CMS and DOH Enforcement Activities and Proactive

Strategies

PACAH 2017 Spring Conference

April 27, 2017

Paula G. Sanders, Esquire

CMS Requirements of Participation (RoPs)

• Published October 4, 2016 (81 Fed. Reg. 68688)

available at https://www.federalregister.gov/documents/2016/10/04

• First comprehensive update since 1991

• CMS’ estimated cost per SNF Year 1: ~ $62,900

Subsequent years: ~$55,000

(81 Fed. Reg. 68844)

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Survey Implementation

• Phase 1: effective November 28, 2016 Same survey process

New RoPs merged into existing F-tags, SOM, Appendix PP, Eff. March 10, 2017, available at: https://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/SurveyCertificationGenInfo/Downloads/Survey-and-Cert-Letter-17-19.pdf

• Phase 2: effective November 28, 2017 New SOM Appendix PP with all new F-tags

New survey process combines “traditional” and “Quality Indicator Survey” (QIS)

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Department of Justice (DOJ) Initiatives

• Deputy Attorney General Yates issues memo, ”Individual Accountability for Wrongdoing,” on corporation cooperation with identification of culpable individuals, Sept. 9, 2015 (“Yates Memo)

• Assistant Attorney General Caldwell outlines how criminal division compliance counsel will identify effective compliance programs, Nov. 2, 2015

• DOJ hires new “Compliance Counsel” for Fraud Division, Hui Chen , as of Nov. 3, 2015

Changing Enforcement Environment

• DOJ launches 10 Elder Justice Task Forces including Eastern District of PA, March 30, 2016

Pursue nursing homes that provide grossly substandard care

• Centers for Medicare and Medicaid Services (CMS) releases new Civil Money Penalty (CMP) Analytic Tool

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DOH CP “Guideline”

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Mandatory Referrals

• CMS refers all civil money penalties (CMPs) to DOJ pursuant to a Memorandum of Understanding

• DOH is statutorily required to report immediately to the PA Attorney General (AG) or local law enforcement whenever it has “reasonable cause to believe” that a care dependent adult has suffered bodily injury or been unlawfully restrained” See, Act

28 of 1995, Neglect of Care-Dependent Person, 18 Pa.C.S. § 2713

Referrals to state licensing boards

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Increased Enforcement a Reality

• Marked increase in citations and sanctions

• Marked increase in CMS & DOH civil money penalties

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Federal Civil Penalties Inflation Adjustment Act Improvements Act

of 2015

• Intended to improve “effectiveness” of CMPs and maintain “deterrent effect” of CMPs

• Requires annual “adjustment” of CMPs using October Consumer Price Index for all Urban Consumers (CPI-U)

• First increase was in 2016; most recent increase effective February 3, 2017 (82 Fed. Reg. 9174, 2/3/2017)

Federal Civil Penalties Inflation Adjustment Act Improvements Act

of 2015

• Secretary of covered agency may provide lesser CMP by less than the new formula through a rulemaking only if:

Secretary finds that increasing penalty by required amount will have a negative economic impact or that the social costs outweigh the benefits and

Director of the Office of Management and Budget (OMB) concurs with this analysis

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Impact of Inflation Adjustment Act

