Understanding CMS’ Civil Monetary Penalties for Hospices

The U.S. Centers for Medicare & Medicaid Services (CMS) has been gradually implementing changes to the hospice survey process and enforcement remedies, including civil monetary penalties in some instances.

Congress approved the survey changes and enforcement actions through the Consolidated Appropriations Act of 2021, which incorporated language from the Helping Our Senior Population in Comfort Environments (HOSPICE) Act. CMS in 2022 began working the legislation’s provisions into its rulemaking.

The agency isn’t imposing these penalties on hospices yet, according to Judi Lund Person, vice president of policy and compliance for the National Hospice and Palliative Care Organization (NHPCO). Nevertheless, the agency does have the authority to do so.

“The most important enforcement remedy is the Civil Monetary Penalties,” Lund Person said at the NHPCO Annual Leadership Conference. “CMS or the state agency can decide which enforcement remedy might be required if the hospice has complaints, especially with [immediate jeopardy] or serious condition-level deficiencies.”

The monetary penalties were among seven enforcement remedies introduced through the HOSPICE Act and subsequent CMS rules. The other six are temporary management, payment suspension for new admissions, directed plans of correction, directed in-service training, termination from the Medicare program and continuation of payments.

These actions were designed to strengthen regulatory oversight of providers in the wake of two July 2019 reports from the U.S. Department of Health and Human Services Office of Inspector General (OIG) that detailed widespread compliance issues that impacted quality of care and patient safety.

The civil monetary penalties can be steep, ranging from $500 to as much as $10,000 per day or per instance of a deficiency. Factors such as the size of the hospice, the nature and frequency of deficiencies or complaints or the status of its quality assessment and performance improvement system can influence the amount levied.

CMS and state agencies have the option to impose multiple penalties at once, as long as the total does not exceed $10,000 per day.

For the upper range of payments, $8,500 to $10,000 daily, hospices must have a deficiency that places a patient in immediate jeopardy, Lund Person said. CMS can impose penalties between $1,500 and $8,500 for repeated or condition-level violations that are directly related to poor patient care, though not an immediate jeopardy situation.

Hospices can incur a penalty between $500 to $4,000 per day for repeated or condition-level deficiencies that are not directly related to poor quality care.

Moreover, the daily penalties would start as of the hospice’s survey date, which may be before the hospice is notified of their obligation to pay them, according to Kimberly Skehan, vice president of accreditation for Community Health Accreditation Partner (CHAP) said at the NHPCO conference.

“You may not find out until weeks later that CMPs are being imposed, and they can be imposed per day,” Skehan said. “Once you get to that point, just understand that this is a really significant issue for hospices.”