Department of Health and Human Services 

OFFICE OF 

INSPECTOR GENERAL 

N H E :

URSING  OME  NFORCEMENT
T U
HE  SE OF 

C M P
IVIL  ONEY  ENALTIES

Inspector General 
April 2005 
OEI-06-02-00720  Office of Inspector General 

http://oig.hhs.gov 
The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, 
as amended, is to protect the integrity of the Department of Health and Human Services 
(HHS) programs, as well as the health and welfare of beneficiaries served by those 
programs. This statutory mission is carried out through a nationwide network of audits, 
investigations, and inspections conducted by the following operating components: 
Office of Audit Services 
The OIG's Office of Audit Services (OAS) provides all auditing services for HHS, either by 
conducting audits with its own audit resources or by overseeing audit work done by others. 
Audits examine the performance of HHS programs and/or its grantees and contractors 
in carrying out their respective responsibilities and are intended to provide independent 
assessments of HHS programs and operations in order to reduce waste, abuse, and 
mismanagement and to promote economy and efficiency throughout the department. 
Office of Evaluation and Inspections 
The OIG's Office of Evaluation and Inspections (OEI) conducts short-term management 
and program evaluations (called inspections) that focus on issues of concern to the 
department, the Congress, and the public. The findings and recommendations contained 
in the inspections reports generate rapid, accurate, and up-to-date information on the 
efficiency, vulnerability, and effectiveness of departmental programs. The OEI also 
oversees State Medicaid fraud control units, which investigate and prosecute fraud and 
patient abuse in the Medicaid program. 
Office of Investigations
The OIG's Office of Investigations (OI) conducts criminal, civil, and administrative 
investigations of allegations of wrongdoing in HHS programs or to HHS beneficiaries 
and of unjust enrichment by providers. The investigative efforts of OI lead to criminal 
convictions, administrative sanctions, or civil monetary penalties. 
Office of Counsel to the Inspector General 
The Office of Counsel to the Inspector General (OCIG) provides general legal services to 
OIG, rendering advice and opinions on HHS programs and operations and providing all 
legal support in OIG's internal operations. The OCIG imposes program exclusions and 
civil monetary penalties on health care providers and litigates those actions within the 
department. The OCIG also represents OIG in the global settlement of cases arising 
under the Civil False Claims Act, develops and monitors corporate integrity agreements, 
develops compliance program guidances, renders advisory opinions on OIG sanctions to 
the health care community, and issues fraud alerts and other industry guidance.    E X E C U T I V E   S U M M A R Y   
OBJECTIVE 
To describe reduction, assessment, and collection patterns for civil 
money penalties (CMP) imposed by the Centers for Medicare & 
Medicaid Services (CMS) in calendar years 2000 and 2001. 
BACKGROUND 
The CMPs are one of eight discretionary remedies CMS may use to 
address deficiencies in quality of care or safety standards.  The CMPs 
may be assessed per day of noncompliance or per instance of 
noncompliance. Additionally, CMPs have required dollar ranges that 
correspond to the seriousness of harm to the patient(s). 
We analyzed 100 percent of data from CMSs regionally-based Long-
Term Care Enforcement Tracking System for enforcement cases 
beginning in 2000 and 2001 in which a CMP was imposed. These data 
were supplemented with information from the CMP Tracking System, 
housed in CMSs central office. We also interviewed staff at CMSs 
regional offices and the Department of Health and Human Services, 
Departmental Appeals Board. 
FINDINGS 
While $81.7 million in CMPs was imposed during 2000 and 2001, 
$34.6 million (42 percent) was paid by December 2002. The 
difference is primarily attributable to reductions authorized by 
regulation and delays in making and collecting payments. Although 
CMPs are used quite frequently (51 percent of CMS enforcement cases), 
the CMP amounts originally imposed are often substantially decreased 
before payment is due. Under current regulations, systematic 
reductions, appeals, settlements, and bankruptcies are the main factors 
contributing to this decrease. 
Seventy percent of CMP cases (2,973) received a reduction from the full amount 
imposed prior to payment request.  Every nursing home is entitled to a  
35 percent reduction for waiving its right to appeal.  Appeal waivers and 
appeal settlements account for $22.7 million in reductions. 
Fourteen percent of cases with CMPs due remained uncollected as of    
December 2002; bankruptcies and inconsistencies in the collections 
process were the primary causes.  At the end of our tracking period,  
550 cases, totaling $11.7 million in CMPs due, were still outstanding.  
  OEI-06-02-00720  NURSING HOME ENFORCEMENT:  THE USE OF CIVIL MONEY PENALTIES  i  E X E C U T I V E   S U M M A R Y  
The most frequent reasons for nonpayment were bankruptcies and cases 
for which there was no documentation that CMS attempted to collect.   
Eight percent of all CMP cases were not yet due by December 2002.  By the end 
of our data tracking period, 339 cases had been delayed for more than a 
year, almost exclusively the result of processing appeals and/or 
bankruptcies. 
CMS does not utilize the full dollar range allowed for CMPs; 
impositions tend toward the lower ends of the ranges.  The median 
per day imposition amount for the most severe (immediate jeopardy) 
cases was about $4,000, at the 15th percentile of the allowable range 
($3,050 to $10,000).  The median per day imposition amount for less 
severe cases involving a CMP was $250, at the 7th percentile of the 
allowable range ($50 to $3,000).   
Cases not appealed took over 6 months to collect; appealed cases 
took substantially longer. The Social Security Act specifies that 
remedies should be designed . . . to minimize the time between the 
identification of violations and final imposition of the remedies. 
Required procedures slow this timeframe for all CMP cases, and 
appealed cases took twice as long to collect as cases not appealed.  In 
those cases, CMSs collection efforts cease until an administrative 
decision is reached; therefore, total collection time in appealed cases 
includes the time attributed to the administrative appeals process. 
RECOMMENDATIONS 
This inspection highlights several conditions within the current 
enforcement system that could be improved.  We recommend that CMS: 
  Provide written guidance to CMS staff and States regarding 
appropriate dollar ranges for individual ratings of scope and 
severity. 
  Provide written guidance to CMS staff to clarify responsibilities 
with respect to past due CMPs and to conduct an internal process 
review that would enable CMS and States to streamline CMP 
processing.  
Agency Comments 
CMS concurred with our recommendations.  The agency further 
commented it has already begun work to promote consistent imposition 
of CMPs and to develop appropriate policy guidance regarding 
  OEI-06-02-00720  NURSING HOME ENFORCEMENT:  THE USE OF CIVIL MONEY PENALTIES  ii  E X E C U T I V E   S U M M A R Y

