New York State Office of the State Comptroller

Thomas P. DiNapoli
Division of State Government Accountability

Nursing Home Surveillance

Department of Health

Report 2015-S-26

February 2016

2015-S-26

Executive Summary
Purpose

To determine whether the Department of Health (Department) consistently follows federal and
State regulations and procedures for conducting nursing home surveys and whether survey
processes, including the issuance of fines and other enforcement actions, are effective in
improving the quality of care and safety in nursing homes. This audit covers the period January 1,
2012 through September 17, 2015.

Background

The Department, through its Division of Nursing Homes and Intermediate Care Facilities for
Individuals with Intellectual Disabilities Surveillance (Division), is responsible for ensuring nursing
homes comply with federal and State regulations, which establish standards that govern their
operations. The Division also acts as an agent for the federal governments Centers for Medicare
and Medicaid Services (CMS) in monitoring quality of care in nursing homes. Division staff assess
compliance through on-site facility inspections, referred to as surveys. Standard Health and Life
Safety Code surveys are unannounced and must be conducted at least every 15.9 months pursuant
to CMS guidance. Complaint surveys investigate issues, and nursing home-reported incidents,
that may involve non-compliance with regulations. Follow-up surveys are used to monitor nursing
homes progress in correcting previously noted deficiencies.
CMS requires states to investigate complaints and incidents for severity and urgency to assess
whether a nursing home has violated a federal or State regulation. If any survey reveals violations,
surveyors issue citations. Depending on the severity classification, the Department can implement
a range of enforcement actions, such as fines, directed plans of correction, and, if warranted,
facility closure. Between January 1, 2007 and May 12, 2015, the Division conducted over 39,000
surveys and issued more than 50,000 citations.

Key Findings

The Department is generally meeting its obligations to conduct Standard Health and Complaint
surveys in accordance with federal and State requirements, including the timeliness of inspections
and the accuracy of scope and severity ratings of citations. However, the Departments
enforcement policies and procedures need to be strengthened to better protect the health and
well-being of nursing home residents.
Inefficiencies in the Departments processes have significantly impaired its ability to assess fines
timely, in some cases resulting in delays of up to six years between when the violation is cited
and the resulting fine is imposed. This trend has worsened significantly in recent years.
As a matter of policy, the Department does not utilize the full array of enforcement actions
available to it under both State law and CMS guidelines, choosing to not levy fines for well over
80 percent of the violations it cites.
These weaknesses appear to undermine the incentive that fines can have as a deterrent to
deficient practices, as well as the sense of urgency for correcting the deficiencies, particularly in
addressing cases of repeated non-compliance.

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Key Recommendations

Eliminate the backlog in enforcement activity and maintain timely processing of future
assessments of State fines.
Consider assessing State fines for additional citations allowable by the Public Health Law and
CMS guidelines, especially for facilities that demonstrate a pattern of repetitive citations.

Other Related Audit\Report of Interest

Department of Health: Facility Structure, Safety, and Health Code Waivers (2014-S-27)

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State of New York

Office of the State Comptroller
Division of State Government Accountability
February 19, 2016
Howard A. Zucker, M.D., J.D.
Commissioner
Department of Health
Corning Tower
Empire State Plaza
Albany, NY 12237
Dear Dr. Zucker:
The Office of the State Comptroller is committed to helping State agencies, public authorities,
and local government agencies manage government resources efficiently and effectively and, by
so doing, providing accountability for tax dollars spent to support government operations. The
Comptroller oversees the fiscal affairs of State agencies, public authorities, and local government
agencies, as well as their compliance with relevant statutes and their observance of good business
practices. This fiscal oversight is accomplished, in part, through our audits, which identify
opportunities for improving operations. Audits can also identify strategies for reducing costs and
strengthening controls that are intended to safeguard assets.
Following is a report of our audit entitled Nursing Home Surveillance. This audit was performed
according to the State Comptrollers authority under Article V, Section 1 of the State Constitution
and Article II, Section 8 of the State Finance Law.
This audits results and recommendations are resources for you to use in effectively managing
your operations and in meeting the expectations of taxpayers. If you have any questions about
this report, please feel free to contact us.
Respectfully submitted,
Office of the State Comptroller
Division of State Government Accountability

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2015-S-26

Table of Contents
Background

Audit Findings and Recommendations

Annual Certification and Complaint Survey Requirements

Enforcement Practices

Recommendations

14

Audit Scope and Methodology

15

Authority

16

Reporting Requirements

16

Contributors to This Report

17

Exhibit A

18

Exhibit B

19

Exhibit C

20

Exhibit D

21

Exhibit E

22

Exhibit F

23

Agency Comments

24

State Comptrollers Comments

28

State Government Accountability Contact Information:

