Recent GAO Study Finds CMS Should Improve Accessibility and Reliability of Expenditure Data

Last week, the Government Accountability Office (GAO) publicly released their report on skilled nursing facilities (SNF) where they were asked to provide information on how SNFs spend their Medicare and other revenues. GAO examined the extent to which the expenditure data the Centers for Medicare & Medicaid Services (CMS) collects from SNFs and provides to the public are accessible and reliable, how SNF costs and margins vary by facility characteristics, and how SNF nurse staffing levels vary by facility characteristics and the relationship between SNF nurse staffing levels and margins. GAO analyzed Medicare cost report data for fiscal years 2011 through 2014, the most recent years with complete data available. GAO also interviewed CMS officials, researchers, and beneficiary advocates.

The GAO found that although the Centers for Medicare & Medicaid Services (CMS) collects and reports expenditure data from SNFs, it has not taken steps to make the data readily accessible to public stakeholders or to ensure their reliability. The SNFs do report expenditures to CMS and CMS does post raw data on their website; however, they do not provide that data in a readily accessible format in an easy to find place on their website. Additionally, the GAO report found that CMS does little to ensure the accuracy and completeness of the data.

GAO found that for each fiscal year from 2011 through 2014, direct and indirect care costs were lower as a percentage of revenue, on average, at for-profit SNFs compared with nonprofit and government SNFs. Direct and indirect care costs were similarly lower at chain SNFs compared with independent SNFs. In addition, the median margin, which measures revenue relative to costs, was higher for for-profit and chain SNFs than for other SNFs in each of the 4 years.

The relationship between SNFs' nurse staffing levels (hours per resident day) and their margins varied by ownership type in each fiscal year from 2012 through 2014, the 3 years with complete staffing data the Gao report found. For-profit SNFs generally had lower nurse staffing ratios than did nonprofit and government SNFs. Examining each fiscal year separately, GAO estimated that a SNF's margin had a small, but statistically significant, effect on its case-mix adjusted (that is, adjusted for residents' health care needs) nurse staffing ratios. For example, for each percentage point increase in a for-profit SNF's margin in fiscal year 2014, GAO estimated that the SNF's total nurse staffing ratio (including registered nurses, licensed practical nurses, and certified nursing assistants) decreased by 4.1 minutes per resident day after controlling for other factors. However, in GAO's analyses, these other factors, such as geographic location, were more important predictors of a SNF's case-mix adjusted nurse staffing ratios.

GAO recommends that CMS improve public stakeholders' ability to locate and use SNF expenditure data and ensure the accuracy and completeness of the data. The Department of Health and Human Services (HHS) concurred with the first but not the second recommendation, citing resource considerations. GAO continues to believe that CMS should provide reliable SNF expenditure data.