 and
2001,
Grouped by Category of SNF:
Average nursing time per patient day :
Hospital-based; Average nursing time per patient day: Calendar year
2000: 5 hours, 32.1 minutes; Average nursing time per patient day: May-
December 2001: 5 hours, 32.0 minutes; Change in minutes: -0.1 minutes.
Freestanding; Average nursing time per patient day: Calendar year
2000: 3 hours, 6.7 minutes; Average nursing time per patient day: May-
December 2001: 3 hours, 8.9 minutes; Change in minutes: 2.1 minutes.
For-profit; Average nursing time per patient day: Calendar year 2000:
3 hours, 8.3 minutes; Average nursing time per patient day: May-
December 2001: 3 hours, 9.5 minutes; Change in minutes: 1.3 minutes.
Not-for-profit; Average nursing time per patient day: Calendar year
2000: 3 hours, 51.9 minutes; Average nursing time per patient day: May-
December 2001: 3 hours, 54.6 minutes; Change in minutes: 2.7 minutes.
Government; Average nursing time per patient day: Calendar year 2000:
3 hours, 53.8 minutes; Average nursing time per patient day: May-
December 2001: 3 hours, 58.9 minutes; Change in minutes: 5.0 minutes.
Chain; Average nursing time per patient day: Calendar year 2000: 3
hours, 14.9 minutes; Average nursing time per patient day: May-December
2001: 3 hours, 15.4 minutes; Change in minutes: 0.5 minutes.
Nonchain; Average nursing time per patient day: Calendar year 2000: 3
hours, 34.7 minutes; Average nursing time per patient day: May-December
2001: 3 hours, 38.6 minutes; Change in minutes: 3.9 minutes.
Note: For freestanding and nonchain SNFs, the change in minutes between
2000 and 2001 was significant at the .05 level. Due to rounding, the
reported change in minutes does not always match the 2000 and 2001
figures exactly.
Source: GAO analysis of CMS‘s OSCAR data.
[End of table]
[End of section]
Appendix III: Comments from the Centers for Medicare & Medicaid
Services:
DEPARTMENT OF HEALTH & HUMAN SERVICES:
Centers for Medicare & Medicaid services:
Administrator, Washington, DC 20201:
DATE: SEP 25 2002:
TO: Laura A. Dummit
Director, Health Care-Medicare Payment Issues, General Accounting
Office:
FROM: Thomas A. Scully Administrator Centers for Medicare & Medicaid
Services:
SUBJECT: General Accounting Office (GAO) Draft Report, ’Skilled Nursing
Facilities: Available Data Show Average Nursing Staff Time Changed
Little After Medicare Payment Increase“ GAO-02-1051:
As requested, we have reviewed the above-captioned report, which GAO
developed in response to Section 312 of the Benefits Improvement and
Protection Act of 2000 (BIPA, P.L. 106-554, Appendix F). The BIPA
legislation provided for a temporary, 16.66 percent increase in the
nursing component of the case-mix adjusted payment rates for skilled
nursing facilities (SNFs), from April 1, 2001, through September 30,
2002. It also directed GAO to study the payment increase impact on
nurse staffing ratios in SNFs, and to submit its findings to the
Congress, including a recommendation on whether the payment increase
should be continued.
The report finds that there was no significant overall increase in
nurse staffing ratios after the payment increase went into effect. It
attributes the modest staffing changes that did occur mainly to other
factors, such as payment or policy changes in individual state Medicaid
programs aimed at increasing nurse staffing. Accordingly, GAO
recommends that the Congress consider permitting the payment increase
to expire.
We believe that the report represents a useful contribution to the
ongoing examination of SNF care under the prospective payment system,
and we appreciate receiving the opportunity to review it. The GAO‘s
findings in this report are consistent with our expectations, as well
as our understanding of other findings in this area.
[End of section]
Appendix IV: GAO Contacts and Staff Acknowledgments:
GAO Contacts:
Jonathan Ratner, (202) 512-7107
Phyllis Thorburn, (202) 512-7012:
Acknowledgments:
Major contributors to this report were Robin Burke, Jessica Farb, and
Dae Park.