responsibility for collection of past-due CMPs and streamlined CMP 
processing.  
CMS noted that we included required reductions for appeal waivers, 
appeals, and settlements in a discussion of CMP amounts imposed and 
paid. CMS suggested that an Office of Inspector General (OIG) analysis 
of the collection process should more properly begin with the amount 
remaining after accounting for these required reductions and that doing 
otherwise may imply OIG criticism of CMS performance.  We recognize 
that reductions for appeal waivers, appeals, and settlements are 
required by Federal regulations, and we appreciate CMSs concern in 
this matter.  For this reason, we have made certain to clearly denote 
throughout the report which reductions are obligatory. 
  OEI-06-02-00720  NURSING HOME ENFORCEMENT:  THE USE OF CIVIL MONEY PENALTIES  iii    T A  B L E   O F   C O N T E N T S  
EXECUTIVE SUMMARY ......................................... i 

INTRODUCTION ................................................ 1 

FINDINGS ...................................................... 10 

$81.7 million in CMPs was imposed........................... 10 

CMS does not utilize the full dollar range allowed.............. 13 

Cases took over 6 months to collect ........................... 16 

RECOMMENDATIONS ......................................... 18 

END NOTES .................................................... 20

APPENDIXES .................................................. 24 

A: Discretionary Remedies .................................. 24 

B: Data Description and Cleaning............................ 25 

C:  Terminology............................................. 29 

D: Agency Comments to Draft Report ........................ 31 

ACKNOWLEDGMENTS ......................................... 34 
 OBJECTIVE
To describe reduction, assessment, and collection patterns for civil
money penalties (CMP) imposed by the Centers for Medicare &
Medicaid Services (CMS) in calendar years 2000 and 2001.
BACKGROUND
Sections 1819 and 1919 of the Social Security Act establish the
requirements that nursing homes must meet to participate in the
Medicare and Medicaid programs. The Secretary is responsible for
ensuring that these requirements and their enforcement "are adequate
to protect the health, safety, welfare, and rights of residents and to
promote the effective and effcient use of public moneys.
Nursing Home Enforcement
The Omnibus Budget Reconciliation Act of 1987 (OBRA '87) established
a survey and certification process for States and CMS to verify that
Federal standards are maintained in Medicare and MedicarelMedicaid
dually-certified nursing homes. CMS contracts with State agencies to
survey and certify compliance with Federal standards no less than once
every 15 months. Additional surveys or abbreviated surveys are also
used to investigate complaints. Any deficiency that puts the nursing
home out of substantial compliance, as determined through the surveys
may initiate CMS enforcement action(s).
The State uses information from the surveys along with a nursing
homes past record of compliance to determine what action(s) to take
and/or to recommend. Specific remedies recommended by the State are
usually accepted and imposed by CMS. However, imposed remedies wil
not actually go into effect until after a formal notice period is observed
and the effective date given to the nursing home is reached. At any
time during this enforcement cycle, the State may conduct a "revisit" to
determine if deficiencies have been corrected. During revisits
surveyors may also revise (increase or decrease) deficiency rankings or
cite new deficiencies. Enforcement actions may be rescinded, new
actions imposed, or timeframes adjusted as a result of the revisit
findings.
Each enforcement case (from initial finding of 
deficiency to either
termination of the Medicare contract or substantial 
compliance) is
characterized by rigidity in timeframes, but flexibility in course of
action. The designed purpose is to create an environment in which
OEI-06-02-00720 NURSING HOME ENFORCEMENT: THE USE OF CIVIL MONEY PENALTIES I N T R O D U C T I O N  
enforcement staff may customize the process to appropriately address 
the uniqueness of each situation. 
The following flow chart (Figure 1) provides an overview of the 
enforcement process for Medicare and Medicare/Medicaid dually-
certified nursing homes.  Terms within the flowchart are defined in 