• CMS CMPs for surveys have increased astronomically

Pre-August2016

August 1, 2016

February 3, 2017

Cat.2 Per Day $50 -$3,000 $103 -$6,188

$105 –$6,289

Cat. 2 Per Instance

$1,000 -$10,000

$2,063 –$20,628

$2,097 -$20,965

Cat. 3 Per Day $3,050 -$10,000

$6,291 -$20,628

$6,394 -$20,955

Cat. 3 Per Instance

$1,000 -$10,000

$2,063 –$20,628

$2,097 -$20,965

Average CMS Per Diem CMP

CMS Region 3Philadelphia

CMS Region 4Atlanta

CMS Region 2New York

2014 Q1Q2Q3Q4

$123,25486,81767,723

146,724

$ 71,12082,07559,58564,678

$ 18,60313,06519,36059,101

2015 Q1Q2Q3Q4

73,451111,983127,940190,496

86,58064,11093,404

102,489

19,00133,56610,92826,400

2016 Q1Q2Q3Q4

101,195235,945246,877368,958

71,26882,24199,571

211,031

23,381128,84048,825

171,618

Pennsylvania Nursing Care Facility Sanctions

P1 & CP P2 & CP P1 Only P2 Only P3 Only P4 Only BAN CP Only

Amount Imposed

2014 1 2 4 2 8 $62,000.00

2015 6 2 7 2 1 1 1 24 $176,170.00

2016 4 31 4 51 $401,600.00

Jan.-March 2017

1 3 1 2 63 $570,250.00

Immediate Jeopardy Citations

I

Immediate Jeopardy To Resident Health Or Safety

PoC JRequired: Cat. 3

Optional: Cat. 1

Optional: Cat. 2

PoC KRequired: Cat. 3

Optional: Cat. 1

Optional: Cat. 2

PoC LRequired: Cat. 3

Optional: Cat. 1

Optional: Cat. 2

Actual Harm That Is Not Immediate Jeopardy

PoC GRequired: Cat. 2

Optional: Cat. 1

PoC HRequired: Cat. 2

Optional: Cat. 1

PoC IRequired: Cat. 2

Optional: Cat. 1

Optional: Temporary Mgmt

No Actual Harm With Potential For More Than Minimal Harm That Is Not Immediate Jeopardy

PoC DRequired: Cat. 1

Optional: Cat. 2

PoC ERequired: Cat. 1

Optional: Cat. 2

PoC FRequired: Cat. 2

Optional: Cat. 1

No Actual Harm With Potential For Minimal Harm

ANo PoC

No remedies

Commitment to

Correct

Not on CMS-2567

PoC B

No remedies

PoC C

No remedies

Substandard Quality of Care (F221-226; F240-258; F309-334)

Out of Compliance

Substantial Compliance

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Isolated Pattern Widespread

Federal Scope and Severity Grid

Federal Remedies Categories

Category 1 (Cat.1) Category 2 (Cat.2) Category 3 (Cat.3)

Directed Plan of Correction;State Monitor; and/or Directed In-Service Training

Note: If CMP >$10,4830 or SQC, automatic loss of Nurse Aide Training Competency Evaluation Program (NATCEP)

Denial of Payment for New Admissions;Denial of Payment for All Individuals imposed by CMS; Termination; Temp. Mgmt and/or Civil Money Penalties: Old: $50 - $3,000/day $1,000 - $10,000/ instanceNew: * $105 - $6,289/day$2,097 - $20,628/ instance

Temp. Mgmt.; Termination; Civil money penalties Old: 3,050-$10,000/day $1,000 - $10,000/ instanceNew:*$6,394 - $20,965/day$2,097 - $20,965/ instance

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* Updated effective Feb. 3, 2017

Mandatory Immediate Imposition of Federal Remedies

• Immediate Jeopardy (IJ) on the current survey

• SQC deficiencies on current surrey

• G level at 42 CFR 483.13 (Resident Behavior and Facility Practices); 42 CFR 483.15 (Quality of Life); or 42 CFR 483.25 (Quality of Care)

• CMS S&C 16-31-NH: Mandatory Immediate Jeopardy of Federal Remedies and Assessment Factors Used to Determine the Seriousness of Deficiencies for Nursing Homes, (July 2016)

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Mandatory Immediate Imposition of Federal Remedies

• Actual harm or above on current survey and deficiencies of actual harm or above on the previous standard health or LSC survey OR deficiencies of actual harm or above on any type of survey between the current survey and the last standard survey surveys must be separated by a period of compliance (i.e., from different noncompliance cycles)

• Special Focus Facility (SFF) has a deficiency citation at level “F” or higher on its current survey

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Mandatory Criteria for ImmediateImposition of Federal Remedies

