CMS Announces Increased Oversight of Underperforming Nursing Facilities | King and Spalding

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On October 21, 2022, CMS announced new actions to increase accountability and oversight of nursing homes under the Special Targeted Facilities Program (SFF Program), a program to monitor the worst performing nursing homes in the world. country. The latest revisions to the SFF program increase the requirements for completing the SFF program and increase penalties for facilities that do not meet program standards. This announcement is another step forward in CMS’s plan, in coordination with the Biden administration, to: (i) increase accountability for nursing home owners who repeatedly fail to meet patient safety requirements, licenses and regulations for the operation of these facilities; (ii) improve the quality of care provided in EHPADs; and (iii) make nursing homes safer for patients.

The SFF program identifies the nation’s worst performing nursing homes to provide an in-depth review with the goal of rapidly improving the care they provide. The CMS, in collaboration with the States, visits retirement homes at least once a year to assess the quality of care provided. Facilities with extremely poor survey results may be placed on the SFF program list. Currently, 88 nursing homes participate in the SFF program, or about 0.5% of all nursing homes in the country. During an 18-24 month period of participation in the SFF program, participants are inspected twice as often as normal nursing homes – no less than every six months – and are expected to significantly improve the quality of care by putting implement practices to ensure poor performance is corrected. A facility participating in the SFF program may face continued escalation in the form of civil monetary penalties and denial of payment from Medicare while participating in the SFF program if improvement is not demonstrated. Upon completion of the SFF program, a nursing home either “graduates” from the program by passing two consecutive inspections, or is terminated from the Medicare and/or Medicaid program.

In its latest amendments to the SFF program, CMS left much of the existing program intact, but made changes to increase oversight and penalties, both while facilities are in the SFF program and after obtaining the diploma. The main changes made to the revised memo are presented below.

  • Strengthen requirements. CMS has raised the bar for graduation from the SFF program. SFF properties must now complete two consecutive standard health surveys with 12 or fewer deficiencies cited at the scope and severity level of “E” or less on each survey and with no intervening complaints. Additionally, CMS has added additional criteria that prevent graduation even if the institution passes two consecutive surveys with 12 or fewer gaps. For example, an intermediate investigation of complaints with deficiencies cited at an “F” level or higher will prevent graduation.
  • Supervision continues after graduation. In an effort to prevent facility regression after graduation from the SFF program, CMS will now continue to monitor SFF program graduates for three years to ensure lasting improvements. If graduates fail to demonstrate compliance after graduation, CMS has the discretion to impose enhanced application options, including termination from federal health care programs.
  • Tougher Penalties for Progressive Enforcement. CMS can now impose escalating civil monetary penalties and withholding payment penalties on SFFs that fail to demonstrate or maintain improvement in correcting deficiencies in any of the investigations. These progressive penalties target facilities making “little or no effort” to improve their performance. Penalties may increase as the period of non-compliance lengthens.
  • Involuntary termination. Any SFF who is cited with “immediate risk” deficiencies in two investigations (standard health, complaint, LSC, or EP) will be considered for discretionary termination of federal Medicare and Medicaid funding.
  • Additional Considerations for SFF Selections. States generally focus on survey results and compliance history when selecting nursing homes to participate in the SFF program. CMS has now acknowledged the role of staff turnover in declining quality of care and is directing states to consider a facility’s staffing level when selecting applicants for the SFF program.
  • Increased engagement between CMS and facilities. CMS provided additional engagement between CMS and underperforming retirement homes through direct and indirect outreach by CMS leaders with the goal of helping facilities understand the impact of the SFF program and resources for improvement.

The CMS announcement also highlighted efforts nursing facilities can make to support performance improvement, such as engaging CMS quality improvement organizations, hiring external consultants, implementing implementing evidence-based interventions and documenting changes such as staffing levels and management updates.

These changes to the SFF program are effective immediately. CMS’s October 21, 2022 press release is available here. CMS’s memo reviewing the program is available here. Additional information on the Biden administration’s recent efforts to examine the quality of nursing homes and the role of private nursing home ownership is available in the client alert available here.

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