CMS fails to collect monetary penalties from facilities

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The Centers for Medicare & Medicaid Services collected less than half the civil monetary penalties it imposed on nursing homes that committed quality of care or safety violations in 2000 and 2001, a governmental agency found.

During the two years reviewed by the Department of Health and Human Services Office of Inspector General, CMS imposed $81.7 million in penalties. But homes paid only $34.6 million as of December 2002. A majority of the money was not collected due to waivers for homes that do not appeal citations. Also, the OIG found a lag in collecting penalties, and penalty amounts that fell within the lowest range of fines.
The report has raised the concern of policy makers, such as Sen. Charles Grassley (R-IA), who said the report shows "another shortcoming" in nursing home oversight.
Among the OIG's findings: CMS imposed penalties in about half of all nursing home enforcement cases, but in 70% of those cases the penalties were reduced. However, nursing homes are entitled to a 35% reduction for waiving their rights to appeal, according to the OIG. CMS also tended to impose penalties at the low end of the available spectrum of fines.

The OIG said CMS should provide written guidance to staff and states about appropriate dollar ranges for penalties to account for scope and severity of violations. It also recommended CMS provide written guidance to staff about penalty collection responsibilities, especially concerning past due penalties.