Protecting administrators from ‘layer in between’

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

The layers in between

Whereas members of the governing body can be held liable for breaches of fiduciary duty and the NHA can be sanctioned by his or her licensure board for survey deficiencies and other signs of mismanagement, there is that third group of individuals who play a central role in many long-term care facilities but often go unnoticed-individuals who are appointed by the governing body and have authority over the NHA in ways that can ultimately influence day-to-day operations. The “layers in between,” as we call them, can range from a single person to an elaborate hierarchy of reporting relationships. Titles might include “regional VP of operations,” “clinical consultant,” “coordinator of operations,” “regional administrator,” “regional VP of finance,” “regional director,” or “clinical services consultant,” as well as a multiplicity of other possible titles.

The scope of each of these positions and the roles they play differ, depending upon the organization’s size, makeup, and profit status. Many of these managers are “watchdogs,” in that they seek to maintain tight control of budgets, supplies, resources, or other essential functions or processes to maximize profitability. Each of these positions has legitimate authority over the facility administrator, granted to them by the governing body-but they are not specifically mentioned in the regulations and therefore are not subject to sanction by the state survey and certification agency rules and regulations. Even if members of the “layer in between” were licensed as NHAs, they cannot be disciplined by their respective boards under the provisions of Chapter 7, as they are not the “administrator of record” of the facility.

This situation was addressed in a 2007 article by Dr. V. Tellis-Nayak (Nursing Homes/Long Term Care Management, October 2007, p.20), who explored questions of where the “quality buck” should stop. Dr. Tellis-Nayak described how NHAs feel that they are just a “front” for the multiple management positions that exist above them. Dr. Tellis-Nayak’s article engendered greater than usual response from readers, the editors noted, adding that all of them were in full agreement that this is a serious problem.⁷

Since managers who occupy these positions are not the “administrators of record,” nor are they members of the organization’s governing body, they stand to lose very little from poor decisions that they either make or enforce. Although it is certainly true that they may lose their jobs for poor decisions or negative outcomes, these consequences are relatively minimal in that one can always find another job. There are no regulatory or legal threats to the basis of their livelihoods: no financial penalty in the form of fines, no humiliations related to disciplinary action, up to and including revocation of his or her license to practice. As Davis, Haacker and Townsend remind us, when the administrator can’t obtain the necessary authority to manage the day-to-day operations of the skilled nursing facility, his or her license may, in fact, be in jeopardy.⁸

And that jeopardy is growing. The survey process is generally becoming more difficult, and more and more administrators are feeling its bite. For example, the average number of citations rose from 5.6 in 2000 to 7.0 in 2008.⁹ During this same period, the number of citation-free surveys declined from 17.3% to 8%, while the percentage of nursing facilities found to be in substantial compliance decreased from 22.2% in 2000 to 9.8% in 2008.⁹ The percentage of nursing facilities with immediate jeopardy citations increased from 1.5% in 2000 to 2.5% in 2008.⁹

Protecting your license

There are several precautionary steps NHAs might want to consider in confronting the issue of management by the “layer in between.” During an initial job interview, for example, the NHA should ask questions about key areas that can impact administrative autonomy and, ultimately, quality of care-questions regarding control of staffing levels, budget, and other key daily management issues. If the administrator finds him- or herself in a position where autonomy is being usurped by the owner(s), governing body, or the “layers in between,” they should attempt to educate those managers as to their professional need for administrative authority over day-to-day matters.

At the same time, they should ask themselves: “Do I want to remain in this type of employment situation, or should I avoid or cut these ties and find an organization more conducive to administrator autonomy?” Certainly, if resignation isn’t an immediate option, careful documentation of daily decision making is essential. Begin a professional journal and document dates, times, issues, concerns, responses from supervisory individuals, etc., in your daily work. Keep copies of e-mail communications and notes on phone conversations. These records may help if you ever are required to present before your state board of nursing home administrators.

However, should you be called to answer for survey deficiencies that resulted from circumstances beyond your control, do not attempt to deal with the state board alone. Recall the sage advice of Abraham Lincoln: “The man who represents himself has a fool for a client.” Contact an attorney with experience in dealing with state licensure boards immediately.

