July 14, 2010
Proposed Rule regarding Civil Money Penalties for Nursing Homes Issued Monday, July 12, 2010
The Centers for Medicare & Medicaid Services (CMS) on July 12, 2010, issued a proposed rule implementing a portion of the Patient Protection and Affordable Care Act of 2010 (PPACA). This proposed rule addresses: (1) the collection of civil money penalties (CMPs); (2) the requirements for receiving a fifty percent (50%) reduction in CMPs; and, (3) the informal dispute resolution (IDR) process.
1. Establishment of an Escrow Account for Civil Money Penalties
In response to Section 6111 of the PPACA, CMS is proposing to collect and place CMPs into an escrow fund. This will be initiated on the earlier date of either: (1) when a requested IDR process is completed; or, (2) ninety (90) days after the imposition of the CMPs. CMPs will be collected and maintained in an escrow account until final resolution. If the facility is successful with its IDR, the CMPs will be returned to the facility with interest. However, if the facility is unsuccessful and continues its appeal to an administrative law judge or the Departmental Appeals Board (DAB), the amounts will continue to be held in escrow until expiration of CMS's timeframe to appeal any rendered decisions. CMS's rationale for collection of the CMPs closer to the date of imposition is that delaying collection of "an imposed civil money penalty diminishes the immediacy of the enforcement response, insulates the facility from repercussions of enforcement, and may undermine the sanction's deterrent effect."
2. Fifty Percent (50%) Reduction of Civil Money Penalties
In response to Section 6102 of the PPACA, which allows for a permissive reduction of imposed CMPs of up to 50%, CMS is proposing to implement such a reduction if the facility: (1) self-reports the deficient behavior prior to discovery and reporting by any individual or state or federal agency; and, (2) the deficient behavior is corrected within ten (10) days of the date the facility identifies the deficient behavior. The 50% reduction will not be available to facilities with deficiencies which constitute immediate jeopardy, a pattern of widespread harm, or result in a resident's death. While the PPACA allowed for up to a 50% reduction, CMS is proposing to set the reduction at a defined 50%. To have repeated noncompliance, and/or to have received a penalty reduction within the previous year, renders the facility ineligible to receive the 50% reduction. A facility that elects to receive the 50% reduction must also waive its right to a hearing. A facility may also elect to receive the thirty-five percent (35%) reduction if it elects to waive its right to appeal a determination of noncompliance that resulted in the imposition of a CMP; however, a facility cannot receive both a 50% reduction and a 35% reduction.
3. New Opportunity for Informal Dispute Resolution
Pursuant to Section 6111 of the PPACA, CMS is proposing to require an independent IDR process in addition to the current IDR processes available. The independent review process must be requested by the facility within thirty (30) days of a notice of imposition of CMPs and it must be completed within sixty (60) days of the imposition of CMPs. The independent IDR process must also include notification to any involved resident or resident's representative as well as the state ombudsman to provide them an opportunity for written comment. Importantly, this IDR process will be conducted at the facility's expense via a system of user fees. The proposed user fee levels were not provided; however, CMS offered examples of some State fees ranging from $160.00 per deficiency to in excess of $3,000.00 for the most complex cases. CMS states that each facility must determine whether the cost/benefit ratio associated with utilizing the user fee system is appropriate.
The proposed rule may be reviewed at: http://edocket.access.gpo.gov/2010/pdf/2010-16927.pdf
CMS is requesting public comment for this proposed rule. All comments should be submitted to CMS no later than 5 p.m. on August 11, 2010.
If you are interested in submitting a comment to the proposed rule or would like additional information, please contact: