December 04, 2018

Deregulating Nursing Homes

Toby S. Edelman

The pdf for the issue in which this article appears is available for download: Bifocal, Vol. 39 Issue 3.

Deregulating Nursing Homes

In lockstep with the nursing home industry, the Trump Administration is rapidly dismantling the regulations and guidance that have been developed over the past 30 years to implement and enforce the federal Nursing Home Reform Law.Until the Christmas Eve 2017 report in The New York Times,2 these devastating changes, often made without any public notice or comment, received no public attention.

The single deregulatory issue in the nursing home area that attracted any public concern was the Trump Administration’s proposed rule3 that would reverse the Obama Administration’s 2016 final rule prohibiting nursing homes from using pre-dispute mandatory arbitration provisions in their admissions contracts with residents.4 The Trump rule has not yet been issued in final form.

Although litigation is an important tool when residents are seriously harmed or killed by poor care, the regulatory system is intended to prevent avoidable bad outcomes in the first place.5 It is the regulatory system, and particularly, at this time, the enforcement system, that is under severe attack.

The 1987 Nursing Home Reform Law, signed by President Reagan as part of the Omnibus Budget Reconciliation Act, has three broad components. First, it sets federal standards of care, called Requirements of Participation, for skilled nursing facilities and nursing facilities that voluntarily choose to participate in (and receive reimbursement from) the Medicare and Medicaid programs. Second, it establishes a survey system with unannounced on-site visits by trained health care professionals to determine compliance with those standards. And third, it establishes a range of intermediate sanctions, or penalties that may be imposed when a facility fails to meet the standards of care for any, some, or all residents. Most of the remedies are discretionary.

Through subregulatory guidance – that is, guidance below the level of regulations that is implemented without notice and comment rulemaking under the Administrative Procedures Act – the Centers for Medicare & Medicaid Services (CMS) has essentially eviscerated the enforcement system.

In July 2017, CMS issued guidance to surveyors that reduced the amounts of civil money penalties (CMPs) that could be imposed against facilities,6 expressly replacing guidance issued by the Obama Administration in 2014.7 The 2017 guidance makes lower per instance CMPs the default, rather than higher per day CMPs; it discourages the Regional Offices (ROs) that officially impose remedies from starting per day CMPs before “the start date of the survey” (a change that especially affects problems identified as a result of complaint surveys); it requires CMS’s Central Office to review CMPs exceeding $250,000; and it expands facilities’ ability to describe CMPs as unaffordable, among other changes that reduce CMP amounts.

On October 27, 2017, CMS proposed repealing and replacing8 surveyor guidance that the Obama Administration issued in July 2016.9  Remarkably, the American Health Care Association (AHCA), the large nursing home trade association, had explicitly requested replacement of the Obama guidance, which it identified by number, in its December 2016 letter to President-Elect Trump.10 AHCA repeated the request in a March 9, 2017 letter to then-HHS Secretary Tom Price.11 The proposed 2017 guidance calls for limiting the imposition of CMPs for immediate jeopardy deficiencies (the highest of four levels of severity by which deficiencies are classified) that reflect a “one-time mistake” or that do not reflect “intent” to harm; prohibits imposition of CMPs for “past noncompliance;” uncouples scope and severity of deficiencies from particular remedies; and reduces enforcement against the one or two worst facilities in each state that are designated as Special Focus Facilities.12

Other changes to enforcement are planned. CMS officials told state survey agency directors in August 2017 that CMS is evaluating additional regulatory policies, including “[m]ultiple tags for same noncompliance (AKA ‘stacking’)” – that is, citing a single deficiency rather than multiple deficiencies when multiple systems fail in a facility – and “[e]xploring improving care through other remedies (e.g., DPOC [directed plans of correction]” – that is, using remedies other than financial penalties, even when deficiencies are cited.13

As dismantling of the enforcement system continues,14 CMS is also delaying enforcement for certain standards of care that were promulgated by the Obama Administration in 2016 as so-called Phase 2 requirements,15 ended a five-year initiative to reduce the inappropriate use of antipsychotic drugs,16 solicits changes to revise federal standards of care,17 and announces plans to revise the requirements in order to reduce provider burden.18 This is a very dangerous time for residents.

Residents’ advocates must remain vigilant and vocal.

About the author: Toby S. Edelman has represented older people in long-term care facilities since 1977. As a Senior Policy Attorney with the Center for Medicare Advocacy since January 2000, Ms. Edelman provides training, research, policy analysis, consultation, and litigation support relating to nursing homes and other long-term care facilities. Ms. Edelman has a J.D. from the Georgetown University Law Center and is a member of the Washington, D.C. Bar.

[1] 42 U.S.C. §§1395i-3(a)-(h), 1396r(a)-(h), Medicare and Medicaid, respectively.

[2] Jordan Rau, “Trump Administration Eases Nursing Home Fines in Victory for Industry,” (Dec. 24, 2017), The New York Times, https://www.nytimes. com/2017/12/24/business/trump-administration-nursing-home-penalties.html.