Mandatory Criteria for Immediate

Imposition of Federal Remedies

ImmediateJeopardy on

current survey

Deficiencies of SQC that are not

IJ on current survey

Any G level deficiency on

current survey in§483.13, §483.15,

§483.25

Deficiencies of actual

harm on current survey AND IJ

OR actual harm on

any survey between current

survey and last standard

survey

Special Focus Facility AND “F”

level or higher oncurrent survey

Remedy(ies) considered for immediate imposition by CMS in addition to the CMPs when IJ is cited, mandatory 3month DPNA for new admissions or mandatory 6month termination, as required. NOTE: Multiple remedies may be imposed

TerminationCMPs must be

imposedimmediately

DDPNATemp. Mgmt.State MonitoringDirected Plan

of CorrectionDirected

In-serviceDenial of Payment

for ALL Individuals

TerminationCMPsDDPNADirected Plan of

CorrectionDirected

In-service Training

Denial of Payment

for All Individuals

TerminationCMPsDDPNADirected Plan of

CorrectionDirected

In-service Training

Denial of Payment

for All Individuals

TerminationCMPsDDPNATemp. Mgmt.State MonitoringDirected Plan of

CorrectionDirected In-

serviceDenial of Payment

for All Individuals

TerminationCMPsDDPNATemp. Mgmt.State MonitoringDirected Plan of

CorrectionDirected In-serviceDenial of Payment

for All Individuals

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Financial Hardship Requests

• Possible reduction of CMPs or 12 month repayment plan

• Analytic tool options: facility’s documentation proves that:

(1) “the facility lacks sufficient assets to pay the CMP without having to go out of business,” or

(2) “the facility does not lack sufficient assets to pay the CMP without having to go out of business.”

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Financial Hardship Requests

• “[N]ot CMS's intent to impose CMPs that could, in and of themselves, put providers out of business.”

• Providers can file “compelling evidence of financial hardship,” which CMS “is willing, in the interest of the Medicare and Medicaid programs and their beneficiaries, to consider.”

• Must be filed within 15 days of CMS CMP letter

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Areas of Potential Substandard Quality Of Care

• Major Expansion

• Resident Rights §483.10

Resident Rights

Exercise of Rights

Respect and Dignity

Self-Determination

Safe Environment

• F Tags

F221 – 226

F240 – 258

F309 - 334

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New CMS CMP Analytic Tool

• New approach to federal per day (PD) Civil Money Penalties (CMPs)

• Begin CMP on 1st day noncompliance is documented, even if that date precedes the first day of the current survey

Unless facility can demonstrate that it corrected the noncompliance prior to the current survey (past noncompliance)

CMS Survey & Certification Memo, “Civil Money Penalty (CMP) Analytic Tool and Submission of CMP Tool Cases, S&C: 15-16-NH (Dec. 19, 2014)

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Starting the PD CMP

• Calculate the start date for the proposed CMP with the “first supportable date of noncompliance, as determined by the evidence documented by surveyors in the statement of deficiencies (CMS form 2567)”

• Surveyors instructed to “determine the earliest date for which supportable evidence shows that the non-compliant practice began”

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Ambiguity About Start of Deficient Practice

• CMS analysts will contact state agency if start date is ambiguous or not clearly identified and supportable, to see if start date can be determined

• CMS analysts required to document their discussions and conclusion with the state agency

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If Start Date Not Determinable

• If start date cannot be determined, then PD CMP would start on 1st day during the survey on which the survey team identified the noncompliant practice

• If the team cannot document the first day of noncompliance, then the CMP should start on the day the noncompliance was observed and documented at the time of the current survey

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CMS: Past Noncompliance

• Reduce a CMP by 50% if:

(i) self-reported noncompliance to CMS or

State before it was otherwise identified by or

reported to CMS or State; and

(ii) correction of the self-reported

noncompliance occurred within 15 days of the

incident. 42 C.F.R. § 488.438

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Get Credit for Correcting Past Noncompliance

• Treat any incident that results in reporting to DOH as you would if it was on your 2567

• Develop corrective action and document monitoring and auditing for ongoing compliance

• Give evidence to surveyors at the time of the survey that a monitoring plan was implemented and maintained to assure continued compliance.

CMS: Past Noncompliance Hypo

• Conflicting information about what staff/

departments were responsible for evaluating

residents’ transfer status

Under facility protocol, the nursing staff was

responsible

Interview with nurse indicated that rehabilitation

therapy department was responsible for

performing resident assessments for transfers

and/or use of lifts

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Past Noncompliance Hypo (cont.)

