Report 2017-109 Recommendation 8 Responses

Report 2017-109: Skilled Nursing Facilities: Absent Effective State Oversight, Substandard Quality of Care Has Continued (Release Date: May 2018)

Recommendation #8 To: Public Health, Department of

As the Legislature considers changes to state law, Public Health should take the steps necessary to ensure that its oversight results in nursing facilities improving their quality of care by amending its application licensing reviews by developing a defined process that specifies how an analyst will determine whether an applicant has demonstrated its ability to comply with state and federal requirements. This process also needs to ensure that analysts conduct complete and standardized reviews of each nursing facility application within each class of facility. Specifically, these processes should clearly outline what factors analysts will consider when determining whether an applicant is in compliance, how analysts will weigh those factors for each class of facility, and what objective thresholds will prompt analysts to elevate applications for review and approval by higher-level management. Additionally, Public Health should document the additional factors higher-level management will consider if applications are elevated for their review to ensure that Public Health conducts standardized reviews of nursing facility applications of the same class. Finally, Public Health should develop processes ensuring that it documents its decisions adequately.

Annual Follow-Up Agency Response From October 2023

The Centralized Applications Branch (CAB) took steps to standardize its skilled nursing facility licensing application reviews. CAB enhanced its Compliance History Recommendation Summary (CHRS) to ensure the information presented by staff to management is consistent, complete, and accurate. The enhanced templates provide staff clear directions on the information required to be reviewed to determine if there is evidence satisfactory to the department that the applicant is reputable and responsible for licensure. It includes instructions on researching and summarizing all, but not limited to, the information listed on the Guideline for Weighing Factors of Compliance History, which was given in CAB's last response to CSA on 09/22/2022. Additionally, the templates provide guidance to effectively present findings and recommendations to management. On 05/02/2023, CAB provided training to staff on the updated templates to teach individuals how to consistently and thoroughly summarize their findings from the application and compliance history report. The guidelines and templates assists analysts and management in making a recommendation or determination on whether to approve or deny the applications based on the compliance history of entities with 5% or more ownership interest. Two CHRS templates were created, one for applications received prior to 07/01/2023 and one for applications received after 07/01/2023 when Assembly Bill 1502 - Skilled Nursing Facility Ownership and Management Reform Act of 2022 went into effect, which amended Health and Safety Code (HSC) sections 1265 and 1267.5 and added sections 1253.2 and 1253.3. (See CHRS Template (Received after 07-01-2023).docx and CHRS Template (Received before 07-01-2023).docx)

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

Annual Follow-Up Agency Response From September 2022

On 9/15/2021, the Centralized Applications Branch (CAB), Long Term Care Section, provided training to staff on the Guideline for Weighted Factors of a Compliance History. The purpose of the training is to teach individuals how to weigh the factors contained in the 3-year Compliance History of facilities associated with an application for licensure. The Compliance History recommendations are based on the pattern of citations, deficiencies, and substantiated complaints. The guideline places a range from Least Weight, More Weight, and Most Weight on the level of federal deficiencies, category of state citations, substantiated complaints, and other factors of non-compliance. The guideline is utilized with the Compliance History, Compliance History Grid, and Compliance History Recommendation Summary. The guideline assists analysts in making a recommendation to management whether to approve or deny the application based on compliance. Included is a copy of (1) Guideline for Weighted Factors Training Agenda, (2) Training Attendance Sheet, (3) Guideline for Weighing Factors of Compliance History.

