Opportunities for Engaging Long-Term and Post-Acute Care Providers in Health Information Exchange Activities: Exchanging Interoperable Patient Assessment Information. Regulatory Background (40)

12/01/2011

The Omnibus Budget Reconciliation Act (OBRA) of 1987 included a sweeping set of regulatory reforms for nursing homes. Even prior to, but particularly when Medicare began reimbursing for post-acute nursing home care and Medicaid began paying for long-term nursing home care, there were complaints about the quality of care. These complaints led to a class action lawsuit filed in the late 1970s against the HCFA to ensure nursing homes met regulatory standards.41 In 1983, Congress directed HCFA to study how to improve nursing home regulation. HCFA contracted with the Institute of Medicine (IOM) of the National Academy of Sciences to investigate the quality of care in nursing homes, and to study and recommend changes to existing regulations to ensure quality care. Concurrently, HCFA funded a number of demonstration projects to assess regulatory alternatives for improving the quality of care.42

Prior to OBRA of 1987, the Conditions of Participation for nursing homes were based on the facility’s potential to provide care more than the actual quality of care provided.43 One of the major findings in the IOM study published in 1986 was that a uniform comprehensive assessment of each nursing home resident was essential to improving the quality of care. OBRA of 1987 incorporated many of the recommendations in the IOM report, including amending the Social Security Act to require that the Secretary of HHS specify a minimum data set for use in conducting comprehensive assessments and to designate one or more resident assessment instruments based on the minimum data set. Regulations mandating the completion of the RAI for every nursing home resident went into affect on October 1, 1990, although implementation was postponed until the spring of 1991.44 A revised RAI/MDS 2.0 was implemented across all nursing homes in 1996, and a significantly revised MDS 3.0 is scheduled to be implemented nationally on October 1, 2010.45

In addition to the quality issues addressed by OBRA of 1987, spiraling costs of federally-funded PAC, partially attributable to the implementation of a PPS for acute care in 1983 while exempting PAC facilities, were addressed in the BBA of 1997, which dictated cuts in Medicare spending growth and changes in the way PAC was reimbursed.46 The PPS for nursing facilities, using Resource Utilization Groups (RUGs) based on data collected in the MDS, went into affect in July 1998. In some states Medicaid payments also are based on MDS data. Electronic submission of MDS data to a national repository housed at CMS to facilitate payment and quality evaluation was made mandatory in July 1998.47

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