Proposed Regulations Are the First Under
The New Nursing Home Transparency Law
The Centers for Medicare and Medicaid Services has proposed the first regulations on the nursing home transparency provisions in the Affordable Care Act, the health care reform law. The agency is requesting comments by August 11 on its proposals to implement the new law's requirements to escrow civil monetary penalties (CMPs) during appeals, provide for an independent informal dispute resolution process (IIDR), reduce CMPs when facilities self-report violations, and determine acceptable uses of federal CMP funds.
These are the most important enforcement provisions in the transparency law, and the Consumer Voice believes CMS has accurately interpreted the statute and provided for effective implementation of the critically needed change in the enforcement process that Congress intended. We plan to write comments and circulate them to local, state and national organizations for sign on; but we also encourage other organizations to submit comments. The proposed regulations are in the February 12 Federal Register, which includes background information, a description of the proposed rules, and instructions for filing comments:
http://edocket.access.gpo.gov/2010/pdf/2010-16927.pdf
Under the reform legislation, CMS will be able to place civil monetary penalties in an escrow account until a facility completes formal appeals. The authority addresses a chronic enforcement problem in which nursing homes delay or avoid paying CMPs by filing formal appeals, even though administrative law judges rarely overturn deficiencies, according to a study by the Center for Medicare Advocacy. Congressional sponsors of the legislation concluded that providers would require due process before CMP funds could be withheld, and they authorized an independent informal dispute resolution process--a review by an agency or individuals who were not part of the original survey or citing of deficiencies--before funds could be escrowed. The law also permits a reduction of a CMP by up to 50 percent if facilities self-report and correct the violation.
Following is an
overview of how CMS proposes to implement the law.
Escrow Accounts
Per day civil monetary penalties would continue to accrue until
the
IIDR process was completed, up to a maximum of 90 days, when the
funds
would be placed into escrow if the facility decided to formally
appeal
the deficiency. CMS says that suspending the accrual of CMPs
during the
informal appeal process would undermine the law's financial
incentives
to maintain compliance and correct noncompliance promptly.
If an administrative law judge overturned part but not all of a
civil
monetary penalty determination, that part of the funds would be
returned. CMS says it will collaborate with interested
stakeholders on
operational details of the escrow process.
Independent Informal Dispute Resolution (IIDR)
The creation of the independent informal dispute resolution process in the transparency act concerned advocates because the existing IDR process is often used to eliminate or reduce the scope and severity of valid deficiencies. Moreover, a Government Accountability Office survey of state surveyors published in December 2009 found that a significant proportion of nursing home inspectors in some states believed that IDRs favored providers over resident welfare and were even used to intimidate surveyors. The regulations attempt to address concerns raised by the GAO report and by House sponsors, including Rep. Henry Waxman (D-CA), about the independence and freedom from conflict of interest of the IIDR process, which some states already use.
CMS says that it will provide operational details as guidance in the State Operations Manual, but proposes the following:
- Nursing homes must request an IIDR within 30 days of the imposition of a CMP, and IIDR must be completed within 60 days of the imposition of the penalty.
- The IIDR must generate a written record prior to the collection of a CMP and before the CMP can be placed in an escrow account.
- The IIDR process would not replace the existing IDR process, which could still be used for informal appeals of deficiencies that do not result in a CMP. States could also use IIDR for other types of violations.
- CMS expects states to implement user fees, through which facilities would pay the expense of conducting IIDRs, and to implement fee structures based on the complexity of the violation and the type of personnel and review time required to resolve the appeal. CMS asks for public comments on whether the fees should be returned if a CMP is eliminated during IIDR.
- The entity conducting the IIDR would be approved by the state and/or CMS with no conflicts of interest-such as, a component of an umbrella state agency that is separate from the survey agency; an independent entity with healthcare experience selected by the state and approved by CMS; or a distinct part of the survey agency, as long as the entity or individuals had no conflict of interest or part in the survey findings under dispute.
In a significant breakthrough for consumers, the
proposed regulations would require that an "involved
resident" or the resident's representative and the state
ombudsman
be notified about the IIDR and provided an opportunity to
comment. The
Consumer Voice had objected to adding another appeal process for
providers while consumers lack formal opportunities to challenge
or
support survey findings.
Reduction of CMPs
The law allows reducing CMPs up to 50 percent if a facility promptly reports and corrects a violation and if it did not involve repeated noncompliance or immediate jeopardy, widespread or a pattern of harm; or the death of a resident. CMS proposes to set the reduction at the maximum 50 percent if conditions are met --
- The facility must self-report noncompliance before it is identified by CMS, the state, or a complainant.
- Correction must occur within 10 days of being identified.
- The facility may not receive both the 50 percent reduction for prompt reporting and the 35 percent reduction under existing regulations for waiving its right to appeal. In fact, facilities must waive their right to appeal to receive the reduction, as self-reporting and correction will be treated as acknowledgment of noncompliance.
CMS says it is setting the reduction at the highest
percentage the law allows to "maximize the incentives for
quality
improvement."
New Acceptable Uses of CMP Funds
While Medicaid CMPs are returned to the state to benefit nursing home residents, CMPs collected from Medicare facilities go into the U.S. Treasury to become general revenues. CMS now proposes that 50 percent of Medicare facility CMPs be invested in activities to benefit residents, noting the division "reflects the focus and importance the Affordable Care Act provisions give to improving and promoting the health and well-being of nursing home residents." The proposed regulations also specify that CMP funds cannot be used for survey and certification operations "but must entirely be used for activities that benefit nursing home residents and that any such activity must be approved by CMS."
The new law provides that CMPs may be used:
- To assist residents in facilities that close, including the cost of relocating them to home and community-based settings or another facility;
- Projects to support resident and family councils and other consumer involvement in assuring quality care; and
- Facility improvement initiatives approved by CMS, including joint training of facility staff and surveyors, technical assistance for facilities implementing quality assurance programs, the appointment of temporary management firms, and other activities approved by CMS. The proposed rule specifies that funds should not be used to pay the temporary manager's salary but for other expenses to increase the availability of temporary managers.
CMS says it will issue guidance to permit specific categories of CMP uses without approval while requiring others to be approved on a case by case basis.
Watch for the Consumer Voice's comments on the proposed regulations.
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