CMS Issues Program Memorandum to State Survey Agencies Outlining Required Elements

The Patient Protection and Affordable Care Act of 2010 ACA—also known as the health care reform law—requires that civil money penalties (CMPs) levied against them for survey deficiencies will, as of January 1, 2012, be collected and placed in “escrow” until all appeals, both formal and informal, are completed. ACA also requires CMS and state survey agencies to offer providers who face collection and escrowing of CMPs the opportunity for an independent informal dispute resolution (IIDR). 

On October 14, 2011, CMS issued a program memorandum to state survey agencies (SSAs) containing the required elements and processes states must include in the IIDR process.  According to the memo, the IIDR process will go live on January 1, 2012, and states must submit their proposed IIDR process to their CMS regional office no later than November 30, 2011, for prior approval by CMS. 

CMS also announced that while eventually all CMPs collected and placed in escrow will permit providers to request an IIDR, for now CMS intends to “phase in” the collection and escrow process and limit it to CMPs imposed as a result of deficiencies rated at a “G” (actual harm or immediate jeopardy) level on the scope/severity scale.  That process will not apply, for now, to CMPs issued for deficiency rates “D”, “E” or “F” on the scope/severity scale.  As a result, CMPs imposed for those deficiencies will be treated as they are now and providers will not have the opportunity for an IIDR regarding them (note that, in any event, the vast majority of CMPs result from deficiencies rated “G” or higher).

1. Some of the more important “required” elements set out by CMS in the October 14 memo (which closely tracks the Final Rule on this same topic issued earlier this year) include the following.
2. CMPs may be collected and placed in escrow on the earlier of the date only when the IIDR is completed or 90 days from notice of imposition of CMPs by CMS.
3. An IIDR must be offered to providers within 30 calendar days of the notice of imposition of CMPs sent by CMS, and that notice must include notice of the opportunity for  an IIDR and state agency information about the process, including whom to contact to request it and whether it will be conducted in person, by telephone or in writing.
4. The IIDR must be conducted by an independent entity (not the SSA) or a component of an umbrella state agency that is organizationally separate from the SSA and has knowledge of Medicare and Medicaid requirements, and that entity must be approved by CMS.
5. The facility must request IIDR within 10 days of receiving the CMS notice, and the IIDR must be completed within 60 days of a provider’s request.  An IIDR is “completed” only when the entity conducting the IIDR has provided a written report to the SSA and the SSA has provided written notice of the final IIDR decision to the facility.
6. The SSA retains final decision-making authority over the IIDR, and the report made by the entity conducting the IIDR is only a “recommendation” to the SSA.  CMS retains, as now, final decision-making authority over survey results and CMP imposition.
7. The written record prepared by the IIDR entity must include a number of specified findings and information, but, interestingly, there is no provision for the affected provider to receive a copy of that written record, and it only receives a summary of the outcome and findings from the SSA.  However, where the SSA disagrees with the recommendation of the IIDR entity, the entire written record must be sent to CMS for review.
8. The IIDR process must include notice of an opportunity to comment on the challenged deficiencies to the involved resident(s) or their representative and to the state long term care ombudsman.
9. Any deficiency that has already been the subject of a regular IDR (the process now in place, as opposed to an IIDR) cannot also be challenged in an IIDR.
10. As is the case now with the existing IDR process, providers may not challenge an IIDR for the following reasons.
    • Scope/severity of the deficiency except where the scope/severity constitutes immediate jeopardy or substandard quality of care
    • Remedies imposed by the SSA or CMS
    • Failure of the survey team to follow required survey processes
    • Inconsistency of the survey team in citing deficiencies at other facilities
    • Allegations that the IIDR process is inadequate

There is no fee or charge for providers to take advantage of the IIDR process, although many SSAs have requested the right to charge fees to cover the expected additional costs of this process to states.  CMS has said it will “study” that issue in the future.

It remains to be seen just how “independent” the IIDR process will actually be and what entity in North Carolina will be responsible for conducting this new process.  We will continue to monitor this process and report to you about it in future issues of Shorts.​