Virginia’s Self-Inflicted Nursing Home Crisis – Part 3 – McAuliffe & Herring

by James C. Sherlock

In the first two parts of this series, I wrote about the shortage of state inspectors for nursing homes in the Virginia Department of Health Office of Licensure and Certification (OLC)  and the continuing danger it poses to Virginia patients.

The problem, unfortunately, is much wider than just nursing homes.  So is the scandal.

That same office inspects every type of medical facility including home care agencies as well as managed care plans. Except it cannot meet the statutory requirements because it does not have sufficient personnel or money. And it have been telling the world about it for years.

Terence Richard McAuliffe was the 72nd governor of Virginia from 2014 to 2018. Mark Herring has been Attorney General since 2014.

We will trace below that they can reasonably be called the founding fathers of overdue inspections of medical facilities in Virginia.

VDH has been short of health inspectors since McAuliffe and Herring took office and still is .

Both of them know it. And they know that lack of inspections demonstrably causes unnecessary suffering and death.

They know that when VDH health inspectors do show up, they have proven very good at their jobs. They file thousands of health and safety citations annually that require immediate mitigation.

Their health industry donors know that too. McAuliffe, Northam and Herring have been well compensated by them.

In return, those three men, Democrats all, have attacked the very viability of Medicare and Medicaid with their willful disregard of inspection personnel shortfalls.

It turns out that honor, duty and self-respect do have a price. We can count it up below.

Follow the money. As a Virginia gubernatorial candidate, McAuliffe has raised over $2.18 million in campaign donations from health care interests.

McAuliffe was governor when the inspector shortage was disclosed publicly by the Virginia Inspector General. VDH first disclosed the problem in his first year in office.

His successor, Ralph Northam, took over $1.6 million from the health care industry. Dr. Northam knows.

Mark Herring has raised over $420,000 in campaign donations from health care interests. Herring is the legal advisor to the Department of Health. The Attorney General is also charged with the enforcement of the Virginia Consumer Protection Act and, like all attorneys, the Social Security Act.

Herring has known since his first term.

Below you will see the depth and duration of this scandal and how officially and publicly it has been identified.

And ignored. While Virginians suffer and die in un-inspected facilities and at home un-inspected home health providers.

OLC inspection responsibilities. VDH’s Office of Licensure and Certification (OLC) is responsible for licensure of eight categories of medical care facilities or services:

  • Hospitals
  • Abortion facilities
  • Outpatient surgical hospitals
  • Nursing facilities
  • Home care organizations
  • Hospice programs
  • Managed care health insurance plans
  • Private review agents

In 2016 OLC was licensing authority for over 7,800 medical facilities throughout the Commonwealth.

VDH’s 2014-2016 Strategic Plan

In VDH’s 2014-2016 Strategic Plan was written:

“turnover of qualified staff to conduct inspections and investigations has resulted in delays in inspection processes.”

The 2017 Report of the Inspector General. In 2016, the Virginia Inspector General undertook a performance review of the Virginia Department of Health. The review lasted from February 1, 2016 through September 30, 2016 and

“focused on two operational areas:

    • Centralization, Automation, and Oversight of Core Administrative Services
    • Health Care Facilities Inspection, Certification and Licensure”

The IG filed an April 2017 report to the State Health Commissioner. The leaders in the administration and the General Assembly were provided addressed copies.

OLC’s Director identified to the IG 830 medical facilities that had exceeded the required inspection date for licensure, a two-year renewal period. The number of facilities overdue for CMS certification inspections by OLC, a one-year renewal requirement, was not disclosed.

In response, the OLC Director wrote (in 2017):

“Existing staff are strained to conduct surveys and maintain the records. A noteworthy legislative change from the 2017 session of the General Assembly prohibits routine revisits of a facility until all like facilities have completed their routine survey cycle. The impact of how we utilize our MFIs is not yet known; however, we estimate a significant need for resources in order to adequately provide the existing level of required services and implement this legislative change. Estimated resources needs include 22 acute care MFIs, 1 acute care supervisor, 2.5 administrative staff, and additional equipment to support these staff members. The estimated cost of these resources is approximately $2.5 million annually. VDH has made several requests to increase licensure fees in order to cover our certification and inspection costs, but our requests have not been implemented and general funds have not been provided to offset the cost of inspections and additional staffing needs.

Responsible Position: OLC Director
Estimated Completion Date: On-going due to upcoming OSIG review that may impact action plan, funding dependent.

VDH will continue to request increases of licensure fees in order to cover our certification and inspection costs and fund staffing needs to address the timeliness of inspections.”

November 2020 FOIA request response. The Deputy Health Commissioner for Governmental and Regulatory Affairs responded on November 30, 2020 to my FOIA reques.  I am going to provide it here in its entirety because it is so extraordinary.

This is in response to your recent email about the April 2017 performance review conducted by the Office of the State Inspector General. Thank you for contacting us with your concerns.

