On October 27, 2017, CMS issued a draft Survey and Certification Memo (S & C Memo) in which it announced its intention to reverse a previous policy regarding “immediate jeopardy” and federal enforcement actions. The new draft policy significantly revises the previous position of CMS and offers a more equitable and pragmatic approach to enforcement actions.
CMPs
CMS Regional Offices have been imposing high 6-figure civil money penalties (CMP), and frequently CMPs well in excess of $1 million, for alleged deficiencies that constitute immediate jeopardy. The approach by CMS regarding CMPs was fueled, in part, by an S & C Memo from July 29, 2016.
CMS is authorized to impose either a per instance or a per day CMP for noncompliance with the Requirements of Participation. When CMS alleges that immediate jeopardy existed for months prior to a survey and opts to impose a per day CMP instead of a per instance CMP, the financial impact of that decision can be devastating. The draft S & C Memo reflects a major policy shift that may offer relief for providers alleged to have noncompliance at the immediate jeopardy level.
Instead of reflexively imposing a per day CMP whenever immediate jeopardy is alleged, which has been the practice of many CMS Regional Offices, the new policy states that “when the current survey identifies Immediate Jeopardy (IJ) that does not result in serious injury, harm, impairment or death, the CMS Regions may determine the most appropriate remedy.”
Purpose and Other Changes
CMS notes that “the purpose of federal remedies is to encourage the provider to achieve and sustain substantial compliance.” Additionally, the draft policy does not change statutorily required remedies such as a mandatory denial of payment for new admissions (DPNA) when there is 90 days of noncompliance and termination from the Medicare program when there is six months of noncompliance. It does however, recommend that the CMS Regional Offices use “the type of remedy that best achieves the purpose based on the circumstances of each case.” This view represents a departure from the previously inflexible approach employed by some CMS Regional Offices.
CMS emphasized that when there is immediate jeopardy without resultant serious harm or death, “the [CMS] RO [Regional Office] must impose a remedy or remedies that will best achieve the purpose of attaining and sustaining compliance.” Such a refreshing policy statement connects the type of remedy with the underlying facts rather than using a cookie-cutter per day CMP approach to enforcement. It reflects serious thought and a practical approach that will better enable providers to achieve, maintain, and sustain substantial compliance with the Requirements for Participation.
Among the remedies CMS may impose are the following: Directed In-Service Training; a Directed Plan of Correction; Temporary Management; Denial of Payment for New Admissions (DPNA); Denial of Payment for all Medicare and Medicaid Residents (DPAA); State Monitoring; and Termination of the Medicare Provider Agreement.
The provider community, acting through professional organizations, elected officials, and individual counsels, had been raising concerns with CMS about the inappropriate imposition of per day CMPs in the context of alleged immediate jeopardy.