Guidance to States for Medicaid NF Remedies

4140 - Guidance to States for Medicaid NF Remedies (Rev. 1, 05-21-04) (See also Chapter 7) 4140A - Background (Rev. 1, 05-21-04) Section 1919(h) of the Act requires the State Medicaid Agency (SMA) to establish, by statute or regulation, remedies for NFs that do not meet the requirements of participation. The State must design remedies to result in faster correction of deficiencies and ensure the health or safety of residents of NFs. The SMA imposes these remedies for those NFs that are not operated by the State or those found noncompliant by the CMS validation process. The SA sends recommendations to the SMA for remedies under SMA jurisdiction, and to the RO for remedies under RO jurisdiction. 4140B - Required State Remedies (Rev. 1, 05-21-04) The SMA specifies the criteria as to when and how each remedy is applied, the amounts of any fines, and the severity of each remedy. The SMA designs the procedures to minimize the time between identification of violations and final imposition of remedies. Denial of payment for new admissions, appointment of temporary management, and closure are remedies that may be imposed during the pending of any hearing. The criteria for all remedies are to provide for incrementally more severe fines for repeated or uncorrected deficiencies. In determining what action to take, the SMA will consider the NF’s compliance history, change of ownership, and the number and gravity of the deficiencies. The SMA may also specify additional remedies, as long as the SMA can demonstrate are as effective in deterring non-compliance and correcting deficiencies as those that follow: The SMA will follow regular procedures to amend it’s approved State plan to establish at least the following remedies: 4140C - Alternative Remedies (Rev. 1, 05-21-04) The SMA will include the specified remedies in subpart B in its approved State plan for any quarter beginning after October 1, 1989. However, the SMA may establish remedies alternative to the specified State remedies (except for the remedy of termination) if the SMA can demonstrate to the satisfaction of CMS that their alternative remedies are as effective in deterring noncompliance and correcting deficiencies as those under §1919 (h)(2)(A) of the Act. For example, the SMA may already have alternative remedies in place for the licensure program or for the Medicaid program under State law, such as: • Civil or administrative fines (different from the specified OBRA remedy); • Court-appointed receiver; • Conditional/provisional licensing, probationary license, or license revocation; and • Withholding of payments. If the SMA has alternative remedies in place, it will summarize its past experience with alternative remedies, indicating that they are effective in deterring noncompliance and correcting deficiencies. The SMA will provide the following types of documentation to indicate the effectiveness of its alternative remedies, such as: • Procedures for implementing the remedies including explanations of what type of deficiencies trigger the remedies, a method or ranking the seriousness of violations and corresponding remedies, timing of remedies and appeals and specific rules designating responsibility for the violation and liability for the remedies; • Identification of the agency responsible for ensuring imposition of the remedies and the amount of resources being devoted to this effort, including legal and other enforcement-related staff; and • Method of evaluation and supporting data for alternative remedies that have proved to be effective in deterring noncompliance and correcting deficiencies including the number of facilities in evaluation and the rate of recidivism. Alternatives to the specified remedies must be submitted under the established procedures for approval of State plan amendments. 4140D - Incentives for High Quality Care (Rev. 1, 05-21-04) In addition to the remedies specified under §1919(h)(2) of the Act, the SMA may establish in it’s approved State plan a program to reward NFs that provide the highest quality care to Medicaid residents. The reward may be in the form of public recognition, incentive payments, or both. The expenses incurred in carrying out such a program are considered expenses necessary for the proper and efficient administration of the State plan under Medicaid. (See §1903(a)(7) of the Act.) If the SMA elects to use an incentive payment, the State plan amendment must define highest quality care, state the criteria to be met, and the measurements to be used in awarding an incentive payment. To be considered as “efficient” in the administration of the State plan, the incentive payment must be reasonable, as determined by the RO in its State plan review process. 4140E - Federal Financial Participation (FFP) (Rev. 1, 05-21-04) Reasonable State expenditures for the proper and efficient administration of the State plan, such as temporary management, closing a NF, transfer of residents to another NF, and other expenses associated with implementing these remedies, are subject to Federal matching payment at the rate of 50 percent. The SMA establishes procedures to prevent claiming FFP for expenditures which have been funded by the CMPs discussed in subpart B.