Response to healthcare related deficiency citations at U.S. nursing homes: Do organizational and market factors matter?

Raphael Ezeagu, The University of Texas School of Public Health


The quality of care at nursing homes in the United States has been under intense scrutiny for several decades. Major policy reforms administered through the Centers for Medicare and Medicaid Services (CMS) and state agencies to strengthen regulatory enforcement and reduce asymmetry of information has produced mixed results. Prior research shows substantial differences in the enforcement of federal standards, resulting in significant variation in the number and severity of deficiency citations and their associated penalties (e.g. payment denials). With the rising importance to healthcare quality transparency, nursing homes are expected to correct their deficiencies in timely manner to maintain their quality reputation and minimize revenue loss from Medicare/Medicaid reimbursement denials. Numerous studies have examined the prevalence of and variations in quality deficiencies based on facility level and market level factors. However, a critical research gap exists in our understanding of the sources of variations in the duration taken to resolve quality deficiencies. This study presents a retrospective ‘pooled’ cross-sectional analysis of 15,649 CMS-certified nursing homes examining the association of select organizational and market factors with healthcare-related deficiency resolution time and Medicare payment denial duration. The Donabedian’s Structure-Process-Outcome framework was adapted to conceptualize the research model, and the data was analyzed using Heckman’s model in Stata. Data was obtained from Nursing Home Compare (June 2015 data release covering deficiencies and payment denials during 2012-2014) and Provider of Service files, and Census Bureau. The results show that nursing facilities on average have 31 deficiency citations (standard deviation SD=18) of all categories. The average resolution time was about 35 days (SD=18days) for mild severity deficiencies and 37 days (SD=26days) for harmful deficiencies. Only 1,227 facilities had payment denials of which 76 percent (n=1065) had single denials, and the average denial duration was 31.5days (SD=44days). Regression results show that facilities have longer deficiency resolution time when operating in states with lower regulatory enforcement stringency levels and counties with higher market concentration. However, contrary to expectation, organizational factors like nonprofit status, five-star ratings and high staffing ratios were associated with longer response time to deficiencies. Whereas, the empirical evidence for payment denial duration was mixed. In overall, the study provide new insights to policymakers and payer organizations on the need of focusing on select organizational and market factors in identifying targeted improvement initiatives.

Subject Area

Health care management

Recommended Citation

Ezeagu, Raphael, "Response to healthcare related deficiency citations at U.S. nursing homes: Do organizational and market factors matter?" (2016). Texas Medical Center Dissertations (via ProQuest). AAI10131766.