State, U. S. in Accord on Care Homes

California and the federal government, locked in a bitter dispute over the delivery of care in nursing homes, reached a temporary settlement Tuesday, with each side claiming a decisive victory.

But nursing home spokesmen in California said they remained confused about how the settlement affects patient care, and angry advocates for nursing home residents accused the federal and state governments of striking a face-saving “backroom deal” at the expense of old people.

Gail Wilensky, director of the federal Health Care Financing Administration, said that California agreed to begin using tough federal guidelines and regulations when inspecting nursing homes. In turn, the federal government will allow California to propose changes in the inspection guidelines.

Federal inspectors had been working in California after the state refused to carry out inspections, arguing that the guidelines would add paperwork and expense.

California inspectors will be back on the job next month, Wilensky said in an interview here. She emphasized that the federal government will have the final word on the guidelines.

In Sacramento, however, Gov. Pete Wilson claimed a triumph, saying that the federal government will rewrite 200 pages of guidelines that California asserted were illegal and added millions of dollars in costs without improving care.

“Finally, California’s opposition to the illegal interpretive guidelines has been recognized,” the governor said. A spokesman said that Wilson had won his battle with a “renegade bureaucracy.”

The National Senior Citizens Law Center, which filed a class-action lawsuit against the state to force compliance with the reforms, said it will return to federal court this week to seek a contempt citation against both the state and the Health Care Financing Administration.

The center’s deputy director, Neal S. Dudovitz, said Tuesday’s agreement constitutes a “backroom deal” that illegally meddles with an act of Congress. “What has happened, incredibly, is that the federal government has said, ‘Here California, do you like this? OK, we’ll change the law for everybody,’ ” Dudovitz said.

Federal Judge Edward J. Garcia last month issued a preliminary injunction in the case, ordering California to comply with the regulations.

The nursing home industry in California also was uneasy about the agreement between state officials and the Health Care Financing Administration. “It seems like a compromise . . . to meet the needs of HCFA and the state, but I’m not so sure it meets our needs or those of nursing home patients,” said David Helmsin of the California Assn. of Health Facilities.

The agreement gives the state 30 days to detail its objections to the federal inspection rules. The pact postponed an unusual administrative hearing that was to have begun Tuesday in San Francisco to determine whether California should be sanctioned for failure to comply with federal law.

Because of the agreement, the state decided not to pursue a lawsuit--filed in Sacramento last week--against the Health Care Financing Administration, pending the outcome of negotiations over the guidelines, according to Kenneth W. Kizer, director of the California Department of Health Services.

The respite will enable both sides to focus on an even more vital dispute: the rate of payment by California to nursing homes caring for 100,000 poor, elderly people under the Medi-Cal program.

The federal government says that the state is not offering enough money to nursing homes to pay for the improvements in care under the regulations, including additional staffing.

Helmsin, of the nursing home association, agreed. He said his group, representing most of California’s 1,300 nursing homes, estimates the cost of implementing the rules at $440 million, while state health officials estimate $27 million.

Helmsin said he could get no new information on how nursing homes would be paid to implement the rules.

Federal funding of $1 billion for the state’s nursing homes is in jeopardy if Washington and Sacramento cannot reach a final agreement settling their differences over the inspection guidelines and the Medi-Cal payment schedules.

The federal law that sparked the controversy calls for increased nursing personnel. It also requires a reduction in use of restraints, including drugs to tranquilize nursing home residents and straps to tie them down.

Wilensky said she discussed the issue with Wilson last week, but strongly denied she had backed down under political pressure. Wilson earlier sent a letter of complaint to White House Chief of Staff John Sununu and said Tuesday the White House had been “very helpful” in resolving the problem.

But Wilensky said, “We could hardly accede to the right of a state to make changes” in federal rules. “It was a very unpleasant, uncomfortable situation. A major state appeared to be defying a part of the Medicare-Medicaid program. There was an emotionalism attached to the issue we didn’t understand.”

Sununu also received a letter supporting Wilensky’s position from the New Hampshire Health Care Assn., a nursing home industry group. Sununu is a former governor of the state.

Rosenblatt reported from Washington and Wielawski from Los Angeles.