Category Archives: CMS Transmittals

CMS Releases the Civil Money Penalty Analytic Tool

The Centers for Medicare and Medicaid Services (“CMS”) recently released the civil money penalty (“CMP”) analytic tool used by CMS Regional Offices (“RO”) to review, approve or modify the proposed fines for nursing facilities (“NF”) and skilled nursing facilities (“SNF”)(collectively “NF”) (Link). Regulatory guidance CMS S&C 15-16-NH was released on December 19, 2014 and includes a description and the components of the analytic tool used by CMS since April, 2013 to determine the adequacy of the proposed CMPs for survey violations for NFs. The RO is required to review and either approve or modify the proposed CMPs issued by each State Agency based upon NF Medicare and Medicaid certification citations. Providers have often wondered about the actual calculation method being utilized by CMS and this analytic tool lays out the interpretation factors being used by CMS when applying the factors in the required by 42 CFR 488.404 for consideration when imposing a CMP on a facility as result of a single survey or for multiple surveys in a survey cycle.

CMPs and other enforcement remedies are required to be imposed based upon the scope and severity of the regulatory citations either for health deficiencies or life safety code deficiencies. CMS indicates that the analytic tool does not replace professional judgment but it to be used as a guideline in the CMP calculation process. The guidance states that the tool is “provide logic, structure, and defined factors for mandatory consideration in the determination of CMPs.” The analytic tool distinguishes between the use of Per Instance penalty use and a Per Day penalty use. A Per Instance penalty is a single defined fine amount between $1,000 and $10,000 for the survey cycle. The analytic tool indicates that a Per Day penalty is to be used unless the specific requirements are met for the Per Day penalty. A Per Instance penalty is often less costly to a provider than a Per Day penalty and is typically preferred by providers due to the certainty of the actual amount being imposed.

Per Instance penalties can only be applied if:
1. The facility is not a special focus facility;
2. Findings are no more than a G level (actual harm, isolated) or an F level (no actual harm, widespread with substandard care) and the facility has a good compliance history for the past 3 standard surveys; and
3. Findings of past noncompliance are not cited at a G level or an F level substandard care.

In addressing the discretion and professional judgment to be used by the RO personnel the guidance provides for a 35% increase or decrease in the CMP amount without CMS Central Office approval. If the RO proposes to increase or decrease the CMP amount by more than 35%, Central Office must provide approval of those changes. The stated purpose of the utilization of the analytic tool is to provide a more consistent application of enforcement remedies. The guidance also states that a Per Day CMP is to begin on the first day of noncompliance which may or may not be during the on-site survey. Also, the Per Day CMP is to start on the first day of identified noncompliance even if that date is prior to the survey. However, the CMP start date cannot be prior to the date of the last standard survey. This guidance reaffirms the imposition of CMPs that are applied retrospectively with a possibility that CMPs may be imposed as far back as 15 months. A retrospective CMP imposition can be in the hundreds of thousands of dollars for providers for an immediate jeopardy citation and can result in significant ramifications for providers.

A few of the factors that change the proposed amount of CMPs and are calculated with the tool include:
1. Scope and severity of the citations;
2. Number of citations;
3. Repeated citations;
4. Facility culpability; and
5. Facility financial condition.

The guidance provides some examples related to application of criteria for facility culpability based upon Departmental Appeals Board (“DAB”) cases. Those examples include repeated failure to follow or clarify doctor’s treatment orders; repeated failure to notify doctor of significant changes; repeated failure to supervise resident with a known history of elopement; staff failure to report physical, verbal or sexual abuse and egregious dignity issues.

Providers should carefully review this recently issued S&C guidance to have a clear understanding of how the CMPs are calculated by CMS and what factors can affect the increase or decrease of those CMPs. Understanding the factors related to fines and sanctions imposed by CMS and the amount of discretion that is allowed in the imposition of fines are important in the operation of NFs on an ongoing basis.

Important Regulatory Update Issued for Medicare Certified Home Health Agencies

The Centers for Medicare and Medicaid Services (“CMS”), the Medicare oversight agency, issued a new Chapter to the State Operations Manual (“SOM”) governing the imposition of alternative sanctions for home health agencies (“HHA”). Chapter 10 of the SOM is a new chapter outlining the processes for implementing the imposition of civil money penalties, directed in-service training, directed plans of correction, suspension of payment and temporary management. These intermediate sanctions were authorized in a final rule issued in 2012. Continue reading

CMS Issues Updated Guidance on Fine Imposition and the Collection Process for Nursing Homes

On April 25, 2014, the Centers for Medicare and Medicaid Services (“CMS”) issued revision 113 to the State Operations Manual (“SOM”) governing skilled nursing and nursing facility survey and enforcement processes. Specifically, CMS updated the SOM Chapter 7 with an effective date of January 1, 2012 as the modifications were mandated by section 6111 of the Affordable Care Act of 2010. The major provisions related to guidance on the independent informal dispute resolution process; escrow of civil money penalty funds pending a formal appeal; a reduction of fifty percent (50%) for facilities that promptly correct self-reported non-compliance and guidance on the use of civil money penalty funds for the state agencies. As of today, the online CMS manual system does not include the updated guidance.

This guidance is available at http://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/Downloads/R113SOMA.pdf.

CMS Directs MACs to Reject Part B Ambulance Claims for SNF to SNF Transfers

On November 6, 2013, CMS issued Transmittal No. 1311 which instructed Medicare Administrative Contractors (“MACs”) to reject claims for SNF to SNF ambulance transfers that are billed separately under Part B. According to CMS, ambulance transportation and related ambulance services for residents in a Part A stay are included in the SNF PPS rate and may not be billed as Part B services by the supplier. Instead, the SNF discharging the beneficiary to another SNF is responsible for the transportation fees. As such, ambulance providers must seek payment from the transferring SNF. Continue reading

New CMS Guidance Encourages Facility Buyers to Accept Automatic Assignment of Medicare Provider Agreements

Earlier this month, the Centers for Medicare and Medicaid Services (“CMS”) released a policy memorandum announcing stricter Medicare certification practices for buyers of Medicare-participating providers opting to reject the automatic assignment of the seller’s Medicare provider contracts. When a purchaser is considering opting out of automatic assignment, it must carefully weigh the risk of reimbursement gaps with the benefit of reduced liability exposure.   Continue reading

CMS Announces Discontinuance of the HHABN in Transmittal 2782

On September 6th, 2013, in its Transmittal 2782, CMS announced the discontinuance of the use of the HHABN.  Advance Beneficiary Notices of Noncoverage or ABNs are required to be issued by providers in order to inform medicare beneficiaries about possible non-covered services/charges. Transmittal 2782 announces that home health agencies (HHAs) will  discontinue the use of HHABNs (Form CMS-R-296, the specific form for HHAs) and starting in December will use the ABN (Form CMS-R-131) for liability notification. The transmittal provides instructions for HHAs on the use of the ABN and also provides some clarification to the manual instructions on ABNs  in Medicare Claims Processing Manual (Pub. 100-04), Chapter 30, Section 50.

You can find a copy of the transmittal at here –> CMS Transmittal 2782