subsequent sections.  A number of variations from this diagram can, 
and will, frequently occur.3  Regardless of any exceptions that may 
occur, immediate jeopardy is to be resolved within 23 days and all 
nursing homes must be in substantial compliance within 6 months or 
CMS is required to terminate the Medicare contract. 
  OEI-06-02-00720  NURSING HOME ENFORCEMENT:  THE USE OF CIVIL MONEY PENALTIES  2  I N T R O D U C T I O N

Figure 1:  Flowchart of the Enforcement Process 
S urveyor finds 
a de ficiency 
S ubsta ntia l 
Cy cle E nds 
C ompliance  Yes 
No 
Th e s tate n oti f ie s th e   fac ili ty 
an d CM S o f reco m m e nd at ion 
Immediate 
to  imp ose i mm  e d iate reme d ies,
J eopardy  Ye s 
 inc lud ing   te rmi  nati on or 
te mporar y manag em  e nt .
No 
Double G 
Rule 
Ye s 
CMS   imp o ses rem  e di es; 
no t ifi es fa c ili t y 
No 
Sta te   n otifi es facil ity 
Opportunity  o f def i cienc ies and ma ndato ry 
to Corr ec t  re m ed ies ; req ui res P O C.  F aci lit y sub m it s Pl an of 
No 
Corre ct ion 
 Yes 
Th e st at e no t ifi es CM S o f 
S ta te n otifi e s faci  lity  reco m m en da t ion t o i m po se  Re visit  Te rm ination 
o f d efi cienc ies and ma ndatory  re m ed ies .  Nonim med iat e  Im me dia te 
re m ed ies ; req ui res P O C  Jeopardy  Je opa rdy 
D eficiencies 
Substa ntia l 
Com plian ce 
F ac i lit y s ub m it s  No  C M S im p ose s re m ed ie s; 
no t ifi es fa c ili t y of ef fec ti ve  Cy cle E nds 
accepta ble P lan 
dat e(s). 
of C orrec ti on 
 Yes 
Imm e dia te 
F aci lit y sub m i ts Pl an o f 
Je opa rdy  Correcti on . 
Revisit 
Nonimmediate 
Je opa rdy  Rem edi es t ake ef fe ct . 
Subs tantial  De fic iencie s  Nonim med iat e 
Je opa rdy 
Com plianc e 
Re visit  D eficiencies 
Im me dia te 
Cycl e Ends  Je opa rdy 
Subs tantial 
Com plianc e 
If  n on-c omp  lia nt for 3 mo nths
Rem  e dies res ci nd ed.   D en ial o f Pa ym ents for New 
A d m is si ons g oesi nt o ef fe c t. 
Rem edi es ta ke effect. 
Cycl e Ends 
If  non-comp  lia nt for  6 mo nth s, 
M ed ica re con tra ct i s te rm inate d. 
Source:  Office of Inspector General Analysis of Documents, Regulations, and Interviews with CMS 
  OEI-06-02-00720  NURSING HOME ENFORCEMENT:  THE USE OF CIVIL MONEY PENALTIES  3  I N T R O D
 U C T I O N  
Scope and Severity 
The Scope and Severity Grid (Table 1) was created so that deficiencies 
could be ranked in accordance with outcomes, e.g., harm to patients, as 
required by regulations.4 The severity of the deficiency refers to the 
degree of harm, while the scope of the deficiency refers to the number 
of affected residents.  These factors are combined to rank deficiencies on 
a scale from A through L.  The ranking is then used to define specific 
levels of compliance and to select appropriate remedies. 
Table 1:  Scope and Severity Grid for Deficiencies 
Deficiency Scope 
Deficiency Severity 
Isolated  Pattern  Widespread 
J  K  L 
Actual or potential for 
Category 3  Category 3  Category 3 
death or serious injury 
Optional: Category 1;  Optional: Category 1;  Optional: Category 1; 
(immediate jeopardy) 
Category 2  Category 2  Category 2 
G  H  I 
Category 2  Category 2  Category 2 
Actual harm that is not 
Optional: Category 1  Optional: Category 1  Optional: Category 1; 
immediate jeopardy 
Temporary 
Management 
D  E  F 
Potential for more than  Category 1  Category 1  Category 2 
minimal harm  Optional: Category 2  Optional: Category 2  Optional: Category 1 
A  B  C 
Potential for minimal 
Substantial  Substantial  Substantial 
harm, substantial 
Compliance  Compliance  Compliance 
compliance exists 
Source:  CMS State Operations Manual 
As shown in Table 2 (next page), the category from which remedies will 
be chosen is determined by the highest scope and severity of the 
deficiencies (i.e., deficiencies with a scope and severity rating closest to 
L) rather than the number of deficiencies.  However, for each category, 
there is an option to impose additional remedies from categories other 
than those indicated by the scope and severity rating, if that is 
determined to be appropriate.  For example, a nursing home with at 
least one deficiency associated with actual harm (scope and severity 
ratings G through I) may receive one or more remedies from Category 2. 
Additional remedies from Category 1 may also be imposed.  
  OEI-06-02-00720  NURSING HOME ENFORCEMENT:  THE USE OF CIVIL MONEY PENALTIES  4  I N T R O D U C T I O N

