On January 18, 2021, a lawsuit was filed against the U.S. Department of Health and Human Services (“HHS”) and the Centers for Medicare and Medicaid Services (“CMS”) challenging a 2017 CMS policy change The plaintiffs, the National Consumer Voice for Quality Long-Term Care and the California Advocates for Nursing Home Reform are nonprofit consumer advocacy groups for long-term care. The policy at the heart of the lawsuit relates to a change made by CMS to the way Civil Monetary Penalties (“CMP”) are imposed on nursing facilities.
For your information, under the Nursing Home Reform Act of 1987 (NHRA), Congress created a regime whereby CMS and the states shared responsibility for ensuring that the states met federal standards. quality and safety of care for residents of nursing homes. Under this program, state agencies regularly assess a nursing facility‘s compliance with requirements by conducting periodic, often unannounced, surveys. The results of the investigation would then be communicated to the CMS Regional Offices (“ROs”) along with recommended enforcement actions. Acting on the results of the investigation and the recommendation of the state agency, ROs would then impose CMPs per day on facilities for past non-compliance with federal standards.
The 2017 change, however, made it clear that ROs, regardless of the findings and recommendations of state investigative agencies, must impose a CMP for past noncompliance based solely on each instance of noncompliance that occurred but was corrected before the state investigation was completed. “Past non-compliance” is a statutory term that refers to situations where a state finds that a nursing facility meets all federal requirements “but, at a prior period, did not meet those requirements” . With this 2017 policy change, if a facility corrected this non-compliance just before the investigation team arrived at the facility, even if the non-compliance lasted for months, the facility would not be not penalized for each day of non-compliance, but would instead receive a “per instance” CMP.
Plaintiffs in the recently filed litigation argue that by announcing to state investigative agencies that its ROs will assess CMPs only for each instance of past noncompliance and not for each day of past noncompliance, the change in CMS policy effectively contravenes the express intent of Congress to give states the direction to recommend (and CMS the discretion to impose) one CMP per day for past noncompliance.
The complaint alleges that the plaintiffs were prejudiced by this change. CMPs per instance currently range in amount, adjusted for inflation, from a minimum of $2,233 to a maximum of $22,320 for each instance of non-compliance. 42 CFR § 488.438(a)(2); 45 CFR § 102.3. Using the example of a non-immediate risk impairment, the maximum CMP per instance a nursing facility faces for this type of impairment is $22,320, regardless of whether the facility has left the impairment uncorrected for one day. , a week or a month. In contrast, the maximum CMP per day for this type of deficiency begins to exceed, and quickly eclipses, the maximum CMP per instance whenever the institution has left the deficiency uncorrected for four or more days (4 x $6,695 = $26,780). Plaintiffs argue that imposing CMPs solely by instance for past noncompliance will thus encourage nursing facilities to knowingly let deficiencies linger for days, weeks, or even months, until the next state investigation. , because the sanction will be the same whether the deficiency has persisted for a day or a month. As long as the establishment remedies the breach before the next investigation (usually 12-15 months apart), the establishment can only be fined a maximum of $22,320 per instance.
The human impact of this, as stated in the lawsuit, is that for every day that a facility allows an impairment to persist, whether for a week or several months, residents of that facility may be put at risk by the deficiency. Therefore, the plaintiffs claim that if facilities do not fear monetary penalties, they will be less inclined to make their facilities safe for residents.
Certainly, nursing facilities across the country will view it very differently from the plaintiffs in the litigation. Since investigations are unannounced, facilities don’t “let their guard down” and intentionally allow facilities to become less safe simply because they know they will be assessed a per-instance penalty instead of a penalty. per day. On the contrary, the possibility of obtaining a CMP per instance (as opposed to a penalty per day) would incentivize nursing facilities to identify and correct problems immediately so that these problems are identified as a past nonconformity when the state investigative agency will come knocking at the door. . Although there can be bad actors, most nursing facilities do everything they can to avoid noncompliance. In other words, the actions and decisions of facilities are not based on the fact that they would prefer to have a penalty per day rather than a penalty per instance.
It should also be noted that while the litigation mentions the COVID-19 pandemic, it does not mention the enhanced CMPs that are now available for infection control violations. CMS aggressively used these enhanced CMPs to enforce large CMPs per instance per day for relatively low level violations. For example, an employee making an error in wearing their mask or in daily documentation of COVID-19 symptoms (even if there are no adverse consequences) can result in a CMP of $15,000 if the establishment had any lack of infection control over the past two years. An investigator may see a staff member failing to comply with the requirements every time (e.g. not wiping the face shield after sitting down for a few seconds, letting their mask fall under their nose, etc.) and may impose severe penalties accordingly. . Although most institutions agree that infection control is important, these penalties are excessive, especially considering that they are imposed for some of the most minor and isolated events that can occur.
Facilities should be aware of this litigation and the views expressed by organizations seeking to change the CMP landscape to be more severe than it currently is. CMS has already shown a willingness to increase CMP levels for infection control purposes, and they may seek to extend those penalties more permanently.