Nursing home operators should be on high alert for potential rule changes regarding civil monetary penalties after a lawsuit was filed against federal health agencies Sunday that targets a 2017 rule that relaxed CMPs for providers, a legal expert warned. 

The AARP Foundation on Tuesday announced the lawsuit filed against the Department of Health and Human Services and Centers for Medicare & Medicaid. The litigation was filed on behalf of the National Consumer Voice for Quality Long-Term Care and California Advocates for Nursing Home Reform, which are listed as plaintiffs in the suit. 

The groups are targeting a July 2017 directive from CMS that called on state surveyors to use per instance or per day CMPs for non compliant providers, depending on the timing of the noncompliance in relation to the survey, if residents were harmed or abused, if the facility had good compliance history and whether noncompliance was persistent when imposing a CMP.

The lawsuit alleges the policy change “severely weakened” the Nursing Home Reform Act of 1987 by “allowing nursing facilities to knowingly let deficiencies persist for days, weeks or even months while facing only a per instance CMP.” 

“Because this penalty amounts to a nothing more than the ‘cost of doing business’ or a veritable ‘slap on the wrist,’ CMS has eliminated the incentives for facilities to self-police and take remedial measures at the earliest point possible,” the litigation states. 

The implications of the lawsuit could mean that providers may face escalated fines if they were out of compliance during the coronavirus public health crisis, warned Wilson Blount, an Alabama based attorney who specializes in regulatory and healthcare law. 

“Nursing home operators and providers should monitor this case very closely, particularly during the pandemic,” he told McKnight’s Long-Term Care News on Tuesday. 

“If the plaintiffs prevail, it is possible CMS could impose CMPs on operators and providers for every day they were out of compliance for COVID-19 infection control practices, as opposed to each instance. This scenario could represent a substantial increase in liability for them,” Blount added. 

Brendan Williams, lawyer and president and CEO of the New Hampshire Health Care Association, noted that incoming HHS Secretary Xavier Becerra was among those who previously criticized the CMP policy change.

“It would seem that a regulatory change back could be forthcoming if the evidence warrants it — certainly a more efficient remedy than litigation,” Williams speculated. 

Williams added that he has “no patience for bad actors and would agree entirely that sanctions for them [are] warranted, but I think a policy discussion should occur as to what the best sanction is.”