Table 2:  Discretionary Remedies by Category 
Category 1  Category 2  Category 3 
Directed Plan of Correction  Denial of Payments for New  Temporary Management
  Admissions 
State Monitoring  Denial of Payments for All  Termination
  Individuals 
Optional: 
Directed In-Service Training  Civil Money Penalties  Civil Money Penalties
  $50 - $3,000 per day   $3,050 - $10,000 per day
  $1,000 - $10,000 per instance   $1,000 - $10,000 per instance 
Source:  CMS State Operations Manual 
Remedies 
The enforcement actions available to CMS include both mandatory and 
discretionary remedies. These remedies are used to bring nursing 
homes into compliance. The current remedy options are the result of 
the enforcement strategy established in OBRA 87 and implemented in 
1995.5,6 
Mandatory remedies are those that must be imposed and take effect in 
accordance with statutory requirements, such as extended 
noncompliance ending in termination of the Medicare contract.  
Discretionary remedies are those that may be customized to address 
each nursing homes circumstance; they are selected in accordance with 
the scope and severity grid.  The stated purpose of remedies is to 
ensure prompt compliance with program requirements.7  Additional 
remedies may be imposed by individual States under their licensure 
authority and for Medicaid-only facilities; however, those will not be 
discussed within this report. 
CMS has at its disposal eight discretionary remedies to address 
deficiencies found during a survey. One such remedy is the civil money 
penalty, with fines ranging from $50 to $10,000.  All eight discretionary 
remedies are described in Appendix A. 
Civil Money Penalties  
The CMPs can either be per day or per instance; the fine amount can 
vary depending on the scope and severity of the deficiency. (See  
Table 2.) Per day fines usually begin accumulating on the last day of 
the survey and continue accruing until substantial compliance is 
achieved (i.e., deficiencies are corrected to the scope and severity level of 
  OEI-06-02-00720  NURSING HOME ENFORCEMENT:  THE USE OF CIVIL MONEY PENALTIES  5  I N T R O D U C T I O N  
C or lower). Per instance CMPs (established in 1999) allow a set 
dollar amount to be imposed in relation to a particular deficiency. 
Per day and/or per instance CMPs were imposed in 51 percent of the 
8,309 enforcement cases referred to CMS during the years 2000 and 
2001. They were imposed almost twice as often as the second most 
utilized remedy, denial of payments for new admissions.  
Unlike other remedy options, CMPs have no notice requirement, and 
the effective date is usually retroactive to the last day of the survey.  
For many non-CMP remedies, the notice period and delayed effective 
date serve as an opportunity for nursing homes to achieve compliance 
and, consequently, preempt the remedy from going into effect.   
Once CMS notifies a nursing home of the CMP amount due and 
requests payment, remittance is expected within 15 days, unless a 
payment schedule is negotiated or the nursing home files an appeal.  
Monies not received within the specified timeframes will begin to accrue 
interest.  If collection efforts fail, Medicares fiscal intermediary and the 
appropriate State agency should be notified to withhold payments from 
the home until the balance is paid.8 
Appeals 
Facilities have the right to contest survey findings through an 
administrative appeal and/or an informal dispute resolution process. In 
both cases, there is potential for one or more deficiencies to be 
eliminated, or for a scope and severity rating to be revised. 
Determinations made through an administrative appeal or informal 
dispute resolution are carried through to the enforcement actions 
pending or initiated.  Remedies are retrospectively adjusted to reflect 
the new findings. 
The CMPs differ from other remedies in that CMPs cannot go into effect 
(i.e., monies are not collected) until an administrative appeal decision is 
reached (this does not apply to informal dispute resolutions, nor does it 
extend to judicial appeals that may follow an administrative appeal).  
For this reason, nursing homes may use the administrative appeal to 
delay payment of a CMP.  Other types of remedies are not delayed 
during an administrative appeal.  A Government Accountability Office 
(GAO) report in March 1999 tracked the imposition of CMPs for a 
sample of nursing homes with multiple survey deficiencies identified 
between 1995 and 1998.  In GAOs sample, 115 CMPs were imposed, but 
