State Long-Term Care Ombudsman Advocacy Improvement Act of 1986

State Long-Term Care Ombudsman Advocacy Improvement Act of 1986 - Amends the Older Americans Act of 1965 to require States to establish an Office of the State Long-Term Care Ombudsman (Office) encompassing any area or local ombudsman entity designated by the State Long-Term Care Ombudsman as a subdivision of the Office. Requires States to provide assurances that Office staff are not subject to conflicts of interest and that mechanisms are in place to identify and remedy such conflicts. Immunizes Office representatives from liability under State law for the good faith performance of official duties. Directs States to provide legal counsel to: (1) the Office for advice and consultation; and (2) Office representatives sued in connection with the performance of official duties.

Requires States to provide appropriate sanctions against: (1) those willfully interfering with Office representatives in the performance of official duties; and (2) extended care facilities which retaliate against residents or employees who file a complaint with, or provide information to, the Office.

Requires State licensure and certification agencies to provide the Office with inspection reports, notices of deficiencies, and sanctions issued with respect to extended care facilities as well as other data relevant to the Office's investigations of such facilities.

Directs the Office to submit annual reports to State licensure and certification agencies, State agencies on aging, and the State legislature and Governor analyzing and suggesting resolutions to problems experienced by, and complaints received against, extended care facilities.

Requires that office staff who do investigative work be trained in Federal, State, and local laws, regulations, and policies regarding State extended care facilities as well as investigative techniques. Directs the Secretary of Health and Human Services to provide technical assistance and training to State Long-Term Care Ombudsman programs and Ombudsman representatives.

Amends titles XVIII (Medicare) and XIX (Medicaid) of the Social Security Act to require that extended care facilities provide ombudsmen with access to facility residents and, with the patient's or guardian's consent, to the patient's medical and social records. Requires that ombudsmen be given access to individuals who are admitted to hospitals from skilled nursing or intermediate care facilities.

Directs the Secretary to promptly notify the appropriate Office of the State Long-Term Care Ombudsman of any Medicare or Medicaid sanction imposed on a skilled nursing or intermediate care facility.

Requires the Commissioner on Aging to issue a report by January 15th of each year analyzing and suggesting resolutions to problems experienced by, and complaints received against, extended care facilities. Specifies the congressional Committees, Federal agencies, and private organizations which are to receive such reports.

Amends the Older Americans Act of 1965 to require the Commissioner on Aging to designate a full-time staff of the Administration on Aging within 90 days of enactment of this Act. Requires the Administration to conduct studies and issue findings regarding the practices and impact of the Ombudsman program.

Amends part B (Peer Review) of title XI of the Social Security Act to require peer review organizations to make available to Ombudsman program personnel their data showing the substantial failure of a provider to meet professionally recognized standards of health care.