Nursing Home Penalties for Noncompliance Expected to Rise

Nursing home operators are on high alert for potential rule changes regarding civil monetary penalties (CMP's) after a lawsuit was filed against federal health agencies Sunday that targets a 2017 rule that relaxed CMPs for providers, this according to an article in McKnight's Long-term Care News.

The AARP Foundation on Tuesday announced the lawsuit filed against the Department of Health and Human Services (DHS) and Centers for Medicare & Medicaid Services (CMS). The litigation was filed on behalf of the National Consumer Voice for Quality Long-Term Care and California Advocates for Nursing Home Reform, which are listed as plaintiffs in the suit. 

The groups are targeting a July 2017 directive from CMS that called on state surveyors to use per instance or per day CMPs for non compliant providers, depending on the timing of the noncompliance in relation to the survey, if residents were harmed or abused, if the facility had good compliance history and whether noncompliance was persistent when imposing a CMP.

The lawsuit alleges the policy change “severely weakened” the Nursing Home Reform Act of 1987 by “allowing nursing facilities to knowingly let deficiencies persist for days, weeks or even months while facing only a per instance CMP.” 

“Because this penalty amounts to a nothing more than the ‘cost of doing business’ or a veritable ‘slap on the wrist,’ CMS has eliminated the incentives for facilities to self-police and take remedial measures at the earliest point possible,” the lawsuit alleges. 

The implications of the lawsuit could mean that providers may face escalated fines if they were out of compliance during the coronavirus public health crisis, warned Wilson Blount, an Alabama based attorney who specializes in regulatory and healthcare law: 

“If the plaintiffs prevail, it is possible CMS could impose CMPs on operators and providers for every day they were out of compliance for COVID-19 infection control practices, as opposed to each instance. This scenario could represent a substantial increase in liability for them.”  

Brendan Williams, lawyer and president and CEO of the New Hampshire Health Care Association, noted that incoming HHS Secretary Xavier Becerra was among those who previously criticized the CMP policy change.

The timeframe for increases, of course, resulting only from litigation is uncertain.  The lawsuit, nonetheless, portends legislative review, and makes policy change more likely. The industry is taking note.  Hopefully, lawmakers will too.