78 of those had not yet taken effect as of the reports publication. Many 
of the 78 CMPs were still under appeal.9 
  OEI-06-02-00720  NURSING HOME ENFORCEMENT:  THE USE OF CIVIL MONEY PENALTIES  6  I N T R O D U C T I O N  
Appeal Waivers 
Regulations require that CMS or the State reduce the amount of the 
penalty by 35 percent if the nursing home chooses to waive its right to 
appeal the deficiency.10  In issuing this regulation, CMS stated that    
. . . the reduction . . . would reflect the savings to both the government 
and the provider of costs that would otherwise be incurred to formally 
adjudicate the dispute.11  In spite of this waiver program, over 
700 nursing home enforcement administrative appeals have been 
requested each year since 2000. This represents approximately 
20 percent of CMP cases and 7 percent of cases not involving a CMP. 12 
METHODOLOGY 
This study relies on data from CMSs Long-Term Care Enforcement 
Tracking System (LTC), its Civil Money Penalty Tracking System 
(CMPTS), and a set of interviews.  Analysis was conducted on  
100 percent of the data for 9 of the 10 CMS regions (region II was 
excluded as the result of self-reported implementation difficulties), with 
the exception of cases eliminated because data were missing or 
incorrect. 
Scope 
This study is limited to the 4,253 cases involving CMPs imposed by 
CMS as the result of surveys or complaint visits during the years  
2000 and 2001.  The cases were tracked through December 16, 2002.  
Any actions that occurred after that date are not included in this report.  
Also, the data include only those cases that States referred to CMS.  
This means that all cases found to have deficiencies with a scope and 
severity level of A, B, or C, cases in which the nursing home successfully 
corrected after being given an opportunity to correct, and any cases 
mistakenly not referred by the State are not included.  Other 
enforcement authorities rest with the States and the Office of Inspector 
General for the Department of Health and Human Services (HHS); 
however, the authorities and actions based on them are beyond the 
scope of this study.13 
Long-Term Care Enforcement Tracking System 
The LTC database is a compilation of each CMS regions nursing home 
enforcement case files.  In the nine regions used, caseworkers update 
this information as enforcement actions occur.  More detailed 
information about the LTC database is provided in Appendix B. 
  OEI-06-02-00720  NURSING HOME ENFORCEMENT:  THE USE OF CIVIL MONEY PENALTIES  7  I N T R O D U C T I O N  
Significant cleaning of the data was necessary.14  The data cleaning 
process, detailed in Appendix B, included elimination of cases with 
questionable values or pertinent missing data during the affected 
analysis, correction of typographical errors and inconsistent 
information, and deletion of duplicate files.  A total of 4 percent   
(353 records) was eliminated from all analysis.  
Civil Money Penalty Tracking System 
The CMPTS is the centralized CMS database used for tracking the 
collection and allocation of CMP payments.  For analysis involving 
monetary collections, we found it beneficial to capture fields regarding 
CMP payments through the CMPTS data rather than the LTC data.  
The CMPTS data were additionally useful for matching CMP amounts 
with the specific scope and severity levels that were used to determine 
those amounts.   
After significant data cleaning, we found a match rate of more than 
99 percent between CMPTS and LTC.  For calendar years 2000 and 
2001, we found 4,253 CMP cases included in both LTC and CMPTS.  
More detailed information about the CMPTS database is provided in 
Appendix B. 
Interviews 
CMS Regional Staff. Interviews with staff in all CMS regions regarding 
their use of the LTC database allowed us to better understand the 
operational differences between regions.  
Departmental Appeals Board. Interviews with staff at the Departmental 
Appeals Board allowed us to better understand administrative appeals 
as they relate to nursing home enforcement.  Staff also supplied us with 
information on case status and outcomes for particular cases within the 
LTC database and with aggregate numbers on the appeals caseloads. 
Data Limitations 
The LTC data were determined to be the best source of comprehensive 
enforcement data, and therefore are the primary data in our analysis.  
Certain limitations to the data are noted; however, they do not 
compromise the quality of our findings.  The data include only 9 of the 
