Kusserow on Compliance: Increased CMS Spotlight on Nursing Facilities

CMS and states visit nursing homes on a regular basis with “survey” or “inspection” teams to determine if the nursing homes are providing the quality of care that is required by Medicare and Medicaid, as well as to identify deficiencies in meeting CMS safety requirements. When deficiencies are identified, they must be corrected, and, if serious ones are not corrected, it may lead to termination from participation in Medicare and Medicaid.

Most facilities correct their problems within a reasonable period. However, some have significantly more problems that the norm with a pattern of serious problems persisting over three or more years. Although some facilities institute enough improvement that they are in substantial compliance on one survey, significant problems often resurface by the time of the next survey. Such facilities are referred to by CMS as a “yo-yo” or “in and out” compliance history. These facilities rarely address underlying systemic problems that are giving rise to repeated cycles of serious deficiencies. To address this problem CMS created the “Special Focus Facility” (SFF) initiative that is a listing of problematic nursing homes that have had a history of serious quality issues and are included in a special program to stimulate improvements in their quality of care.

Those on the SFF list are visited in person by survey teams twice as frequently as other nursing homes (about twice per year). The longer the problems persist, the more stringent the enforcement actions, including imposition of civil monetary penalties (“fines”) or termination from Medicare and Medicaid.  Within about 18 to 24 months after a facility is identified by CMS as an SFF nursing home, CMS expects: (1) improvement & graduation off the SFF; (2) termination from participation in Medicare/Medicaid programs; or (3) extension of time on SFF because of some progress or change of ownership. For more information check the CMS website that posts SFF Nursing Homes in five (5) categories:

  1. newly added to the SFF;
  2. failing to show significant improvement since being posted on the SFF;
  3. showing significant improvement by the most recent survey, and CMS is monitoring;
  4. graduating off the SFF because they not only improved, but they sustained significant improvement for about 12 months (through two standard surveys); and
  5. terminated by CMS from participation in Medicare and Medicaid within, or voluntarily chose not to continue such participation.

To assist in improving Nursing Home quality, CMS began rating all nursing homes using a Five-Star Quality Rating System that can be found at https://www.medicare.gov/NHCompare.

 

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

Connect with Richard Kusserow on Google+ or LinkedIn.

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Copyright © 2019 Strategic Management Services, LLC. Published with permission.

Kusserow on Compliance: Meeting nursing home compliance program legal mandates

The November 28, 2019 deadline approaches for skilled nursing facilities and nursing homes to adopt and implement an effective compliance and ethics program as a condition of participation in the Medicare and Medicaid programs. At that time, state survey agencies will begin assessing facility compliance with implementation of an effective compliance and ethics program. Yet, the OIG continues to find major problems with that health care sector. The OIG recently reported that posthospital extended care services or Medicare beneficiary coverage must be preceded by an inpatient stay in a hospital for not less than three consecutive calendar days. The OIG found that CMS improperly paid 65 of the 99 skilled nursing facility (SNF) claims sampled by the OIG.  Projecting from its sample, the OIG estimated that CMS improperly paid $84 million for SNF services over a two-year period.

Those nursing homes that followed the OIG guidance will have little problem in meeting the new mandate, but those who did not have only months to come into compliance. Organizations trying to catch up should consider having a compliance expert perform a gap analysis to identify elements needed for the compliance program and how be able to evidence program effectiveness. A gap analysis should provide a “road map” and step-by-step plan for bringing a facility into compliance with the mandates. Those that have already implemented a compliance program should consider having an effectiveness evaluation conducted by experts to verify that the program will meet mandated standards.

For more information about meeting the standards of these new mandates, Tom Herrmann may be reached at thermmann@strategicm.com or at (703) 535-1410.

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

Connect with Richard Kusserow on Google+ or LinkedIn.

Subscribe to the Kusserow on Compliance Newsletter

Copyright © 2019 Strategic Management Services, LLC. Published with permission.

Kusserow on Compliance: CMS announced updates to nursing home ratings

CMS announced updates in April 2019 to Nursing Home Compare and the Five-Star Quality Rating System. Its purpose is to provide tools for consumers to compare quality between nursing homes. This comes in advance of the November 28, 2019 deadline for skilled nursing facilities and nursing homes to have implemented an effective compliance and ethics program as a condition of participation in the Medicare and Medicaid programs. The new tools announced have been created to help consumers, their families, and caregivers compare nursing homes and identify areas they may want to ask about when looking at nursing home care. Nursing Home Compare has a quality rating system that gives each nursing home a rating between 1 and 5 stars and those with 5 stars are considered to have above average quality and nursing homes with 1 star are considered to have quality below average. There is also a separate rating for each of the following three factors:

 

  1. Health Inspections include findings on compliance to Medicare/Medicaid health and safety requirements from onsite surveys conducted by state survey agencies at nursing homes.
  2. Staffing Levels are the numbers of RNs available to care for patients in a nursing home at any given time.
  3. Quality Measures for care are based on resident assessment and Medicare claims data.

