On June 3, 2016, CMS released a memorandum that answered questions regarding the agency’s criteria for selection of enforcement remedies for long-term care facilities with deficiencies. The document reported data on enforcement actions taken by the agency when a nursing home is not in compliance with the Medicare and Medicaid requirements of 42 C.F.R. Part 488. These actions were categorized as enforcement remedies imposed in a particular state and region. The report also contains a calculated percentage of providers with active remedies in a state and its respective region, in addition to data regarding civil penalties imposed by the agency also categorized by state and grouped by region. CMS collected the data using several surveying resources. The report focused on data gathered between the years of 2006 and 2014.

The Law

The Enforcement of Compliance for Long-Term Care Facilities with Deficiencies laws are set forth in the Social Security Act, Sections 1819(h) and 1919(h), along with 42 C.F.R. Part 488, subpart F. These statutes provide that CMS or the state may impose one or more enforcement remedies when a facility is out of compliance with Medicare and Medicaid program participation requirements. The facilities the statute refers to are skilled nursing facilities (“SNFs”), nursing facilities (“NFs”) and dually participating SNFs/NFs.

National Survey Results

In this report, CMS determined that between the years of 2006-2014:

  • The average number of deficiencies cited per survey decreased from 7.2 to 5.7;
  • Zero health deficiencies increased from approximately 8.2 percent to 10 percent;
  • Actual harm/immediate jeopardy deficiencies decreased from 18 percent to approximately 10.2 percent;
  • Substandard care remained relatively unchanged at approximately 3.5 percent;
  • The total enforcement remedies in all states experienced minimal increase. These remedies include:
    • CMS-approved alternative or additional state remedies, civil money penalty, denial of payment for all individuals, discretionary denial of payment for new admissions, mandatory denial of payment (new admissions three months), directed service training, discretionary termination, directed plan of correction, state monitoring, temporary management, transfer of residents and transfer of residents/closure of facility.
  • The denial of payment for all individuals remedy was only imposed on average in zero to two instances every year;
  • The civil money penalties remedy was the most imposed remedy during the eight years this report evaluated;
  • The penalties due by facilities experienced a large increase from a per-day average of $17,207,703 in 2006 to a per-day average of $55,745,428 in 2014; and
  • The percentage of active providers that have no active remedies has increased from 81.9 percent in 2006 to 85.1 percent in 2014.

The Impact of the Recession on National Survey Results

Although these results are representative of the eight-year period surveyed, it was during this period of time where state governments experienced what has been often called the “Great Recession.” Starting in December of 2007, the Great Recession impacted state budgetary funding, which resulted in constraints on enforcement practices. The hiring freezes, layoffs and furloughs negatively impacted the State Survey Agencies’ oversight capacity. CMS’s report provides a context for its results, taking into account the effect that the recession had on the survey data collected.

Deficiency Trends Before the Recession

  • The average number of deficiencies cited per survey increased from 5.1 to 7.1 between the years of 1996 and 2008. The years that experienced the largest increase in cited deficiencies were between 1997 to 2000 and between 2005 to 2008. These sharp changes are due to CMS’s quality assurances initiative that provided for an increase in oversight. The leveling effect of years in between is attributed to the assimilation of changes in such oversight.
  • Deficiencies cited declined in scope and severity in the 2000 to 2004 period.

Deficiency Trends After the Recession

  • The average number of deficiencies cited per survey decreased from 6.7 to 5.7 between the years of 2009 and 2014.
  • Lower deficiency citation rates led to fewer enforcement actions imposed against facilities.
  • Actual harm/immediate jeopardy deficiencies decreased from approximately 16.5 percent in 2008 to 10.5 percent in 2014. This decline also resulted in less enforcement activity since most of the enforcement actions are taken in response to these levels of deficiencies.

Practical Takeaways

  • Deficiency citations experienced a decrease from 2006 to 2014; however, this decrease is partly due to the impact that the recession had on State Survey Agencies and opportunities for enforcement.
  • The civil money penalties remedy was the most common type of enforcement action utilized by the agency.

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