[3] 82 Fed. Reg. 26649 (Jun. 8, 2017).

[4] 42 C.F.R. §483.70(n); adopted by 81 Fed.Reg. 68688, 68790-68800 (Oct. 4, 2016).

[5] Kizer v. City of San Mateo, 806 P.2d 1353 (1991) (rejecting the claim that a personal injury lawsuit is an adequate substitute for pre-injury enforcement by a public agency and describing the state police power to protect public health).

[6] CMS, “Revision of Civil Money Penalty (CMP) Policies and CMP Analytic Tool,” S&C: 17-37-NH (Jul. 7, 2017), (Memorandum from David R. Wright, Director, Survey and Certification Group, to State Survey Agency Directors), https://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/SurveyCertificationGenInfo/ Downloads/Survey-and-Cert-Letter-17-37.pdf.

[7] CMS, “Civil Money Penalty (CMP) Analytic Tool and Submission of CMP Tool Cases,” S&C: 15-16-NH (Dec. 19, 2014) (Memorandum from Thomas E. Hamilton, Director, Survey and Certification Group, to State Survey Agency Directors), https://www.cms.gov/Medicare/Pro­vider-Enrollment-and-Certification/SurveyCertification­GenInfo/Downloads/Survey-and-Cert-Letter-15-16.pdf.

[8] CMS, “Revised Policies regarding the Immediate Imposition of Federal Remedies – FOR ACTION,” S&C: 18-01-NH (Oct. 27, 2017), https://www.cms.gov/ Medicare/Provider-Enrollment-and-Certification/Sur­veyCertificationGenInfo/Downloads/Survey-and-Cert- Letter-18-01.pdf.

[9] CMS, “Mandatory Immediate Imposition of Federal Remedies and Assessment Factors Used to Determine the Seriousness of Deficiencies for Nursing Homes,” S&C: 16-31-NH (Jul. 22, 2016), revised 7.29.16, https://www. cms.gov/Medicare/Provider-Enrollment-and-Certifica­tion/SurveyCertificationGenInfo/Downloads/Survey-and- Cert-Letter-16-31.pdf.

[10] http://www.ihca.com/Files/Comm-Pub/AHCAN­CAL-Letter-TrumpAdmin-Attachments.pdf

[11] http://www.ihca.com/Files/Comm-Pub/AHCA-Final- Price-Ltr-3.9.17.pdf.

[12] CMS, The Special Focus Facility (‘SFF’) Initiative, https://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/CertificationandComplianc/downloads/sfflist.pdf

[13] CMS Powerpoint at annual meeting of Association of Health Facility Survey Agencies, Slide 41 (Aug. 23, 2017), http://www.ahfsa.org/resources/Pictures/CMS%20Update_AHFSA_%20AUG2017-AHFSAonly.pdf  

[14] CMS, “Revised Federal Oversight Support Survey (FOSS) Process National Pilot,” Admin. Info. 18:06-NH (Dec. 22, 2017), https://www.cms.gov/Medicare/Provider- Enrollment-and-Certification/SurveyCertificationGenInfo/ Downloads/Admin-Info-8-06.pdf (advising that deficiencies identified in federal surveys will not be cited unless they reflect substandard quality of care, harm, or im-mediate jeopardy that were not identified by the state sur-vey agency’s survey).

[15] CMS, “Revisions to State Operations Manual (SOM) Appendix PP for Phase 2, F-Tag Revisions, and Related Issues,” S&C: 17-36-NH (Jun. 30, 2017), https://www. cms.gov/Medicare/Provider-Enrollment-and-Certification/ SurveyCertificationGenInfo/Downloads/Survey-and-Cert- Letter-17-36.pdf.

[16] 16) CMS, “Data show National Partnership to Improve Dementia Care achieves goals to reduce unnecessary antipsychotic medications in nursing homes” Fact Sheet (Oct. 2, 2017), https://www.cms.gov/Newsroom/MediaReleaseDa-tabase/Fact-sheets/2017-Fact-Sheet-items/2017-10-02.html.

[17] 82 Fed. Reg. 21014, 21089 (May 4, 2017).

[18] CMS, “Requirements for Long-Term Care Facilities: Regula-tory Provisions to Promote Program Efficiency, Transparency, and Burden Reduction,” CMS-3347-P, https://www.reginfo.gov/ public/do/eAgendaViewRule?pubId=201710&RIN=0938-AT36.

Toby S. Edelman

About the author: Toby S. Edelman has represented older people in long-term care facilities since 1977. As a Senior Policy Attorney with the Center for Medicare Advocacy since January 2000, Ms. Edelman provides training, research, policy analysis, consultation, and litigation support relating to nursing homes and other long-term care facilities. Ms. Edelman has a J.D. from the Georgetown University Law Center and is a member of the Washington, D.C. Bar.