Audit Director: John Buyce
Phone: (518) 474-3271
Email: StateGovernmentAccountability@osc.state.ny.us
Address:
Office of the State Comptroller
Division of State Government Accountability
110 State Street, 11th Floor
Albany, NY 12236
This report is also available on our website at: www.osc.state.ny.us
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Background
The Department of Health (Department) oversees nursing home facilities in New York State
through its Division of Nursing Homes and Intermediate Care Facilities for Individuals with
Intellectual Disabilities Surveillance (Division). The Division also acts as an agent for the federal
governments Centers for Medicare and Medicaid Services (CMS) in monitoring quality of care in
nursing homes. The Division is responsible for ensuring nursing homes comply with federal and
State regulations, which establish standards that govern their operations. These standards cover
a range of requirements, such as residents rights, clinical services, and administrative practices,
and are intended to ensure the highest possible quality of care for all residents. In order to
receive payment under Medicare and Medicaid programs, nursing homes must comply with
these standards and be certified as compliant by the Department.
Division staff assess compliance through the following types of on-site facility inspections,
commonly referred to as surveys:
Standard Health and Life Safety Code surveys (usually conducted together and hereafter
referred to as Standard Health surveys), which are unannounced and must be conducted
at least every 15.9 months.
Complaint surveys, which investigate complaints and incidents reported by the nursing
homes or third parties that may involve non-compliance with federal or State regulations.
Follow-up surveys to monitor nursing homes progress in correcting previously noted
deficiencies.
If a survey reveals violations of federal or State regulations, surveyors issue a Statement of
Deficiencies detailing all deficiencies identified. For each deficiency, surveyors use record reviews,
interviews, and observations to determine both the scope and the severity of the issue based on
CMSs rating system (see Exhibit A). Depending on the severity classification, the Department can
implement a range of enforcement actions, such as directed plans of correction, State fines, and,
if warranted, facility closure.
The Division has seven regional offices throughout the State that carry out survey functions,
including three in the New York City area, known as Metropolitan Area Region Offices (MARO).
Of the 631 nursing home facilities currently active in New York State, over half are located in the
MARO area. Between January 1, 2007 and May 12, 2015, the Division completed 39,373 surveys,
including Standard Health and Complaint surveys, and issued over 50,000 citations (see Table 1).
Additionally, the Division received over 79,000 complaints and incident reports, of which more
than 37,000 were investigated.

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Table 1 Survey, Citation, and Complaint/Incident Data, 2007May 12, 2015

2007

2008

2009

2010

2011

2012

2013

2014

2015

Totals

Surveys

5,884

4,391

4,508

4,144

4,733

4,533

4,759

4,809

1,612 39,3731

Citations

7,343

5,713

5,918

5,351

6,040

5,985

5,832

6,135

2,114 50,4312

Intake

8,594

9,581

9,244

9,158

8,573

8,907 10,695 11,098

3,954

79,804

Investigated

5,077

5,304

4,765

4,471

3,726

4,276

1,180

37,303

Complaints
/Incidents:

4,104

4,400

Includes 478 Federal Monitoring surveys conducted directly by CMS.

Includes 968 citations from surveys before January 1, 2007 that had revisits after January 1, 2007 as well as 804 citations
resulting from Federal Monitoring surveys.

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Audit Findings and Recommendations

We found that the Department is generally meeting its obligations to conduct periodic Standard
Health and Complaint surveys in accordance with State and federal requirements, including the
timeliness of those inspections, and the accuracy of the scope and severity of cited deficiencies.
However, the Departments enforcement policies and procedures still need to be strengthened
to better protect the health and well-being of nursing home residents. For instance, as a matter
of policy, the Department does not utilize the full array of enforcement actions available to it
under both State law and CMS guidelines, choosing to not levy fines for certain categories of
violations that comprise almost 85 percent of the problems identified during its surveys. In fact,
the Department only imposes fines if it finds that a problem has already resulted in actual harm to
an individual or is currently placing people in immediate jeopardy, a condition that has historically
comprised less than 4 percent of violations.
Even when fines are imposed, inefficiencies in the Departments processes for issuing and tracking
these assessments have significantly impaired its timeliness, in some cases resulting in delays
of up to six years between when a violation is cited and a resulting fine is imposed. This trend
has worsened significantly in recent years. These weaknesses undermine the incentive that fines
can have as a deterrent to deficient practices, as well as the sense of urgency for correcting the
deficiencies, particularly in addressing cases of repeated non-compliance.

Annual Certification and Complaint Survey Requirements

The Department is required to comply with certain CMS performance standards when conducting
Standard Health and Complaint surveys. As part of its Performance Standards System, CMS reviews
the Departments surveys to ensure they are conducted in accordance with federal regulations.
This includes examining the accuracy of the ratings assigned to the scope and severity of citations
and the timeliness of the inspections themselves. We found the Department met CMSs quality
measures for conducting surveys in accordance with federal regulations, including accurate
assessment of the scope and severity of citations.
For each facility, the Department is required to conduct its Standard Health surveys within 15.9
months of the last day of the previous survey, and to maintain an overall statewide average of
12.9 months or less between consecutive Standard Health surveys. This schedule allows the
Department flexibility in the frequency with which it conducts individual surveys based on nursing
homes performance. For example, better performing nursing homes can be surveyed only once
every 12 to 15 months, while poorer performing nursing homes can be surveyed every 9 months.
We found that between calendar years 2007 and 2014 the Department generally inspected all
nursing homes within the 15.9-month cycle and had a statewide average of 11.8 months between
surveys.
We also found the Department effectively utilized its discretion to conduct more frequent surveys
of riskier nursing homes that had historically received more citations. Those facilities that were
inspected more frequently at or less than 9.9 months between Standard Health surveys had
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83 percent more citations than those inspected less frequently. Additionally, the Department met
another CMS requirement that increases the element of surprise associated with the Standard
Health survey. CMS requires that at least 10 percent of these surveys begin either on the weekend,
before 8:00 a.m., after 6:00 p.m., or on a holiday. Between January 1, 2007 and May 2015 the
Department conducted 847 (20 percent) of 4,163 Standard Health surveys during these off hours.
As with Standard Health surveys, CMS imposes performance standards when conducting
Complaint surveys. Depending on the seriousness of the allegation, the Department is required
to prioritize and conduct Complaint surveys within established time frames, as follows:
Immediate Jeopardy complaints (which involve serious injury, harm, impairment, or death
of a patient or resident, or the risk of such occurring) must be investigated within two
business days 95 percent of the time.
Non-Immediate Jeopardy High Priority complaints (where alleged non-compliance may
have caused harm to an individuals mental, physical, and/or psychosocial status) must be
investigated within 10 business days 95 percent of the time.
We found the Department investigated Immediate Jeopardy complaints timely, within two
days 98 percent of the time. The Department fell short of the 95 percent requirement for NonImmediate Jeopardy High Priority complaints, investigating them on time only 73 percent of the
time. However, we determined this was largely due to the sheer volume of complaints received
in this category, especially in the MARO area. MARO accounted for 13,206 (53 percent) of the
24,938 complaints prioritized as Non-Immediate Jeopardy High Priority between January 2007
and April 2015 and for over 90 percent of the High Priority complaints that werent investigated
on time. Department officials stated that, based on the volume of complaints received and other
priorities, such as investigating Immediate Jeopardy complaints, it has difficulty meeting CMSs
requirement to investigate Non-Immediate Jeopardy High Priority complaints within 10 business
days.

