At a glance…
This article will examine how the administrator of record could be disciplined for negative outcomes of decisions made by managers who exist within “the layer in between.”
Regardless of whether one works for a large multifacility (aka “chain”) organization or a sole proprietorship, the administrator of record is ultimately responsible for deficiencies resulting from state surveys.
This has been identified as one factor resulting in the decline in the number of individuals seeking licensure as nursing home administrators.1 Consequences arising from one's own decisions which result in survey deficiencies are difficult enough to deal with-but what of the decisions of others who are not mentioned in the regulations yet have direct control over the administrator, and whose decisions more profoundly impact the facility than the decisions of the administrator of record?
In this article we will review the regulatory basis of the governing body (tag F-493), as well as the role of the administrator in daily operations (F-490 and F-493), and examine how the administrator of record (AOR) could be disciplined for negative outcomes of decisions made by managers who exist within what we will term “the layer in between.” This layer consists of managers (regional and otherwise) situated between the governing body and the administrator. We'll conclude with a discussion of how the administrator can protect him or herself should he or she ever be called before their state licensing board to answer for survey deficiencies that may have resulted from decisions beyond his or her control.
What the regulations require
As with any federal regulation, states may adopt regulations as written by the federal government or make them more stringent. We will focus on the requirements (Figure 1) for a “governing body” as established by the Centers for Medicare & Medicaid Services (CMS). The governing body can range from a sole proprietor to an elaborate board of directors.
Regardless of structure, a shared commonality of any governing body is its fiduciary duty. Longest, Rakich, and Darr define a fiduciary duty as a relationship in which a person has “knowledge and authority and in whom trust is placed.”
2 They also remind us that “governing body members can be held personally liable for gross negligence which can be acts of commission or omission.”
2 In other words, members of a governing body must act in the organization's best interest or they may face personal consequences.
Violations of fiduciary responsibility do not always result in findings of personal liability,
2 but it should be equally appreciated that corporate wrongdoing has come under greater scrutiny in recent years. Although members of the governing body of skilled nursing facilities (SNFs) have a fiduciary responsibility to act in the best interest of the facility, and have the potential to be named in lawsuits for breaches of fiduciary duty, there are no specific regulations that enable state survey and certification agencies to levy remedies, fines, and/or penalties against them.
Recall that F-493 requires that the governing body “appoints the administrator who is: (i) licensed by the state where licensing is required; and (ii) responsible for the management of the facility.”3 Another regulation found at §483.75 (F-490, Administration) applies to the administrator more directly. It requires that the facility “must be administered in a manner that enables it to use its resources effectively and efficiently to attain or maintain the highest practicable physical, mental, and psychosocial well-being of each resident.”3
To meet the requirements of F-490, the nursing home administrator (NHA) must skillfully direct multiple areas, including resident care and quality of life, human resources, finance, physical environment and atmosphere, leadership and management, and engage in ethical practice.7 To successfully negotiate these multiple responsibilities, the NHA must have sufficient legitimate authority delegated to him or her through the organization's governing body.
Unlike members of the governing body, the NHA is answerable to the state board that issues him or her a license, and the licensed NHA can experience sanctions against that license resulting from state surveys. Figure 2 describes the regulatory basis of sanctions against the nursing home administrator as outlined in Chapter 7 of the “Survey and Enforcement Process for Skilled Nursing Facilities and Nursing Facilities.”5
Some states inform their licensed NHAs that any reports from the Department of Health specific to “bad surveys” will (as opposed to “can”) result in investigation of the administrator. In Ohio, for example, NHAs are informed, via the Ohio Board of Examiners of Nursing Home Administrators (BENHA) Web site, that “Two (2) notifications within a year will warrant a visit by the board's investigator, and a third notification within a year could result in the suspension or revocation of the administrator's license.”6