Stiffer Penalties for Nursing Home Health and Safety Violations Restored

A federal policy that dramatically limited financial penalties for nursing home violations for the last four years has been reversed, six months after AARP Foundation and a Washington-based law firm filed suit to end the practice.

The policy, instituted by the federal Centers for Medicare & Medicaid Services (CMS), had restricted monetary fines for certain nursing home violations to a maximum one-time amount of $22,320 — even if the violation had continued for months. The adoption of such “per-instance” penalties in July 2017 stopped state agencies that monitor nursing homes from recommending per-day fines of up to $22,320, in situations involving past noncompliance, regardless of how long the violation had lasted and how dangerous the violation was.

The reversal comes after the coronavirus pandemic ravaged nursing homes and other long-term care facilities, taking the lives of more than 184,000 residents and staff members. Nearly a third of the more than 600,000 U.S. COVID-19 deaths have been in nursing homes, assisted living facilities and other long-term care settings.

AARP Foundation's case against CMS, which regulates more than 15,000 U.S. nursing homes, claimed the federal agency violated federal law, disregarded proper rulemaking procedures and endangered the lives of nursing home residents when it restricted some monetary fines starting in 2017.

According to the U.S. Government Accountability Office, 82 percent of surveyed nursing homes between 2013 and 2017 were cited for infection protocol violations. Before the 2017 policy change, the most serious violations could bring fines of up to $20,965 a day, according to the AARP Foundation, which helps defend vulnerable people over age 50 through legal advocacy.

In modifying its policy, CMS allowed nursing homes to treat penalties for past noncompliance as “a cost for doing business,” rather than see them as a motivation to quickly change or fix problems, said William Alvarado Rivera, senior vice president of litigation at AARP Foundation.

"We entrust these facilities with our loved ones. We expect that they're going to be well taken care of,” Rivera said. “And in the absence of strong enforcement, the nursing facilities really have a lot less of an incentive to do everything that they should be doing in order to protect their residents."

Though the reversal has not been publicized by CMS, the revision to its civil money penalty policies appears on its website. “Upon further consideration, CMS has determined that the agency should retain the discretion at this time to impose a per-day penalty where appropriate to address specific circumstances of prior noncompliance,” the summary reads. The previous guidance was “rescinded effective 7/19/2021,” according to the guidance page of the U.S. Department of Health and Human Services’ website. 

“CMS ensures that nursing homes meet an essential level of safety and quality of care to protect Medicare/Medicaid beneficiaries from abuse, neglect, exploitation, inadequate care or supervision,” a CMS spokesperson wrote in an email. “These long-standing standards are always in place, and we hold nursing homes accountable for meeting these requirements. … Nursing homes have the primary responsibility for the health and safety of their residents.”

The American Health Care Association/National Center for Assisted Living, which represents long-term care providers, said that a return to stiffer nursing home penalties is not the answer. “Per-diem penalties only take precious resources away from an already underfunded industry, especially during an unprecedented time when nursing homes need every support to protect their residents,” the emailed statement said.

Lives might have been saved
The need to maintain health and safety standards in long-term care facilities has long been recognized, gaining teeth with the Nursing Home Reform Act of 1987. The CMS policy to limit penalties undercuts enforcement of the law, attorneys who filed the lawsuit say, which became glaringly problematic during the coronavirus pandemic.

"By returning to meaningful penalties for noncompliance, CMS is incentivizing nursing facilities to correct problems before they lead to a similar disaster,” said Henry Su, co-counsel in the complaint.

AARP Foundation and Constantine Cannon LLP, the Washington-based firm where Su works, filed the lawsuit in the U.S. District Court for the District of Columbia in January, on behalf of the National Consumer Voice for Quality Long-Term Care and California Advocates for Nursing Home Reform. The complaint came two years after AARP wrote to CMS seeking to stop the penalty limits.

Patricia McGinnis, executive director of the California advocacy group, is grateful that the federal agency reversed its course, but she wonders how many lives lost to coronavirus might have been saved if CMS had stuck to its stiffer penalty policies all along.

"Thousands of nursing home residents have died from COVID-19 in nursing homes over the past year in facilities that have had years of uncorrected infection control deficiencies because CMS failed to ensure adequate safety and meaningful accountability,” she said. “CMS's reversal of their policy of restricting monetary penalties for facilities that violate federal health and safety laws will reduce the risk of harm to vulnerable residents everywhere."