Enforcement Practices
Untimely Assessment and Inefficient Tracking of State Fines
The Department levies fines as an enforcement tool for compliance; however, we found the
Department does not process and issue fines timely or efficiently. Our analysis shows that, for
at least the past seven years, the time lag between when deficiencies are uncovered and related
fines are assessed has been steadily rising at a significant rate. At the same time, the number and
total amount of monetary penalties imposed peaked several years ago and have steadily declined
thereafter. These trends undermine the credibility and effectiveness of the threat of monetary
sanction as a meaningful deterrent to deficient practices.
The process for assessing and issuing fines is complex and involves multiple branches within the
Department. Once identified through survey, deficiencies are assessed to determine whether and
what type of enforcement should be applied. Surveyors rate the seriousness of each deficiency
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based on the following CMS lettered rating system (which is further described in Exhibit A), where
A represents the least severe, most isolated deficiencies and L the most severe, widespread
problems:
AC: No Actual Harm With Potential for No More Than Minimal Harm
DF: No Actual Harm With Potential for More Than Minimal Harm
GI: Actual Harm But Not Immediate Jeopardy
JL: Immediate Jeopardy
Nursing homes are required to correct all deficiencies with a rating greater than A. Furthermore,
Division policy recommends that deficiencies that meet the following criteria be identified for
fine assessment:
All Immediate Jeopardy and Substandard Quality of Care (SQC) events - deficiencies rated
as F, H, I, or JL in one of the following regulatory groups: Resident Behavior and Facility
Practices, Quality of Life, or Quality of Care;
Two or more G deficiencies in the same survey (Double G); and
Any G deficiencies where a G or greater deficiency was cited within the prior two survey
cycles and continues to exist.
The Divisions Bureau of Quality & Surveillance (Bureau) refers citations to the Division of Legal
Affairs (Legal) to assess State fines pursuant to the Public Health Law. As part of this process,
the Bureau creates enforcement packets, which include recommended State fine amounts, and
submits them to Legal. In turn, Legal reaches settlements with the nursing homes and issues
Stipulation & Orders (Orders) that include the agreed-upon fines.
Prior to 2008, Section 12 of the Public Health Law (Law) allowed for a maximum fine of just
$2,000 per incident even for the most egregious violations, including those that result in serious
physical harm or death to a patient. In 2008, the Law was amended to include additional fine
amounts for certain types of violations. The amendment authorized the Department to assess a
$5,000 fine for repeat violations fined in consecutive years and a $10,000 fine if a violation results
in serious physical harm to a resident.
However, the amendment is currently scheduled to expire in April 2017, after which the maximum
fine for any violation, no matter how severe, will once again be $2,000 or less than the equivalent
of one weeks revenue derived from one bed. The Department estimates the average daily rate for
nursing home care ranges from $288 to $407 (or $2,016 to $2,849 per week) across the various
regions of the State, as shown in the following map chart.

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Source: https://www.health.ny.gov/facilities/nursing/estimated_average_rates.htm

We analyzed data on the Orders issued during calendar year 2014, and found the average time
between the survey end date when deficiencies are first identified and reported and the issuance
of Orders was 3.89 years. This compares to just 6 months for Orders issued in 2007. Further,
between January 2014 and July 2015, the Department assessed only 12 State fines totaling
$152,000. Table 2 shows a breakdown of fine processing data from January 2007 to July 3, 2015.

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Table 2
Year

2007
2008
2009
2010
2011
2012
2013
2014
20151
Totals

Fine
Orders
Issued

28
57
51
66
62
47
20
10
2
343

Total Fine
Amounts

$82,500
197,000
247,000
511,000
628,000
482,000
238,000
148,000
4,000
$2,537,500

Average Time
Between
Survey and
Fine Order
(in years)
0.50
0.74
1.09
1.39
1.43
1.48
2.12
3.89
2.97
1.362

Average Fine
per Order

$2,946
3,456
4,843
7,742
10,129
10,255
11,900
14,800
2,000
$7,3981

Note. Adapted from DOH Bureau of Complaints & Analysis (BCA).

1

Excludes seven orders processed on June 24, 2015, totaling $46,000 in fines that were not included in BCAs
database.

The average of 1.36 years was calculated on the entire population of data and is different than calculating the
average of the averages (1.73 years). Calculating the average of the averages puts more emphasis on the years
with minimal Orders processed and higher processing times.