10 regions, and only cases actually referred from States (rationale for 
excluding region II is included in Appendix B). 
Estimation errors could result from the omission of cases with missing 
information in certain analyses.  Of particular concern are dismissed 
CMPs and payment dates.  The case notes in many files indicated that 
  OEI-06-02-00720  NURSING HOME ENFORCEMENT:  THE USE OF CIVIL MONEY PENALTIES  8  I N T R O D U C T I O N  
revocation of a CMP resulting from a bankruptcy settlement or an 
appeal determination was reflected in the data by deleting the CMP 
from the case record.  Therefore, both the aggregate impositions and 
reductions may be understated.  Also, the data required for computing 
the time between the date the CMP was considered due and the date 
the CMP was paid were available for only 2,605 of the 3,850 applicable 
cases.  We believe that these dates were missing because the cases were 
still in process at the end of our data tracking period.  For this reason, 
the collection time may be significantly underestimated.  
Terminology 
A list of defined terms is located in Appendix C.  This section 
establishes operational definitions, as well as the fundamental 
vocabulary used in the field of long-term care enforcement.  For 
example, the term actual harm (customarily defined as scope and 
severity levels G, H, and I) is expanded to include scope and severity 
level F.  These distinctions are important for precise interpretation of 
our findings. 
Quality Standards 
This study was conducted in accordance with the Quality Standards for 
Inspections issued by the Presidents Council on Integrity and 
Efficiency. 
  OEI-06-02-00720  NURSING HOME ENFORCEMENT:  THE USE OF CIVIL MONEY PENALTIES  9  
 F I N D I N G S
While $81.7 million in CMPs was imposed during   Although CMPs are used 
2000 and 2001, $34.6 million (42 percent) was  frequently (51 percent, 4,253, of all 
8,309 enforcement cases), the CMP 
paid by December 2002.  The difference is 
amounts originally imposed are 
primarily attributable to reductions authorized 
often substantially decreased before 
by regulation and delays in making and 
payment is due. Under current 
collecting payments. 
regulations, systematic reductions, 
appeals, settlements, and bankruptcies are the main factors 
contributing to this decrease.  Of the $81.7 million that was imposed by 
CMS during the years 2000 and 2001, $34.6 million (42 percent) was 
paid by nursing homes. The unpaid portion, $47.1 million (58 percent), 
was most affected by reductions to amounts imposed and by delays in 
due dates.  (See Table 3.) 
Table 3:  Reductions and Delays in Due Dates Most Affected CMP Amounts 
(in millions) 
Total Imposed  $81.7 
Total Paid  $34.6  (42% of imposed) 
Difference  $47.1  (58% of imposed) 
Difference of $47.1 is attributable to:    
Reductions in Amount Due  $22.7  48% of difference 
Appeal Waivers  $11.8 
Appeals and Settlements  $10.8 
Other  $0.1 
Not Yet Due  $12.7  27% of difference 
Appeal  $8.5 
Bankruptcy in Process  $3.7 
Other  $0.5 
Partial Payment Made  $3.3  7% of difference 
Installment: Not Fully Due  $1.8 
Remainder Due is Late  $1.3 
Other  $0.2 
No Payment Made  $8.4  18% of difference 
Late  $5.3 
Bankruptcy*  $2.9 
Extended Due Date  $0.2 
Source:  Office of Inspector General Analysis of LTC and CMPTS data, 2003 
*For this subgroup, available data indicated that the CMPs were due and payable; however, some may be uncollectable. 
Either the case was incorrectly entered into CMPTS as due or the facility is unable to pay subsequent to the resolution of 
the bankruptcy case. 
The unpaid portion included $11.8 million in reductions resulting from 
nursing homes waiving their right to appeal and $10.8 million in 
settlements and reductions resulting from appeals.  An additional   
  OEI-06-02-00720  NURSING HOME ENFORCEMENT:  THE USE OF CIVIL MONEY PENALTIES  10  F I N D I N G
 S  
$12.7 million was not yet due, generally as the result of delays caused 
by appeals or bankruptcy proceedings.  Nonpayment of collectable 
CMPs accounted for only 14 percent ($6.6 million) of the $47.1 million in 
uncollected CMPs during the years 2000 and 2001; $5.3 million from the 
category No Payment Made/Late and $1.3 million from Partial Payment 
Made/Remainder Due is Late. 
Seventy percent of CMP cases received a reduction from the full amount 
imposed prior to a payment request.   
For 70 percent of cases (2,973 of 4,253 cases), an average reduction of  
