‘Aggressive’ CMS Penalties for Nursing Homes in New SNF Rule Could Be Subject To Political Swings

The Centers for Medicare & Medicaid Services (CMS) has announced proposed expansions to CMS’ existing enforcement authority – including higher fines – related to financial penalties for nursing homes.

The proposed SNF rule for 2025 will allow CMS more flexibility to impose penalties, within statutory limits. The potential alterations have raised concerns about the heightened financial strain the new penalties could impose on skilled nursing facilities if implemented, irrespective of the star rating. And all facilities are at risk of facing substantial penalties for a single incident, especially if CMS enforces both per-day and per-instance penalties, experts said. And, another sticking point is CMS’ plan to review facility compliance over the past three years.

In a press release, CMS said this move is intended to encourage facilities to promptly address and maintain lasting compliance with health and safety requirements.


Fred Bentley, Managing Director in ATI’s Post-Acute/Long-Term Care and Senior Living Practice, said that the stringency of the penalties for operators may fall on a political pendulum.

“If it’s a new administration next year, then presumably, it’s going to be a more operator-friendly, more SNF-friendly administration, and they will dial this back,” he said. “That’s a well-worn, common experience. So, it depends very much on who’s in the White House next year as to whether the more aggressive penalties and steeper potential fines will stick around.”

Understanding the proposed new rule

CMS currently enforces civil money penalties (CMPs) for noncompliance, applying penalties per day (PD) or per instance (PI) based on deficiency severity, but PD and PI penalties cannot be imposed simultaneously for the same issue.


Currently, PD CMPs are applied until noncompliance is corrected, while PI CMPs are for isolated instances. Under the current system, both PD and PI penalties cannot be imposed during the same survey, and PI penalties cannot be imposed concurrently for the same deficiency.

In the proposed rule, however, CMS seeks to expand the penalties that can be imposed by revising regulations to allow for more per-instance and per-day CMPs. These revisions would not exceed statutory daily limits but would provide CMS with greater flexibility to impose penalties that more directly reflect the health and safety impact on residents. CMS said the goal is to incentivize permanent correction of deficiencies and ensure that nursing homes are held accountable for providing safe and quality care.

Amy Stewart, chief nursing officer of the American Association of Post-Acute Care Nursing (AAPACN), said that under the proposed rule, CMS could wield the power to impose both per-day and per-instance CMPs simultaneously, with the combined amount not surpassing the daily limit.

“Whether you’re a five-star facility or a one-star facility, we are all at risk of receiving an immediate jeopardy citation with just one incident,” she said. “This could result in a per-day CMP, but under this new rule, it would mean per day and per instance, potentially leading to much higher expenses for a single incident resulting in an immediate jeopardy citation.”

Additions to the rule

One of the most contentious aspects of the proposed rule is CMS’ plan to review facility compliance over the past three years. Stewart expressed reservations about this timeframe, deeming it excessive due to the dynamic nature of staffing, resident demographics, and leadership within that span.

“You could have a resident with dementia who’s confused and combative, and perhaps you’ve taken action or their dementia has progressed,” she said. “So, you could have been discharged—or they may have passed away. Then, you take in someone new, so it’s a new scenario with a new person, but it’s the same problem.”

Stewart also raised concerns about the need for additional resources to investigate incidents over multiple surveys, questioning the feasibility of conducting thorough surveys given existing backlogs in some states.

“I wonder if the surveyors actually have those resources because in some states, they are still behind in conducting standard surveys,” she said. “That’s going to be one aspect of this: do the surveyors have the capacity to do this extra digging? Will it extend surveys in the facility for facility leadership? It could, and that could be burdensome.”

Regarding record-keeping practices, Stewart noted that while the proposed rules may not directly alter these practices, they underscore the importance of ongoing compliance monitoring and root cause analysis. These measures are crucial for mitigating potential penalties and ensuring sustained quality improvement.

Silver linings

Despite these apprehensions, Stewart acknowledged a positive aspect of the proposed rules—the inclusion of social determinants of health questions in the Minimum Data Set (MDS).

She said that these additions, such as inquiries about transportation and utilities, aim to enhance discharge planning and community support for residents, ultimately contributing to safer transitions to home settings.

Brian Ellsworth, VP of Public Policy & Payment Transformation at Health Dimensions Group, said that the changes are a part of a larger trend on behalf of the Biden administration to improve nursing home quality, yet he cautioned against potential over-penalization.

“The concern arises regarding potential over-penalization: when previous survey findings are addressed and fixed, could the new scheme lead to re-penalization or repeated penalties for the same occurrence, despite the ultimate goal being to improve care quality?” he said. “This brings us back to the conversation about motivating improvements through meaningful incentives rather than focusing solely on penalizing providers in various ways.”

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