As of July 2015, the most recent facility survey that had progressed to the point of an Order and
fine assessment was completed on March 25, 2012. In the intervening three years from that point
through May 2015, completed surveys have noted a total of 433 citations that meet the Divisions
criteria for assessing State fines, but are yet to progress to the point of an Order, including:
343 Immediate Jeopardy citations;
80 Double G citations; and
10 F citations with SQC.
The standard fines for these citations amount to $820,000, all of which have yet to be assessed
and collected.
While we recognize the Departments successful effort to meet CMSs performance standards
and to implement the specific practices that CMS mandates and reviews, it does so at the
expense of timely conduct of other enforcement activities, such as imposing fines, which is an
equally important but non-regulated outcome. In particular, we identified three aspects of the
Departments process that contribute to inefficient and ineffective fine assessment:
Insufficient Enforcement Resources: The Department has focused its resources on
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2015-S-26
those areas mandated by CMS (e.g., conducting mandated inspections, follow-up on
complaints), but has not assigned appropriate resources to enforcements. The Bureau
has only one part-time employee assigned to process enforcement referrals and prepare
enforcement packets. This employee also assists in conducting surveys when needed,
having participated in 66 surveys since 2007, reducing the time allocated to processing
fines.
Six-Month Waiting Period: The Division prefers to wait six months before processing
enforcements in the event fine assessments are amended or withdrawn as a result of
appeals. However, it does so at the expense of timely management of other enforcement
activities. This wait period is neither required by CMS nor established by Department
policy. We note that between August 2012 and May 21, 2015 there were only 29 appeals,
accounting for 42 citations that would be fined. Of these citations, 36 were fully upheld (86
percent), five were reduced (12 percent), and only one was expunged (2 percent). Given
the low volume of disputes, the waiting period appears unwarranted and contributes to
an unnecessary delay in processing State fines.
Inadequate System for Tracking Assessed Fines: The Bureau uses a database that, by
its staffs own admission, is fragmented and incomplete. In March 2015, the Bureau
started using a spreadsheet to track each enforcements status and ultimate submission
to Legal. However, the spreadsheet did not replace the original database for enforcement
tracking and does not contain information on enforcements prior to March 2015, nor does
it contain all information for each enforcement, such as fine amounts. Therefore, the
Bureau uses both systems to track assessed fines. According to Division officials, technical
improvements for an enhanced database were being developed as of September 2015.
Division officials stated the use of both data sources has improved the tracking and
monitoring of assessed fines in the interim.
As part of its 2014 internal control certification process, the Division identified the backlog in
assessing State fines as a risk that needed to be addressed. In response, the Division reassigned
two full-time staff to assist in the processing of enforcement referrals. In addition, in April 2015, the
Division implemented a revised enforcement process based on policy established by the Center
for Health Care Provider Services and Oversight, which oversees the Division. Since implementing
these improvements, the Department states that the backlog has been significantly reduced.

Stronger Remedies Needed for Repeated Non-Compliance

CMSs State Operations Manual allows states to impose civil monetary penalties for each instance
a nursing home is found to be in non-compliance at or above the Minimal Harm level (DF rating).
In addition, CMS considers a facilitys history of non-compliance, both in general and specifically
with reference to cited deficiencies, as a factor that states should consider when determining
which remedies to impose. However, the Departments routine policy is to not assess any fines
for Minimal Harm citations, regardless of past performance. Instead, the Department opts to
implement what it refers to as alternative remedies, such as directed plans of correction and/or
in-service training, to resolve these lower-level issues.
We found that some nursing homes are repeatedly cited for continued deficiencies within the
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same categories and that, when problems are not corrected timely, Minimal Harm citations can
escalate in severity over time. As a result, although the Departments alternate remedies are
intended to correct the deficiencies and achieve maintained compliance, in many cases there is
little assurance that these outcomes are ultimately being realized.
Between January 2007 and May 2015, the Department issued 42,585 citations rated with a
Potential for More Than Minimal Harm (DF rating). The Department has the ability to impose
fines in these instances, but chooses not to. These accounted for 84 percent of all the citations
issued during this 100-month period (see Table 3). Comparatively, only 4 percent (1,981) of the
violations noted were cited at the Actual Harm (GI) or Immediate Jeopardy (JL) levels the
level at which the Department assesses State fines.

Table 3 Citations by Scope and Severity, January 1, 2007 to May 12, 2015
Harm Level
No More Than Minimal
Harm
Subtotal
Potential for More Than
Minimal Harm
Subtotal
Actual Harm
Subtotal
Immediate Jeopardy
Subtotal
Total

Scope/Severity
Rating
A
B
C
D
E
F
F(w/SQC)
G
H
I
J
K
L

Citations
Issued
257
3,974
1,634
5,865
25,738
15,229
1,597
21
42,585
985
36
5
1,026
74
566
315
955
50,431

Percent of
Total
0.51
7.88
3.24
11.63
51.04
30.20
3.17
0.04
84.45
1.95
0.07
0.01
2.03
0.15
1.12
0.62
1.89
100.00

Note. For more information about where citations rated at or above the Actual Harm level
occur across New York State, see Exhibits C through F.

When identified problems are not corrected timely, and enforcement actions cease to be an
effective deterrent to continued non-compliance, the risk increases that issues will escalate in
both scope and severity. Our analysis of deficiency citations issued between January 2007 and
May 2015 identified a facility, the Westgate Nursing Home in Rochester, which received more
citations than any other active facility. We reviewed the citation history for Westgate and found
that, over time, citations once cited at the Minimal Harm level eventually rose to Actual Harm or
Immediate Jeopardy levels of severity, as follows:

