Wake-up call.

GAO calls for assisted living self scrutiny

NO NEW FEDERAL OVERSIGHT IS ANTICIpated, but the assisted living industry was put on notice at a Senate aging committee hearing that its performance will be under tighter scrutiny following a General Accounting Office report that highlighted several concerns.

The industry and its investors had anxiously awaited the report, especially following a prediction earlier this year from Sheryl Skolnick, an analyst with BancBoston Robertson Stephens. She projected that the report would be the bearer of bad news, namely that regulations were on the horizon. At the time, assisted living stocks went into a tailspin.

As it turned out, the GAO report did contain two main criticisms. First, many assisted living facilities are not routinely providing prospective residents with key information they need in advance so they can compare facilities and select one appropriate for their needs.

Also, in its study of facilities in four states--California, Florida, Ohio, and Oregon--the GAO said it found that residents of a number of facilities are "encountering problems with quality of care or consumer protection, which in some cases can have a serious effect on their health."

Assisted living now is largely a privately funded industry regulated by individual states. Senator John Breaux (D-La.) suggested that "we could end up with 50 different sets of regulations as opposed to one set of federal regulations." Senator Ron Wyden (D-Ore.), who said his mother resides in an "outstanding" assisted living facility in California, declared that most ALF residents are affluent and suggested a need to cover costs for lower-income senior citizens.

Other senators also expressed concerns but indicated they saw no immediate need for additional regulatory activity. Still, Senator Charles Grassley (R-Iowa), who chairs the committee, left the door to regulations open. "The jury is still out," he said, adding that the assisted living industry should consider the GAO report a "wake-up call."

Acknowledging that Congress "has not paid much attention" to assisted living in the past, Grassley said the GAO study was conducted for "educational purposes." He advised consumers to "shop carefully" when selecting a facility.

Provider groups and other organizations who testified at the hearing generally agreed that assisted living regulation should remain a state-by-state matter, although some said clearer definitions are needed. For example, there is no consensus among state policymakers about the "appropriate regulatory model" for assisted living and, similarly, no consensus about "what assisted living is," asserted Catherine Hawes of the Myers Research Institute of Menorah Park Center for the Aging in Beachwood, Ohio.

"The present state regulatory environment allows innovation and creativity to flourish, which ultimately gives the consumer more options from which to choose," Dean Painter told the committee on behalf of the American Association of Homes and Services for the Aging. He emphasized that regulation at the state level is working, but added, "if providers want to maintain the variety and flexibility for which assisted living is known, they must continue to be highly committed to consumer protection."

David Schless, executive director of the American Seniors Housing Association, did not testify at the hearing but said later that most states "have done a good job trying to stay on top of assisted living." He adds: "To the extent that there are providers that have serious and deficient quality problems, we would hope that the states would step up and close them down."

"Developing an outcome-oriented, consumer-focused regulatory and oversight system is not easy. However, states are the laboratory where changes can be tested. States welcome this challenge," said Robert L. Mollica, deputy director of the National Academy for State Health Policy.