April 30 2026 | Denial of Payment for New Admissions vs. Stop Placement

Last month’s Survey & Regulatory Update gave an overview of state enforcement remedies. This article will discuss the federal enforcement remedy, Denial of Payment for New Admissions (DPNA). DPNA is often confused with the state’s enforcement remedy, Stop Placement. It is important to understand the difference between these two different actions.

DPNA

DPNA may, and in certain instances, must, be imposed by CMS or the State Agency (SA). DPNA may be imposed alone or in combination with other remedies to encourage “quick compliance.” Formal notice of the imposition and rescission of this remedy may also be provided by the state.

DPNA may be imposed anytime a facility is found to be out of substantial compliance if the facility is given written notice at least two calendar days before the effective date in immediate jeopardy situations and at least fifteen calendar days before the effective date in non-immediate jeopardy situations.

CMS will accomplish the denial of payment remedy through instructions to the appropriate Medicare Area Contractor and/or the regional office. Regardless of any other remedies that may be imposed, DPNA must be imposed when the facility is not in substantial compliance three months after the last day of the survey identifying deficiencies, or when a facility has been found to have furnished substandard quality of care on the last three consecutive standard surveys.

If the facility achieves substantial compliance and it is verified, CMS or the SA must resume payments to the facility prospectively from the date it determines that substantial compliance was achieved. However, when payment is denied for repeated instances of substandard quality of care, the remedy may not be lifted until the facility is in substantial compliance and the state or CMS believes that the facility will remain in substantial compliance. No payments are made to reimburse the facility for the period between the date the remedy was imposed and the date that substantial compliance was achieved.

A resident who is not subject to the DPNA sanction and goes on temporary leave, whether there is a leave of absence, is not considered to be a new admission for the purposes of the DPNA, upon his/her return to the facility.

CMS may impose the DPNA remedy whenever a facility has not met a requirement; it is a severe sanction. Factors to be considered in selecting this remedy could include:

1. Seriousness of current survey findings.
2. Noncompliance history of facility; and
3. Use of other remedies that have failed to achieve or sustain compliance.

If a facility achieves substantial compliance, CMS resumes payments to the facility prospectively from the date that it verifies (in accordance with §7317) as the date that the facility achieved substantial compliance. No payments are made to reimburse the facility for the period between the date the remedy was imposed and the date that CMS verifies as the date that the facility achieved substantial compliance. When CMS denies payment for all Medicare residents for three consecutive findings of substandard quality of care, the denial of payment cannot be lifted until the facility achieves substantial compliance and CMS believes that the facility will remain in substantial compliance.

Stop Placement

As mentioned, stop placement is often confused with the federal enforcement action of DPNA. These actions are entirely different. DSHS must impose a stop placement order when required by RCW 18.51.060 and WAC 388-97-4460 and may impose a stop placement order as an optional remedy in accordance with WAC 388-97-4480. The Department’s stop placement order becomes effective upon verbal or written notice. A stop placement can affect all admissions and readmissions, or it can apply to a certain area/unit of the facility, or residents with a specific medical need. Stop placement can affect all payer types.

The facility does have the right to an Informal Department Review (IDR) to refute the state deficiencies cited as the basis for the stop placement. However, the Department will not delay or suspend a stop placement order because the nursing home requests an administrative hearing or IDR. The stop placement order must remain in effect until the Department terminates the stop placement order or the stop placement order is terminated by a final agency order following appeal.

The Department must terminate the stop placement when:

• The nursing home states in writing that the deficiencies necessitating the stop placement action have been corrected; and
• Within fifteen working days of the nursing home’s notification, Department staff confirm by on-site revisit of the nursing home that:
• The deficiencies that necessitated the stop placement action have been corrected; and
• The nursing home exhibits the capacity to maintain adequate care and services and correction of deficiencies.

After the stop placement, the Department may continue to perform on-site monitoring visits to verify that the nursing home has maintained correction of deficiencies.

If you have questions, contact Elena Madrid at 360-352-3305.