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Between January 2007 and October 2011, the Department issued Westgate a total of 156
citations for violations, all of which were rated below the Minimal Harm level and therefore
not subject to fines under the Departments policy. Between November 2011 and May
2015, the Department conducted four Standard Health surveys and 10 Complaint surveys
at this facility, resulting in 115 additional citations. Included therein was the Departments
June 2013 survey, which resulted in 18 citations, one of which was cited for SQC, another
at the Actual Harm level, and three at the Immediate Jeopardy level. These were the first
and only citations that the Department issued to Westgate that were cited at or above the
Minimal Harm level.
Of the five deficiency categories cited, four had been cited a total of eight times in
previous surveys, and three were cited a total of six more times on subsequent surveys.
One deficient category that focused on keeping facilities free from accidents and hazards
was cited at the highest level of severity (Immediate Jeopardy-Widespread). This same
deficiency category had been cited on two previous surveys: at the Minimal Harm-Pattern
level in April 2012 and at the Minimal Harm-Isolated level in April 2013. No fine was
previously issued because these levels fell below the Departments criteria for assessing
State fines. In April 2014, the facility was again cited for violating the same category of
deficiency, with the levels again falling to just below the threshold for fine assessment
(Minimal Harm-Isolated; Minimal Harm-Pattern).
Despite having the highest number of citations issued during this 100-month period,
Westgate hasnt been assessed a single monetary fine since January 2005, which resulted
from a March 2004 survey. Because of the inefficiencies in the fine process, even the
problems cited in June 2013 (for SQC, Actual Harm, and Immediate Jeopardy) have yet to
result in an Order to impose a fine.
In addition to Westgate, there were other facilities in which citations once cited at the Minimal
Harm level eventually rose to Actual Harm or Immediate Jeopardy levels of severity.
The Department expressed confidence that the other remedies it relies upon, such as directed
plans of correction, can be an effective means of ensuring quality of care and service delivery.
However, for nursing homes that show a pattern of non-compliance, stronger consequences,
such as fines coupled with these alternate remedies, may be more effective in deterring poor
behavior and, in turn, ensuring higher-quality care for patients.

Recommendations
1. Eliminate the backlog in enforcement activity and maintain timely processing of future
assessments of State fines.
2. Take steps to initiate the assessment of State fines earlier to better align survey results with
the assessed penalty.
3. Develop and implement a single, more comprehensive system to track and monitor all
enforcement actions.

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4. Consider assessing State fines for citations issued at the Greater Than Minimal Harm level
(DF rating, as allowable by the Public Health Law and CMS), especially for those facilities that
demonstrate a pattern of repetitive citations.

Audit Scope and Methodology

The objectives of our audit were to determine whether the Department of Health (Department)
consistently follows federal and State regulations and procedures for conducting nursing home
surveys, including the identification of violations and the scope and severity of citations issued,
and to assess whether the Departments inspection process is effective in improving the quality
of care and safety in nursing homes. The audit covered the period January 1, 2012 through
September 17, 2015.
To accomplish our audit objectives, we interviewed Department officials responsible for nursing
home oversight. We reviewed relevant State and federal laws and regulations, including pertinent
sections of the Centers for Medicare and Medicaid Services State Operations Manual. We
examined the Departments internal controls and assessed their adequacy as they related to our
objectives. In addition, we obtained and reviewed survey-related data and complaint/incident
data for the period January 1, 2007 through May 12, 2015. We did not obtain or review any
personal and/or confidential information during the course of the audit. Although the start of
our audit scope was January 1, 2012, we reviewed data going back to 2007 for trending purposes.
We reviewed a stratified random sample of 25 surveys representing each of the seven regional
offices, plus an additional 25 complaint/incident intakes, to conduct data reliability testing, and
found the data to be reliable for purposes of our audit objectives.
To identify the number of surveys completed, we counted Standard Health surveys and Life Safety
Code surveys as single events, even though both are required for certification. The Department
most often combines these surveys as one when presenting these statistics.
We obtained fine assessment data for the period January 1, 2007 through July 3, 2015 from the
Departments Bureau of Complaints & Analysis. This data was based on Orders issued to nursing
homes by the Division of Legal Affairs. We used this data to identify Division processing times
between the survey end dates and the dates fines were assessed. Also, we used the Departments
Nursing Home Profile webpage to obtain additional information on particular nursing homes,
such as deficiency and penalty information.
We conducted our performance audit in accordance with generally accepted government auditing
standards. Those standards require that we plan and perform the audit to obtain sufficient,
appropriate evidence to provide a reasonable basis for our findings and conclusions based on
our audit objectives. We believe that the evidence obtained provides a reasonable basis for our
findings and conclusions based on our audit objectives.
In addition to being the State Auditor, the Comptroller performs certain other constitutionally and
statutorily mandated duties as the chief fiscal officer of New York State. These include operating
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the States accounting system; preparing the States financial statements; and approving State
contracts, refunds, and other payments. In addition, the Comptroller appoints members to
certain boards, commissions, and public authorities, some of whom have minority voting rights.
These duties may be considered management functions for purposes of evaluating organizational
independence under generally accepted government auditing standards. In our opinion, these
functions do not affect our ability to conduct independent audits of program performance.

Authority
This audit was performed according to the State Comptrollers authority under Article V, Section
1 of the State Constitution and Article II, Section 8 of the State Finance Law.

Reporting Requirements
A draft of this report was provided to Department officials for their review and comment. We
considered their comments in preparing this report. Their comments are attached to this report
in their entirety. While Department officials generally agree with our findings and respond they
have taken steps to implement our recommendations, certain of their explanations, which we
have highlighted in the agencys response, warrant further comment. Our rejoinders in these
areas are attached at the end of the report as State Comptrollers Comments.
Within 90 days after final release of this report, as required by Section 170 of the Executive
Law, the Commissioner of Health shall report to the Governor, the State Comptroller, and the
leaders of the Legislature and fiscal committees, advising what steps were taken to implement
the recommendations contained herein, and if the recommendations were not implemented, the
reasons why.

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Contributors to This Report

John F. Buyce, CPA, CIA, CFE, CGFM, Audit Director
Walter Irving, Audit Manager
Heather Pratt, CFE, Audit Supervisor
Scott Heid, CGAP, Examiner-in-Charge
Cheryl Glenn, Senior Examiner
Christi Martin, Senior Examiner
Hilary Papineau, Special Research Assistant
Marzie McCoy, Senior Editor

Division of State Government Accountability

Andrew A. SanFilippo, Executive Deputy Comptroller
518-474-4593, asanfilippo@osc.state.ny.us
Tina Kim, Deputy Comptroller
518-473-3596, tkim@osc.state.ny.us
Brian Mason, Assistant Comptroller
518-473-0334, bmason@osc.state.ny.us

Vision
A team of accountability experts respected for providing information that decision makers value.

