Last week CMS published new federal regulations for nursing homes that will significantly change the way the government imposes and collects civil monetary penalties (“CMPs”). The regulations implement changes first mandated by Section 6111 of the health care reform law and become effective on January 1, 2012. Some of the key provisions of the regulations include:
• Mandatory Upfront Payment of CMPs. Currently facilities may appeal a CMP imposition of remedies notice and need not pay the CMP until after all administrative appeals have been exhausted. Under the new regulations, facilities must pay the CMPs before the appeal is finally resolved and within certain specific deadlines.
CMS will hold all CMPs in an escrow account pending the facility's appeal. If the facility wins the appeal, CMS will return the CMP to the provider with interest once the decision is final. Additionally, CMS may extend the time period for payments of the CMP into escrow if it finds immediate payment would create a “substantial and undue financial hardship on the facility.” If the facility does not timely pay the disputed CMP into escrow after receiving a demand, CMS may setoff the CMP amount from sums later due the facility.
• CMPs Reduced 50% For Self-Reporting and Correction of Deficiencies. The new regulations also encourage facilities to self-report deficiencies by giving a 50% CMP reduction incentive if certain conditions are met. This reduction does not apply to Intermediate Jeopardy tags or non-compliance showing a pattern of harm, widespread harm to residents, or non-compliance resulting in a resident’s death. Additionally, the 50% reduction is not available for any deficiency existing in a previous survey.
To qualify for the 50% reduction, the facility must:
• Self-report the non-compliance to the State or CMS before it is identified by surveyors or before the government receives a complaint.
• Correct the deficiency within a certain number of days of identifying the non-compliance or when the CMP is imposed.
• Waive its right to a hearing regarding the deficiency and penalty.
• Opportunity for Independent IDR Process. If CMPs are assessed and are eligible for payment to the escrow fund, the facility has the opportunity to request a new “independent” IDR process. This IDR is a new alternative to the current State IDR process. CMS calls this IDR “independent” because it would be run by a separate State agency that must be approved by CMS.
CMS has announced additional guidance interpreting these regulations will soon be published in the State Operations Manual. Although these revised rules do not go into effect until January 1, 2012, facilities should prepare now for the significant changes this new long term care law will have on existing CMP appeals strategies. For additional information on these new regulations or other issues affecting Long Term Care facilities, please contact Mark Bina at mbina@kdlegal.com or 312-423-9305.
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