Judge issues ruling in $1 billion nursing home case, says IL governor's firm not responsible

A provision included in the Bipartisan Budget Act of 2015 that would double the maximum amount civil monetary penalties for providers has one leading healthcare organization crying foul.

Under the provision, facilities governed by the Social Security Act or the Occupational Safety & Health Administration would no longer be exempt from a 1996 law that requires federal agencies who impose CMPs to increase those fines each year in accordance with the consumer price index.

Currently, the maximum CMP for healthcare providers is capped at $10,000 per day for each day a facility is out of compliance. Without that cap, which was put in place by the Nursing Home Reform Act of 1987, the maximum per day fine would rise to $20,626.

Although the maximum fines are reserved for the “most egregious” offenders, providers  should be aware that CMPs will increase — up to 150% — across the board, Lyn Bentley, senior director of regulatory services for the American Health Care Association, told McKnight’s Thursday. Without the cap on maximum CMPs, those fines will be updated annually as the CPI changes.

“Any time I see a 100% increase in an upper level of CMPs, the ability to impose that and the impact that can have on a provider who is caring for primarily a Medicaid population, that’s a devastating thought,” Bentley said.

As a CMP-imposing agency, the Centers for Medicare & Medicaid will have until August 1, 2016, to submit a proposal on how they plan to implement the adjusted fines. CMS also has the ability to increase fines by a lesser amount than the 150% called for by the adjusted formula, if the maximum increase would have a negative economic impact.

AHCA is currently working to decide what the best legislative options are for remedying the CMP provision, which President and CEO Mark Parkinson said was “outrageous” in a statement on Friday.

“It’s unnecessary, and places an excessive burden on the providers striving to do the right thing, every day,” Parkinson said. “We need a quality assurance system that seeks first to work with skilled nursing providers and meet the care needs of those elderly individuals in our centers, not a punitive one that ups the ante in an arbitrary way.”

The provision, known as the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, was included in the budget bill’s judiciary section. The bill was signed by President Obama last week.