Mission
To improve government operations by conducting independent audits, reviews and evaluations
of New York State and New York City taxpayer financed programs.

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Exhibit A
Centers for Medicare & Medicaid Services Scope and Severity Grid
Scope & Severity Grid

SEVERITY

Level 4
Immediate Jeopardy

Level 1
Isolated

SCOPE
Level 2
Pattern

Level 3
Widespread

J*

K*

L*

Level 3
G
H*
I*
Actual Harm
Level 2
Potential for Greater Than
D
E
F*
Minimal Harm
Level 1
Potential for No More
A
B
C
Than Minimal Harm
*Substandard Quality of Care Refers to Scope/Severity Levels F, H, I, J-L in one of
the following Regulatory Groups: Resident Behavior & Facility Practices (42 CFR
488.13); Quality of Life (42 CFR 483.15); or Quality of Care (42 CFR 488.25).

Severity Levels (1 through 4)

Level 1 Deficiency with potential for no more than minor negative impact on
resident(s).
Level 2 Non-compliance with no more than minimal physical, mental and/or
psychosocial discomfort to the resident and/or has potential (not yet realized) to
compromise the residents ability to maintain and/or reach his/her highest practicable
physical, mental and/or psychosocial well-being as defined by resident assessment, plan
of care and provision of services.
Level 3 Non-compliance resulting in negative outcome that compromised residents
ability to maintain and/or reach his/her highest practicable physical, mental,
psychosocial well-being defined by resident assessment, plan of care, and provision of
services. Does not include a deficient practice that only could or has caused limited
consequences to resident.
Level 4 Immediate Jeopardy where immediate corrective action is necessary because
facilitys non-compliance with one or more requirements has caused, or is likely to
cause, serious injury, harm, impairment, or death to a resident receiving care in the
facility.

Scope Levels (1 through 3)

Level 1 One or a very limited number of residents affected, staff involved and/or
situation only occasionally or in very limited number of locations.
Level 2 More than very limited number of residents affected, staff involved and/or
situation occurred in several locations, and/or repeated deficient occurrences to same
resident(s) but not pervasive throughout facility.
Level 3 Problems causing deficiencies are pervasive in facility and/or represent
systemic failure that affected or has potential to affect a large portion or all facility
residents.

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Exhibit B
Breakdown of New York State Citations by Scope and Severity
for the Period January 1, 2007 to May 12, 2015

SEVERITY

Breakdown of NYS
Citations by Scope &
Severity
(N = 50,431)
Level 4
Immediate Jeopardy

Level 1
Isolated

SCOPE
Level 2
Pattern

Level 3
Widespread

J
74
(0.15%)

K
566
(1.12%)

L
315
(0.62%)

Level 3
Actual Harm

G
985
(1.95%)

H
36
(0.09%)

I
5
(0.01%)

Level 2
Potential for Greater Than
Minimal Harm

D
25,738
(51.04%)

E
15,229
(30.20%)

F*
1,618
(3.21%)

Level 1
Potential for No More
Than Minimal Harm

A
257
(0.51%)

B
3,974
(7.88%)

C
1,634
(3.24%)

*Includes 21 citations (0.04%) with Substandard Quality of Care tags, which are automatically
enforced by the Divisions Bureau of Quality & Surveillance.

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Exhibit C
Major Deficiencies (Actual Harm/Immediate Jeopardy) Cited by County
January 1, 2007 May 12, 2015
Major Deficiences
County

Albany
Allegany
Bronx
Broome
Cattaraugus
Cayuga
Chautauqua
Chemung
Chenango
Clinton
Columbia
Cortland
Delaware
Dutchess
Erie
Essex
Franklin
Fulton
Genesee
Greene
Hamilton
Herkimer
Jefferson
Kings
Lewis
Livingston
Madison
Monroe
Montgomery
Nassau
New York
Niagara
Oneida
Onondaga
Ontario
Orange
Orleans
Oswego
Otsego
Putnam
Queens
Rensselaer
Richmond

Rockland
Saratoga
Schenectady
Schoharie
Schuyler
Seneca
St Lawrence
Steuben
Suffolk
Sullivan
Tioga
Tompkins
Ulster
Warren
Washington
Wayne
Westchester
Wyoming
Yates
Grand Total

Number of
Nursing
Homes

Portion of
Statewide
Total

Total
Violations
Identified

14
4
46
11
5
4
9
6
5
5
3
3
4
13
43
3
3
3
4
2
None
5
6
43
1
3
4
35
7
37
22
12
18
15
5
10
3
6
3
2
60
9
11
10
4
7
1
1
1
9
6
45
2
2
5
7
4
4
4
48
2
2

2.1%
0.6%
6.8%
1.6%
0.7%
0.6%
1.3%
0.9%
0.7%
0.7%
0.4%
0.4%
0.6%
1.9%
6.4%
0.4%
0.4%
0.4%
0.6%
0.3%
N/A
0.7%
0.9%
6.4%
0.1%
0.4%
0.6%
5.2%
1.0%
5.5%
3.3%
1.8%
2.7%
2.2%
0.7%
1.5%
0.4%
0.9%
0.4%
0.3%
8.9%
1.3%
1.6%
1.5%
0.6%
1.0%
0.1%
0.1%
0.1%
1.3%
0.9%
6.7%
0.3%
0.3%
0.7%
1.0%
0.6%
0.6%
0.6%
7.1%
0.3%
0.3%

