Long Term Care Oversight During the COVID-19 Pandemic: Lack of Compliance Could Lead to Loss of CARES Act Funding

By Published On: June 23, 2020

NEW WEBINAR: Join FTLF attorney Susannah Gopalan on June 30, 2020, at 1 PM ET, for a webinar entitled “Long Term Care Facility Infection Control Requirements and the COVID-19 Crisis.”  The webinar will review the most current LTC facility requirements for infection control, the status of related state surveys, and the outlook for additional audit and government reports.  Learn more or register here.

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The pandemic amplifies the importance of existing regulatory requirements related to infectious disease control for long term care providers, and a wave of audit and enforcement is underway. For example, the OIG has updated its Work Plan with several planned reports focused on Long Term Care (LTC) facilities.  Most importantly, on June 1, 2020, CMS released guidance which further highlighted its commitment to focusing additional enforcement efforts on LTC facilities. The new guidance places CARES Act funding at risk if facilities and states fail to comply.

Focused Infection Control Nursing Home Surveys

New CMS guidance from the Center for Clinical Standards and Quality/Quality, Safety & Oversight Group warns that States that have not completed 100 percent of their infection control nursing home surveys by July 31, 2020 will be required to submit a corrective action plan which outlines their strategy for completing the surveys within 30 days.  CMS originally announced requirements concerning these “targeted infection control surveys” in memo QSO 20-20, dated March 23, 2020. Following the 30-day period, if states fail to complete surveys in 100% of their nursing homes, then their respective CARES Act fiscal year 2021 allocation may be reduced by up to 10 percent.  Additional 30-day extensions could also result in more reductions that range up to an extra five percent of the allotment.  The “retrieved” CARES Act funds will then be redistributed to the states that successfully complete 100 percent of their focused infection control surveys by July 31, 2020.  Beginning in fiscal year 2021, states will also perform annual Focused Infection Control surveys of 20 percent of nursing homes.

COVID-19 Survey Activities

By July 1, states must perform on-site surveys of nursing homes with previous COVID-19 “outbreaks,” defined as:

  • Cumulative confirmed cases or bed capacity at 10 percent or more; or
  • Cumulative confirmed plus suspected cases or bed capacity at 20 percent or more; or
  • Ten or more deaths reported due to COVID-19.

States must also perform on-site surveys of any nursing home with three or more, new COVID-19 suspected and confirmed cases since the last National Healthcare Safety Network COVID-19 report, or one confirmed resident case in a facility that was previously free of COVID-19.  States that fail to perform these survey activities timely and completely could forfeit up to 5% of their CARES Act Allocation, annually.  CARES Act funds may also be used for State-specific interventions (such as Strike Teams, enhanced surveillance, or monitoring of nursing homes).

Expanded Survey Activities

States are permitted to expand beyond the current survey prioritization of Immediate Jeopardy, Focused Infection Control, and Initial Certification surveys after they enter Phase 3 of the Nursing Homes Re-opening guidance, or earlier, at the state’s discretion.­­  States will prioritize providers based on those with a history of noncompliance, or allegations of:

  • Abuse or neglect;
  • Infection control;
  • Violations of transfer or discharge requirements;
  • Insufficient staffing or competency; or
  • Other quality of care issues.

CMS Enforcement Regarding Infection Control Deficiencies

CMS is increasing its overall enforcement regarding infection control deficiencies in order to improve accountability and compliance.  In doing so, CMS has noted that substantial non-compliance with any deficiency that is associated with Infection Control requirements may lead to enforcement remedies.  These enforcement remedies include civil monetary penalties that range from approximately $5,000 to $20,000 per instance for continued and sustained noncompliance.

HHS-OIG Focus on LTC Facilities

Prior to the outbreak of COVID-19, the OIG already planned to focus on State Survey Agencies (SAs) for deficiencies, such as not verifying whether nursing homes implemented corrective action and failing to investigate complaints in a timely manner.  This targeted intention has only become more urgent following wide-spread illness and deaths attributable to COVID-19 in nursing homes.  Upcoming activity by OIG includes:

Office of Evaluation and Inspections:

Office of Audit Services:


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