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A 1986 study conducted by the Institute of Medicine concluded that many nursing home residents were mistreated. This study fueled the reform efforts that came into effect in 1987. The Nursing Home Reform Act was passed as part of the Omnibus Budget Reconciliation Act of 1987.
The aim of the reforms was to ensure that patients received the highest practical care to promote their mental, physical and psychosocial well-being. The law established a Resident’s Bill of Rights and specifies the services to be provided. Medicare and Medicaid payments will be halted if the facility does not comply with the reforms. Since nursing homes rely on financing most of their expenditure from these sources, facilities are forced to ensure that their care is up to standards.
Services required for residents include: comprehensive care plans for each individual resident, periodic assessments by professionals, nursing services, rehabilitation services, social services, pharmaceutical services, dietetic services, and if the facility houses more than 120 patients, she must employ a social worker on time.

The Residents’ Bill of Rights gives patients the following:
-The right to indemnification from abuse, mistreatment and neglect;
-The right to freedom from physical limitations;
-The right to privacy;
-The right to housing for medical, physical, psychological and social needs;
-The right to participate in resident and family groups;
-The right to be treated with dignity;
-The right to participate in the review of a person’s care plan and to be fully informed in advance of any changes in care, treatment, or change of status in the facility; and
-The right to express grievances without discrimination or retaliation
To assess whether nursing homes meet the criteria established by the Nursing Home Reform Act, the law has established a certification process. It requires the state to conduct unannounced surveys and interviews with residents at random times. However, the government did not enact regulations for the process until 1995. If specific complaints have been made against a nursing home, residents will often be questioned accordingly so that if there is a problem it can be traced.
If a nursing home is found to be in violation, it may have the opportunity to correct deficiencies before disciplinary action is imposed. However, the following penalties have been imposed for facilities that fail: targeted staff retraining, targeted correction plan, state oversight, civil fines, denial of payment for all new Medicare or Medicaid admissions, denial of payment for all Medicaid or Medicare patients, temporary management and termination of the supplier agreement.
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