Healthcare providers cited for violations of federal regulatory requirements – and particularly skilled nursing facilities (SNFs) and home health agencies (HHAs) – will face increased civil monetary penalties (CMPs) following recent publication of an interim final rule by the U.S. Department of Health and Human Services (HHS). The rule implements adjustments for inflation and a “catch up” provision requiring annual adjustments to CMPs. These adjustments were authorized by Congress in the Federal Civil Penalties Inflation Adjustment Act, which was enacted to “improve the effectiveness of federal CMPs and to maintain their deterrent effect” for violations of numerous healthcare regulatory laws.
The newly adjusted rates, which became effective immediately with the publication of the interim final rule, apply to penalties assessed after August 1, 2016 for violations that occurred after November 2, 2015. While these adjustments should serve as further indication to all providers that HHS will strictly enforce compliance standards, the impact of these increased rates may be more severe for certain provider groups, especially SNFs and HHAs.
For certain violations, SNFs will now be faced with CMPs that are 106% higher than previous levels. For example, previous penalties for a SNF’s failure to meet certification requirements ranged from a minimum of $3,050 to a maximum of $10,000 per day. Under the interim final rule, however, the new penalties for SNFs failing to meet certification requirements more than double from a minimum of $6,291 to a maximum of $20,628 per day.
CMPs are often imposed by the Centers for Medicare and Medicaid Services (CMS) in connection with SNF certification surveys. SNFs facing numerous regulatory violations could be assessed with multiple penalties in amounts significantly higher than those previously experienced.
The CMP rate adjustments follow other recent agency actions directed at SNFs, including a ban on pre-dispute arbitration agreements. In addition, as of late July 2016, survey agencies are required to immediately impose a CMP any time an instance of immediate jeopardy (IJ) is cited in a SNF survey.
Home health agencies will be faced with CMP limits that are 98% higher than previous levels. For example, previous penalties for an HHA’s failure to meet certification requirements ranged from a minimum of $8,500 to a maximum of $10,000 per day.
With the CMP adjustment, the new penalties for HHAs failing to meet certification have increased to a minimum of $16,819 to a maximum of $19,787 per day.
Further guidance for SNFs and home health agencies will be provided by CMS through the State Operations Manual. CMS will also publish subsequent annual adjustments in the Federal Register by January 15 following the publication of the initial rate adjustments.
The magnitude of these rate adjustments not only highlights HHS’s intent to assess penalties for regulatory violations, but serves as further indication of the continuing federal scrutiny of SNFs and home health agencies.
Thank you to Aubrey Beckham, Belmont University College of Law, for her assistance in preparing this article.