The total amount of fines the Centers for Medicare & Medicaid Services has collected through per-incident penalties has increased more than eight-fold from 2016 to 2020, and the figure is projected to reach new heights by the end of 2021, according to a new analysis released Wednesday by the National Investment Center for Seniors Housing & Care.

CMS has steadily increased its collection of per-incident penalties from SNFs after federal guidelines were updated in 2017 that set per-instance CMPs as the default penalty as opposed to the per-day fines, explained NIC Senior Principal Ryan Brooks.

The agency collected less than $5 million in total per-incident fines in 2016. That same figure jumped to about $15 million in per-instance fine collections in 2017, followed by collecting just over $20 million in 2018, about $18 million in 2019, and about $27 million in 2020. 

The organization is projected that CMS will collect a total of about $40 million in per-incident penalties from skilled nursing facilities at the completion of the 2021 fiscal year, which ends Sept. 30. 

“Per-day penalties are often applied retrospectively and can accumulate to significant fines. Although per-day penalties remained the recommended approach for major violations, their overall use has been curtailed substantially,” Brooks explained. 

He later added, “As per-day penalties can be applied retrospectively and accumulate to significant amounts, operators benefitted during these years, as they were sheltered from penalties above the per-incident maximum fine of $20,965. There is no cap on the accumulation of per-day penalties.” 

Photo: NIC

Data also showed that the average penalty amount among SNFs had steadily risen between 2016 and the third quarter of 2019 just before the onset of the COVID-19 pandemic. The average penalty for SNFs hovered around $8,000 in January 2016 and around $9,000 in January 2017 before drastically increasing throughout the year and reaching close to $14,000 by January 2018. 

The figure reached a high point in July 2019 of about $16,000 in average fines for SNFs before dipping during the COVID-19. Brooks explained that was likely a “reflection of the more collaborative, less-punitive surveys that took place while surveyors and operators alike learned about COVID-19 and its spread.” 

The average penalty amount is now back up to about $15,000 as of April 2021, according to the analysis. Operators could be facing even more costs if the trend continues. 

“A greater emphasis on infection control has broadened the scope of surveys, and subsequently the amount of time and resources involved in survey preparation,” Brooks concluded. “Without additional funding, a revival of more stringent surveys and quality standards could result in added annual costs for operators.”