CMS Increases Mandatory Enforcement to Protect Nursing Home Residents

Under the federal Nursing Home Reform Law, the Centers for Medicare & Medicaid Services (CMS) has authority and the “responsibility”[1] to impose Civil Money Penalties (CMPs) and other enforcement actions at nursing homes that are found to violate federal standards of care (which are called Requirements of Participation).[2]  For the first time in more than 20 years – since the federal enforcement regulations were published in 1994[3] – CMS has increased the numbers and types of situations when CMPs must be imposed against facilities, without first giving the facilities an opportunity to correct their noncompliance.

Effective for all nursing home surveys completed on or after September 1, 2016, CMS’s new national policy mandates, under additional specified circumstances, the immediate imposition of CMPs at nursing homes.[4]  The new policy will be implemented through revisions to Chapter 7 of the State Operations Manual (SOM), Pub. 100-07.[5]

The most striking changes are requirements that CMS impose immediate CMPs when a facility is cited with:

(1) A harm-level deficiency (level G or above)[6] in three specified areas:

  • 42 C.F.R. §483.13, Resident Behavior and Facility Practices [restraints],
  • 42 C.F.R. §483.15, Quality of Life, or
  • 42 C.F.R. §483.25, Quality of Care, and

(2) A harm-level deficiency in any other regulatory requirement on a previous survey, whether the prior survey was an annual survey, a Life Safety Code survey, or a complaint survey.

These revisions to the so-called “double G” policy, which currently limits the immediate imposition of CMPs to facilities that were cited with G-level deficiencies in two consecutive annual surveys,[7] are significant, especially when viewed historically.

Historical Background

On July 21, 1998, President Bill Clinton introduced the “double G” policy as one part of his 21-point Nursing Home Initiative.  The nursing home industry was strongly opposed and argued, in a March 1999 press release, that G-level deficiencies were cited for trivial matters.  Senator Charles Grassley (R, IA), then chairman of the Senate Special Committee on Aging, asked the American Health Care Association (AHCA) to identify G-level deficiencies that it felt were unfair.  The Senator then asked the Government Accountability Office (GAO) to analyze the 10 examples that AHCA provided in a May 6, 1999 letter.  AHCA claimed that its 10 examples “are clearly symptomatic of a regulatory system run amok.”[8]  Seven involved higher scope and severity than AHCA considered warranted and three involved proposed terminations.

The GAO’s analysis “did not find evidence of inappropriate regulatory actions.”[9]  Reviewing the eight examples for which it had “sufficient information for an objective assessment,” the GAO reported that the states had taken “appropriate regulatory action.”[10]  Of the seven G-level deficiencies, the GAO found that three citations were justified, the GAO did not have sufficient information to analyze two other deficiencies, and states withdrew the citations in the other two cases when the facilities provided additional information that had not been provided to surveyors during the survey.[11]  The GAO also cited its then-recent report, which found that 98% of 201 actual harm deficiencies in 107 surveys were correctly cited.[12]

New Enforcement Methods

As in the past, the new enforcement policy requires immediate CMPs when facilities are cited with immediate jeopardy deficiencies, the highest category of deficiencies reflecting practices that did or could cause significant harm or death to residents.  Under the new policy, however, these CMPs cannot be rescinded.

Another change is the requirement that CMS impose immediate CMPs at Special Focus Facilities that are cited with deficiencies at level F or above.  Special Focus Facilities are those with “a history of serious quality issues” that are subject to two standard surveys each year and more rigorous enforcement actions.[13]

More Needs to Be Done to Protect Residents from Poor Care

While the new policies strengthen enforcement against facilities that are cited with the most serious deficiencies, comparatively few deficiencies are actually cited at the immediate jeopardy and harm levels.  CMS reported in its 2015 Data Compendium that in 2014, only 0.9% of deficiencies nationwide were cited with an immediate jeopardy deficiency and only 2.3% of deficiencies nationwide were cited with an actual harm deficiency.[14]

The GAO has reported repeatedly since the enforcement system was put in place in 1994 that state survey agencies undercite and undercode deficiencies.[15]  The Center for Medicare Advocacy’s study of antipsychotic drug deficiencies cited in seven states in 2010 and 2011 found that 95% of the deficiencies were cited at a no-harm level, regardless of the poor outcomes for residents, the total number or proportion of residents affected by the deficient practice, and the number of federal requirements violated by the facility.[16]  Only 15 harm-level deficiencies were cited in the two-year period, and one state cited 11 of them.[17]  In a separate analysis, the Center showed that even facilities cited with immediate jeopardy deficiencies in nurse staffing are frequently not sanctioned at all.[18]

In addition, CMS has not yet promulgated rules to increase the amounts of CMPs, as required by The Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015.[19]  The law requires the heads of federal agencies to adjust civil money penalties through interim final rulemaking – a so-called “catch up adjustment” – with the increased penalties effective no later than August 1, 2016, and thereafter, to make cost-of-living adjustments to federal penalties.  The nursing home Civil Money Penalties were set in 1994 and have not been increased for more than two decades.  Rules to reflect the 2015 legislation are expected to be published shortly.