California State Auditor's Assessment of Annual Follow-Up Status: Partially Implemented

This recommendation is partially implemented pending Public Health taking additional steps to standardize its skilled nursing facility licensing application reviews. Public Health has developed policies and processes that clarify which factors will receive the most weight in its decision-making process and has developed thresholds for elevating applications for review by higher-level management. However, based on our review of five recent application files, we have concerns regarding the sufficiency and consistency of the documentation in Public Health's application files. For example, we identified one application in which the final reviewer provided no reasoning for approving the application. This was concerning given that the file included references to patient deaths and citations that raised concerns. When we shared this example with Public Health, staff involved in reviewing the applications informed us that the decision was made after they had conversations about the application. However, the file does not include any information about those conversations or what factors the final reviewer used to justify approving the application. Additionally, although Public Health has outlined which factors it will consider and what weight they have in the final decision, Public Health did not clearly document that it reviewed or considered all factors in the application files we reviewed. We also identified two examples in which Public Health's reviews appear incomplete or inaccurate. As a result, to fully implement this recommendation, we believe that Public Health needs to ensure that it thoroughly and consistently documents the factors it considers and the justification for its final licensing decisions.

The Governor also signed the Skilled Nursing Facility Ownership and Management Reform Act of 2022 which goes into effect July 1, 2023. This law will significantly change Public Health's licensing review process and may lead to additional policy or procedural changes that will affect Public Health's approach to fully implementing this recommendation.

Annual Follow-Up Agency Response From September 2021

The CAB, Long-Term Care Section, has created a Guideline for Weighing Factors contained in the Compliance History (8/17/2021). The Guideline is a job aid to assist analyst and management staff when reviewing and weighing the factors gathered and compiled in the Compliance History. The guideline places a range from Least Weight, More Weight, and Most Weight on the level of federal deficiencies, category of state citations, substantiated complaints, and other factors of non-compliance. The guideline is utilized with the Compliance History, Compliance History Grid, and Compliance History Recommendation Summary. The guideline assists analysts in making a recommendation to management whether to approve or deny the application based on compliance.

California State Auditor's Assessment of Annual Follow-Up Status: Partially Implemented

This recommendation remains partially implemented. Public Health has implemented some processes to address our recommendation and improve its nursing facility licensing process. However, it only recently developed and implemented guidance to weigh the factors that it considers when making licensing decisions. Public Health trained analysts to begin using the new guidance September 15, 2021. Thus, we will be unable to evaluate the efficacy of this guidance in improving Public Health's licensing process until at least six months after its been implemented.

Annual Follow-Up Agency Response From May 2021

CDPH, CHCQ, Centralized Applications Branch (CAB) provided the following documentation: Compliance History P&P 4/12/2019; SNF P&P 4/22/2019; SNF Training 7/22/2019; Compliance History Grid (management elevation) 4/27/2020, SNF Internal Checklist 10/16/2020, Compliance History Recommendation Summary Template. CAB staff have received P&Ps and the necessary training to review, analyze, and complete the application review process.

The CAB, Long-Term Care Section, has created a SNF internal checklist which includes conducting several database checks as well as conducting a three year compliance history on any individual with 5% or more ownership interest to ensure applicants meet state licensure and federal certification requirements. After compiling the compliance report, the analyst creates a summary document adding total of citations and deficiencies incurred by applicants in all health care facilities owned in California. The data is aggregated by year and level of deficiency and citation. The data summary is put in a table which highlights scope and severity of deficiencies incurred by applicants. The analyst summarizes the compliance history report and flags pattern and widespread deficiencies along with any A and AA citations. Furthermore, the Compliance History Grid is used to guide the process of elevating the review of the compliance history through the chain of command. All reviewers follow the standardized process as documented on the Compliance History Grid. CDPH has developed a process and each decision taken on a SNF application is documented adequately with its supporting materials, documents and maintained in the application file.