[End of section]
Related GAO Products:
Skilled Nursing Facilities: Providers Have Responded to New Payment
System By Changing Practices. GAO-02-841. Washington, D.C.: August 23,
2002.
Nursing Homes: Quality of Care More Related to Staffing than Spending.
GAO-02-431R. Washington, D.C.: June 13, 2002.
Nursing Homes: Federal Efforts to Monitor Resident Assessment Data
Should Complement State Activities. GAO-02-279. Washington, D.C.:
February 15, 2002.
Nursing Workforce: Emerging Nurse Shortages Due to Multiple Factors.
GAO-01-944. Washington, D.C.: July 10, 2001.
Nursing Homes: Success of Quality Initiatives Requires Sustained
Federal and State Commitment. GAO/T-HEHS-00-209. Washington, D.C.:
September 28, 2000.
Nursing Homes: Sustained Efforts Are Essential to Realize Potential of
the Quality Initiatives. GAO/HEHS-00-197. Washington, D.C.: September
28, 2000.
FOOTNOTES
[1] The nursing component includes costs related not only to nursing
but to medical social services and nontherapy ancillary services, such
as drugs, laboratory tests, and imaging. The therapy component includes
costs related to occupational, physical, and speech therapy. The
routine cost component includes costs for capital, maintenance, and
food.
[2] Pub. L. No. 106-554, App. F, § 312(a), 114 Stat. 2763, 2763A-498.
[3] Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of
1999, Pub. L. No. 106-113, App. F, § 101, 113 Stat. 1501, 1501A-324.
[4] BIPA § 312(b).
[5] A nurse staffing ratio is defined as nursing hours per patient per
day. Nursing staff include registered nurses, licensed practical
nurses, and aides. In this report, ’staffing“ refers to these nursing
staff.
[6] OSCAR stores data collected during annual inspections or surveys of
SNFs conducted by state agencies under contract to CMS. OSCAR is the
only uniform data source that contains data on both patients and
nursing staff.
[7] CMS administers the Medicare program. On July 1, 2001, the
Secretary of Health and Human Services changed the name of the Health
Care Financing Administration (HCFA) to CMS. In this report, we will
continue to refer to HCFA where our findings apply to the
organizational structure and operations associated with that name.
[8] CMS officials have stated that OSCAR data are accurate in the
aggregate--that is, at national and state levels--but have indicated
that data on some individual facilities may not be accurate. We report
OSCAR data only at national and state levels. See HCFA, Report to
Congress: Appropriateness of Minimum Nurse Staffing Ratios in Nursing
Homes, Phase I (Baltimore, Md.: July 2000).
[9] Our 2001 OSCAR data include May through December 2001, after the
payment increase took effect. As a result, we only reviewed data for an
8-month period after the payment increase was implemented. We were not
able to review data for a later period when facilities might have used
the payment increase differently.
[10] A spell of illness is a period that begins when a Medicare
beneficiary is admitted to a hospital and ends when a beneficiary has
not been an inpatient of a hospital or SNF for 60 consecutive days. A
beneficiary may have more than one spell of illness per year that is
covered by Medicare.
[11] CMS considers a facility to be hospital-based if it is ’under the
administrative control of a hospital.“
[12] Government-owned facilities are operated primarily by counties or
cities.
[13] State agencies, under contract to CMS, conduct initial and follow-
up visits to assess compliance with federal standards--Medicare‘s and
Medicaid‘s conditions of participation.
[14] Pub. L. No. 105-33, § 4432, 111 Stat. 251, 414.
[15] These groups are based on patient clinical condition, functional
status, and use or expected use of certain types of services. Each RUG
describes patients with similar care needs and has a corresponding
payment rate.
[16] These figures are for facilities in urban areas. For facilities in
rural areas, the nursing component ranged from 23 percent to 72 percent
of the total rate.
[17] Pub. L. No. 106-113, App. F, § 101, 113 Stat. 1501, 1501A-324.
[18] The 4 percent increase is based on the PPS daily rates that would
have been in effect for those years without the 20 percent temporary
increase for the 15 high-cost RUGs noted above.