August 17, 2016 – T. Edelman


[1] “It is the duty and responsibility of the Secretary to assure that requirements which govern the provision of care in skilled nursing facilities under this subchapter, and the enforcement of such requirements, are adequate to protect the health, safety, welfare, and rights of residents and to promote the effective and efficient use of public moneys.”  42 U.S.C.  §§1395i-3(f)(1), 1396r(f)(1), Medicare and Medicaid, respectively.
[2] 42 U.S.C. §§1395i-3(h), 1396r(h), Medicare and Medicaid, respectively.
[3] 42 C.F.R. §488.438, added by 59 Fed. Reg. 56116 (Nov. 10, 1994), https://www.gpo.gov/fdsys/pkg/FR-1994-11-10/html/94-27703.htm.
[4] CMS, “Mandatory Immediate Imposition of Federal Remedies and Assessment Factors Used to Determine the Seriousness of Deficiencies for Nursing Homes,” S&C: 16-31-NH (July 22, 2016, revised 7.29.16) (Memorandum from David R. Wright, Director, Survey and Certification Group, to State Survey Agency Directors), https://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/SurveyCertificationGenInfo/Downloads/Survey-and-Cert-Letter-16-31.pdf.
[5] https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/som107c07.pdf (Survey and Enforcement Process for Skilled Nursing and Nursing Facilities).
[6] CMS classifies deficiencies in a 12-box grid, reflecting the scope and severity of deficiencies.  Harm-level deficiencies (G, H, I) reflect the second highest level of deficiencies.
[7] State Operations Manual, Pub.No. 100-07, Chapter 7, §7304.2.1 (“Mandatory Criteria for Having No Opportunity to Correct”), https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/som107c07.pdf.
[8] AHCA’s letter is Enclosure A, pages 12-14, in GAO, Nursing Home Oversight: Industry Examples Do Not Demonstrate that Regulatory Actions Were Unreasonable, GAO/HEHS-99-154R (Aug. 13, 1999), http://www.gao.gov/assets/90/89202.pdf
[9] GAO, Nursing Home Oversight: Industry Examples Do Not Demonstrate that Regulatory Actions Were Unreasonable, GAO/HEHS-99-154R, page 2 (Aug. 13, 1999), http://www.gao.gov/assets/90/89202.pdf.
[10] Id. 
[11] Id.
[12] Id., citing GAO, Nursing Homes: Proposal to Enhance Oversight of Poorly Performing Homes Has Merit, http://www.gao.gov/assets/230/227568.pdf.
[13] CMS, Special Focus Facility Initiative, https://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/CertificationandComplianc/downloads/sfflist.pdf.
[14] CMS, Nursing Home Data Compendium 2015 edition, page 48, Figure 2.2.3, https://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/CertificationandComplianc/Downloads/nursinghomedatacompendium_508-2015.pdf.
[15] See, e.g., GAO, Federal Monitoring Surveys Demonstrate Continued Understatement of Serious Care Problems and CMS Oversight Weaknesses, GAO-08-517 (May 2008), http://www.gao.gov/assets/280/275154.pdf; GAO, Nursing Home Reform: Continued Attention Is Needed to Improve Quality of Care in Small but Significant Share of Homes, GAO-07-794T (May 2, 2007), http://www.gao.gov/assets/120/116452.pdf; GAO, Nursing Homes: Efforts to Strengthen Federal Enforcement Have Not Deterred Some Homes from Repeatedly Harming Residents, GAO-07-241 (March 26, 2007), http://www.gao.gov/assets/260/258016.pdf;  GAO, Nursing Homes: Despite Increased Oversight, Challenges Remain in Ensuring High-Quality Care and Resident Safety, GAO-06-118 (Dec. 28, 2005), http://www.gao.gov/assets/250/248869.pdf; GAO, Nursing Home Quality: Prevalence of Serious Problems, While Declining, Reinforces Importance of Enhanced Oversight, GAO-03-561 (July 15, 2003), http://www.gao.gov/assets/240/238941.pdf.
[16] Center for Medicare Advocacy, “CMA Report: Examining Inappropriate Use of Antipsychotic Drugs in Nursing Facilities” (CMA Alert, Dec. 12, 2013), http://www.medicareadvocacy.org/cma-report-examining-inappropriate-use-of-antipsychotic-drugs-in-nursing-facilities/.  The full report is available at http://www.medicareadvocacy.org/cma-report-examining-inappropriate-use-of-antipsychotic-drugs-in-nursing-facilities/.
[17] Id.
[18] Center for Medicare Advocacy, “Staffing Deficiencies in Nursing Facilities: Rarely Cited, Seldom Sanctioned,” CMA Alert, March 7, 2014), http://www.medicareadvocacy.org/staffing-deficiencies-in-nursing-facilities-rarely-cited-seldom-sanctioned/.
[19] Section 701 of the Bipartisan Budget Act of 2015, Pub. L. 114-74.  See Center for Medicare Advocacy, “Budget Act of 2015 Increases Penalties for Programs under the Social Security Act, Including Nursing Facilities” (CMA Alert, Nov. 18, 2015), http://www.medicareadvocacy.org/budget-act-of-2015-increases-penalties-for-programs-under-the-social-security-act-including-nursing-facilities/.