A final recommendation: All NHAs should work through their professional organizations to bring about changes in regulation to remove this vulnerability. It would be difficult to conceive that CMS is oblivious to the fact that these “layers in between” issues exist, and it is equally difficult to imagine that CMS assumes that administrators have the necessary levels of autonomy needed to effectively govern the SNF on a daily basis, especially regarding decisions based on profits or margins. CMS should revise the requirements of Chapter 7 specific to mandatory reporting to the administrator’s state board (unless compelling evidence exists to indicate that the administrator is at fault for the quality deficiencies identified.) In addition, laws and subsequent regulations could be enacted that would include sanctions against individuals who occupy these “layer in between” managerial positions so that they share in the legal and professional responsibility of the administrator. A potential sanction might be disqualification from working with Medicare/Medicaid programs. Although this may seem farfetched, it should be noted that the U.S. Food and Drug Administration uses this approach for clinical investigators who have “repeatedly or deliberately failed to comply with applicable regulatory requirements.”¹⁰ Still another possibility would be changes in regulations that would require the governing body to communicate directly with the licensed administrator.

Regardless of what the ultimate solution might be, the current system is clearly flawed. Revisions to existing regulations could return control of the SNF to those individuals most qualified to administer its day-to-day operations and restore the authority that laws and regulations already ascribe to the NHA. And they will keep administrator’s management prerogatives in line with his or her responsibilities.

Sharon A. Nazarchuk, PhD, MHA, RN is Professor and Chair of the Department of Social Sciences at Lackawanna College, Scranton, Pennsylvania. She maintains a private practice as a long-term care consultant. Dr. Nazarchuk can be reached at (570) 466-9544 or

nazarchuks@lackawanna.edu.

Timothy J. Legg, PhD, CNHA, GNP-BC, FACHCA, is Assistant Professor of Health Sciences at TUI University, Cypress, California. In addition to his teaching responsibilities, he serves part time as director of continuing education for Gerber Consulting Services, Inc. Dr. Legg can be reached at (570) 406-3387 or

tlegg@tuiu.edu.

Reference

1. Pratt JR. The disappearing administrator: Results of a national survey [Electronic version]. Nursing Homes/Long Term Care Management, 2002; 4:24-9.
2. Longest BB, Rakich JS, Darr K. Managing health services organizations and systems. 4th ed. Baltimore Maryland:Health Professions Press, Inc., 2002.
3. Centers for Medicare & Medicaid Services Appendix PP: Guidance to Surveyors for Long-Term Care Facilities. State Operations Manual 2007; Rev. 55, 12/2/09.
4. Long Term Care Leadership Council (2007). Essential core functions: Responsibilities, knowledge, and skill: A guide for the consultant pharmacist, director of nursing, medical director, and nursing home administrator in long term care organizations. Available at: www.achca.org/content/pdf/LTCPLC_Core_Func-R_6-07lw.pdf.
5. Centers for Medicare and Medicaid Services (CMS).Chapter 7 Survey and Enforcement Process for Skilled Nursing Facilities and Nursing Facilities-State Operations Manual, Revision 1, 05/21/04.
6. BENHA online (n.d.) Frequently asked questions regarding enforcement: Can bad surveys affect my license? Available at: www.ohiobenha.org/enforcementfaq.aspx.
7. Tellis-Nayak V.Disenchantment among LTC leaders-and its toll on quality. Nursing Homes and Long Term Care Management October, 2007. Available at: www.iadvanceseniorcare.com/LTCDisenchantment.
8. Davis WE, Haacker RW, Townsend JE. The principles of health care administration. Shreveport Louisiana:Professional Printing & Publishing, Inc., 2002
9. American Health Care Association (ACHA) Trends in nursing facility standard health survey citations 2008. Available at: www.ahcancal.org/research_data/trends_statistics/Documents/trends_survey_citations_Mar2008.pdf
10. U.S. Food and Drug Administration.Disqualified/totally restricted list for clinical investigators, 2008. Available at: www.fda.gov/ora/compliance_ref/bimo/disqlist.htm

Long-Term Living 2010 August;59(8):43-46