[19] BIPA § 314.
[20] The remaining 12 RUGs retained the 20 percent increase.
[21] BIPA requires that CMS submit a report to the Congress on possible
alternatives to the current RUG patient classification system by
January 1, 2005. BIPA § 311(e).
[22] This figure represents the number of full-time equivalents.
[23] In some parts of the United States, LPNs are known as licensed
vocational nurses (LVN).
[24] See U.S. General Accounting Office, Nursing Homes: Quality of Care
More Related to Staffing than Spending, GAO-02-431R (Washington, D.C.:
June 13, 2002); Centers for Medicare & Medicaid Services, Report to
Congress: Appropriateness of Minimum Nurse Staffing Ratios in Nursing
Homes, Phase II Final Report (Baltimore, Md.: December 2001); U.S.
Department of Health and Human Services, Quality of Care in Nursing
Homes: An Overview, Office of Inspector General (Washington, D.C.:
March 1999); and Institute of Medicine, Nursing Staff in Hospitals and
Nursing Homes: Is it Adequate? (Washington, D.C.: National Academy
Press, 1996).
[25] 42 U.S.C. § 1395i-3(b) (2000).
[26] 42 C.F.R. § 483.30 (2001).
[27] The Department of Health and Human Services may waive the
requirement that a SNF provide the services of an RN for 8 hours a day,
7 days a week, including a director of nursing, in certain
circumstances. However, according to CMS, few facilities have those
requirements waived.
[28] See U.S. General Accounting Office, Nursing Workforce: Emerging
Nurse Shortages Due to Multiple Factors, GAO-01-944 (Washington, D.C.:
July 10, 2001), and Centers for Medicare & Medicaid Services, Report to
Congress: Appropriateness of Minimum Nurse Staffing Ratios in Nursing
Homes, Phase II Final Report, ch. 4.
[29] AHCA represents for-profit and not-for-profit nursing facilities.
[30] American Health Care Association, Results of the 2001 AHCA Nursing
Position Vacancy and Turnover Survey (Washington, D.C.: Feb. 7, 2002).
[31] These figures are based on data from BLS‘s Occupational Employment
Statistics and National Compensation Survey for 1999 and 2000. BLS‘s
2001 Occupational Employment Statistics were not available at the time
of our analysis.
[32] The 2001 Nursing Facility Compensation Survey, sponsored by AHCA
and the Alliance for Quality Nursing Home Care, was conducted by Muse
and Associates and Buck Consultants.
[33] The 2001 data are from May through December 2001, after the
increased nursing component payment took effect.
[34] These staffing ratios, and the ratios presented throughout this
report, are based on SNFs‘ overall direct care nursing staff and the
total number of patients; they are, therefore, facilitywide staffing
ratios, rather than ratios specific to Medicare patients.
[35] That is, the change was too small to be statistically
distinguished from zero. Since we were only able to review data for a
limited period after the payment increase was implemented, we compared
SNFs‘ staffing ratio changes over time to test whether this affected
our results. When we compared the change in staffing ratios among
facilities surveyed soon after the payment increase to those surveyed
later in 2001, we found no significant difference. This suggests that
our results were not affected by examining staffing soon after the
payment change. SNFs responded similarly to the increase regardless of
how much time had elapsed since its implementation.
[36] The estimates ranged from 9.4 to 10.1 minutes, depending on
whether we assumed relatively large--10 percent--or small--3 percent--
increases in wage rates from 2000 to 2001.
[37] For this analysis, we consider patients to be Medicare-covered if
they are receiving Medicare-covered SNF care. Although a SNF may have a
large number of patients who are Medicare beneficiaries, not all such
patients necessarily receive Medicare-covered SNF care. For example,
patients receiving long-term custodial care could be eligible for
Medicare-covered services, but their SNF stays would not be paid for by
Medicare.
[38] The average staffing levels in 2000 were similar for the groups
with the highest and lowest Medicare patient shares--3 hours, 11
minutes of nursing time per patient day for the highest group, and 3
hours, 8 minutes for the lowest group.
