The CMS final rule: Twist and shout, but we can work it out

In Twist and Shout, the Beatles famously sang, “Well, shake it up baby.” And, that is precisely what the Centers for Medicare and Medicaid Services (CMS) just did. On October 4, 2016, CMS published its Final Rule, Reform of Requirements for Long Term Care Facilities, in the Federal Register.[i] The long-anticipated final rule imposes the most sweeping changes to the long term care industry since 1991.  Not surprisingly, CMS received almost 10,000 comments prior to the adoption of the final rule.

According to Dr. Susan Levy, President of AMDA, The Society for Post-Acute and Long-Term Care Medicine, “AMDA is pleased that CMS listened and incorporated some changes into the initial proposed rule based on comments….CMS also revised the rules to incorporate additional regulations around recent areas of focus such as QAPI, infections and transitions of care.” 

The regulatory topics in the final rule

Pre-dispute Arbitration Agreements

Perhaps the most controversial aspect of the final rule, which has already come under legal challenge, is the provision prohibiting pre-dispute arbitration.

In spite of strong opposition, CMS banned pre-dispute arbitration agreements in its final rule. According to Mark Parkinson, president of the American Health Care Association (AHCA), “AHCA is extremely disappointed that CMS included in the final rule a provision banning all pre-dispute arbitration agreements.” Parkinson noted that banning pre-dispute arbitration agreements “clearly exceeds CMS’s statutory authority and is wholly unnecessary to protect residents’ health and safety.” Consequently, AHCA, joined by the Mississippi Health Care Association and three nursing homes, filed a complaint in the U.S. District Court for the Northern District of Mississippi, asserting that CMS lacks the authority to forbid pre-arbitration agreements based on the Federal Arbitration Act, which favors arbitration.

Providing little consolation to the long-term care industry, CMS’ Acting Administrator Andy Slavitt has said that “facilities and residents will still be able to use arbitration on a voluntary basis at the time a dispute arises… [as long as they are] clearly explained to residents, including the understanding that the arbitration agreements are voluntary and that these arbitration agreements should not prevent or discourage residents and families from talking to authorities about quality of care concerns.”[ii] Meanwhile, the ban on pre-dispute arbitration goes into effect on November 28, 2016. In future columns, we will report on how the courts deal with this contentious issue.

The other new requirements included in the final rule will be phased in over a three-year period. Providers can expect to see a new survey process beginning in November 2017 (the second phase of implementation) when the QIS survey will be merged with the traditional survey.

Given the broad nature of the final rule, only a very brief and partial overview of some of the salient requirements is listed below.[iii]

New Definitions (42 CFR 483.5)

CMS has added definitions to the following terms: “abuse,” “adverse event,” “exploitation,” “misappropriation of resident property,” “mistreatment,” “neglect,” “person-centered care,” “resident representative,” and “sexual abuse.” CMS notes that regarding the definition of “abuse,” ”’willful’ means the individual must have acted deliberately, not that the individual must have intended to inflict injury or harm.” CMS further defines “abuse” as including mental abuse “facilitated or enabled through the use of technology.” Thus, inappropriate use of social media could constitute abuse.

Admission, Transfer, and Discharge Rights (42 CFR 483.15)

In addition to documenting the reasons for a transfer or discharge in a resident’s medical record, facilities must also document and exchange specific information with the receiving facility.

Comprehensive Person-Centered Care Planning (42 CFR 483.21- This is a new regulation)

Facilities must develop and implement “a baseline care plan” for all new residents within 48 hours of admission with a focus on “effective and person-centered care that meets professional standards of quality care.” Additionally, a member of the food and nutrition services and a nurse aide must be part of the interdisciplinary team that develops the comprehensive care plan.

Physician Services (42 CFR 483.30)

In addition to all previous requirements for physicians, the new regulation permits attending physicians to delegate the task of writing dietary orders to qualified nutrition professionals and dieticians, consistent with their scope of practice as defined by State law. Physicians may also delegate the task of writing therapy orders to “qualified therapists” within the scope of their respective practice.

Nursing Services (42 CFR 483.35)

CMS added a competency requirement under nursing services. Essentially, the “sufficiency” of the nursing staff must be based on a facility assessment which incorporates factors such as, but not limited to, the number of residents, their acuity levels and scope of diagnoses as well as their needs as noted in their care plans.

Behavioral Health Services (42 CFR 483.40)

A new section will require facilities to provide residents with necessary behavioral services in accord with their comprehensive assessment and plan of care.

