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Proposed Rule Addresses CMP Reductions For Nursing Homes

August 2, 2010

On July 12, 2010 and pursuant to Section 6111 of the Patient Protection and Affordable Care Act (“PPACA”), the Centers for Medicare & Medicaid Services (“CMS”) released a proposed rule addressing reductions in nursing home civil monetary penalties (“CMPs”) when the nursing home self-reports and promptly corrects the compliance violation(s). As discussed in Shipman & Goodwin’s client alert on PPACA compliance issues, PPACA provides that CMPs may be reduced by up to 50% if the nursing facility self-reports (before CMS or the applicable state agency discovers the violations) and corrects the deficiency within 10 days of the nursing home identifying the violation. The reduction will not apply to violations that jeopardize patient health, are part of a pattern of harm to patients or result in patient death. In order to qualify for the 50% reduction, however, a nursing home will have to waive their right to an administrative hearing.

The proposed rule also includes a provision that allows the government to collect all CMPs and place them in an escrow account until any appeals are exhausted. The proposed rule states that this is in response to deficiencies in the existing process in which “facilities are able to avoid paying a civil money penalty for years because it can often take a long time for administrative appeals to be completed.” CMS, however, will not begin collecting and placing the CMP into an escrow account until the completion of an independent informal dispute resolution process or 90 days from imposing the penalty, whichever date is earlier. If a nursing home is successful in a formal administrative hearing, CMS would return the CMP, with interest, from the escrow account. Under the proposed rule, nursing homes would have 30 days from the imposition of the CMP to request the independent informal dispute resolution process.

Comments on the proposed rule are due August 11, 2010. For a link to the complete proposed rule and instructions on how to submit comments, click here.
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