[39] A margin is the difference between revenues and costs, divided by
revenues, and expressed as a percentage.
[40] When we looked at median changes in staffing rather than average
changes, we found that these SNFs had a median increase of 13.6 minutes
of nursing time.
[41] These SNFs had a median decrease of 11 minutes.
[42] This pattern appears to reflect a common statistical phenomenon in
which high and low values tend to move closer to the average over time.
[43] Our sample included 30 percent of the facilities in Arkansas, 38
percent of the facilities in Nebraska, 62 percent of the facilities in
North Dakota, and 16 percent of the facilities in Oklahoma. SNFs in
four other states had staffing increases of 15 minutes or more, but
those changes were not statistically significant.
[44] See HCFA, Report to Congress: Appropriateness of Minimum Nurse
Staffing Ratios in Nursing Homes, Phase I. HCFA‘s analysis was based in
part on data from a special survey of payroll records from facilities
in Ohio.
[45] See Medicare Payment Advisory Commission, Report to the Congress:
Medicare Payment Policy (Washington, D.C.: March 2001).
[46] See HCFA, Report to Congress: Appropriateness of Minimum Nurse
Staffing Ratios in Nursing Homes, Phase I and CMS, Report to Congress:
Appropriateness of Minimum Nurse Staffing Ratios in Nursing Homes,
Phase II Final Report.
[47] See CMS, Report to Congress: Appropriateness of Minimum Nurse
Staffing Ratios in Nursing Homes, Phase II Final Report (Baltimore,
Md.: December 2001).
[48] In addition to the standard survey, state agencies conduct other
surveys including complaint surveys.
[49] See HCFA, Report to Congress: Appropriateness of Minimum Nurse
Staffing Ratios in Nursing Homes, Phase I (Baltimore, Md.: July 2000).
[50] To test whether our results reflected any seasonal trends in
staffing, we examined the change in nurse staffing ratios among
facilities surveyed from May through December of both 2000 and 2001. We
found that these facilities had a small change in their nurse staffing
ratios that was similar to the change among facilities that were
surveyed at any time during calendar year 2000 and from May to December
2001.
[51] Although the payment increase began with services furnished on or
after April 1, 2001, according to CMS, facilities would not have begun
to receive the added payments until May 1, 2001, because of the time it
takes to process claims. We compared the change in staffing ratios
among facilities surveyed in May and June 2001 to those surveyed in
July and August 2001 and found no significant difference. This suggests
that the results were not affected by examining staffing soon after the
payment change.
[52] We compared the change in staffing ratios among SNFs surveyed from
May through August 2001 to the change among those surveyed later in the
year--the period for which state agencies had not yet entered all
survey data into OSCAR--and found no significant difference.
[53] These rules identified facilities that reported more patients than
beds, 12 or more hours of nursing time per patient day, less than 30
minutes of nursing time per patient day, and any hours coded as ’999“-
-which could indicate reporting error. Other researchers who use OSCAR
data have developed similar decision rules. Although we also initially
used a CMS rule to identify facilities that had no staff registered
nurse (RN) hours but 60 or more beds, we did not exclude facilities
based on this rule because we later determined it was not a good
indicator of problem data. After reviewing the federal SNF staffing
regulations and discussing these requirements with a number of SNFs, we
determined that a SNF could have 60 or more beds and have no RNs except
for administrative staff. 42 C.F.R . § 483.23 (2001).
[54] Facilities are instructed to report only patients in certified
beds. As a result, the number of patients reported in OSCAR for these
facilities may not truly reflect the number of patients who received
care from nursing staff.
[55] Total nursing hours includes the number of full-time, part-time,
and contract RN, licensed practical nurse (LPN), certified nurse aide
(CNA), CNA-in-training, and medication technician hours reported in
OSCAR for a 2-week period. Nursing hours do not include RN directors of
nursing or nurses with administrative duties. In addition, nursing
hours reflect the amount of time that nursing staff were at work, but
do not necessarily reflect the time they spent with patients. For
example, they may spend a portion of their day in training or on
breaks.
[56] We estimated patient days by multiplying by 14 the number of
patients reported in OSCAR for 1 day.
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