Posted: October 27th, 2022

Case Study

The Omnibus Budget Reconciliation Act (OBRA), also known as the Nursing Home Reform Act of 1987, has dramatically improved the quality of care in the nursing home over the last twenty years by setting forth federal standards of how care should be provided to residents. 

This Act is interpreted with the U.S. Code of Federal Regulations (42 CFR Part 483). Such improvements include less use of antipsychotic drugs, a reduction in chemical and physical restraint use, and a reduction in inappropriate use of indwelling urinary catheters.

Mandates

The quality of care mandates contained within OBRA, and the regulations, require that a nursing home must provide services and activities to attain or maintain the highest practicable physical, mental, and psychosocial well-being of each resident in accordance with a written plan of care. 

In order to participate in Medicare and Medicaid programs, nursing homes must be in compliance with the federal requirements for nursing homes.

The mandates of OBRA are regarded in the nursing home setting to represent minimum accepted standards of care. The failure of a nursing home to comply with the OBRA quality of care mandates in caring for a resident represents a failure to exercise the degree of reasonable care and skill that should be expected.

Penalties

The Indiana State Department of Health is responsible for ensuring that nursing homes follow these mandates through the state survey process. The Department of Health and Human Services (DHHS) and the states may apply penalties against nursing homes for failure to meet the minimum standard of care as defined in the OBRA regulations. 

Such penalties may include fines, appointment of administrative consultants to run the nursing home while deficiencies are remedied, and even closure of a nursing home.

• Residents must be assessed to identify their medical problems and their abilities to perform basic self-care activities. The DHHS established a uniform data set, referred to as the minimum data set (MDS), to document this assessment.
• The nursing home is responsible for the safety of each resident. This includes being responsible for orders written by the resident’s primary physician or other medical provider. If the physician writes an order that does not comply with the federal regulations, the nursing home is responsible for making sure the physician changes such order. The mere presence of a physician’s inappropriately written order does not absolve the nursing home of responsibility in providing safe care.
• Provide services that will enhance each resident’s quality of life to its fullest (42 CFR §483.15).
• Maintain the dignity and respect of each resident (42 CFR §483.15).
• Develop a comprehensive care plan for each resident (42 CFR §483.20).
• Conduct a comprehensive and accurate assessment of each resident’s overall health upon admission and at each required interval (42 CFR §483.20).
• Prevent a decline in activity of daily living (ADL) activities, including the ability to eat, toilet, bathe and walk. Staff must provide for ADL care when necessary (42 CFR §483.25).
• Prevent the development of pressure sores, and if a resident has pressure sores, provide the necessary treatment and services to promote healing, prevent infection, and prevent new sores from developing (42 CFR §483.25).
• Provide appropriate care to those who have urinary incontinence and restore bladder function if possible. This also includes only using urinary catheters when appropriate as outlined in the regulations to prevent adverse consequences related to such use (42 CFR §483.25).
• Prevent accidents, including falls, accidental poisonings and other incidents that could cause injuries (42 CFR §483.25).
• Maintain adequate nutrition to prevent unnecessary weight loss (42 CFR §483.25).
• Provide each resident with sufficient fluid intake to prevent dehydration (42 CFR §483.25).
• Ensure that residents are free from significant medication errors (42 CFR §483.25).
• Have sufficient nursing staff (42 CFR §483.30).
• Ensure that each resident’s rights to choose activities, schedules, and health care are maintained (42 CFR §483.40).
• Provide pharmaceutical (medication) services to appropriately meet the physical and psychological needs of each resident (42 CFR §483.60).
• Maintain accurate, complete, and easily accessible clinical records for each resident (42 CFR §483.75).

CASE STUDY: Mrs. J is repeatedly asking for a nurse; other patients are complaining, and you simply cannot be available to Mrs. J for long periods.  Considering the setting and the OBRA guidelines, what would you do to manage the situation?

Federal Nursing Home Reform Act
from the

Omnibus Budget Reconciliation Act of 1987
or simply

Developed by Hollis Turnham, Esquire

In 1987, President Ronald Reagan signed into law the first major revision of the federal
standards for nursing home care since the 1965 creation of both Medicare and Medicaid
42 U.S.C1396r, 42 U.S.C. 1395i-3, 42 CFR 483. The landmark legislation changed
forever society’s legal expectations of nursing homes and their care. Long term care
facilities wanting Medicare or Medicaid funding are to provide services so that each
resident can “attain and maintain her highest practicable physical, mental, and psycho-
social well-being.”

Medicaid Provision: 42 U.S.C. 1396r(b)(4)
http://www4.law.cornell.edu/uscode/42/1396r.html

Medicare Provision: 42 U.S.C. 1395i-3(b)(4)
http://www4.law.cornell.edu/uscode/42/1395i-3.html

Federal Regulations: 42 CFR 483.25 http://www.access.gpo.gov/nara/cfr/cfr-
retrieve.html – page1 (Use the search engine at the bottom of the page to retrieve a
specific title part and section.)

WHAT IS OBRA ’87?