 

The April 2019 changes include revisions to the inspection process, enhancement of new staffing information, implementation of new quality measures, and lifting of the “freeze” on the health inspection ratings instituted in February 2018 to hold up the star rating score until all nursing homes were surveyed at least once under the new survey process. In April, users of the site will be able to see the most up to date status of a facility’s compliance, which is a very strong reflection of a facility’s ability to improve and protect each resident’s health and safety. CMS is also setting higher thresholds and evidence-based standards for nursing homes’ staffing levels, recognizing that nurses have the greatest impact on the quality of care nursing homes deliver. As such, CMS is assigning an automatic one-star rating when a Nursing Home facility reports no RN is onsite. In April 2019, the threshold for the number of days without an RN onsite in a quarter that triggers an automatic downgrade to one-star will be reduced from seven days to four days. The new Update includes:

 

  • changes to the quality component to improve the identification of quality differences among nursing homes, raising expectations for quality, and incentivizing continuous quality improvement;
  • adding measures of long-stay hospitalizations and emergency room transfers;
  • removing duplicative and less meaningful measures;
  • establishing separate quality ratings for short-stay and long-stay residents; and
  • revising the rating thresholds to better identify the differences in quality among nursing homes making it easier for consumers to find the information needed to make decisions.

 

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

Connect with Richard Kusserow on Google+ or LinkedIn.

Subscribe to the Kusserow on Compliance Newsletter

Copyright © 2019 Strategic Management Services, LLC. Published with permission.

Rural hospitals hit hard by reductions in Medicare disbursements, declining population

Approximately 3 percent of all rural hospitals closed in the period between 2013 and 2017, which can affect rural residents’ access to health care services. The U.S. Government Accountability Office (GAO) did a study to determine how HHS supports and monitors rural hospitals’ financial viability and rural residents’ access to hospital services. The study also details the number and characteristics of rural hospitals that have closed as well as what is known about the factors that contributed to those closures. According to the GAO report, Medicare Dependent Hospitals and for-profit hospitals were some of the hardest hit by reductions in Medicare disbursements, while hospitals in Medicaid expansion states and states with higher enrollment under the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) were the least affected (GAO Report, GAO-18-634, September 30, 2018).

Rural hospitals

In 2017, 2,250 general acute care hospitals in the United States met the definition of rural. Rural hospitals represented approximately 48 percent of hospitals nationwide and 16 percent of inpatient beds. Rural hospitals spread across 84 percent of the United States land area that is classified as rural and served 18 percent of the United State population that lived in those areas. Rural areas tend to have a higher percentage of elderly residents than urban areas, a higher percentage of residents with limitations in activities caused by chronic conditions, and a lower median household income. Rural areas also face a decreasing population and slow employment growth.

Payment policies and programs

HHS provides key financial support to rural hospitals to provide rural residents access to hospital services through a number of payment policies and programs. CMS administers five rural hospital payment designations, in which rural or isolated hospitals that meet specified eligibility criteria receive higher reimbursement for hospital services than they otherwise would have received under Medicare’s standard payment methodology. The Federal Office of Rural Health Policy (FORHP) administers multiple grant programs, cooperative agreements, and contracts that provide funding and technical assistance to rural hospitals. CMS’s Center for Medicare and Medicaid Innovation tests new ways to deliver and pay for healthcare. There are also the broader HHS payment policies and programs such as Medicare and Medicaid base payments, Medicare and Medicaid uncompensated care payments, the state innovation models initiative, as well as other targeted HHS payment policy and programs.

Rural hospital closures

An analysis of data shows that from 2013 through 2017, 64 rural hospitals closed. This is more than twice the number of rural hospitals that closed during the prior 5-year period and accounts for more than the share of urban hospitals that closed and more than the number of rural hospitals that opened. Rural hospitals in the South represented 38 percent of the rural hospitals in 2013 but accounted for 77 percent of the rural hospital closures from 2013 through 2017. Medicare dependent hospitals represented 9 percent of the rural hospitals in 2013 but accounted for 25 percent of the rural hospital closures.

For-profit hospitals are twice as likely to experience financial distress relative to government-owned and non-profit hospitals and represented 11 percent of rural hospitals in 2013 but accounted for 36 percent of closures. Bed size also seems to be a factor as rural hospitals with between 26 and 49 inpatient beds represented 11 percent of the rural hospitals in 2013 but accounted for 23 percent of the closures. While critical access hospitals (CAHs), which have 25 acute inpatient beds or less and make up a majority of the rural hospitals, were less likely than other rural hospitals to close. This may be due, in part, to the CAH payment designation.

Contributing factors

Data shows that rural hospital closures were generally preceded and caused by financial distress. This is partially due to a decrease in patients seeking inpatient care at rural hospitals. There are an increasing number of federally qualified health centers or newer hospital systems outside of the area that create increased competition for rural hospitals. Technological advances have also allowed for more services to be provided in outpatient settings. There is also data showing that the years 2010 through 2016 marked the first recorded period of rural population decline.

Rural hospitals are sensitive to changes in Medicare payments because, on average, Medicare accounted for approximately 46 percent of their gross patient revenues in 2016. Reductions in nearly all Medicare reimbursements and reductions in Medicare bad debt payments have contributed to negative margins for rural hospitals.

Medicaid expansion

According to stakeholders that were interviewed and literature that was reviewed, the strongest factor that likely strengthened the financial viability of rural hospitals was the increased Medicaid eligibility and enrollment under the ACA. A 2018 study showed that Medicaid expansion was associated with improved hospital financial performance and a substantially lower likelihood of closure, especially in rural markets. Drops in uninsured rates in 2008 through 2009 and 2014 through 2015 corresponded with states’ decisions to expand Medicaid, with small towns and rural areas seeing the largest increase in Medicaid coverage and decline in uninsured. Data shows that from 2013 through 2017, rural hospitals in states that had expanded Medicaid as of April 2018 were less likely to close compared with rural hospitals in states that had not expanded Medicaid.