During onsite survey, clear that staff did not have a consistent understanding of facility’s protocol for assessing appropriate transfer status

Facility failed to implement a mechanism(s) for ongoing monitoring to assure that residents were being transferred in accordance with their needs/assessment in order to ensure their safety

Facility failed to demonstrate that they implemented adequate corrective measures to address this event, after the incident occurred and before DOH’s survey

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Critical Timeline

Day 1

Survey2567

Rec’d

10 Days

POC Due

IDR Due

CMS Remedies

Letter Rec’d

Day 90

DPNA

CMS Appeal Or

Waiver of Appeal

Right

60 Days

Day 180

Termination

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10 Days to

File IIDR

How to Read the 2567

• What are the deficiencies?

• What are the regulatory violations?

Federal

State

• What is the best way to respond?

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Know Your Regulators

Sanction Letters

• DOH imposes state sanctions against license and recommends federal sanctions to CMS

• CMS imposes sanctions against certification, often after time for state IDR has passed

CMS not required to follow DOH recommendation

• Challenges to federal CMP must include escrow of CMP

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POC Disclaimer Language

• Preparation and submission of this POC is required by state and federal law. This POC does not constitute an admission for purposes of general liability, professional malpractice or any other court proceeding.

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“Required” POC Elements

• What corrective action(s) will be accomplished for residents affected by the deficient practice?

• How will you identify other residents having the potential to be affected by the same deficient practice and corrective actions?

• What measures will be put in place or system changes will you make to ensure that the deficient practice does not recur?

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“Required” POC Elements

• How will the corrective action be monitored to ensure the deficient practice will not recur, i.e., what quality assurance programs will be established?

• Dates when the corrective action will be completed.

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Strategies for Preparing Effective POCs

• Less is more

• Read the F Tags and the state tags

• Don’t be afraid to have your POC rejected

• Be responsive and responsible

Don’t overpromise

Don’t admit liability

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Strategies for Preparing Effective POCs

• Don’t go overboard with policies, procedures and plans of correction

• Keep your date of compliance as short as possible

Begin implementing corrective action during the survey and document corrections (e.g., inservicing of staff)

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Post Survey Revisit

• Nature of deficiency dictates scope of revisit

• Required whenever S/S F-L level deficiencies exist

• 3rd Revisit subject to CMS Regional Office (RO) approval

• 4th Revisit subject to CMS Central Office (CO) approval

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Survey Strategy

• Reevaluate how you approach survey

Surveyors may reject any documents not provided at time of survey

Where are your critical documents

What do your medical records look like

How up to date is your filing

• Review 2567 carefully and prepare IDRs for any factual inaccuracies

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Prepare Now

• Review and implement new ROPs – focus on grievances, resident rights, policies and procedures

• Ongoing review of MDS accuracy

• Engage your medical director and attending physicians

• Reevaluate wound care protocol and scope of practice issues

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Change Your Mock Survey Process

• Interview residents

• Interview families

• Interview staff

Prepare direct care staff for better surveyor interaction

What do you say when you are not sure of the answer?

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QA and QAPI

• Make better use of your Quality Assurance (QA) and/or Quality Assurance & Process Improvement (QAPI) committee

• DOH expects to see evidence of investigations

Multiple issues should be documented separately

• Make certain electronic record reports (e.g., call bells) part of QAPI if they are used such purposes

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Collateral Issues

• Potential repayment

Obligation to repay within 60 days of identification of known overpayment

• PA Preventable Serious Adverse Events (PSAE) Act

DOH has been filing reports with Department of Human Services (DHS, formerly Department of Public Welfare)

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DOH Surveys: What Happened?

