The AARP Foundation and the law firm Constance Cannon filed a lawsuit against the Centers for Medicare & Medicaid Services (CMS) and outgoing Department of Health and Human Services (HHS) secretary Alex Azar, alleging that the federal government put nursing home residents’ lives in danger by weakening enforcement of monetary penalties for nursing homes.
The lawsuit was filed on January 18 — two days before the inauguration of President Joe Biden on Wednesday, which also marked Azar’s planned resignation — on behalf of California Advocates for Nursing Home Reform (CANHR) and the National Consumer Voice for Quality Long-Term Care.
According to the plaintiffs, a July 2017 directive from CMS that restricted monetary penalties for nursing homes, in violation of federal law, was itself a violation of the Administrative Procedure Act. They also argued that it exposes residents of nursing homes to dangerous conditions by removing the incentive for facilities to identify and fix problems as fast as possible.
The July 2017 directive saw states and CMS restrict violations to one-time fines that could not be more than $22,320, rather than fines of up to $22,320 per day of noncompliance.
“The size and scope of a civil monetary penalty matters,” Lori Smetanka, executive director of the National Consumer Voice for Quality Long-Term Care, said in the press release announcing the lawsuit. “By changing the policy, CMS not only put the interests of facilities above that of the residents, but it allows a mere slap on the wrist for even the most egregious problems. The harm a resident suffers should be worth more than that.”
The press release put out by the AARP cites the rising toll of the COVID-19 pandemic in long-term care facilities, in both the number of cases and the number of fatalities among residents and staff, as evidence.
“CMS’s decision to severely limit monetary penalties for nursing homes that do not follow the law has had devastating consequences for residents and their families,” AARP Foundation vice president for litigation Kelly Bagby said in the press release. “It is not an exaggeration to say that people’s lives hang in the balance. CMS must reverse this harmful policy and restore protections for people living in nursing homes.”
The lawsuit itself described the policy change announced by the July 2017 directive as “irregular and unlawful,” by subverting the enforcement of the Nursing Home Reform Act (NHRA) of 1987. The enforcement scheme created by the NHRA included the regular evaluation of nursing facilities’ compliance with requirements through “periodic, unannounced surveys,” with findings reported to CMS and enforcement action recommended. The setup charges CMS and states with shared responsibility for implementation, according to the lawsuit.
Enforcement actions “can include the imposition of CMPs [civil money penalties] for each day, over a previous period, that a facility was found out of compliance with federal standards,” with CMS regional offices then acting on that recommendation and able to impose per-day CMPs.
The lawsuit stressed that Congress gave states the discretion to recommend a CMP for the days that when a facility was out of compliance with federal requirements, and that the HHS secretary has the discretion to set such per-day penalties.
“In announcing to state survey agency directors that its regional offices will assess CMPs only for each instance of past noncompliance and not for each day of past noncompliance, CMS’s policy change contravenes Congress’s express intent to give the states the discretion to recommend, and CMS the discretion to impose, a per-day CMP for past noncompliance,” the lawsuit argued.