A stethoscope on top of a pile of money

Federal officials are narrowing the ways in which providers can use penalty funds collected from sanctioned nursing homes as the Civil Monetary Penalty Reinvestment Program relaunches.

The program allows nursing home operators to apply to state agencies for a share of Centers for Medicare & Medicaid Services grants. It had been paused since April as CMS looked at ways to rein in significant growth in projects’ costs and scope.

Changes outlined in a Monday memo include a halt to routine awards for workforce initiatives. The agency previously said it plans to use $75 million in CMP funds to help providers with workforce and education initiatives that support its nursing home staffing mandate, but that program is not expected to be underway until next year.

“More information on this campaign will be released in the future, and there will be opportunities for states to partner with CMS on this program,” CMS said Tuesday. “To avoid duplication, CMS will no longer accept Nursing Workforce applications for CMP funding.”

Projects can now be approved in the following provider-oriented project categories: resident or family council, consumer information, training to improve quality of care, and activities to improve quality of life. COVID-era grants meant to aid visitation and communication are still available, as are emergency and administrative grants to states.

CMS also notified skilled nursing home providers they will no longer be able to receive CMP funding for “complex or highly-sophisticated technology projects, such as telemedicine, virtual reality, or artificial intelligence.”

“These types of projects typically have high costs that, if adopted broadly, would quickly exceed the available amount of CMP funds, preventing access to all nursing homes and resulting in inequity,” the agency noted. “While some of these projects may have merit, we want to ensure all nursing home residents have access to basic services and beneficial projects before funding more sophisticated services in only a few nursing homes, creating inequity.”

Projects targeting mental and behavioral health support also will not be accepted, as CMS is encouraging providers to work with the Substance Abuse and Mental Health Services Administration Center of Excellence on such efforts.

“In essence, the program is back online,” Jodi Eyigor, director of nursing home quality and policy told LeadingAge members on a call Monday. “You can begin submitting applications for CMP reinvestment funds today. But there are some new limitations to the program and there’s some reorganization.”

Previous approvals upheld

The revised regulations also put $5,000 caps on awards from each category, though providers can apply across multiple categories in any single year.

Eyigor said providers would likely be disappointed in the technology news, given that many had used funds to buy devices needed for improved telehealth connectivity or remote monitoring services, while billing payers for the services themselves.

When the CMP program was paused earlier this year, many providers with submitted applications found themselves in limbo. Monday’s memo said facilities that had not previously been granted approval or denial would need to revise and resubmit, if they could make their project fit the new confines. 

Eyigor added that providers whose projects had already been approved but not actually funded before the freeze should now be issued grants in the same amount under the previous rules.

“Your funding is not going to be impacted by these new qualifications,” she said. “It’s only the projects that are going forward.”