Increased Federal Attention to Skilled Nursing Facility Compliance and Quality Improvement Results in Modified Program Requirements

Evidencing the Biden Administration’s implementation of its agenda, the US Department of Health and Human Services Office of Inspector General (OIG) released its Semiannual Report to Congress. The OIG noted 21 ongoing audits and evaluations of nursing home issues. Changes to the SFF program aim to progress the improvement of substandard care for affected residents through stronger enforcement actions. 

History of the SFF Program

The Omnibus Budget Reconciliation Act of 1987 enacted requirements for the quality of care in SNFs. The quality of care provisions required the Centers for Medicare and Medicaid Services (CMS) to establish regulations implementing the SFF program, which oversees nursing homes with significant histories of noncompliance, resulting in poor quality of care. While the SFF program has helped some SNFs improve compliance with CMS regulations and the quality of care offered to residents, other SNFs have not been as successful under the SFF program. As a result, on October 21, 2022, CMS announced revisions to the requirements for SFFs.

Selection of Special Focus Facilities by SSAs 

The changes to the SFF program do not include an increase in the number of nursing homes the program will serve. However, the SFF program asks the State Survey Agencies (SSAs) to be pickier with SFF candidates. For example, CMS now specifies that SSAs evaluate staffing ratios and staffing star ratings as part of the SSAs’ appraisal of the facility’s candidacy for the SFF program. Therefore, if a SSA considers comparable SNF candidates with similar compliance histories, CMS proposes that the SSA select the SNF with lower staffing ratios to participate in the SFF program to ensure that the SNFs with the greatest need for improvement are selected.

Initial Meeting with Selected SFF 

The changes to the SFF program also mean that CMS has revised its initial meeting requirements between SSA and the SNF. Upon selecting a SNF for the SFF program, the SSA will conduct an initial informational meeting with the SNF’s responsible parties to discuss the SFF program. The initial meeting details the steps required for the SNF to graduate from the program, and the conditions under which CMS may terminate the SNF from Medicare and Medicaid participation.

The initial meeting addresses the seriousness of the SFF designation, the importance of the SNF’s organizational culture, and the resources available to support quality improvement. It conveys CMS’ expectation that the SNF demonstrate a good faith effort for systematic change to improve quality which may be evidenced, among other means, by hiring external consultants and implementing evidence-based interventions. The SNF’s good faith effort to improve the quality of care is paramount. CMS can impose enforcement actions for failure to demonstrate improvement or a good faith effort to improve. 

Progressive Enforcement for SFFs

Historically, when a SNF is in the SFF program, the SSA must conduct a standard health survey every six months. CMS urges SSAs to conduct standard health surveys with unpredictable timing to ensure compliance. If the SNF continues to fail to meet the conditions of participation in the Medicare and Medicaid programs, the SSA must recommend more robust enforcement actions.

Another change reflected in the State Operations Manual (SOM) and the SFF program is related to deficient surveys. If survey results are deficient enough to indicate that the SNF continues to provide a level of care that harms residents (scope and severity of G, H, I,) or puts residents in immediate jeopardy (scope and severity of J, K, L,) the SSA must immediately notify the CMS regional office. Further, if a SNF has a standard health or complaint survey with deficiencies at a scope and severity level of “F” or higher, or if a SNF has a Life Safety Code/Emergency Preparedness survey with deficiencies cited as “G” or higher, the SSA must immediately impose remedies.

Importantly, this change to the SOM requires that if subsequent surveys result in additional deficiencies of a similar nature, the enforcement remedies must increase in severity. When considering enforcement remedies, the CMS regional office will consider the SNF’s efforts to improve its performance. However, the increased enforcement severity may lead to a larger Civil Monetary Penalty (CMP) and the imposition of other remedies in conjunction with the CMP. 

SFF Graduation or Provider Termination

Historically, graduation from the SFF program requires that a SNF have two consecutive standard health surveys with 12 or fewer deficiencies at the scope and severity level of “E.” However, going forward, any standard health survey that results in deficiencies at the scope and severity level of “F” or higher will now prevent a SNF from successful program graduation. Likewise, any Life Safety Code or Emergency Preparedness survey that results in deficiencies at the scope and severity level of “G” or higher will prevent a SNF from graduating from the SFF program. 

Regardless of the reasons a SNF remains in the SFF program, the SOM provides that the CMS regional office retains discretion for SFF graduation criteria. CMS factors in unique circumstances of the particular SNF, including a SNF’s effort to improve performance, the circumstances of any noncompliance, and the evaluation of whether discretionary termination from the SFF program may cause beneficiaries issues with accessing care.

The goal of the SFF program is to increase quality of care in SNFs and for noncompliant SNFS to graduate from the program. When a SNF cannot meet the requirements to graduate after its third standard health survey, the SSA will coordinate with the CMS regional office. The SSA and CMS will evaluate the SNF’s improvement efforts, the SNF’s reasons for noncompliance, and the likelihood of the SNF engaging in long-term compliance. CMS will then decide whether to terminate the SNF from the Medicare and Medicaid programs or to continue collaborating with the SSA to focus on the SNF’s continued improvement. In addition, CMS has published criteria for its discretionary termination of a SNF from the Medicare and Medicaid program for situations where the SNF receives two surveys with immediate jeopardy citations.

Post-Graduation Continued Monitoring and Enforcement

As a result of the updated SOM, CMS will continue to monitor the SNF for three years after its graduation from the SFF program to ensure that the quality of care and compliance improvements are ongoing and to verify that the SNF is not in a “yo-yo” trend between compliance and noncompliance. In addition, if the graduated SNF demonstrates insufficient compliance on any survey, CMS can impose additional enforcement options including discretionary termination from the Medicare and Medicaid programs.

As CMS works to carry out the White House’s agenda to protect seniors by improving the quality and safety of nursing homes, ArentFox Schiff is tracking the latest developments. In addition, ArentFox Schiff is prepared to assist clients in understanding how these efforts will alter client responsibilities and requirements, ongoing operations, and potential legal liabilities.