RICHMOND, Va. — The Virginia Department of Health (VDH) did not use millions of federal dollars meant for healthcare facility oversight in recent years, according to the federal government. It's money that could have been utilized during a time when nursing home inspections drastically fell behind schedule and consumer complaints started to tick up.
VDH's office responsible for nursing home oversight, the Office of Licensure and Certification (OLC), is currently being overhauled at the direction of Governor Glenn Youngkin, with state leaders racing to fill all vacancies of nursing home inspectors by the end of the year.
But leading up to these efforts, the understaffed OLC has been failing to complete timely nursing home inspections and still ranks next to last in the country for the percentage of facilities overdue for routine inspection (75%), according to federal data. The office was also the subject of CBS 6 investigations last year in which families voiced frustrations with slow responses to their complaints.
Watch: As nursing home care worsens, why is Virginia struggling to hold facilities accountable?
An internal study of the OLC would later reveal that critical positions remained vacant for years and that inspectors - also known as surveyors - lacked training and weren't given the proper resources to successfully do their jobs. The report noted staffing constraints caused a substantial backlog of work that could take years to address.
Toby Edelman, a nursing home regulation expert with the Center for Medicare Advocacy, said a lack of trained surveyors to complete timely inspections of facilities puts vulnerable residents at risk.
“If the surveyors don't come in, facilities decline in the quality of care they're providing. It's very important that people be there and that a problem be identified quickly and corrected before it affects other people," Edelman said.
While many factors contributed to problems within the office, State Health Commissioner Dr. Karen Shelton partly pointed to inadequate funding from the Centers for Medicaid and Medicaid Services (CMS) at the federal level, which oversees all states' inspection programs.
“Part of the problem with our staffing issues is the funding for the staffing from CMS. We've had stable, flat funding from CMS since 2015," Shelton said in a December 2024 interview.
The limited CMS funding was one of the reasons that led VDH to successfully request that lawmakers approve raising facility licensing fees in an effort to get more state money to hire additional inspectors.
But according to CMS, VDH may not have been maximizing all the federal funding that's been previously available.
CMS has given OLC about $7-8 million annually for healthcare facility regulation, much of which is used for payroll, according to financial reports compiled by VDH. The office is authorized to staff up to about 150 positions, but 62 of them were unfilled as of last month, and a majority of inspector vacancies were within the long-term care division. The starting salary for an inspector ranges from $75,000-$86,000, according to job postings.
In the most recent years of complete data, fiscal years 2021-2023, CMS said Virginia "returned a total of $2,410,693 in unspent federal funds."
"These funds may be used for salaries, hiring new staff, recruitment efforts, contractor support for inspections and complaint investigations, enhanced training, and other resources supporting oversight activities in all Medicare and Medicaid-certified providers," a CMS spokesperson said.
Edelman questions why all funding available to the state wasn't fully leveraged for staffing initiatives or efforts to address the backlog of inspections and complaints, especially as understaffed state agencies across the country have expressed concerns over stagnant federal funding as nursing home complaints and surveyor workloads have increased.
"Not to use the money they have or that they're given seems really troubling. You could hire more staff, pay better wages, make sure that [inspectors] go to training conferences, that they know what they're doing, help them pass the test. There are important things that that money could have been used for," Edelman said.
However, VDH said its payment management system shows a return of $882,000 in drawn CMS funds during the years in question. Those returns were the result of "accounting adjustments" due to reduced payroll and supplies costs, the agency said.
VDH said the difference between its reported total returns and CMS' reported total returns could possibly be explained by a shift in appropriation of funds among states by CMS but did not provide a definitive explanation. The agency noted its reported returns reflected what was shown in its payment management system, which is used for draw purposes, and that any other figures did not originate from that system.
"Overall, the net draw remained positive, the grants stayed active, incurred additional expenses, and VDH continued to receive reimbursements from CMS," a VDH spokesperson said.
For fiscal year 2024, which has not yet been officially closed out, VDH did not draw down an additional roughly $4 million in federal funds out of the total $7.7 million received. VDH said it plans to work with CMS to go back and draw down "as many of these additional federal funds as possible."
CMS has not said how much unspent money, if any, could be left over from fiscal year 2024. At last check, CMS said the close-out process was still underway.
After Governor Youngkin issued his executive order, which directs aggressive recruitment initiatives within OLC, VDH said last month that it received a record number of job applications in a matter of weeks. That included more than 300 applications for inspector positions.
When asked why the agency couldn't have initiated these recruitment efforts years ago, the VDH Chief Operating Officer said, "I think the thing to concentrate right now is, several months ago, we said we need to look at a leadership focus, we need to look at a recruitment focus, and we need to put an incredible amount of attention on not only filling vacancies, but filling vacancies with the right type of clinical leaders."
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