672

100%

Scope of Major Deficiencies

County

Number

Percent of
Violations

Isolated
(Level 1)

Pattern
(Level 2)

Widespread
(Level 3)

955
312
2,963
861
430
498
682
429
319
271
443
381
234
1,072
3,800
294
224
254
268
144
N/A
353
433
2,804
64
180
294
3,621
355
3,390
1,205
871
1,666
1,402
401
776
351
591
188
163
3,773
682
481
916
189
558
0
70
56
395
519
3,644
184
164
506
358
243
364
326
2,819
143
99

72
14
114
31
7
14
26
5
7
20
61
28
40
39
87
33
32
30
6
17
N/A
16
34
104
5
5
12
61
24
91
46
12
108
102
8
18
10
16
12
6
123
61
26
16
6
50
0
1
0
10
10
119
5
5
20
6
21
58
7
59
4
1

7.5%
4.5%
3.8%
3.6%
1.6%
2.8%
3.8%
1.2%
2.2%
7.4%
13.8%
7.3%
17.1%
3.6%
2.3%
11.2%
14.3%
11.8%
2.2%
11.8%
N/A
4.5%
7.9%
3.7%
7.8%
2.8%
4.1%
1.7%
6.8%
2.7%
3.8%
1.4%
6.5%
7.3%
2.0%
2.3%
2.8%
2.7%
6.4%
3.7%
3.3%
8.9%
5.4%
1.7%
3.2%
9.0%
N/A
1.4%
0.0%
2.5%
1.9%
3.3%
2.7%
3.0%
4.0%
1.7%
8.6%
15.9%
2.1%
2.1%
2.8%
1.0%

38
6
54
11
4
12
16
5
5
15
28
19
16
18
50
15
12
22
6
11
N/A
5
24
65
2
3
6
40
12
52
27
12
47
41
5
10
1
4
7
3
83
21
12
7
3
30
0
1
0
10
6
61
2
4
5
6
13
19
4
38
4
1

25
2
36
18
0
2
9
0
2
5
16
6
6
21
37
7
16
0
0
2
N/A
5
10
26
3
2
4
16
6
30
13
0
48
41
3
3
6
12
0
3
30
9
12
9
0
15
0
0
0
0
0
36
3
1
10
0
7
14
3
12
0
0

9
6
24
2
3
0
1
0
0
0
17
3
18
0
0
11
4
8
0
4
N/A
6
0
13
0
0
2
5
6
9
6
0
13
20
0
5
3
0
5
0
10
31
2
0
3
5
0
0
0
0
4
22
0
0
5
0
1
25
0
9
0
0

Albany
Allegany
Bronx
Broome
Cattaraugus
Cayuga
Chautauqua
Chemung
Chenango
Clinton
Columbia
Cortland
Delaware
Dutchess
Erie
Essex
Franklin
Fulton
Genesee
Greene
Hamiltion
Herkimer
Jefferson
Kings
Lewis
Livingston
Madison
Monroe
Montgomery
Nassau
New York
Niagara
Oneida
Onondaga
Ontario
Orange
Orleans
Oswego
Otsego
Putnam
Queens
Rensselaer
Richmond

Rockland
Saratoga
Schenectady
Schoharie
Schuyler
Seneca
St Lawrence
Steuben
Suffolk
Sullivan
Tioga
Tompkins
Ulster
Warren
Washington
Wayne
Westchester
Wyoming
Yates

50,431

1,981

3.9%

1,059

602

320

Grand Total

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Exhibit D

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Exhibit E

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Exhibit F

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Agency Comments

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Department of Health
Comments on the
Office of the State Comptroller's
Draft Audit Report 2015-S-26 Entitled
"Nursing Home Surveillance"
The following are the Department of Health's (Department) comments in response to the Office
of the State Comptroller's (OSC) Draft Audit Report 2015-S-26 entitled, "Nursing Home
Surveillance."
Comments:
The Department is committed to protecting the health and safety of New York State's nursing
home residents. The Centers for Medicare and Medicaid Services (CMS) has developed a
national process for nursing home inspections to ensure quality care and service delivery. The
Department, as the Single State Survey Agency, carries out the federally mandated inspection
program to ensure that nursing home operators are in compliance with all State and/or Federal
regulatory requirements, and investigates occurrences of abuse, neglect or mistreatment.
Nursing home oversight is carried out by the Division of Nursing Homes and ICF/IID (Intermediate
Care Facilities for Individuals with Intellectual Disabilities) Surveillance (Division) within the
Department's Office of Primary Care and Health Systems Management (OPCHSM), Center for
Health Care Provider Services and Oversight (Center).
The purpose of the OSC audit was to determine whether the Department consistently follows
Federal and State regulations and procedures for conducting nursing home surveys and whether
survey processes, including the issuance of fines and other enforcement actions, are effective in
improving the quality of care and safety in nursing homes. The Department is pleased to note
that the OSC found the Department's performance in conducting Standard Health and Complaint
surveys in accordance with Federal and State requirements to be satisfactory, including the
timeliness of inspections and the accuracy of scope and severity ratings of citations. This finding
demonstrates that the Department effectively carries out the Federal inspection process in
monitoring and evaluating nursing home regulatory compliance.
However, the OSC's findings conclude that the Department's enforcement policies and
procedures still need to be strengthened to better protect the health and well-being of nursing
home residents. The draft audit report notes that weaknesses in these policies and procedures
appear to undermine the incentive that fines can have as a deterrent to deficient practices in
nursing homes, as well as the sense of urgency for correcting the deficiencies, particularly in
addressing cases of repeated non-compliance.
As noted in the draft report, there are a number of available remedies to influence regulatory
compliance and quality of care. While State fines may play a role in this regard, they should not
be viewed independent of the overall regulatory structure, which ensures quality care and service
delivery.
The Department is authorized to impose fines of up to $2,000 per violation to health care providers
licensed under Article 28 of the Public Health Law that are found to be out of compliance with
regulatory requirements. These fines can be increased to $5,000 and $10,000 under certain

