Long-Term Care Feels Ongoing Impact from Civil Money Penalty Reimbursement Programs

April 1, 2021
April 1, 2021

Healthcare is experiencing significant change, driven by demographic trends, outdated financial structures, and technological progress, not to mention the glaring problem of COVID-19 and its ramifications throughout the care continuum. Many non-hospital organizations are struggling with how they have long operated. Not only is it becoming harder and harder to retain employees, but everyone in healthcare needs more staff to care for our aging population. At the same time, government oversight and the wide range of measures aimed at improving the quality of care may be inadvertently creating additional problems for already-burdened care providers. Here is a specific challenge affecting this area of care.

Long-Term Care Continues to Feel the Financial Impact of Civil Money Penalties and Civil Money Penalty Reimbursement Programs

The Centers for Medicare & Medicaid Services (CMS) may impose Civil Money Penalties (CMPs) against nursing homes and other residential care facilities for either the number of days or for each instance a nursing home is not in substantial compliance with one or more Medicare and Medicaid participation requirements for long-term care facilities. A portion of the CMP fines collected are given back to the states in which the CMPs are imposed. State CMP funds may be reinvested to support activities that benefit nursing home residents and that protect or improve their quality of care or quality of life. An 18-month moratorium was established for these fines by CMS, prior to the planned imposition of stricter guidelines in 2019, so that care providers had time to educate themselves and prepare for the heightened oversight. According to McKnight’s Long-Term Care News, the “Phase 2 requirements were ‘a little bit of a bigger lift’ for facilities, and some providers, particularly in rural areas, were having a hard time getting up to speed” (Stempniak, 2019).

Subsequently in 2019, in response to requests from the nursing home industry, “The Trump administration’s decision to alter the way it punishes nursing homes has resulted in lower fines against many facilities found to have endangered or injured residents. Federal records show that the average fine dropped to $28,405 under the current administration, down from $41,260 in 2016, President Obama’s final year in office” (Rau, 2019). Current practice does not require inspectors to “to fine facilities unless immediate-jeopardy violations resulted in ‘serious injury, harm, impairment or death.’ Regulators still must take some action, but that could be ordering the nursing home to arrange training from an outside group or mandating specific changes to the way the home operates” (Rau, 2019). According to NPR, “consumer advocates say penalties have reverted to levels too low to be effective” (Rau, 2019).

In a recent development, CMS announced on June 1, 2020 the imposition of “increased civil monetary penalties (CMPs) for nursing homes with patterns of infection control deficiencies, while also implementing new enforcement of lower-level infection control issues to bolster compliance” (Spanko, 2020). At the time of the announcement, nearly 26,000 nursing home residents had died in the unfolding COVID-19 Pandemic, and about 60,000 infections had been reported. These numbers are expected to increase as the pandemic continues.


Rau, J., “Trump Administration Cuts The Size Of Fines For Health Violations In Nursing Homes,” NPR, March 15, 2019, Retrieved at https://www.npr.org/sections/health-shots/2019/03/15/702645465/trump-administration-cuts-the-size-of-fines-for-health-violations-in-nursing-hom.


Spanko, A., “CMS to Increase Penalties for Infection Control Violations in Nursing Homes, Reports 26,000 COVID-19 Deaths,” Skilled Nursing News, June 1, 2020, Retrieved at https://skillednursingnews.com/2020/06/cms-to-increase-penalties-for-infection-control-violations-in-nursing-homes-reports-26000-covid-19-deaths/.


Stempniak, M., “Penalty box: CMS official says moratorium on nursing home fines will end in May,” McKnight’s Long-Term Care News, March 8, 2019, Retrieved at https://www.mcknights.com/news/penalty-box-cms-officials-says-moratorium-on-nursing-home-fines-will-end-in-may/.


This blog post continues a series based on our article, Top Issues Across the Care Continuum, which looks more closely at some of the serious concerns of healthcare organizations across the care continuum. Subsequent challenges to be examined include:

  • Short Staffing in Long-Term Care Is Having an Impact on Resident and Financial Outcomes
  • The Patient-Driven Payment Model (PDPM) Has Changed Reimbursement for Physical Therapy in Skilled Nursing Facilities
  • Low Rates for Medicaid Reimbursement, Coupled with Additional Recent State Funding Cuts, May Be Precipitating Skilled Nursing and Long-Term Care Facility Closures.
  • Efforts to Decrease Widespread Antipsychotic Drugs in Long-Term Care Facilities Require Individualized Care Plans.
  • Focused Dementia Care Surveys Are Reducing the Use of Antipsychotic Medication, with Unintended Consequences
  • Infection Control Surveys Reveal a Widespread Problem Across Long-Term Care.

There is a long list of challenges for providers across the care continuum, outside of acute care. For example, with consistent wage pressures, shifting compliance regulations, and rising acuity levels among resident populations, the skilled nursing and LTC workforce is feeling more pressure than ever before. HealthStream works with organizations throughout non-acute care to address these challenges, from keeping pace with regulatory requirements to engaging and developing competent staff who can satisfy the demands of increased patient complexity. By partnering with HealthStream, organizations are equipped to seamlessly manage the pressures of surveyor visits, while remaining focused on high-quality patient and resident care. Learn more about HealthStream solutions for non-acute care organizations.