Overview of State & Federal CMPs: Including Federal Changes to CMS Civil Monetary Penalties (CMP) Policy
On July 31st the Centers for Medicare & Medicaid Services (CMS) issued the final rule for the skilled nursing facility (SNF) prospective payment system (PPS) fiscal year (FY) 2025 update. Unfortunately contained within this final rule were the enhanced enforcement provisions surrounding civil monetary penalties.
Under this new policy, State Survey Agencies, along with CMS would have the authority to issue Per Diem and Per Instance CMPs on the same survey, as well as the authority to issue multiple Per Instance CMPs when the same type of noncompliance is identified on more than one day. CMS would also be able to impose CMPs for the number of days of previously cited noncompliance since the last three standard surveys for which a CMP has not yet been imposed.
These enforcement updates go into effect October 5, 2024 (60-days after it is published in the Federal Register, scheduled to be published on August 6, 2024). However, the American Health Care Association (AHCA) has informed us that CMS will operationalize these requirements beginning March 3, 2025.
AHCA and other national organizations pushed back on this rule and sent a letter to CMS Administrator Chiquita Brooks-LaSure urging the agency to withdraw its proposal to increase enforcement through excessive CMPs. Unfortunately, this has not budged the administration. AHCA has stated that they will “continue to aggressively push back against this dangerous policy that does nothing to improve care and will only divert precious resources away from making improvements.” If you have questions for AHCA regarding this rule, please contact [email protected] for any questions regarding the CMP enforcement provisions.
Some history regarding federal CMPs helps to provide further context to these changes. The Omnibus Budget Reconciliation Act of 1987 (OBRA ’87) provided the Centers for Medicare & Medicaid Services (CMS) a wide range of remedies (enforcement action options) to “encourage” facilities’ swift return to substantial and sustained compliance. While the option of federal Civil Monetary Penalties (CMP) has been available since the late 1980s, it wasn’t until the early 2010’s that we saw the federal CMPs “take off” for our SNFs in Washington. CMS has two types of CMPs at their disposal, the “Per Day” and the “Per Instance” remedies.
A facility can assist to manage non-compliance and CMPs with the use of Past Noncompliance (PNC). This is a topic that is built into the Long Ter Care Survey Process, but often has to be further explored with surveyors by facilities to advocate for this to happen. There are several criteria that must be met in order for a failed facility practice/citation to be considered PNC. To cite past noncompliance, the state agency is directed by CMS to evaluate and determine whether ALL of the following criteria is met:
- The facility was not in compliance with the specific regulatory requirement(s) as referenced by the specific F-tag/K-tag at the time the situation occurred.
- The noncompliance occurred after the exit date of the last standard (recertification) survey and before the survey (standard, complaint, or revisit) currently being conducted; and
- There is sufficient evidence that the facility corrected the noncompliance and is in substantial compliance at the time of the current survey for the specific regulatory requirement(s), as referenced by the specific F-tag/K-tag.
A SNF is not required to provide a plan of correction for a deficiency cited as past noncompliance because the deficiency is already corrected. The survey team documents the facility’s corrective actions on the CMS-2567. Past noncompliance may be cited on health and/or life safety code surveys and may be cited on any type of survey (standard, recertification, complaint, or revisit). Data about past noncompliance tags is not carried forward to subsequent re-visit surveys because the issue was found to be ‘in compliance’ at the time the citation was documented. A scope and severity determination is assigned to past noncompliance and documented accordingly on the CMS-2567. The state agency indicates in a data entry field of their system (ASPEN) whether a citation is past noncompliance. The provider’s plan of correction column would indicate “Past noncompliance-no plan of correction required.
By utilizing PNC, it can greatly reduce the potential number of days used in calculation of daily CMPs, and more importantly corrects facility systems sooner to safeguard resident health and safety. It is vitally important the facilities have documentation and evidence to support a PNC and present this to the survey team while they are in the building.
Other factors that affect the CMP determination include the facility’s history of noncompliance (a history and/or pattern of noncompliance at a S/S of “G” or above for surveys conducted in the past three calendar years), as well as whether there are repeated deficiencies within the same regulatory grouping of requirements from the last survey, subsequently corrected, and then cited again. CMS also directs the regional CMS office to apply “discounts” to the final calculated CMP amount for facilities waiving their appeal (35%) and for self-reporting and waiving appeal (50%).
After CMPs are collected, CMS sends a portion back to each of the respective states. Each state must reinvest these funds to support projects that benefit nursing facility residents and that protect or improve their quality of care/life. As I’m sure you are aware, CMS “paused” the program in 2023 and released revised guidance and allowable projects in the Fall of 2023. The CMS CMP Reinvestment Resource page can be found here and more information for Washington CMP Grants and Application can be found here.
State Civil Fines or Civil Monetary Penalties (CMP) are the most common state enforcement. It is important to be aware that a facility will often receive both a state and a federal CMP. Each has different rights and processes for a facility. It is important to read the CMP letters very carefully.
Except as otherwise provided in statute, the range for a per-day civil fine is $50 to $3,000 and the per-instance civil fine is $1,000 to $3,000. In the event of continued noncompliance, nothing prevents the Department from increasing a civil fine up to the maximum amount allowed by law.
Accrual of a per-day civil fine begins on the first date the Department verifies that the facility has or had a specific deficiency. Accrual of the per-day civil fine will end on the date the Department determines the facility corrected the deficiency. A per-instance fine may be assessed for a deficiency, regardless of whether the deficiency had been corrected by the time it was first identified by the Department.
State civil fine(s) are due 20 days after the facility is notified of the civil fine(s) if the facility does not request a hearing. If a hearing is requested, the civil fine(s), including interest if any, is due within 20 days after a hearing decision ordering payment of the fine(s) becomes final in accordance with chapter 388-02 WAC.
If a facility fails to pay a civil fine when due, the Department may withhold an amount equal to the fine plus interest, if any, from the facility’s Medicaid payment, impose an additional fine, or suspend the nursing home license under WAC 388-97-570.
If you have questions regarding Federal and State enforcement remedies, please call at Elena Madrid at (360) 352-3304, extension 105, or email.