Pharmacy Services (42 CFR 483.45)

Pharmacists will be required to review residents’ medical charts on a monthly basis as part of the drug regimen review. Additionally, the requirements for “antipsychotic” drugs will be changed to “psychotropic drugs.” (CMS defines “psychotropic drugs” as “any drug that affects brain activities associated with mental processes and behavior.”) CMS is requiring that psychotropic drugs be eliminated or reduced if not contraindicated. Such a requirement is consistent with good medical practice and the regulations’ current requirement to reduce and/or eliminate unnecessary medications.

Laboratory, Radiology, and Other Diagnostic Services (42 CFR 483.50 – this is a new regulation)

A nurse practitioner, physician assistant or clinical nurse specialist will be permitted to order laboratory, radiology and other diagnostic services so long as within the scope of practice in the respective states.

Quality Assurance and Performance Improvement (QAPI) (42 CFR 483.75)

CMS is requiring facilities to “develop, implement, and maintain an effective comprehensive, data driven QAPI program that focuses on systems of care and quality of life.” A positive aspect of the final rule is that CMS reiterated that State survey agencies may not require disclosure of the records of the committee except as “related to the compliance of such committee.” The new requirements regarding QAPI are extensive and facilities are advised to become thoroughly familiar with those requirements.

Infection Control (42 CFR 483.80)

CMS is requiring facilities to develop an Infection Prevention and Control Program (IPCP) which would incorporate an Antibiotic Stewardship Program that includes protocols for the use of antibiotics and a system to monitor antibiotic use. Additionally, facilities will be required to designate at least one or Infection Preventionist (IP) who would be responsible for the facility’s IPCP. The IP must be qualified by education, certification, training or experience (e.g., epidemiology, medical technology, microbiology, nursing, or other related field) and have completed specialized training in infection prevention and control. The IP must also be a member of and report regularly to a facility’s QAPI committee.

Compliance & Ethics Program (42 CFR 483.85 – this is a new regulation.)

The operating organization for each facility will be required to have a compliance and ethics program with written policies, standards and procedures aimed at reducing the likelihood of criminal, civil and administrative violations.

Physical Environment (42 CFR 483.90)

Facilities constructed, reconstructed or newly certified after November 28, 2016 may accommodate no more than two residents per room and must also have a bathroom with a commode and a sink in each room.

Training Requirements (42 CFR 483.95- this is a new regulation)

Facilities will be required to provide training regarding dementia management, resident abuse and care of cognitively impaired residents.

The costs of compliance

CMS states that “We estimate the total projected cost of this final rule will be about $831 million in the first year and $736 million per year for subsequent years. While this is a large amount in total, the average costs per facility are estimated to be about $62,900 in the first year and $55,000 per year for subsequent years.” However, many providers believe their actual costs will greatly exceed CMS’ estimates. Regardless of how much compliance will cost all 15,000-plus nursing homes, such increases will be the cost of doing business. Noncompliance with the new regulations will be even costlier; especially given the congressionally authorized adjustment to civil money penalties (CMP) which substantially increases the amount of CMPs CMS has already begun to impose.


In order to assure compliance, providers should understand which new requirements are tied into the three phase-in periods (i.e., November 28 of 2016, 2017 and 2019); check with state health care associations and relevant professional organizations; keep abreast of changes to the State Operations Manual (SOM; the CMS official guidance to surveyors) as CMS publishes changes and addendums; and attend training and educational seminars. For example, CMS published a Survey & Certification Memo on October 24, 2016, stating that training will begin for surveyors and providers regarding implementation of the final rule, the first phase becoming effective November 28, 2016.[iv] (CMS plans to require all long term care surveyors to complete this training in order to be able to conduct any nursing home surveys after November 28, 2016.)


Providers might have to twist their budgets and shout to comply with the cost of the massive new Requirements for Long Term Care Facilities. In “We Can Work It Out,” the Beatles sang,  “Try to see it my way, only time will tell if I am right or I am wrong.” The courts will decide if CMS is right or wrong about banning pre-arbitration disputes. As for the remainder of the final rule, providers have no choice but to see it CMS’ way and try to work it out. After all, providing quality care to all residents is really the highest and most important goal.

[i]   Reform of Requirements for Long Term Care Facilities, 81 Fed. Reg.68688 (October 4, 2016).

[ii] Andy Slavitt, Acting Administrator, Kate Goodrich, Director, Center for Clinical Standard & Quality, The CMS Blog, Commitment to Person-Centered Care for Long-Term Care Facility Residents, September 28, 2016.

[iii] Facilities’ nursing home administrators, directors of nursing, counsel and members of the QAPI committee should consider reviewing the actual regulations and/or the upcoming guidance to surveyors in the SOM.


Topics: Alan C. Horowitz , Executive Leadership , Medicare/Medicaid , Regulatory Compliance