California State Auditor's Assessment of Annual Follow-Up Status: Partially Implemented

This recommendation is partially implemented because, although Public Health has implemented some processes to address our recommendation and improve its nursing facility licensing process, it has not addressed one of the crucial components of the recommendation—outlining how analysts weigh the factors that it considers when making their decisions. Public Health has implemented processes to standardize how it collects and documents the information that it uses when considering license applications and it has created objective thresholds that prompt analysts to elevate applications for review and approval by higher-level management. However, it has not implemented a process for analysts to weigh important factors that it documents, such as prior deficiencies and citations noted in compliance histories, when making decisions to approve or deny an application. According to Public Health's compliance history guidelines, it determines whether deficiencies or citations may be cause for denial on a case-by-case basis. In our report, we noted that Public Health's licensing decisions appear inconsistent and that some applicants had relatively similar compliance histories, but received different licensing decisions from Public Health. It is important that Public Health implement this portion of the recommendation to ensure that its decision-making is consistent and that similar compliance histories for similar organizations will lead it to make similar licensing decisions.

Annual Follow-Up Agency Response From October 2020

Our previous response submitted on 6/29/20 is still current.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Annual Follow-Up Agency Response From June 2020

The desk procedures for processing skilled nursing facilities (SNF) applications and reviewing compliance history was approved in April 2019. Staff training was provided and completed in July 2019. The Performance Improvement Management (PIM) office is process mapping the future life cycle to develop standardized processes, policies, and procedures to license and certify all facility types and is developing IT systems to improve how analysts review applications and know when to elevate issues to higher-level management.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

This recommendation is pending Public Health completing changes to improve its application licensing review process.

1-Year Agency Response

CDPH hosted a stakeholder meeting on October 30, 2018, to solicit input as the Center for Health Care Quality develops the regulation package for change of ownership. CHCQ is incorporating the input from the stakeholder meeting and the written comments submitted as a result of the meeting. We anticipate the regulations will be in effect in 2020. CDPH completed drafts of the desk procedure for processing skilled nursing facilities (SNF) applications for licensure, certification and for preparing and reviewing compliance history. Both drafts are under management review. The projected date to finalize both drafts is May 2019. CDPH will complete staff training after the desk procedures are approved. In addition, CHCQ's Performance Improvement Management (PIM) office is currently lean process mapping the future state of the Licensing and Certification life cycle to ensure we develop standardized processes, policies, and procedures to efficiently and accurately license and/or certify all facility types. The PIM office has also focused efforts to define the architecture and IT system strategy to incorporate modern technology within the business processes. The IT system strategy will improve the way CHCQ conducts business, as it will clearly outline and standardize the business process of how analysts conduct review of an application and when to elevate issues to higher-level management. This technology solution also will allow for better customer service to providers since all interactions between the provider and CDPH will go through a central portal.

California State Auditor's Assessment of 1-Year Status: Pending

This recommendation is pending Public Health's approval and implementation of desk procedures and regulations related to application licensing and change of ownership.

6-Month Agency Response

California Department of Public Health (CDPH) completed drafts of the desk procedures for processing skilled nursing facilities' (SNF) applications for licensure/certification and for preparing/reviewing compliance history. Both drafts are under management review. CDPH will complete staff training after the desk procedures are approved. CDPH is continuing to solicit input on change of ownership regulations. We anticipate the regulations will be in effect in 2020. CDPH hosted a stakeholder meeting on October 30, 2018, to solicit input as the Center for Health Care Quality develops the regulation package for change of ownership.

California State Auditor's Assessment of 6-Month Status: Pending

This recommendation is pending Public Health's approval and implementation of desk procedures and regulations related to application licensing and change of ownership.

60-Day Agency Response

California Department of Public Health is continuing efforts to develop desk procedures for processing skilled nursing facility applications for licensure/certification, as well as procedures for preparing and reviewing compliance histories. California Department of Public Health anticipates completion of the desk procedures by September 2018, followed immediately by staff training in October 2018. Implementation of the new procedures will occur following completion of staff training. California Department of Public Health is working on regulations to clarify the change of ownership application review process and we anticipate the regulations will be in effect by July 2020.

California State Auditor's Assessment of 60-Day Status: Pending

All Recommendations in 2017-109

Agency responses received are posted verbatim.