The Federal Nursing Home Reform Act or OBRA ‘87 creates a set of national minimum
set of standards of care and rights for people living in certified nursing facilities. This
landmark federal legislation comes by its common name “OBRA” through the legislative
process. Congress, then and now, usually completes a huge measure of its budgetary and
substantive work in one large bill. The bill accomplishing that function in 1987 was
entitled the Omnibus Budget Reconciliation Act of 1987 or “OBRA ‘87.” The separate
Federal Nursing Home Reform Act along with many other separate bills was “rolled
into” one bill to insure final passage of all the elements.

These minimum federal health and care requirements for nursing homes are to be
delivered through variety of established protocols within nursing homes and regulatory
agencies. And as minimum standards, Long-Term Care Ombudsmen should view OBRA
as a baseline that should be built upon to reach not only resident “well-being” but also
happiness and fulfillment.

OBRA also recognized the unique and important role performed by the LTCOP for
nursing home residents. The federal Medicaid and Medicaid legislation included those

http://www4.law.cornell.edu/uscode/42/1396r.html

http://www4.law.cornell.edu/uscode/42/1395.html

http://www.access.gpo.gov/nara/cfr/cfr-retrieve.html#page1

http://www.access.gpo.gov/nara/cfr/cfr-retrieve.html#page1

distinct advocacy roles and subsequent regulations and other guidance has given LTCOPs
additional tools to serve resident interests.

The changes OBRA brought to nursing home care are enormous. Some of the most
important resident provisions include:

• Emphasis on a resident’s quality of life as well as the quality of care;
• New expectations that each resident’s ability to walk, bathe, and perform other

activities of daily living will be maintained or improved absent medical reasons;
• A resident assessment process leading to development of an individualized care

plan 75 hours of training and testing of paraprofessional staff;
• Rights to remain in the nursing home absent non-payment, dangerous resident

behaviors, or significant changes in a resident’s medical condition;
• New opportunities for potential and current residents with mental retardation or

mental illnesses for services inside and outside a nursing home;
• A right to safely maintain or bank personal funds with the nursing home; Rights

to return to the nursing home after a hospital stay or an overnight visit with family
and friends The right to choose a personal physician and to access medical records;

• The right to organize and participate in a resident or family council;
• The right to be free of unnecessary and inappropriate physical and chemical

restraints;
• Uniform certification standards for Medicare and Medicaid homes;
• Prohibitions on turning to family members to pay for Medicare and Medicaid

services; and
• New remedies to be applied to certified nursing homes that fail to meet minimum

federal standards.

OBRA set in motion forces that changed the way state inspectors approached all their
visits to nursing homes. Inspectors no longer spend their time exclusively with staff or
with facility records. Conversations with residents and families are a prime time survey
event. Observing dining and medications administration are a focal point of every annual
inspection.

Under OBRA, Long Term Care Ombudsman Programs have defined roles to fulfill and
tools to use in the annual inspection process to nurture the conversations between
residents/families and inspectors and life in the nursing home.

HOW DID OBRA ’87 COME ABOUT?

The federal Nursing Home Reform Act became law with growing public concern with
the poor quality of care in too many nursing homes and the concerted advocacy of
advocates, consumers, provider associations, and health care professionals. Congress
asked the Institute of Medicine (IoM) to study how to better regulate the quality of care in
the nation’s Medicaid and Medicare certified nursing homes.

In its 1986 report Improving the Quality of Care in Nursing Homes, the expert panel
recommended:

• A stronger federal role in improving quality;
• Revisions in performance standards, the inspection process, and the remedies to

improve nursing home services;
• Better training of nursing home staff;
• Improved assessment of resident needs; and
• A dynamic and evolutionary regulatory process.

Information can be found at: http://www.nao.edu/books/0309026461

In order to assure implementation of the IoM recommendations from the “blue ribbon
panel,” the National Citizens’ Coalition for Nursing Home Reform organized the
“Campaign for Quality Care” to support the federal reforms. National organizations
representing consumers, nursing homes, and health care professionals worked together,
and continue to work, to create consensus positions on major nursing home issues. Their
consensus positions on the IoM report laid the foundation for the federal law.
OBRA has changed the care and lives of nursing home residents across America. There
have been significant improvements in the comprehensiveness of care planning. Anti-
psychotic drug use declined by 28-36% and physical restraint use was reduced by
approximately 40%.

Several states have taken all or parts of OBRA ‘87 and made them state law for their
licensed nursing homes or other kinds of long term care facilities. For example, the state
of Washington has extended the rights that nursing home residents have to residents of all
Washington long term care facilities. RCW 70.129.005 And, Michigan has incorporated
many of the OBRA prohibitions on Medicaid discrimination into state law. MCLA
333.21765a.

Online Research: The links to federal laws and regulations in this document have been
made to the most reliable sources known to the Ombudsman Resource Center. Links to
the Medicaid and Medicare laws are made to the Legal Information Institute maintained
by Cornell University. The federal code of regulations is accessed here through the
United States Government Printing Office. If these resources do not meet your needs or
you find better resources for federal legal research, please contact Center staff at
ombudcenter@nccnhr.org

http://www.nao.edu/books/0309026461

http://access.wa.gov/government/awlaws.asp

http://michiganlegislature.org/law/GetObject.asp?objName=333-21765a

http://michiganlegislature.org/law/GetObject.asp?objName=333-21765a

http:// www.law.cornell.edu/

http://www.access.gpo.gov/

mailto:ombudcenter@nccnhr.org

OBRA ‘87 SUMMARY