CLIENT ADVISORY: Immediate Imposition of Federal Remedies: CMS Makes Changes Affecting Timing of Survey CMPs

On July 29, 2016, the Centers for Medicare and Medicaid Services (CMS) released advance guidance and revisions to Chapter 7 of the State Operations Manual (SOM) regarding mandatory, immediate federal enforcement remedies for certain deficiencies and the assessment factors used to determine the seriousness of deficiencies in nursing facility surveys. The new requirements significantly limit the discretion of CMS and/or the State Agency (SA) to allow facilities an opportunity to correct cited deficiencies prior to imposing Civil Monetary Penalties (CMPs) and/or other enforcement remedies. Among the most significant of these changes is that the immediate imposition of CMPs will now be mandatory for all immediate jeopardy citations, even those for past noncompliance and those corrected during survey. Additionally, certain G-Level deficiencies will now require the immediate imposition of a Category 2 Remedy, like CMPs, in addition to mandatory denial of payment for new admissions within three months. The revisions summarized below will apply to all surveys completed on or after September 1, 2016.[1]

Criteria for Mandatory Immediate Imposition of Federal Enforcement Remedies

The CMS Regional Office (RO) must immediately impose one or more federal enforcement remedies, without affording the facility an opportunity to correct the deficiency, in the following five circumstances:

  • Immediate Jeopardy (IJ) citation (i.e., Scope & Severity Levels J, K, and L) on the current survey;
  • Deficiencies of SQC that are not IJ on the current survey;
  • Any G-Level deficiency on the current survey in Resident Behavior and Facility Practices (42 C.F.R. 483.13), Quality of Life (§ 483.15), or Quality of Care (§ 483.25)
  • Deficiencies of actual harm or above (Level G or above) on the current survey AND:
  • On the previous Standard Health survey or Life Safety Code (LSC) survey; or
  • On any type of survey between the current survey and the last Standard survey;

These surveys must be still separated by a period of compliance, as is the case under the current guidelines.

  • Deficiencies of F-Level or higher cited to a Special Focus Facility (SFF)[2]

The “current” survey refers to whichever type of survey (i.e., Standard, Revisit, or Complaint) is currently being performed at the facility.

Notice & Effective Dates for Federal Enforcement Remedies

Any enforcement remedies imposed will be effective as of the date of the initial notice letter.[3] When the SA imposes remedies without an opportunity to correct, the Agency is required to copy the CMS RO on the initial notice to the facility and refer the matter to the RO for action within five days of the notice. However, the SA is not required to obtain CMS approval prior to sending notice to a facility that federal enforcement remedies are being implemented. All remedies must remain in effect until the facility demonstrates, to the satisfaction of CMS or the SA, that it is in substantial compliance or until the facility is terminated from Medicare and/or Medicaid participation.

Mandatory Civil Monetary Penalties

Under the new requirements, CMS must impose CMPs for any IJ citation, regardless whether the IJ is for past noncompliance, removed during the survey, or removed in a revisit prior to the 23rd day. As of September 1, 2016, facilities will be subject to CMPs for all IJ situations. Once the minimum notice requirements are met, the new guidance further mandates that “CMS shall not rescind any remedies imposed,” (emphasis in original).

Enforcement Remedies by Scope/Severity & for Mandatory Enforcement Criteria

The following table summarizes the remedy requirements for each deficiency categorization according to the corresponding Scope & Severity Levels:

Figure 1

The remedies within each category are as follows:

Figure 2

In addition, the types of remedies CMS must consider in connection with the five Mandatory Criteria for Immediate Imposition of Federal Remedies are set forth in the following table from the CMS Survey & Certification Memo:

Figure 3

Implications

The new requirements significantly limit agency discretion in both the imposition and selection of enforcement remedies for certain types of deficiencies. The Survey and Certification Memorandum specifically states, “The RO must take action to impose remedies as described in policy, regardless of a State’s recommendation … .” Most notably, the immediate imposition of CMPs will be mandatory for all IJ deficiencies, regardless of when the deficiency is removed. Mandatory CMPs could have a significant financial impact on facilities. This is particularly true in cases of per day CMPs and depending upon the date CMS or the SA determines that the facility was first out of compliance.

A slightly more subtle change with respect to certain G-Level deficiencies may have an even greater effect on facilities. The new enforcement criteria impose an additional remedy for a G-Level deficiency in Resident Behavior and Facility Practices (42 C.F.R. § 483.13), Quality of Life (§ 483.15), or Quality of Care (§ 483.25). While G-Level deficiencies currently require Termination and/or a Category 2 Remedy (i.e., Denial of Payment for New Admissions, Denial of Payment for All Individuals, and/or CMPs), a G-Level deficiency in one of the regulatory groupings listed above[4] will now require an immediate Category 2 Remedy in addition to the mandatory Denial of Payment for New Admissions within three months or Termination within six months. A G-Level deficiency in one of these regulatory areas will, therefore, require the immediate imposition of one of the following remedies: Termination, CMPs, Discretionary Denial of Payment for New Admissions, Directed Plan of Correction, Directed In-Service Training, and/or Denial of Payment for All Individuals. Category 1 Remedies will remain optional as to all G-Level deficiencies.

As a greater number of facilities become subject to CMPs, these facilities may also have an additional opportunity to dispute the survey findings that formed the basis for those CMPs. Although any meaningful effect of greater access to the convoluted dispute and appeal processes remains to be seen, more facilities may consider the seldom-used Independent Informal Dispute Resolution process as a means of obtaining review within 60 days’ of the facility’s request.[5]

Conclusion

Those involved in nursing facility compliance and operations should familiarize themselves with the new enforcement criteria prior to the September 1, 2016 effective date, as facilities do not have to be within their annual survey window to suddenly find a survey team in the building. Although substantial compliance is always the goal, stricter enforcement requirements for alleged noncompliance certainly raises the stakes.

Don’t get caught IJin a jam. Should you or your organization have any questions regarding these new enforcement remedies or questions related to survey-readiness, please contact Peter Mellette (Peter@mellettepc.com), Nathan Mortier (Nathan@mellettepc.com), Harrison Gibbs (Harrison@mellettepc.com), or Elizabeth Dahl (Elizabeth@mellettepc.com), or call Mellette PC at (757) 259-9200.

This Client Advisory is for general educational purposes only. It is not intended to provide legal advice specific to any situation you may have. Individuals desiring legal advice should consult legal counsel for up-to-date and fact-specific advice.

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[1] A copy of the Survey & Certification Memo (S&C: 16-31-NH) containing the revisions is available here or at https://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/SurveyCertificationGenInfo/Policy-and-Memos-to-States-and-Regions-Items/Survey-and-Cert-Letter-16-31.html.

[2] These criteria will be at § 7304.1 of Chapter 7 of the SOM.

[3] The current minimum notice requirements remain unchanged and can be found in § 7305 of Chapter 7 of the SOM.

[4] Note that these are the same regulatory groupings as those that result in an SQC when cited at a Scope/Severity of F, H, I, J, K, or L.

[5] 42 C.F.R. 488.431.

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