Nursing Home Fines

Trump Administration Scales Back Medicare’s Nursing Home Fines

Nursing Home FinesThe Department of Health and Human Services’ Centers for Medicare and Medicaid Services (CMS) has been rolling out new guidelines discouraging Medicare from levying fines against nursing homes that place residents at grave risk of injury or cause them harm, even in cases that resulted in death. The nursing home industry has applauded the changes, arguing that federal inspectors had focused excessively on catching wrongdoing instead of helping nursing homes improve service. Critics of the relaxed regulations, however, claim that scaling back nursing home fines weakens an already lax patient-safety tool.

Nursing Home Fines: A Recent History

The move by the current administration to roll back nursing home fines follows President Trump’s pattern of undoing Obama-era regulations, including applying more punitive fines against nursing homes for wrongdoing.

Since 2013, four out of ten nursing homes – roughly 6,500 of them – have received at least one citation for serious violations, including neglect, mistreatment, bedsores, and failing to protect residents from avoidable accidents. Of the nursing homes cited, Medicare fined approximately two-thirds of them.

The average amount of nursing home fines since 2013 has been $33,453.00. However, as many as 531 nursing homes received combined federal fines exceeding $100,000.00. Additionally, Congress acted to increase the fines in 2016 in order to factor in several years of inflation not previously taken into account.

Gradual Rollbacks Throughout 2017

The new rollbacks on nursing home fines levied by Medicare have been gradually introduced throughout 2017, the first year of the Trump administration. For example, in July, CMS issued a memo to the directors of state agencies that survey nursing homes.

The memo discouraged them from issuing daily fines for violations that took place prior to inspection. Instead, CMS urged implementing one-time fines for past violations that had already been remedied, though daily fines are still recommended for major violations discovered during inspections in an effort to spur prompt remedies.

A spokesperson for the American Health Care Association (AHCA), an industry advocacy group, characterized such daily fines for past mistakes as “pointless.” On the other hand, critics have pointed out that the new rules could shelter nursing homes from fines above the new per-instance maximum $20,965.00, even for the most serious errors.

In October, CMS also began discouraging its regional offices from levying any nursing home fines at all in cases involving so-called “one-time mistakes,” regardless of the gravity of the health violations. CMS insists, however, that fines may still be applied in cases of systemic errors or intentional disregard for the health and safety or residents.

In November, CMS instituted a grace period of eighteen months during which nursing homes would be exempted from receiving fines for violating eight new safety rules. The new regulations were designed to address multiple issues involving residents’ well-being, including reducing the overuse of psychotropic drugs and ensuring that nursing facilities have resources to help residents with serious psychological problems.

Other Trump-Era Nursing Home Regulations

In addition to the weakening Medicare’s ability to levy nursing home fines, the Trump administration has also signaled its intention to roll back other regulations previously imposed on nursing homes.

In May and June, the administration introduced two Notices of Proposed Rule-Making (NPRMs). One NPRM suggested reversing a rule that requires nursing homes to have designated facility grievance officers on site to handle allegations of wrongdoing. The other NPRM proposed rolling back a CMS rule banning nursing homes from requiring patients to sign pre-dispute arbitration agreements as a condition of admission.

Pre-dispute binding arbitration contracts prevent nursing home residents from pursuing litigation against the facilities for any future damages, even in cases of mental or physical abuse and wrongful death. Once such a contract is signed, all disputes must be presented to and decided by arbitrators, private individuals typically hired by the nursing homes themselves. The decisions of these arbitrators are not bound by state or federal law, and they are usually final, with no possibility for appeal.

The regulation barring such arbitration agreements dates back to late 2016. While the rule would still have allowed nursing homes and patients to enter into arbitration voluntarily in order to resolve disputes, arbitration could not be automatically compelled, leaving residents with the opportunity to sue the facilities through the court system. This ruling would have only applied to the future use of pre-dispute binding arbitration agreements, and all such agreements previously signed would still have remained in effect.

The rule was praised by many consumer-advocate organizations, including the American Association for Justice, a national trial lawyers association, which issued a statement that the days of nursing home facilities using binding arbitration agreements “to evade accountability and force residents and their families into signing away their legal rights are nearing an end.”

The new regulation never took effect, however, because the AHCA filed suit against the federal government to prevent its implementation. On November 7, 2016, a judge granted a preliminary injunction pending resolution of the case, and CMS filed an appeal – an appeal that the Trump-era CMS later withdrew.

The proposed CMS rule ending the ban on pre-dispute arbitration contracts is not yet final, and it still has to go through the same approval process as other federal regulations. However, in light of the Trump Administration’s other actions weakening nursing home oversight, further deregulation of the industry seems likely.

“In the coming year,” said GWC’s Jason Kroot, an attorney with experience litigating nursing home abuse cases, “it would be no surprise if the administration will likely seek to limit the ability of residents to successfully sue nursing homes for injuries caused by nursing home abuse or neglect.”

Concerns About Nursing Home Deregulation

Nursing home industry advocates and the CMS’s own administrator, Seema Varma, have tried to paint this shift towards deregulation in a positive light, arguing that it will benefit both nursing facilities and their residents.

“We publish nearly 11,000 pages of regulation every year,” said Ms. Verma. “[That paperwork is] taking doctors away from what matters most: patients.”

Advocates for nursing home residents, however, argue that such widespread nursing home deregulation is a step backward, especially at a time when gross violations and injuries to patients are finally being penalized in a way that causes the industry to take notice and modify its behavior.

Mr. Kroot agrees. “The new CMS rules, which drastically scale back the ability to fine nursing homes that harm residents, all but strip away the government’s ability to enforce basic safety standards,” he said.