On October 21, 2022, the Centers for Medicare and Medicaid Services (CMS) announced changes to its Special Focus Facility (SFF) program, including new steps to address nursing home facilities that fail to graduate from the SFF program in a timely manner, or “yo-yo” back into non-compliance after graduating from the SFF program. These changes are consistent with the Federal government’s goal of improving safety and quality of care for the nation’s roughly 1.5 million nursing home residents.

The Affordable Care Act mandated that underperforming nursing homes undergo increased inspection and progressive enforcement actions^[1] through the SFF.^[2] As a result of CMS’ belief that staffing levels have a significant impact on quality of care, it is instructing state agencies to begin considering a facility’s staffing level as part of the SFF selection criteria. Facilities with lower staffing star ratings and lower staffing ratios are more likely to be selected for the SFF, as compared to facilities with a similar compliance history but better staffing numbers. 

CMS will also impose progressive enforcement actions on facilities in the SFF for the failure to demonstrate sustained improvement, or to demonstrate a good faith effort to improve quality. In addition, a facility cited for “Immediate Jeopardy” on any two surveys while in the SFF program faces discretionary termination from the Medicare and Medicaid programs.

To address facilities that remain in the SFF program for too long (i.e., after a third standard survey), CMS will require a dialogue with the state agency to discuss the efforts made towards improvement, the reasons for noncompliance, and the likelihood of achieving sustained compliance. In exercising its discretion to impose progressive enforcement on a facility, including termination from the Medicare and Medicaid programs, CMS will consider the following factors:

• A facility’s efforts to improve performance;

• The circumstances or details of any noncompliance that occurred; and

• Situations when discretionary termination may potentially interfere with access to care.

If warranted – for example, if the facility has made promising progress – CMS may exercise its discretion to allow additional time for a facility to address its quality issues, but only if the facility demonstrates a good faith effort to improve. Facilities can graduate from the SFF program if two consecutive standard health surveys show 12 or fewer deficiencies cited at scope and severity level “E” or less on each survey. Once a facility graduates, CMS will “closely monitor” the facility for a period of three years to ensure improvements are sustained. If subsequent deficiencies are identified on any survey, CMS may use its authority to impose enhanced enforcement actions, up to and including discretionary termination from the Medicare and/or Medicaid programs.

CMS is also revising its monthly public SFF postings to display a listing of (i) all facilities in the SFF program, including the number of months spent in the SFF program and their most recent standard health survey findings; (ii) recent graduates from the SFF program that have shown sustained improvement over a 12-month period; and (iii) facilities that have been recently terminated from the Medicare and Medicaid programs. Information regarding facilities that have graduated from the SFF program will also be maintained on the CMS website for three years.

With all of these initiatives, nursing facilities with a history of non-compliance will face increasingly harsh financial consequences and the very real threat of termination from Medicare and Medicaid, as well as increased public scrutiny. Now is the time for nursing homes to address staffing and quality issues to ensure compliance and the ability to remain in operation.

FOOTNOTES

^[1] Progressive enforcement includes increased civil monetary penalties and/or the imposition of additional remedies such as a Discretionary Denial of Payment for New Admissions and termination from the Medicare and Medicaid Programs. 

^[2] Nursing homes are selected as SFF candidates based on a methodology that calculates points based on the facility’s last three standard survey cycles and the last three years of complaint survey performance and the scope and severity level of those citations. CMS provides a list of such candidates to the state survey agencies who each select a minimum of five and a maximum of thirty nursing homes for the SFF program.