CMS Issues Guidance to States for an Independent Informal Dispute Resolution Process for Long Term Care Facilities

by Zach Cattell, JD, IHCA General Counsel

Section 6111 of the Patient Protection and Affordable Care Act (ACA), in part, formed the basis for the establishment of a new Independent Informal Dispute Resolution (IIDR) process within the Civil Money Penalty scheme. Per Federal Regulations at 42 CFR 488.431, the new IIDR process has specific timelines and requirements for facilities to meet in order to take advantage IIDR. On October 14, 2011, CMS issued Survey & Certification Memorandum 12-02-NH (click here for a copy) that provides further guidance on the new IIDR process.

The new IIDR process is an option for facilities to elect if the facility is the subject of a Civil Money Penalty (CMP) that is subject to being collected and placed in an escrow account. CMS is phasing in the CMS collection and escrow provisions of the ACA and attendant regulations and will only be applying the CMP collection and escrow authority on the most serious deficiencies. Until further notice from CMS only those deficiencies that cite actual harm or immediate jeopardy (G or above) will be subject to the CMP collection and escrow and only those deficiencies will trigger the opportunity for IIDR. Any CMPs imposed for D, E and F deficiencies will be collected under the current process and are not subject to the new IIDR process.

Federal funding is available to States, through the State Survey Agency, for development of the IIDR process. The Indiana State Department of Health (ISDH) recently issued an alert indicating that the department is in the process of developing a new IIDR process according to the CMS guidance. The new IIDR process must:

1. Offer a facility the opportunity for IIDR within 30 calendar days of notice of imposition of CMP that will be collected and placed into escrow. A facility has 10 calendar days to request IIDR after receiving notice.

2. Be completed within 60 calendar days of receipt of the facility request for IIDR. “Completed” IIDR means that (a) a final decision has been rendered, (b) a written report has been generated, and (c) the ISDH has provided written notice to the facility of the decision.

3. Generate a written record of the decision before the CMP is collected. Such written record must include (a) each disputed deficiency/survey finding, (b) a summary of the IIDR recommendation with rationale for the result, (c) documents submitted by the facility, and (d) comments submitted to the IIDR by the Ombudsman and/or residents and their representatives.

4. Notify the Ombudsman, resident and resident’s representative of the opportunity to submit comments to the IIDR entity prior to the completion of the IIDR process.

5. Be administered by an entity that does not have a conflict of interest with the ISDH (State Survey Agency) and that has specific understanding of Medicare and Medicaid program requirements.

CMS indicates that for States to receive Federal funds for IIDR in FY 2012, States must have a process and estimated budget submitted to CMS by November 30, 2011. Furthermore, the new IIDR process is set to begin on January 1, 2012. It is unclear at this time whether the ISDH will meet either deadline. Given that Indiana law regarding state agencies contracting for services requires a fairly lengthy procurement process, it does not seem likely that the ISDH process will be finalized and ready by January 1, 2012. For deficiencies that are subject to the new IIDR process, States may not charge facilities for the IIDR process. For situations that do not require the new IIDR (deficiencies that do not require escrowing of CMP), the State may develop and charge for its own resolution process.

IHCA will continue to monitor the development of Indiana’s IIDR process. For additional information please contact Zach Cattell at zcattell@ihca.org or 317-616-9001.