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2015-S-26
conditions (currently effective until April 1, 2017, with a plan to extend). The Department agrees
with the OSC's finding that there were delays in issuing State fines to nursing homes that were
determined to have failed to comply with regulatory requirements. However, as noted in the draft
report, and as acknowledged by the OSC during an August 25, 2015 meeting with Department
officials to discuss the Preliminary Findings, the Department identified this process as an area for
improvement, and began to address it well before the start of the audit.
The Division targeted its focus in this area following a 2013 Department internal audit of fee and
fine revenue, which included the effective use of nursing home fines. As a result of this internal
audit, the Division's policies and procedures guiding the State fine enforcement process were
updated and implemented in February 2014. This was linked to a larger initiative to implement a
Center-wide policy governing State enforcement for noncompliance by hospitals, nursing homes
and adult care facilities. The Division's 2014 Internal Control Certification identified a backlog in
the assessment of State fines, and included a plan for improvement in this area.

*
Comment
1

Recommendation #1
Eliminate the backlog in enforcement activity and maintain timely processing of future
assessments of State fines.
Response #1
The Division fully implemented a revised enforcement process in April 2015, utilizing the Centerwide policy as a guide. Since implementing these improvements, the Division's backlog in
enforcements (through June 30, 2015) was fully addressed by the end of October 2015. These
efforts are ongoing and being adjusted, as necessary, to ensure that State fines are assessed in
a timely manner. The Center Director and Division Director are responsible for monitoring and
ensuring compliance with the policies and procedures and the timely processing of State
enforcements. As noted in the draft report, the Division has trained additional staff to eliminate
the backlog and ensure timely processing of future enforcements.

*
Comment
1

Recommendation #2
Take steps to initiate the assessment of State fines earlier to better align survey results with the
assessed penalty.
Response #2
By Division policy, enforcement reviews are ongoing, but completed no less than quarterly. This
timeframe allows for the survey process to proceed to conclusion, including the provider's right to
appeal or dispute survey findings. As part of the Division's process refinements, consideration is
being given to identifying enforceable events on a monthly basis (after a period of 90 days to allow
the survey process to proceed to conclusion) to expedite the assessment of penalties.
Recommendation #3
Develop and implement a single, more comprehensive system to track and monitor all
enforcement actions.

*See State Comptrollers Comments on page 28.

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2015-S-26

Response #3
The Department is making improvements to its enforcement tracking system. The Department
has improved tracking and monitoring on an interim basis with existing tools. The draft report
supported the Department's findings from its 2014 internal control review -- that an improved
tracking process is needed. The Division's plan includes the development of an automated report
to track and monitor the status of enforcement processing to identify any issues that may impede
processing, with a goal of ensuring that fines are assessed in a timely manner.
Recommendation #4
Consider assessing State fines for citations issued at the Greater Than Minimal Harm level (D-F
rating, as allowable by the Public Health Law and CMS), especially for those facilities that
demonstrate a pattern of repetitive citations.
Response #4
The Department follows CMS' civil money penalty protocol in assessing State civil penalties
(fines). The Federal protocol states that the imposition of a civil money penalty may be most
appropriate when a facility is not given an opportunity to correct; when immediate jeopardy exists;
when there is noncompliance that results in a negative outcome that has compromised the
resident's ability to maintain and/or reach his/her highest practicable physical, mental and
psychosocial well-being as defined by an accurate and comprehensive resident assessment, plan
of care and provision of services (i.e., actual harm that is not immediate); or when there is a finding
of substandard quality of care. The draft report accurately notes that the CMS State Operations
Manual provides states discretion to assess fines at the Greater than Minimal Harm level.
*
Comment
2

However, the Department maintains that other remedies (such as Directed Plans of Correction)
may be more effective means of ensuring quality care and service delivery. The Department will
continue to review the effectiveness of imposing fines.
Summary
In summary, the Department had recognized issues raised in the enforcement process findings
before the start of the audit, took steps to address them, and continues to review and refine those
actions to improve its processing of enforcements. The Department is committed to protecting
the health and safety of New York State's nursing home residents and, accordingly, will consider
the multiple complexities of the recommendation related to the assessment of fines for citations
issued at the Greater Than Minimal Harm level, especially for those facilities that demonstrate a
pattern of repetitive citations.
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State Comptrollers Comments

1. Although the Department had identified the risks associated with its extensive backlog
in enforcement as part of the agency's annual Internal Control Certification in April
2014, at the time our audit began (a year later, in April 2015), it had just begun training
additional staff on the enforcement process and a significant backlog still existed. By
the time our fieldwork was complete in September 2015, officials reported substantial
reduction to the accumulated backlog, primarily by temporarily diverting staff from other
tasks. However, the core problems that led to the backlog have not been addressed. For
example, although two staff were assigned to assist in completing enforcement, they only
summarized information for the one part-time staff member who is assigned to create
enforcement packets. Therefore, there remains only one part-time person responsible
for processing ongoing enforcement actions, and then only when that person is not
completing inspections. Additionally, the Department has not addressed the six-month
delay that it has built in for the appeals process. As a result, there is significant risk that a
material backlog could recur.
2. While other remedies such as Directed Plans of Corrections may be effective in some
instances, our analysis of specific facilities shows a pattern of repeated violations despite
the Departments use of these other remedies. Therefore, the Department should
consider broader use of its authority to fine as an additional deterrent to persistent noncompliance.

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