• Kaiser Family Foundation: about 40 percent of PA nursing homes have relatively low 5-star ratings, of 1 or 2-stars (May 2015)

See also: http://www.newsweek.com/you-dont-want-be-old-these-states-333052

• Community Legal Services of Philadelphia (CLS) report – “CARELESS: How the Pennsylvania Department of Health has Risked the Lives of Elderly and Disabled Nursing Home Residents” (June 2015)

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CLS Recommendations to Gov. Wolf

• Conduct thorough investigation into why DOH has

failed to properly investigate nursing homes and

enforce regulations

• Implement system-wide changes within DOH to

ensure enforcement of regulations

• Require all DOH nursing home investigators be

retrained on an ongoing basis to ensure patient

safety

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CLS Recommendations to Gov. Wolf

• Require DOH to provide better transparency to

public regarding investigations & characterization

of harm

• Provide better information to public about SNFs so

prospective SNF residents and families can make

informed decisions about care

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DOH Surveys: What Happened?

• ProPublica reports PA cited fewest serious deficiencies of any state, tied with HI and DE (.02) “Inconsistent Penalties Across the States,” updated July 2015

• PA Attorney General staffing investigations

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PA Attorney General (AG) Staffing Investigations

• 7 companies targeted in contingency fee contract between AG and private law firm (Cohen Milstein)

• April 2015: Declaratory judgment case to AG’s authority to:

Hire contingency fee counsel; and

Investigate staffing using Unfair Trade Practice and Consumer Protection laws

• Dec. 2016: SNFs’ declaratory judgment action ultimately dismissed

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PA AG Staffing Investigations

• July 2015: AG files lawsuit against Golden Living

• Oct. 2016: Reliant settlement $2 million

• Nov. 2016: AG files suit against Grane Healthcare-

• Mar. 2017: Commonwealth Court dismisses AG lawsuit

• April 2017: AG appeals to PA Supreme Ct.51

DOH Response

• Accelerate efforts to evaluate regulatory process to determine what additional measures can be taken to ensure enhance quality

• Engage Auditor General to audit DOH policies and procedures to recommend ways to improve how DOH enforces its statutory enforcement authority

• Form task force charged with identifying ways DOH can advance quality improvement

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More Scrutiny of DOH

• PA Auditor General Performance Audit Report: Pennsylvania Department of Health, issued July 26, 2016

• Generated extensive media coverage

“Failing the Frail: Bad care leads to dozens of avoidable deaths in Pa. Nursing Homes.”*

• Senator Casey requests CMS investigation of PA DOH

* www.pennlive.com/news/page/failing_the_frail_part_1.html (Aug 2, 2016)

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OPTIONS FOR REFUTINGNEGATIVE SURVEY FINDINGS

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Informal Dispute Resolution

• Does not toll the federal appeals timetable or delay enforcement action

• Successful IDR expunges deficiency from CMS 2567 and provides for rescission of enforcement action predicated on withdrawn deficiency

• CMS’ findings of noncompliance can overrule state’s conclusions

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State IDR v. IIDR

Tags Disputed Deleted Revised Upheld Withdrawn

2013 IDR 69 19% (13) 7% (5) 72% (50) 0

2013 IIDR 14 0 7% (1) 86% (12) 7% (1)

2014 IDR 60 15% (9) 20% (12) 63% (38) 2% (1)

2014 IIDR 24 25% (6) 0 75% (18) 0

2015 IDR 131 25% (33) 11% (15) 63% (82) 1% (1)

2015 IIDR 30 20% (6) 10% (3) 70% (21) 0

Jan-Oct. 2016 IDR 172 27% (47) 11% (18) 60% (104) 2% (3)

Jan-Oct. 2016 IIDR 42 17% (7) 7% (3) 69% (29) 7% (3)

Sanction Letters

• Ability to file federal IIDR within 10 days of receipt of CMS CMP letter (often sent by certified or regular mail—keep envelope)

• Federal IIDR will often include contact of affected residents

• Waiver of appeal rights gets 35% reduction of CMP

File written notice within 60 days

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Federal Appeals

• Departmental Appeals Board (DAB)

• U.S. District Court

• U.S. Court of Appeals

• Beyond?

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State Appeals

• Administrative hearings

• Court appeals

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Questions

Paula G. Sanders, EsquirePrincipal & Co-Chair, Health Care Practice Group

Post & Schell, PCpsanders@postschell.com

717-612-6027

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