Stiffer Fines, CARES Act Audits: What Nursing Homes Can Expect from the Biden Administration

Newly inaugurated President Joe Biden’s pick to lead the Department of Health and Human Services, Xavier Becerra, will likely bring an uptick in enforcement and an increased focus on compliance from the agency as political scrutiny turns to long-term care facilities, where an estimated 40% of COVID-19 deaths have so far occurred.

Becerra, the current attorney general of California, is known for speaking publicly against former President Trump’s approach toward nursing home regulations, including the delayed rollout of the final round of the updated Requirements of Participation.

And if confirmed, he could also be charged with moving more older Americans to community-based settings of care, a potential priority under the Biden administration.

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But first, Becerra will step into handling the COVID-19 pandemic response.

Harvard professor David Grabowski was a member of a federal commission on safety and quality in nursing homes, which made recommendations to the Trump administration ranging from testing and screening protocols to personal protective equipment (PPE).

Grabowski said he expects Becerra’s HHS to move quickly on ensuring nursing homes are safer for residents than the Trump administration did.

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“In a lot of ways the Trump administration has been slow to handle a lot of the issues in nursing homes, and has pushed a lot of emphasis off to the off to the states,” Grabowski said. “I think they’ll look at improving the rollout of the vaccine, while also protecting nursing home residents.”

Todd Selby, a health care attorney with Hall, Render, Killian, Heath & Lyman, said he expects there to be more infection control surveys as a way to pursue low-hanging fruit related to the pandemic. Under the Trump administration, nursing homes have received more Civil Money Penalties (CMPs) as a result of survey deficiencies, and those penalties will likely just increase under the new administration, especially after inspectors are able to return to conducting surveys in-person at facilities.

“CMS has robust infection control regulations that were part of the 2018 new requirements of participation,” Selby said. “We’ve seen a lot of survey activities where long-term care facilities have been cited and given six-figure CMPs for things that would have just required a plan of correction two years ago, before the pandemic.”

And even when the pandemic subsides and most residents and staff are vaccinated, there will be long-lasting impacts to skilled nursing facilities that in large part received CARES Act funds.

Hedy Silver Rubinger, a partner at Arnall, Golden Gregory, said the selection of Becerra suggests that enforcement and compliance will be a top priority at HHS.

“HHS is likely to face considerable political pressure to pursue the questionable or non-compliant retention of CARES Act funds,” Rubinger said.

That push will cover not just compliance with reporting requirements to show CARES Act funds went to COVID-19-related activities, Selby said, but also audits down the line.

“I can’t help but think that a year to three years down the road CMS is going to do a look back and audit these facilities,” Selby said. “There will be public pressure because the nursing homes are getting killed in the public.”

Rubinger said her partners, which include former federal prosecutors and federal agency attorneys, believe the new administration will prioritize white-collar investigations and prosecutions more than the Trump administration.

“This means that it is more important than ever for health care companies, including nursing homes, to ensure they have a robust compliance program,” Rubinger said.

The Trump administration, as part of the Regulatory Relief Act, delayed finalizing a rule that long-term care facilities must have a compliance and ethics program. But Selby expects the Becerra’s HHS will finalize that rule and start enforcement.

“I think most long-term care facilities have a compliance program, but some don’t, and those that don’t have probably been putting this off, need to get it done,” Selby said. “Surveyors are going to fine-tune and do a deeper dive on looking into whether … a facility has a corporate compliance program being met.”

In addition to the enforcement actions, Becerra’s HHS may carry out goals from the Biden White House to change where aging care is delivered.

“We’re definitely hearing a lot that the Biden administration wants to move individuals out of nursing homes and into the community, and really emphasize home settings,” Grabowski said. “There’s even been discussion of eliminating all the hundreds of thousands of individuals that waiting for Medicaid home and community-based waiver slots.”

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