Home Health & Hospice Week

At least CMS won't publish your survey indiscretions in your local newspaper.

Get ready to face a whole new spectrum of consequences for your survey performance starting next July.

In the 2013 home health prospective payment system final rule, the Centers for Medicare & Medicaid Services finalizes its proposal to implement alternative sanctions for home health agencies based on their survey results. CMS makes only a few minor changes to the provisions it proposed this summer (see Eli's HCW, Vol. XXI, No. 26).

In addition to termination from the Medi-care program, your surveyors soon will be able to impose five new alternative or intermediate sanctions ranging from civil money penalties (CMPs) to directed in-service training (see box, p. 323., for details on each sanction). Medicare also will offer an informal dispute resolution (IDR) process for home care surveys. The CMP, payment suspension, and IDR provisions will take effect in July 2014, while the other changes will go in this coming July, CMS says in the rule published in the Nov. 8 Federal Register.

Changes: CMS does make a few modifications from the proposed rule. For one, it has decided not to publish notice of sanctions in HHAs' local newspapers. "We received many comments opposed to any public notice other than for termination," the agency acknowledges in the rule. "We agree with these comments and we will not include ... public notice when alternative sanctions are imposed."

CMS also listened to industry feedback a-bout CMPs -- at least a little bit. Many commenters told the agency that alternative sanctions, particularly CMPs and payment suspensions, would cause agencies to close even quicker than traditional termination.

Response: "Alternative sanctions allow pro-viders who have been cited for noncompliance to make the necessary corrections to achieve compliance and avoid termination from the Medicare program," CMS maintains in the final rule. "It is not our intent that alternative sanctions force HHA closure."

Accordingly, "we have made revisions to the CMP amounts by expanding the ranges within the regulatory text so as to permit CMS greater flexibility in correlating [the] amount of the CMP with the extent and seriousness of noncompliance," the agency explains. Specifically, "we have revised the proposed regulation in order to expand the lower range of CMP amounts in the middle category."

And CMS agrees to apply payment suspensions to new patients only, not to new episodes for continuing patients. CMS agrees that the "suspension of new payment episodes may be disruptive to patients as they would have to transfer to different HHAs with different staff," it says in the rule. "It would also be difficult for the HHA to maintain a caseload of patients to ensure compliance with requirements. Therefore, we will keep the suspension of payment for new patients as an option, but remove references to new payment episodes from the suspension of payment sanction."

CMS also removes its prohibition against putting the cost of a temporary manager on the HHA cost report. Including the expense on the cost report "is consistent with CMS treatment of temporary managers in nursing homes," the agency points out.

Regulatory consultant Rebecca Friedman Zuber hopes to see CMS be more responsive to additional industry concerns when it issues its interpretive guidance on the sanctions next year.

CMS refers stakeholders to that guidance for many details that it didn't include in the final rule, and when responding to commenters' calls for a delay to the regulation. "We will engage industry, patient advocacy organizations, and other stakeholders in the implementation process and we will do this through the interpretive guidance process," CMS pledges in the rule.

Expect: "We will ... develop associated in-terpretive guidance that will address many of the concerns raised by commenters regarding the actual procedures that will be followed to implement the alternative sanctions," CMS promises. That includes the IDR procedures, more details on how CMP amounts will be determined and their timeline for imposition, temporary management instructions to surveyors, etc., CMS adds.

Out Of Time To Correct Deficiencies

Many, many commenters told CMS that alternative sanctions would increase the risk of closure for HHAs, but CMS disputes this claim. "We believe that risk to be lower than the risk of closure if the alternative were not available and CMS terminated Medicare participation altogether," the agency explains in the rule.

"I am in favor of ... having sanctions to em-ploy other than termination from the Medicare program," says Zuber, a former state survey director.

"CMS is taking a hard line on compliance with the Conditions of Participation and I, for one, am very happy to finally see that," cheers former JCAHO surveyor Lynda Laff, with Laff Associates in Hilton Head Island, S.C. "Survey deficiencies have been viewed as a nuisance rather than an infraction of Federal Regulations that were put into place to insure the safety and healthcare of patients in their care."

Old way: Currently, when HHAs run into survey trouble, they generally don't have to see serious consequences until the surveyor revisit after submitting their plan of correction, notes attorney Robert Markette Jr. with Benesch, Friedlander, Coplan & Aronoff in Indianapolis. If they don't pass muster in the revisit, they head to the termination track.

New way: Under the new alternative sanctions provisions, agencies will start to accrue penalties -- potentially including CMPs of thousands of dollars per day and payment suspensions for new admissions -- starting with that first survey that finds the deficiencies, Markette points out. "I suspect ... providers who might not have been penalized at all will be penalized" under alternative sanctions, he says. That's because they would have corrected their problem prior to the re-survey before.

"Some agencies may be used to problems on survey after survey that they ultimately correct at the nth hour to avoid decertification," observes Wash-ington, D.C.-based attorney Elizabeth Hogue.

CMS brushes off multiple commenter suggestions to delay alternative sanctions until after the revisit. The agency intends the alternative sanctions process "to prompt immediate correction," it emphasizes. "An important goal of the alternative sanctions is to encourage more expeditious correction of any noncompliance with the conditions of participation."

In particular, "civil money penalties were designed to present an incentive to correct a deficiency in a short amount of time," CMS adds.

And CMS is aiming to avoid so-called "yo-yo compliance" it's seen in skilled nursing facilities, it says. That's where facilities bring themselves into compliance for a revisit, only to fall back out of compliance by the time the next survey rolls around.

Remember: It's not just condition-level de-ficiencies that can trigger the sanctions. Standard-level deficiencies "may be cited at the condition level if they are repeat deficiencies or are evaluated as being extremely serious," CMS explains in the final rule. The surveyor will make the distinction clear, if so, the agency says.

"The interim sanctions give CMS new tools to encourage compliance earlier, especially for repeat offenders," Hogue notes.

At commenters' request, CMS clarifies its definition of "repeat deficiency" in the final rule. It "means a condition-level deficiency cited on the survey that is substantially the same as or similar to, a finding of standard-level or condition-level deficiency citation issued on the most recent previous standard survey or on any intervening survey since the most recent standard survey," the agency says.

CMS may be underestimating just how much damage its sanctions will do, industry experts worry. While a directed plan of correction or in-service training probably won't be too severe, CMPs and payment suspensions may "radically impact the bottom line," Markette cautions. That goes for even mid-tier penalties that will add up over time.

Such CMPs may end up being "termination under another name," Markette warns. They will be "extremely damaging to a provider."

And chances are CMPs and payment suspensions will become favorite surveyor tools, as they seem to be in the SNF industry, Markette predicts.

Bottom line: "There are greater ramifications if a survey goes wrong," Markette notes.

At least instant terminations for immediate jeopardy (IJ) situations likely won't affect too many providers. In 2011, surveyors cited only 11 IJ determinations in 5,500 surveys, CMS notes.