43 percent of the imposed amount occurred.  Reductions to the amounts 
imposed were the results of nursing homes waiving their rights to 
appeal, appeals, and settlements. 
Table 4: Reductions for Immediate Jeopardy Cases Were the Most Significant 
Average Amount 
Average Amount Due  Average Reduction 
Imposed 
Immediate 
$37,088  $18,695  50% 
Jeopardy 
Actual Harm  $12,796  $8,154  36% 
Source:  Office of Inspector General Analysis of LTC and CMPTS data (4,119 cases) 
On average, as Table 4 shows, the cases with more serious immediate 
jeopardy deficiencies (scope and severity ratings of J, K, and L) received 
a higher percentage reduction to imposition amounts than the less 
serious actual harm cases. 
Appeal Waivers.  For the sample years 2000 through 2001, 59 percent of 
all cases (2,498 of 4,253) elected to waive their right to appeal; in return, 
they received a 35 percent reduction in their CMP amount as required 
by regulation. The waiver option and reduction amount are granted to 
nursing homes through Federal regulations.15  Reductions from the 
appeal waiver totaled $11.8 million for the sample years, with an 
average reduction of $4,717 per case.  Facilities with higher dollar 
CMPs imposed were less likely to use the waiver, opting for the formal 
appeals process.16  The mean CMP imposed for cases that waived their 
rights to appeal was $13,489, while the mean CMP imposed for cases 
requesting appeals was $41,873. 
Appeals and Settlements. Appeals and settlements reduced fine amounts 
in 11 percent of all CMP cases (466 of 4,253).17   Combined, appeals and 
settlements reduced CMP impositions by $10.8 million during the 
  OEI-06-02-00720  NURSING HOME ENFORCEMENT:  THE USE OF CIVIL MONEY PENALTIES  11  F I N D I N G
 S  
2-year sample period. Appeals were requested more frequently in cases 
involving a CMP (20 percent) than in non-CMP cases (7 percent).  
Appeals have the potential to alter the scope and severity of the 
deficiencies that are driving enforcement or to eliminate one or more 
deficiencies altogether.  If the deficiencies driving enforcement action 
are changed, the remedies must be modified to appropriately address 
the newly-defined circumstance. Of the 632 appealed CMP cases from 
2000 and 2001 for which the final decision is known, 74 percent resulted 
in dollar amount reductions.  The average reduction was 56 percent of 
the imposed amount (including pretrial settlements).  Even those 
nursing homes that do not prevail at the hearing benefit by significant 
delays in due dates, deferring direct financial costs.   
Bankruptcies.  Bankruptcies are another source of dollar amount 
reductions that is not fully apparent in Table 3.  CMS is required to 
consider the financial condition of the nursing home prior to imposing a 
CMP.18  For this reason, CMS may reduce the CMP amount 
recommended by the State or decide not to impose a CMP at all.  When 
a CMP is imposed, a nursing home facing financial difficulties will likely 
choose the appeal waiver and receive a 35 percent reduction or will 
request a formal appeal, often resulting in a reduction.  We did not 
consider these reductions to be a direct result of the bankruptcy, but 
realize that financial condition may influence the nursing homes 
behavior.  Additionally, bankruptcy settlements often result in the CMP 
being discharged or reduced. 
Overall, 14 percent of cases where CMPs were imposed involved nursing 
homes that filed for bankruptcy or were part of a chain that filed for 
bankruptcy (608 of the 4,253 CMP cases). Eighteen million dollars in 
CMPs (22 percent of the total amount imposed) were imposed on these 
nursing homes. These facilities paid only 50 percent of the amount that 
was due ($4.3 million of $8.7 million), and only 24 percent of the amount 
that was originally imposed ($4.3 million of $18 million).   
Fourteen percent of cases with CMPs due remained uncollected as of 
December 2002; bankruptcies and inconsistencies in the collections 
process were the primary causes. 
For 2000 and 2001, nearly 550 cases, totaling $11.7 million in CMPs 
that were due and payable, were still outstanding as of December 2002 
($3.3 million for partial payments and $8.4 million for no payments). 
The most frequent reasons for nonpayment were bankruptcies  
(168 cases, which were included in the discussion above of bankruptcy, 
  OEI-06-02-00720  NURSING HOME ENFORCEMENT:  THE USE OF CIVIL MONEY PENALTIES  12  F I N D I N G S  
paid part or none of the amount due) and cases in which the data 
