Home Health & Hospice Week

CMS gives HHAS a survey wakeup call with alternative sanctions.

Are you ready to pay $10,000 per day for your survey mistakes? That's what could happen under a newly proposed rule from Medicare.

The Centers for Medicare & Medicaid Services sets out a whole new array of "alternative sanctions" that surveyors can use before they get to Medicare termination, according to CMS's 2013 home health prospective payment system proposed rule published in the July 13 Federal Register. The new sanctions range from Civil Monetary Penalties (CMPs) to mandatory in-service training (see story below for a full list of the proposed sanctions).

The sanctions aim to provide "incentives for HHAs to achieve and maintain full compliance with the requirements ... before termination becomes necessary," CMS says in the rule.

If finalized, the alternative sanctions will result in "an enormous change" in how home health agencies deal with issues of noncompliance, predicts Washington, D.C.-based health care attorney Eliza-beth Hogue. "Surveyors will have all kinds of tools they never had before."

Old way: Currently, when surveyors cite agencies with deficiencies, they have the option of either terminating an HHA's Medicare participation or requiring a plan of correction (POC). CMS tends to be reluctant to pull the trigger on termination, observes attorney Robert Markette Jr. with Be-nesch Friedlander Coplan & Aronoff in Indiana-polis. Even when deficiencies go on for a while, agencies often can avoid termination "with a credible allegation of compliance and a resurvey," Mar-kette says.

New way: Under the proposal, "CMS will be able to take lesser steps to sanction an agency, which will likely lead to them being used more," Markette forecasts. If HHAs still aren't in compliance after six months for non-immediate-jeopardy deficiencies, then they will face termination, CMS says in the proposed rule.

In other words, "the use of intermediate sanctions against an HHA could be a negative if the agency would not have been sanctioned otherwise," says attorney Marie Berliner with Joy & Young in Austin, Texas. Surveyors also could pile on multiple sanctions where now they might impose only one.

Background: CMS received authority in a 1987 law to implement alternative sanctions for HHAs, and proposed a rule on the matter in 1991. But the agency never finalized the rule. "Sweeping changes in the law and other regulations, together with the demands of additional improvement efforts, impeded the promulgation of a final rule," CMS explains in the 2013 HH PPS proposed rule.

Why has the issue become a priority now? Recently, "CMS has been under fire by the OIG for the inaction" on this topic, notes the National Association for Home Care & Hospice. A March report from the HHS Office of Inspector General may have given CMS a push, Markette notes (see Eli's HCW, Vol. XXI, No. 10).

CMS's alternative sanctions proposal is a wakeup call for HHAs, judges therapy consultant Cindy Krafft with Fazzi Associates. CMS is getting more serious about enforcement, and is sending a message to agencies that they'd better get serious too, Krafft tells Eli.

CMPs Could Shut Agencies' DoorsQuicker Than Termination

The alternative sanction most likely to significantly impact HHAs is Civil Monetary Penalties, experts agree. Under the proposal, CMS could fine agencies up to $10,000 per day for condition-level or repeated deficiencies (see related chart, p. 208, for CMP fine amounts).

The proposed sanctions, particularly CMPs, give "more clout and teeth to surveys," warns financial consultant Tom Boyd with Rohnert Park, Calif.-based Boyd & Nicholas. "Even a disputed survey or a pending correction could put an HHA out of business while awaiting resolution and proper payments or return of fines."

HHAs can get socked with a $10,000 fine for just one instance of noncompliance, points out attorney Liz Pearson with Pearson & Bernard in Edgewood, Ky.

And CMS is a "big fan" of using daily CMPs in the nursing home setting, Markette points out. Expect the same in home care. "Even a lower fine would reach a prohibitive penalty amount, if it was a per day fine," he cautions.

The fines will be hard on agencies that already are struggling under years of Medicare payment cuts, Markette expects.

Burden: Frequent use of daily fines means "HHAs will need to address each and every deficiency immediately regardless of how minor," Pearson anticipates.

Currently, agencies may end up dawdling when it comes to implementing an acceptable POC. But when they are racking up daily fines and other penalties, "they will feel enormous pressure," Hogue predicts. The new motto will be, "we've really got to get it corrected the first time around."

Fines Will Impact Care Resources

And remember, these fines will come out of agencies' pockets, says attorney Jim Pyles with Powers Pyles Sutter & Verville in Washington, D.C. That money often would otherwise be going to patient care, he maintains. "The money doesn't drop out of the sky," he laments. New policies should put patient care first, he maintains.

Even more frustrating will be CMPs based on "poor" survey findings, Pearson says. Under the proposal, "incompetent and arbitrary survey findings ... will result in CMPs, suspension of payments on new admissions, and potential terminations," she stresses.

Pyles estimates that half of the citations issued by surveyors are outright wrong or not as described. (For information a new informal dispute resolution process to combat such survey findings, see story, p. 209.)

Authorities may need a CMP model for nursing homes, because homes have an inpatient population that would make termination burdensome. "Termination is not a viable sanction when there is a building full of residents with potentially nowhere to go," Pearson says. But the CMP model doesn't fit home health, Pearson argues. "For HHAs the patients can be orderly transferred to another agency -- as there is always a 30 day notice of termination." In most areas, "there is no shortage of HHAs so the clients can be moved."

The alternative sanction system will mostly serve to make a lot of money and "potentially deter good people from getting or staying in the business," Pearson fumes. It "won't really impact the bad [actors], because they are only in for a short time and if caught, will just shut down."

Follow the money: In the rule, CMS proposes that the CMPs collected go to both the Medicare and Medicaid programs. Policymakers must be careful to ensure that CMP proceeds do not funnel directly back to the state survey agency assessing providers, Pyles says. "You should never give investigators a direct financial interest" in the results of the investigation, he cautions.

Watch out: Another sanction that could close an agency's doors quickly is payment suspension of claims for new patients and new episodes. Surveyors in some areas, like California, already are employing this tool, Hogue reports. "It can be death," she warns. New admissions are "the lifeblood" of most agencies' finances.

Give your 2 cents: Given the impact of the alternative sanctions proposal, Pearson urges every provider and industry representative to submit official comments on the rule. CMS will take comments until Sept. 4.

"The alternative sanction rule is one of the most significant changes proposed by CMS in years," NAHC emphasizes. The trade group has "concerns about abuses with such sanctions with other provider sectors."

Note: The rule, including instructions on how to submit comments, is online at www.gpo.gov/fdsys/pkg/FR-2012-07-13/pdf/2012-16836.pdf.