CMS Proposes Alternative Sanctions for HHAs Out of Compliance with CoPs

 The long-awaited regulations governing intermediate sanctions for home health agencies (HHAs) have finally been proposed by CMS and included in the Home Health Prospective Payment System Rate Update for Calendar Year 2013, proposed rule published in the Federal Register on July 13, 2012.  But the proposed regulations have raised concerns from the National Association of Home Care and Hospice (NAHC) and home health professionals regarding the lack of clarity and ambiguity and high dollar amounts of the fines.

Although CMS issued a Notice of Proposed Rulemaking  in 1991, proposing intermediate sanctions to noncompliant HHAs, CMS had not implemented intermediate sanctions for noncompliant HHAs as mandated by the Omnibus Budget Reconciliation Act of 1987 (P.L.  100-203) 4023 (Social Security Act 1891 (e) and (f)). OBRA 1987 directed CMS to develop and implement intermediate sanctions to apply to HHAs found to no longer be in compliance with Medicare conditions of participation.  Under Social Security Act 1891(f), intermediate sanction must include civil money penalties, payment suspension for new admissions, and appointment of temporary management. Prior to OBRA 1987, the only action available to CMS to address HHAs out of compliance with federal requirements was termination of their Medicare provider agreement.

In an August 2008 report, Deficiency History and Recertification of Medicare Home Health Agencies,  the Office of Inspector General (OIG) found that CMS’ sanction options for HHAs with deficiency citations were limited because CMS had not implemented intermediate sanctions and termination from Medicare was the only federal sanction for noncompliant HHAs. OIG further found that CMS rarely used the termination sanction. At that time, OIG recommended that CMS make HHA intermediate sanctions and complete implementation as soon as possible, according to Stuart Wright, Deputy Inspector for Evaluations and Inspections noted in an Early Alert Memorandum Report. Wright added that intermediate sanctions would allow CMS to penalize HHAs found to be out of compliane with the Medicare conditions of participation and give noncompliant HHAs an incentive to imporve their practices.

CMS has proposed a general rule for enforcement actions against an HHA with condition-level deficiencies. If CMS finds that the HHA is not in compliance with the home health Medicare conditions of participation (CoPs) and the deficiencies involved either do or do not immediately jeopardize the health and safety of the individuals to whom the HHA furnishes items and services. CMS may terminate the provider agreement, impose an alternative or both. The decision to impose one or more sanctions including termination would be based on condition-level deficiencies found during a survey. In determining what sanctions to apply, CMS would consider:

  • whether the deficiencies pose immediate jeopardy to patient health and safety;
  • the nature, incidence, degree, manner, and duration of the deficiencies or noncompliance;
  • the presence of repeat deficiencies in the HHA’s compliance history in general, and specifically with reference to cited deficiencies;
  • whether the deficiencies are directly related to a failure to provide quality patient care;
  • whether the HHA is a part of a larger organization with documented performance problems;
  • whether the deficiencies indicate a system wide failure to provide quality care.

In addition to civil money penalties, suspension of payment for new admissions, and temporary management, which are provided for under Social Security Act 1891(f), CMS proposed the following sanctions: a directed plan of correction, directed in-service training, and suspension of payment for new PPS episodes. If the HHA’s deficiencies pose immediate jeopardy to the health or safety of its patients,  CMS would take immediate action to notify the HHA of the immediate jeopardy and require the HHA to address and resolve the situation within 23 days and. of the HHA is unable or unwilling to correct the deficiencies, CMS would terminate the HHA’s provider agreement and could impose other alternative sanctions. When the deficiency does not pose immediate jeopardy, although CMS may terminate the provider agreement, CMS would give an HHA at least 15 days advance notice of any proposed sanctions except civil money penalty which would remain in effective until the effective date of an impeding termination or until the HHA achieved compliance with the CoPs, which ever is earlier.  HHAs that are terminated would be required to appropriately an safely transfer its patients to another local HHA within 30 days of termination.

Under the proposed rule, civil money penalties can not exceed $10,000 for each day of noncompliance. CMS has proposed a per day and per instance application of the civil money penalty. In addition, CMS would establish a three-tier system with subcategories that would establish the amount of the civil money penalty, an upper range (Immediate jeopardy, $8500 – $10,00), middle range (repeat and condition-level deficiency not immediate jeopardy but directly related to poor quality patient care outcomes, $2500 – $8500), and lower range (repeated and condition-level deficiencies – deficiencies in structure or process, not immediate jeopardy or directly related to poor quality patient care, $500 – $4000).

CMS is accepting comments until September 4, 2012, on its proposed rule.