A top federal watchdog will audit the Centers for Medicare & Medicaid Services’ nursing home survey practices in 2024, according to a new report. 

Though sparse on details, the Jan. 16 announcement highlights concerns that third-party contractors may not have sufficient oversight to ensure proper performance of nursing home surveys.

The report acknowledged a survey backlog that has plagued the skilled nursing sector for years. With more states, and even CMS itself, relying on contractors to fill gaps, the US Department of Health and Human Services Office of Inspector General report suggests that CMS’ regulatory practices warrant a closer look.

The OIG report did not go into detail about the upcoming audit, but the agency likely will be looking at third-party surveyors’ training and qualifications, team size and composition, potential conflicts of interest and other factors that could impact the quality of surveys, according to Melanie Tribe-Scott, vice president of quality and regulatory compliance at Zimmet Healthcare Services Group.

These questions are especially relevant given previous evidence of how little ability CMS has to oversee its own state surveyors. 

“CMS has limited oversight into effectiveness of state correction actions,” Tribe-Scott told McKnight’s, referring to the findings of a Jan. 2022 OIG report. “So then are they effective at managing and overseeing these third party contractors?”

While noting that much analysis at this point can only be speculative, Amy Greer, director of quality innovations at Zimmet told McKnight’s she expects the results of the audit to be a clarifying moment for the skilled nursing sector.

“Just getting all this information is going to be very eye-opening and tell us what is needed moving forward with the survey process — how to improve upon it and how to catch facilities up to where they should be,” she said.

Rising provider frustrations

Resources for audits have been scarce for years, partially due to the federal government’s reluctance to add funding. The pipeline could tighten following the implementation of a CMS staffing mandate. A May report from the US Senate Special Committee on Aging confirmed that 32 state survey agencies had job vacancy rates of 20% or higher.  

Even pro-mandate policymakers have championed the need for more audit funding to match the increased nursing home staffing requirements.

State survey struggles are well known and can cascade onto providers, according to Spencer Blackman, director of product for StarPro, which provides data insights to operators, lenders and insurers, and Colleen Muncy, managing director at StarPro.

“It’s no secret that states are struggling to conduct surveys quickly and effectively,” Blackman and Muncy told McKnight’s in a written comment. “It’s not fair to operators to leave them in limbo and it’s not fair to residents to live in a facility that’s not inspected regularly for compliance issues.  The pressure is coming from all sides, so it’s no surprise that states are turning to contractors to address the gap.”

With demands on nursing homes so high, frustrations may rise in the sector about surveyors not being held to similar standards, Greer noted.

“If nursing homes are held to such a high standard,” she told Mcknight’s, “it should be reciprocal. We want to know that people coming into our facilities have had the training, have the understanding, and they do know what they’re looking for…. We want to know we can work with them.”

But whether the OIG audit returns positive or negative reviews of CMS oversight and third-party contractors, it will likely prove difficult to return to the old status quo of primarily using only state surveyors.

“We know that the state surveyors are short-staffed, as is everybody right now,” Tribe-Scott explained. “If [the OIG audit] does find negative outcomes and take third-party contractors out of the process, it will only put more pressure on an already short-staffed entity.”

Such a negative result of the audit would also likely have repercussions for any third-party contractors found to be in violation of regulations and for the regional offices that employ them, Tribe-Scott added.

“Our impression,” wrote Blackman and Muncy, “is that low levels of funding and a complicated survey procedure makes it difficult to train and deploy knowledgeable and fair surveyors at all, whether employee or contractor.  Frankly, we expect that they’ll find continue to find shortcomings with the actions of both contracted and employee surveyors….  It will be interesting to see whether OIG places the blame on states, CMS, or on those controlling the purse strings.”

The OIG expects to issue its findings in 2025.