In 2016, the General Accounting Office Makes Recommendations Regarding Accurate and Reliable Nursing Home Financial Reports:  HHS Says “Thanks, but No Thanks.”

    In 2016, the General Accounting Office (GAO) reported the results of its investigation into the reliability and validity of financial information submitted by nursing home corporations.  The GAO was tasked with determining how skilled nursing facilities “spend their Medicare and other revenues.”[1]  In its report, the GAO recommended that CMS undertake two actions: “ (1) improve public stakeholders’ ability to locate and use SNF expenditure data and (2) ensure the accuracy and completeness of the data.”[2] According to the report, “HHS concurred with the first but not the second recommendation, citing resource considerations.”[3]  The agency’s partial concurrence is farcical.  What is the benefit of making financial data available to the public if the data is inaccurate and unreliable?

    HHS disagreement with a reasonable recommendation by the GAO that CMS demand honest cost reports from contractors, should evoke the public into a profound and angry reaction. For an agency with a FY 2023 request for discretionary budget authority of $127 billion and $1.7 trillion in mandatory budget authority[4] a project for making financial data easily accessible to the public is de minimus in the overall scheme of its expenditures.  The cost of a reasonably accessible database containing well-audited cost reports from each facility would be a trivial expenditure – so trivial that it would have no meaningful impact on government deficits and debt.

    The problem is that the public has not been stunned by the rejection of the GAO investigators’ recommendations and their stated belief that  “CMS should provide reliable SNF expenditure data”[5] because the public has not been made aware of the report or what it contains.  That in itself is puzzling.  A government agency for the responsibility of nearly $2 trillion worth of federal expenditures is shirking its responsibility for informing the taxpayers – the funders – about how their money is spent – let alone whether it is effectively and efficiently spent.  This should be big news but advocates and activists have failed to take advantage of it.

    Consequently, the nursing home system remains a closed system that is troubling to most Americans, but they can’t articulate the financial machinations responsible for the lack of investment by corporations in an adequately paid workforce and quality of care.  Absence of openness in a complex social system funded by government inevitably leads to the bigger problem of corruption.

[1] “Skilled Nursing Facilities: CMS Should Improve Accessibility and Reliability of Expenditure Data,” (2016), Washington, D.C. General Accounting Office, Highlights of GAO-16-700.

[2] Ibid

[3] Ibid


[5] GAO, Op. Cit.