The Centers for Medicare & Medicaid Services (CMS) collects millions in civil money penalties (CMPs) each year. But Section 6111 of the Affordable Care Act (ACA) specifies that the bulk of the penalty funds “must be applied directly to promote quality care and the well-being of residents in nursing facilities.”1 Where is all that money going?
According to CMS regulations, “ percent of the collected civil money penalty funds [CMPs; placed in escrow and remaining after a final administrative determination]…must be used entirely for activities that protect or improve the quality of care for residents.”2 One of the 10 CMS regional offices imposed more than $18 million in CMPs in 2012. Thus, the amount of money that “must” be applied to promote quality care is substantial.
Despite this, 24 states had not approved any projects using CMP funds in 2012, according to CMS.3 That is about to change. On May 6, CMS published a proposed rule that, among other things, clarifies the uses of CMPs collected from skilled nursing facilities (SNFs). The proposed rule should provide a modicum of relief, especially to providers who have paid substantial amounts of money to the ever-increasing CMPs.
CMS determined that several states used collected CMP funds for prohibited purposes, such as survey and certification operations. According to CMS' proposed rule, one state maintained more than $15 million in fiscal year 2012. CMS noted that maintaining $15 million in collected CMP funds was not “desirable” and was inconsistent with ensuring that collected CMP funds are used to benefit nursing home residents.4
FREE FUNDS FOR WORTHY PROJECTS
“CMP funding is a viable source of monies for improvement projects in the post-acute and long-term care continuum. This is an avenue that [AMDA] state chapters have pursued to obtain funds for educational purposes or other endeavors with their corresponding state departments of health,” says Leonard Gelman, MD, CMD, and president of the AMDA—The Society for Post-Acute and Long-Term Care Medicine (AMDA) Board of Directors. “For instance, in New York, a few years ago, the New York Medical Directors Association, in collaboration with the New York State Department of Health, developed extensive and comprehensive guidelines, based upon AMDA guidelines, for physician practice and medical direction. Then, the New York State Department of Health and a consortium of organizations, including the New York Medical Directors Association, applied through the Department of Health to [CMS] for funds through the CMP system for statewide education of facilities about the guidelines. Significant CMP funds were subsequently acquired and the New York Medical Directors Association and New York State have begun this project, developing and producing the educational experience.”5