CMS Issues Proposed Rule for Home Health Sanctions

By Stephanie Bouchard, Healthcare Finance News

WASHINGTON – Fifteen years after the Omnibus Budget Reconciliation Act directed the Centers for Medicare & Medicaid Services to implement intermediate sanctions for noncompliant home health agencies, the federal agency has finally complied.

In August, CMS released proposed intermediate sanctions for HHAs in its 2013 prospective payment system update notice. Highlights of the proposed sanctions include money penalties that range up to $10,000 per day; imposition of temporary management; suspension of payment; directed plan of correction; and directed in-service training.

CMS is basing the choice of sanctions on how much the deficiencies pose immediate jeopardy; the nature and duration of the deficiencies; whether or not there are repeat deficiencies; an HHA’s compliance history; failing to provide quality care; and how deeply connected an agency is to a larger organization that has performance problems.

To date, CMS’ only sanction option for noncompliant HHAs has been termination, an option widely reported as not happening very often, said Neil Hoffman, an Atlanta-based lawyer with Arnall Golden Gregory who represents HHAs.

The new proposed rule focuses on intermediate sanctions but also strengthens its language around termination, which may, he said, be an indication that CMS is going to be more aggressive about termination than it has in the past.

But stronger termination language is not high on the list of concerns from HHAs as they and industry representatives dig through the proposal.

What’s making HHAs “nervous” and “concerned” about the proposal, said Mary St. Pierre, vice president, regulatory affairs, the National Association for Home Care and Hospice, is the lack of clarity provided by CMS and the high dollar amount of the fines, sentiments echoed by the Association for Home and Hospice Care of North Carolina, a member of NAHC.

“My concern is that you don’t know what your risk would be,” said Sherry Thomas, senior vice president, Association for Home and Hospice Care of North Carolina.

In her home state, many HHAs are supported by county health departments. Those local governments are small and don’t have large tax bases on which they can depend, she said. The potential of paying undetermined financial penalties coupled with increased regulation is scary to these health departments, she said. “If the cost is more, then we fear – we really do fear – that they will say that ‘we just can’t do this any more,’” and they will close down HHAs where they are most needed.

“At the end of the day, I’m worried that we might lose more and more access to the folks that are providing indigent care,” she continued. “We don’t want to do that because we haven’t fixed how they might else get healthcare.”

Thomas said the Association of Home and Hospice Care of North Carolina will be making comments to CMS during the public comment period, which ends Sept. 4, 2012, and feels that her organization’s comments and those of other HHAs will be thoughtfully considered by CMS.

St. Pierre is not so confident. Even if CMS is thoughtful, the agency can only make minor tweaks to the proposed rule, she said. Major changes would require the proposed rule to be withdrawn and reissued. “I would like to be optimistic,” she said, “but I’m just not sure if they can make enough changes to make the industry satisfied.”

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