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Federal Government Scales Back on Fines for Nursing Homes

February 2108

By: Douglas Quzack

Maryland has more than 200 licensed nursing homes.  Although the number of nursing home complaints nationwide increased by 33 percent from 2011 to 2015, there was only a 7 percent increase in Maryland.  However, according to data from the Centers for Medicare and Medicaid Services (CMS), Maryland nursing homes have incurred $5.67 million in penalties in the past three years.

On December 2017, the federal government announced new guidelines from CMS, which, along with earlier regulations that scaled back regulatory oversight of nursing homes, will likely reduce the issuance of fines against nursing homes. 

The announcement was viewed as welcome news by the nursing home industry, which requested a change in the Medicare program’s penalty protocols.  One of the most vocal advocates for the change was the American Health Care Association that sent a letter in 2016 to then-President-elect Trump requesting “relief” from the CMS monetary penalty system.  It argued that nursing home inspectors placed too much emphasis on discovering violations rather than focusing on assisting patients at nursing facilities.  Kate Goodrich, M.D., who is now the CMS director of clinical standards and quality, had been critical of CMS’s method of discovering violations and imposing monetary penalties.  She said, “providers are spending time complying with regulations that get in the way of caring for their patients.”

The government’s announcement continues the recent trend in reducing CMS’s heavily regulatory approach to the nursing home industry.  Those regulatory improvements include:

  • In June 2017, CMS rescinded the regulation that prohibited nursing homes from requiring residents to submit to arbitration to settle disputes rather than going to court;

  • In July 2017, CMS issued a memo that recommended thatstate agencies that survey nursing homes issue one-time fines instead of daily fines for mistakes that began before an inspection;

  • In October 2017, CMS issued a memorandum entitled, “Revised Policies regarding the Immediate Imposition of Federal Remedies.”In the memorandum, CMS revised its Civil Money Penalty analytic tool to include a recommendation that CMS’s regional offices not levy fines against a nursing home for a “one-time mistake;” and

  • In November 2017, CMS issued a moratorium on eight newrules including the requirement to develop a baseline care plan for new patients within 48 hours of admission, along with requirements on behavioral health care, psychotropic medication and facility assessments.

The federal government stated that the new guidelines on fines have been gradually phased in throughout the last year.  It will take some time, however, to see what impact these new guidelines will have on the fines levied against nursing homes. 

If you have any questions about this issue or would like additional information, please contact Doug Quzack or a member of Tydings’ healthcare group.

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