The Virginia Department of Health (VDH) Office of Licensure and Certification (OLC) is responsible for licensing and inspecting health care facilities in the Commonwealth of Virginia.  OLC’s overall situation with respect to funding and staffing has not improved since April 2017. OLC’s current authorized staffing is 127 positions, with current actual staffing being 105 (95 FTEs and 10 wage positions) and current vacancies being 22 (20 FTEs and 2 wage positions). Neither the current authorized staffing nor the current actual staffing allow OLC to meet its statutory and regulatory mandates. The specific shortfalls affecting OLC are the lack of sufficient medical facilities inspectors (MFIs) to conduct state licensure inspections. Even if OLC had every MFI vacancy filled, it would still not be enough to meet the statutorily prescribed 2-year interval between routine state licensure inspections. OLC has calculated the number of licensed facilities that have exceeded the 2-year inspection interval:

  • Inpatient hospitals (IHs): 97.1%
  • Outpatient surgical hospitals (OSHs): 86.4%
  • Hospice and hospice facilities: 74.1%
  • Home care organizations (HCOs): 88.2%
  • Nursing homes (NHs): 47.9%

(Columnist’s note: no mention of the one-year federal inspection interval for nursing homes that are conducted by OLC, for example)

(Another columnist’s note. Patients pay $5,000 a week for full-time home nursing care in Virginia. I find some comfort in the fact that Northam, McAuliffe and Herring have put their richest friends and perhaps their own families in the same jeopardy as the rest of us by not inspecting HCO’s.)

OLC has calculated it would need at least 10 additional MFIs for IHs and OSHs, 13 additional MFIs for hospice and HCOs, and 3 additional MFIs for NHs in order to fully meet its statutory and regulatory mandates. However, OLC’s ability to hire additional staff is directly tied to the licensure fee revenue it receives, as general appropriations to this office have been flat for many years.

Unfortunately, OLC cannot raise fees for IHs, OSHs, and NHs because these fees are set by statute. The statutory fee structure for these facilities is $1.50/bed with a $500 fee cap; this fee structure has not been changed in 41 years. 

VDH has previously sought, without success, to have legislation introduced to remove these fees from statute and authorize the State Board of Health (Board) to set fees via regulatory action so that sufficient licensure fee revenue could be generated to support the necessary staff to conduct licensure inspections. Given the continued limited availability of state general funds, VDH again sought to have such legislation introduced during the 2021 Session.  The Board already has fee-setting authority for the hospice and HCO program and OLC has initiated a regulatory action for the HCO regulations, which will include increasing licensure fees, as well as planning a regulatory action for the hospice regulations that will likewise include fee increases. It should be noted that normally, these type of regulatory actions taken two years to accomplish; this timeline has been complicated by the COVID-19 pandemic and VDH’s role in responding to that crisis.

Current turnover of qualified staff does continue to impact the ability of OLC to carry out its duties. For federal fiscal year 2019, OLC’s turnover rate was 18.8% and for federal fiscal year 2020 (during which the COVID-19 pandemic has taken place), OLC’s turnover rate was 15.2%. This turnover rate is roughly twice or more that of the VDH overall. This turnover has largely impacted OLC’s MFI staff in the Division of Long Term Care Services and support staff throughout the office.

Another hindrance to OLC’s ability to carry out its duties is the passage of Chapter 465 (2017 Acts of Assembly), which prevents OLC from re-inspecting a facility unless all other facilities of that same type have received an inspection.

(Columnist’s comment: To show the power of the health care facility lobbies, that bill passed unanimously in both Houses and the Governor signed it even though his own Health Department OLC opposed it.)

Prior to this legislative act, OLC would schedule inspections based on geographic closeness of facilities, to better utilize the MFIs’ time and state resources; after the passage of Chapter 465, MFIs travel greater distances between inspections so that inspections can be conducted in order. This increased travel increases the length of inspections, which means less inspections are conducted annually, and increases the cost of inspections, which compounds OLC’s financial situation.

OLC has a single policy analyst responsible for all legislative work, budget requests, and regulatory actions for the 10 state programs that OLC manages. OLC has previously requested additional funding for another policy analyst, and currently has a pending budget request. This budget request is in the process of being reviewed by both the offices of the Secretary of Health and Human Resources and of the Governor. OLC does not have any further information at this time to indicate whether this request will be included in the Governor’s proposed budget for the 2021 session of the General Assembly.

In regards to your question regarding OLC’s capability to “easily identify inspection issues and evaluate trends and optimum staffing levels,” OLC had previously reached an initial agreement with VDH’s Office of Information Management (OIM) wherein OIM would build an automated online licensing system for the Division of Long Term Care Services, at OIM’s expense, which would allow supervisors to run ad hoc reports so trends and issues could be easily identified. Provided this system was successful for the Division of Long Term Care Services, OLC had planned to expand the system to the other divisions within OLC.

However, OIM subsequently declined to pursue development on any system unless OLC was responsible for the costs associated with development. As noted above, OLC is operating under severe financial constraints and is not able to do so at this time. OLC has repeatedly requested funding to support development of an automated online licensing system; these funding requests have been unsuccessful to date. OLC will continue to pursue funding for this purpose.

We want all residents in Virginia to have access to safe and high quality health care.

Joseph Hilbert

Deputy Commissioner for Governmental and Regulatory Affairs

Bottom line. Joe Hilbert’s letter above is the most extraordinary and amazingly honest and thorough response to a FOIA request that I have ever seen. We are blessed to have such public servants in Virginia.

Medicare and Medicaid were established in 1965 under amendments to Title XVIII and XIX respectively of the Social Security Act. Those federal statutes and supporting regulations are enforced with inspections.

OLC can’t come close to meeting its responsibilities and has tried to get help from the Governors since 2014. Nothing doing.

Mark Herring could sue the worst of the operators that have been identified by OLC for violations of their specific responsibilities imposed by the Social Security Act to provide quality health care. His staff could have found them in the same government databases that I have used for this series. He could have sued under Virginia’s Consumer Protection Act.  Hasn’t happened.

Terry McAuliffe and Mark Herring are running again  To the cheers of the health care facilities lobby.

Just not mine.