Under new federal agency rules, all nursing centers will be granted the option to petition for an Independent Informal Dispute Resolution (IIDR) if the agency has imposed Civil Monetary Penalties (CMPs) in the course of a serious deficiency citation.

The Centers for Medicare & Medicaid Services (CMS) released its revision to Chapter 7 of the State Operations Manual, “Survey and Enforcement Process for Skilled Nursing Facilities and Nursing Facilities,” in March that focuses on the issues of the IIDR process and CMPs.

The revision says that while CMS will continue to offer facilities an opportunity for an existing Informal Dispute Resolution (IDR) conducted by state agencies, all skilled nursing facilities (SNFs), nursing facilities (NFs), and SNF/NFs will be given an opportunity to request and participate in an IIDR if CMS imposes CMPs.

Each state can have its own IIDR process, but all states must include provisions established by CMS.
Decisions by the IIDR will be handled in either of two ways. If the state agency agrees with the recommendations of the IIDR and no changes will be made to the disputed survey findings, the survey agency will send written notice to the facility within 10 calendar days. If the state agency disputes the recommendations of the IIDR, the CMS regional office will review all information and make a final decision.
CMS retains the ultimate authority for the survey findings and CMPs.

IIDR Requirements

To be approved as an IIDR entity or person, specific CMS requirements must be met. To determine “independence,” the entity or person must meet the following requirements:

■ Demonstrate an understanding of Medicare and Medicaid program requirements, including the State Operations Manual Chapter 7, Appendix P, Appendix PP, and Appendix Q;

■ Have no financial or other conflict of interest;

■ May be a component of a state agency, provided that it is organized separately; and

■ May be an independent entity or person selected by the state and approved by CMS.

After a state’s proposed IIDR process is approved by CMS, the state survey agency and the IIDR entity or person can then formalize a written contract or Memorandum of Understanding (MOU).

An IIDR is conducted only upon a timely request by facility staff; they must make their request within 10 calendar days of receipt of the offer from CMS.

If the request is mailed, the postmark on the envelope should confirm that a response was made within the 10-day time period. Once the facility’s request for an IIDR is received, the state agency will notify the involved resident (or resident representative) and the ombudsman and give them an opportunity to comment.

Process Restrictions

The IIDR process does not delay imposition of remedies, including CMP. The process gives staff the chance to dispute the factual basis of cited deficiencies, but not the scope and severity classifications unless these involve substandard quality of care or immediate jeopardy levels.

Things facility staff may not dispute include remedies, failure of the survey team to comply with requirements of the survey process, and the survey team’s inconsistencies in citing deficiencies in comparison with other facilities.

The IIDR may not be used to allege that the IDR or IIDR process was inadequate or inaccurate. Facility staff may not use the process to dispute a previous decision from another survey in which they elected to follow the IDR process.

The IIDR will be conducted within 60 days of the facility’s request, and findings of the IIDR review will be documented in a written report no later than 10 calendar days after the decision is reached.

The state agency provides the final decision to the facility no later than 10 calendar days after receiving the IIDR report.

Where Challenges Go

Deficiencies that are pending an IIDR are entered into both the Automated Survey Processing Environment (ASPEN) software and the ASPEN IDR Manager software, but are not uploaded to the Certification and Survey Provider Enhanced Reporting (CASPER) system until the IIDR is completed.
In the event that a facility has undergone a federal survey with the imposition of a CMP, a federal IIDR will be offered. It will be conducted as a paper review performed by a federal IIDR entity under contract with CMS.

If the facility has a conflict of interest with the federal IIDR entity, or if the federal entity is unavailable, the review will be performed by the CMS central office. Federal reviews are to be completed within 60 days of the facility’s timely request.

If facility staff do not request the IIDR in the proper time frame, then the process is considered to be completed.

Agency Actions

When an IIDR is conducted and the final decision is in the facility’s favor, the survey agency will:

■ Change the deficiency citation content findings;

■ Adjust the scope and severity;

■ Annotate the citations as “deleted” or “amended as recommended;”

■ Have a new CMS Form 2567 signed by a survey manager or supervisor;

■ Recommend to CMS the deletion or reduction of enforcement actions; and

■ Provide facility written notice.

Facility staff have the option to request a clean (new) copy of CMS Form 2567. This new copy will only be released when a new plan of correction is provided and signed by a facility representative. The original CMS Form 2567 will be released to the public if the facility does not meet these requirements.

Penalties May Be Reduced

CMPs are subject to collection and placement in an escrow account pending a final administrative decision of the IIDR. Under the original guidelines of Chapter 7, facility representatives can waive their right to a hearing in writing within 60 days from the date the CMP is imposed. The CMP will then be reduced by 35 percent. Payment is not due until after this time period passes.

Under the IIDR process, if the facility staff have self-reported, promptly corrected the facility’s noncompliance, and waived their right to a hearing, the CMP will be reduced by 50 percent. Facility staff cannot request both the 35 percent and 50 percent reductions.

Noncompliance that is designated immediate jeopardy, a pattern of harm, widespread harm, or that results in a resident’s death is not eligible for CMP reduction.

CMP Funds Allocated To Benefit Resident Care

The Patient Protection and Affordable Care Act allows 90 percent of CMP funds to be used to support activities that benefit residents. These include assistance to support and protect residents of a facility that closes either voluntarily or involuntarily. If a facility is decertified, funds may be used to offset the cost of relocating the residents.

Other CMS-approved uses for the CMPs include projects that support resident and family councils, other consumer involvement in ensuring quality of care, and facility improvement initiatives.

These initiatives must be approved in advance and may include joint training of facility staff and surveyors, technical assistance for facilities such as implementation of quality assurance programs, and appointment of temporary management firms. All proposed activities must receive approval from CMS prior to initiation.
Areas considered inappropriate for CMP use include capital improvements to facilities, payment for services or items already the responsibility of the facility, projects not related to improving quality of life or quality of care for residents, projects in which there is an appearance of a conflict of interest, projects taking longer than three years, temporary manager salaries, and supplementary funding of federally required services.

Click to obtain Survey and Certification Memorandum S&C-14-18-NH and the revised Chapter 7.

Betty MacLaughlin Frandsen, RN, NHA, MHA, CDONA/LTC, C-NE-MT, is the curriculum development specialist for the American Association of Nurse Assessment Coordination. She can be reached at (800) 768-1880.