‘Introduces Chaos’: Nursing Homes Oppose Expansion of Penalties as Comment Period Ends for Proposed Payment Rule 

As the comment period ended Tuesday for the Centers for Medicare & Medicaid Services’ (CMS) proposed rule that updates Medicare payment policies and rates for skilled nursing facilities for fiscal year 2025, a majority of the feedback centered on the possible expansion of the agency’s authority to enforce civil monetary penalties (CMPs) for noncompliance.

In late March, CMS proposed to expand the penalties under the Skilled Nursing Facility Prospective Payment System (SNF PPS) so as to allow for more CMPs per instance and per day in the coming year.

About half of the more than 300 comments received were related to the change in the CMP process, while some focused on the 4.1% Medicare payment rate update itself.

Advertisement

In contesting the proposed expansion of CMPs, LeadingAge’s Jodi Eyigor, director of Nursing Home Quality & Policy, said in her letter to federal officials on Friday that it was imperative to update the survey process before considering changing the increasing the penalties.

“Increasing financial penalties without revising the survey process to allow for constructive feedback and educational support will not improve quality of care in nursing homes,” Eyigor said. “CMS continues to labor under the misguided notion that taking money away from nursing homes is the best and only way to bring about compliance. This ignores the obvious fact that taking money away from nursing homes through CMP fines means less money is available for the care and services residents depend on.”

Eyigor also said that if the CMPs were expanded, it would mean less money for training, recruiting and retaining qualified staff at a time when nursing homes were working toward meeting minimum staffing requirements.

Advertisement

Currently, CMS may only enforce either per instance or per day CMPs in a survey, but not both. CMS proposed expansion of authority would allow for both in the same survey. Also, CMS proposes to allow for multiple CMPs to be enforced in the same survey for the same noncompliance.

And finally, CMS also proposes to expand the look-back period on which daily CMPs are calculated so as to include the last three standard surveys, rather than limiting the look-back period to the most recent standard survey as is currently the requirement.

“We oppose expanding the look-back period to the last three standard surveys, effectively giving CMS the opportunity to reverse course on practices that were previously determined to be compliant,” Eyigor said. “Noting the vast inconsistencies that exist within the survey process, both within states and among states, allowing for survey determinations to be overthrown in this manner introduces chaos into a system that is already seriously in need of reform.”

A portion of CMPs collected from nursing homes are returned to the states in which CMPs are imposed. State CMP funds may be reinvested to support activities that benefit nursing home residents and that protect or improve their quality of care or quality of life.

Many of the comments received from providers echoed similar sentiments, using identical language opposing the monetary penalties as follows: “Financial penalty without survey reform will not improve nursing home quality. Rather, CMPs hurt residents by taking money away from the nursing home where it is needed to recruit and retain staff, implement quality improvement programs, and make capital improvements to the physical environment. Do not finalize the expansion of CMP authority.”

Other comments related to the CMPs pertained to incurring the federal CMP due to use of agency nursing staff – a necessity in the environment of stubborn labor problems.

“Even more devastating than the monetary penalties, was the inability to hold nurse aide classes in our home until May of 2025 for an incident that occurred in September of 2022. We are considered not fit to teach a nurse aide due to the actions of one rogue nurse aide that was educated and oriented,” wrote April Lauver, director of Quality at Garvey Manor and Our Lady of the Alleghenies Residence.

Lauver shared that due to the failure of an agency worker to follow protocol and training, a resident fell causing her facility to incur a federal CMP of $23,989 and a state CMP of $14,500.

To avoid problems from possibly higher and more frequent fines, LeadingAge recommends a different approach, the advocacy group for nonprofit nursing homes said in an emailed statement.

“Rather than penalizing nursing homes through increased fines, CMS would do better by turning its attention to survey process reform—in particular, allowing for constructive feedback and educational support. A punitive approach focusing on fines alone will not improve quality of care in nursing homes,” the statement reads.

LeadingAge officials also expressed concerns over the possibility of tying CMS’ $75 million in funds for the staffing campaign to money received from CMP fines.

Moreover, the advocacy group also wrote to federal authorities on the insufficiency of proposed payments in the SNF PPS rule.

“While welcome, LeadingAge voiced concern that the increase still will not adequately capture nursing homes’ additional expenses resulting from the increased need for personal protective equipment (PPE) both to meet enhanced barrier precautions requirements and respond to needs of residents with COVID throughout FY2025, as well as higher recruitment and retention-related costs as providers prepare for implementation of staffing mandates in May 2026,” the LeadingAge statement reads.

Companies featured in this article: