The federal government relies on outside contractors, not just state employees, to inspect a growing share of the nation’s roughly 15,000 nursing homes, and a new federal audit found that nobody is checking whether those contractors actually meet the government’s own standards. The finding matters to any family with a parent in a nursing home, or comparing facilities before a move, because the survey that produces a home’s public deficiency record and star rating is the main outside check on whether a resident is safe — and that check itself has gone largely unverified.
What the Watchdog Actually Found
The Department of Health and Human Services’ Office of Inspector General examined how the Centers for Medicare & Medicaid Services oversees states’ growing use of contract surveyors — private inspectors hired to supplement state employees who conduct the surveys that certify nursing homes for Medicare and Medicaid. In a report numbered A-04-24-08105, OIG concluded plainly that “CMS did not provide adequate oversight of States’ use of contract surveyors to conduct nursing home surveys.” The audit reviewed 14 states that use contract surveyors and found that all 14 could have improved their policies and procedures to ensure the surveys met federal requirements. During the audit period, CMS had issued a memo telling state agencies what contracting practices to use, but the agency “did not monitor whether SAs implemented practices that achieved the memo’s underlying objectives” — in other words, CMS wrote the rulebook and then never checked whether anyone followed it.
Inside the kit: 51 state Medicare cost-help packs, the new Part D out-of-pocket cap, the prior-authorization appeal steps and a medication and cost tracker. Open The Medicare Cost & Coverage Protection Kit.
Why States Turned to Contract Surveyors in the First Place
State survey agencies are the ones legally responsible for inspecting nursing homes on CMS’s behalf, checking everything from medication management to whether residents are treated with dignity. OIG’s report notes that staffing shortages and survey backlogs, worsened by the COVID-19 pandemic, pushed “many States and CMS” to lean more heavily on contract surveyors rather than state employees to keep up with the inspection schedule federal law requires. That shift makes sense as a stopgap for an overwhelmed system, but it also means a growing share of the inspections behind a nursing home’s public record are being performed by people the state agency does not directly supervise day to day — which is exactly the gap OIG says CMS failed to backstop.
The System CMS Is Supposed to Track This In
OIG’s core recommendation is almost administrative in nature, which is part of what makes the finding notable: CMS does not currently require states to record, in its own tracking system, whether the person who conducted a given survey was a state employee or an outside contractor. OIG recommended CMS “add worker classification (i.e., employee or contractor) as a required entry” in that system — known as iQIES — and require both CMS and state agencies to record who performed every nursing home survey. Without that basic record, OIG found, CMS has no reliable way to know how many surveys nationwide were done by contractors in the first place, let alone whether those contractors met federal training and conduct requirements.
CMS Agreed — But the Fix Is Not Built Yet
CMS did not dispute the findings. The agency “concurred with both recommendations,” according to OIG, agreeing both to add the worker-classification field to its tracking system and to confirm that state agencies have policies in place to ensure contract surveyors meet federal requirements, potentially by checking during CMS’s annual assessment of each state agency. But agreement is not the same as completion: OIG’s recommendation tracker lists both items as “Open Unimplemented,” with CMS’s own target date for an update set at March 1, 2027 — nearly six months from the report’s publication, and with no guarantee the fix arrives on that timeline given how OIG’s tracker routinely shows recommendation dates slip.
What an Unverified Surveyor Means for a Family Paying the Bill
For a family paying $8,000 to $10,000 or more a month out of pocket, or watching a parent’s Medicaid application move through the system, the nursing home survey is not an abstraction — it is the document behind the facility’s star rating on Medicare’s Care Compare website, and the trigger for citations that can carry real financial and legal consequences for a facility found to be out of compliance. If the person who conducted that survey was a contractor whose qualifications the state never verified against federal standards, the resulting deficiency finding, or clean bill of health, carries less certainty than the paperwork suggests. A family relying on a facility’s survey history to decide where a parent should live, or to challenge a facility’s billing or care practices, is trusting a process that OIG says CMS itself cannot currently confirm was done correctly in 14 states reviewed.
What Happens Next
Nothing changes immediately for any specific nursing home because of this report; OIG’s findings are about the oversight system behind the surveys, not a reversal of any individual facility’s rating. The practical marker to watch is CMS’s own March 2027 deadline for implementing the two recommendations — whether the agency actually adds worker-classification tracking to iQIES and confirms state policies meet federal requirements, or whether, as with many OIG recommendations, the deadline passes with the item still marked open.
Checking a Facility’s Own Numbers When the Inspection Behind Them Is in Question
A federal audit questioning how nursing home surveys get done does not come with a worksheet for evaluating what a specific facility charges Medicare, Medicaid or a family directly, or for challenging a bill that does not match what the coverage rules actually allow.
The Medicare Cost & Coverage Protection Kit is a 10-page kit built around the prior-authorization appeal steps and a medication and cost tracker, along with 51 state Medicare cost-help packs and the new Part D out-of-pocket cap.
Look up the prior-authorization appeal steps in The Medicare Cost & Coverage Protection Kit.
This article was produced with AI assistance and reviewed by a human editor. Figures are linked to their primary sources.
