Even as complaint-based investigations tick up, federal regulators this week proposed several regulatory changes that would make it easier for skilled nursing providers to handle complaints and limit penalties.

The Centers for Medicare & Medicaid Services, in a proposed rule posted Tuesday, said it wants to create a “constructive” waiver process that streamlines how facilities qualify for a 35% reduction in survey-linked civil monetary penalties.

Currently, a facility has 60 days to waive its right to a hearing, which triggers the automatic discount. If the facility doesn’t waive its hearing rights, the original penalty amount remains enforceable.

In 2016,  81% of LTC facilities submitted a written hearing waiver, but another 15% failed to do so even though they ultimately did not contest the penalty or its basis. Going forward, CMS officials would automatically assume a facility has waived its rights to a hearing if no hearing request is submitted within 60 days.

“A constructive waiver process … would produce the same, or better, results for less money and effort,” CMS said in its proposal. The change is projected to save providers $1.2 million annually, though the agency said the bigger gains would come in the form of paperwork reductions.

Attorney Alan C. Horowitz, Esq., RN, has worked for CMS and now represents providers. He called the shift a “generous one”  that would help facilities without “the benefit of counsel reminding them to either submit a written waiver or an appeal within the 60 calendar days’ notice from the CMS imposition notice.”

Disputed info kept off Nursing Home Compare

The proposed rule would also put a time limit of 60 days on informal dispute resolutions that facilities can request at the state level after learning of survey deficiencies. Additionally, it would prohibit states from adding disputed survey information to Nursing Home Compare until after the resolution process is completed.

While Horowitz applauded those changes, he was most pleased that the agency will now specify the final result of an Independent IDR, including the rationale behind the decision, must be relayed to a facility in writing by the state or CMS.

“In some CMS regions, where a provider is successful at an IDR or independent IDR and the recommendation is to eliminate the alleged deficiencies — especially when at an ‘Immediate Jeopardy’ level — the CMS Regional Office routinely rejects the recommendation of the IDR or IIDR panel without providing an explanation,” Horowitz said. “Such a lack of transparency is counterproductive and raises questions of fundamental fairness.”

Comments on the proposed rule will be accepted through September 16.

Dedicated grievance official eliminated

The same proposal would also ease requirements for a grievance policy that requires facilities to field resident complaints, including eliminating the need for a dedicated grievance official. That position was first proposed in 2016, and the position was deemed responsible for all information collection, reporting and documentation. Existing staff could split responsibilities in the future. The new rule would also relax standards for written grievance decisions, reduce storage time from three years to 18 months and help facilities discern what constitutes an actual grievance.

“General feedback or complaints stem from general issues that can typically be resolved by staff present at the time a concern is voiced, while grievances are more serious and generally require investigation into allegations regarding the quality of care,” CMS said. Repeatedly receiving the same feedback, however, could escalate such an issue to grievance status.

In all, the changes to grievance rules are expected to save providers more than $78 million annually.

All of these recommendations come as CMS Administrator Seema Verma says she is “doubling down” on efforts to keep residents safe. In an op-ed published in the Tampa Bay Times, Verma noted that complaint-based inspections have increased about 20% since 2013 without a matching budget adjustment from Congress since 2015.

“Members of Congress can help nursing home residents in their own communities by increasing funding for inspections and allowing us to focus our resources on nursing homes that need increased scrutiny,” Verma wrote.

Doug Burr, Senior Vice President of Finance, Reimbursement & Government Relations for Health Care Navigator, said the goals of clarifying review processes and decreasing penalties aren’t necessarily at odds with inspection efforts that aim to drive quality improvements.

“The 35% penalty reduction could actually be viewed as an investment in helping the provider regain compliance instead of as somehow weakening the enforcement activity,” Burr told McKnight’s. “And THAT is in the best interest of the patients.”