Medicare Compliance & Reimbursement

Watch out for administrative hand holding by CMS disguised as “alternative sanctions.”

If you are finding the host of new alternative sanctions scary, you had better clean up condition level deficiencies. Without clear-cut dollar amounts spelled out, you are in hot water. Worse, there is no guarantee of “temporary management” causing a return to compliance.

Although we first learned about the new “alternative sanctions” for home health agencies with condition-level deficiencies back in November, most experts are just now beginning to understand what the sanctions really mean for HHAs. This is especially true of the Centers for Medicare & Medicaid Services’ “temporary management,” “directed plans of correction” and “directed in-service training.”

Background: “Basically, CMS has the authority for intermediate sanctions short of termination,” says Mark Sharp, CPA of BKD. And although CMS has always had this authority, it only just now started to use that authority due to pressure from the HHS Office of Inspector General.

“If an agency has condition-level deficiencies in their surveys, CMS has the authority (and will start using this in 2014) to put sanctions in place, which could include monetary penalties, payment suspension or even temporary management requirements,” Sharp explains. “So, some pretty significant authority that could be used by CMS when you do have condition-level deficiencies.”

What Are Directed Plans of Correction & In-Service Training?

Two of these alternative sanctions involve enforcing a correction plan or mandatory staff training. For directed plans of correction, CMS could force your HHA “to take specific corrective actions in response to deficiencies within time frames set by CMS” or the State Survey Agency, according to the Maryland National Capital Homecare Association. A directed plan of correction differs in this way from normal plans of correction that the provider develops and the SSA and/or CMS approve.

CMS will hand down directed plans of correction when an HHA’s deficiencies warrant directing the agency to take specific actions, or when the agency fails to submit a correction plan that’s acceptable to CMS, MNCHA states. And if you don’t comply with the direct plan of correction’s time frames or stipulations, CMS will move on to harsher punishments, such as terminating the provider agreement or issuing CMPs.

Similarly: You could face more severe alternative sanctions if you don’t comply with directed in-service training. This sanction would arise if your HHA has deficiencies that amount to “noncompliance” and when “education is likely to correct them,” MNCHA explains. CMS or the SSA must approve the training, which should be from established centers of health education or consultants. Also, your HHA would foot the bill for all the training costs.

Expect Temporary Management To Equal A ‘Takeover’

MNCHA expects temporary management to become a least-frequently used sanction, because it basically amounts to the SSA or a CMS-approved manager “essentially taking over operation of the agency until either compliance is achieved or the provider’s Medicare agreement is terminated.” CMS may use the temporary management sanction when your HHA:

Has one or multiple condition-level deficiencies; and

CMS believes your HHA won’t be able to correct them on its own and return to full compliance within the permitted time period (within six months).

More bad news: Also, the HHA must pay the manager’s full salary and benefits, including any other associated costs, which you cannot charge to Medicare.

If an HHA does not relinquish full authority and control of the agency to the new manager, CMS will terminate the agency’s Medicare provider agreement, MNCHA warns. The same outcome holds true when an HHA fails to pay the manager’s salary, benefits and associated costs.

For a successful end to temporary management, the HHA must return to full compliance and demonstrate its ability to maintain compliance after the manager leaves, MNCHA relates. But if the HHA resumes management control from the temporary manager without CMS approval, CMS will terminate the provider agreement and may impose additional alternative sanctions.

No guarantee: And beware that temporary management isn’t a sure remedy — in fact, “there is no guarantee that a temporary manager will accomplish a return to compliance,” MNCHA warns. “And the provider is essentially shut out of many major daily operation decisions or, at least, can be overruled by the manager.”

Silver lining: Don’t expect CMS to start slapping every errant HHA with hefty fines and administrative hand-holding — at least not quite yet. In the final rule, “CMS indicated there will be a very open dialogue with the home care industry in the development of interpretive guidelines,” states the Iowa Alliance in Home Care.