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Statement of Need: The intent of this final rule is to improve the efficiency and effectiveness of the nursing home enforcement process, particularly as it relates to civil money penalties imposed by CMS. The new provisions will reduce the delay between the identification of problems with noncompliance and the effect of certain penalties that are intended to motivate a nursing home to maintain continuous compliance with basic expectations regarding the provision of quality care. The new provisions also eliminate a facility’s ability to significantly defer the direct financial effect of an applicable civil monetary penalty until after an often long litigation process. Specifically, this rule would allow for civil money penalty reductions when facilities self-report and promptly correct their noncompliance; offer, in cases where civil money penalties are imposed, an independent informal dispute resolution process where interests of both facilities and residents are represented and balanced; provide for the establishment of an escrow account where civil money penalties may be placed until any applicable administrative appeal processes have been completed; and improve the extent to which civil money penalties collected from Medicare facilities can benefit nursing home residents. Through the proposed revisions, we intend to directly promote and improve the health, safety, and overall well-being of residents.

Summary of the Legal Basis: Section 6111 of the Affordable Care Act of 2010 amended the Act to incorporate specific provisions pertaining to the imposition and collection of civil money penalties when facilities do not meet Medicare and Medicaid participation requirements.

Alternatives: None. This rule implements a statutory requirement. The proposed rule was published on July 12, 2010. Alternatives proposed by commenters will be considered in the preparation of the final rule.

Anticipated Costs and Benefits: The regulatory impact statement provides that these regulatory proposals would have no consequential effect on State, local, or tribal governments or on the private sector. The anticipated benefits of this regulation include stronger protections for nursing home residents, improved due process for nursing homes, incentives for prompt self-correction of deficiencies, and increased quality improvement.

Risks: CMS does not expect any additional risks to providers and/or States as a result of the implementation of this rule.