revealed no apparent collection effort (184 cases). 
According to the centralized tracking system for CMP payments, the 
CMPTS, at least 174 of the 550 unpaid cases with data available 
(including some cases with collection activity and some without) 
remained outstanding for more than 1 year.  The majority of the  
174 cases had no payment as of December 2002. In cases of 
nonpayment, CMS may advise the fiscal intermediary and State agency 
to withhold or offset payments for services rendered up to the amount 
that is owed.  However, according to interviews with CMS staff, this is 
not routinely done in all regions. It appears that some regions accept 
the onus of CMP collection efforts, while other regions expressed that 
their role ends after entering the necessary information into CMPTS 
and that the CMS central office is then responsible.  There is 
opportunity for CMPs to remain uncollected for extended amounts of 
time. 
Eight percent of all CMP cases were not yet due by December 2002. 
Of the 4,253 CMP cases, 339 cases (almost exclusively appeal and/or 
bankruptcy cases) had been delayed for more than a year as the result 
of required abeyances (temporary inactivity).  A CMP in the process of 
an appeal or bankruptcy cannot be collected until a decision is made as 
to whether all or a portion of the imposed amount should be dismissed.  
These cases (representing $12.7 million in CMPs imposed) were 
initiated by a survey performed during the years 2000 or 2001.  
However, there was no amount due entered into CMPTS as of 
December 2002, the end of our data tracking period, nor was there 
evidence of collection efforts by CMS regional offices in the databases 
analyzed. Although the majority of these cases will likely have some 
reduction to their CMPs, reduction amounts are unknown. 
CMS does not utilize the full dollar range  The CMP dollar amounts are 
allowed for CMPs; impositions tend toward the  required to be imposed within 
defined ranges, according to the 
lower ends of the ranges. 
degree of harm caused by the 
deficiency, i.e., scope and severity rating.19  The ranges are inclusive of 
multiple scope and severity ratings and leave a great deal of discretion 
to regional enforcement staff.  In practice, the allowable ranges are not 
utilized to their fullest extent. 
  OEI-06-02-00720  NURSING HOME ENFORCEMENT:  THE USE OF CIVIL MONEY PENALTIES  13  F I N D I N G S  
Figure 2:  Per Day Imposition Amounts for Actual Harm and Immediate Jeopardy 
Source:  Office of Inspector General Analysis of LTC and CMPTS data, 2003 
Per Day CMPs. Forty percent of documented immediate jeopardy cases 
had CMPs imposed at the bottom of the allowable per day range 
$3,050 (259 of 630 cases).  In actual harm cases, over 80 percent of cases 
had CMPs imposed below the 15th percentile of the allowable range 
$500 or less (1,856 of 2,229 cases). The median-imposed CMP for 
immediate jeopardy cases was $4,000 (the 14th percentile of the 
allowable range). The median-imposed CMP for actual harm cases was 
$250 (the 7th percentile of the allowable range). The distributions are 
displayed in Figure 2 (next page). 
The CMPs were imposed at the maximum amount in 8 percent of 
immediate jeopardy cases versus 1.2 percent of actual harm cases. In 
many of the immediate jeopardy cases for which the highest CMP 
amount was utilized, noncompliance was resolved within only a few 
days.  (Deficiencies constituting immediate jeopardy are often corrected 
before the surveyors leave the nursing home.) 
Per instance CMPs.  Per instance CMPs do not accrue over time and 
may be imposed in amounts between $1,000 and $10,000.  In immediate 
jeopardy cases, where per day CMP totals could rise to tens or even 
hundreds of thousands of dollars, per instance CMPs were chosen in 
over half the cases. Two-thirds of per instance CMPs were imposed at 
nonaccruing amounts of $5,000 or less, and over 30 percent of actual 
harm cases were imposed at the minimum amount of $1,000.  The 
distributions are displayed in Figure 3 (next page).  
  OEI-06-02-00720  NURSING HOME ENFORCEMENT:  THE USE OF CIVIL MONEY PENALTIES  14  F I N D I N G S  
Figure 3:  Per Instance Imposition Amounts for Actual Harm and Immediate 
Jeopardy 
Source:  Office of Inspector General Analysis of LTC and CMPTS data, 2003 
The dollar ranges and availability of per instance CMPs allow CMS to 
customize remedies to address the unique circumstances of each 
instance of noncompliance; however, these options also allow for 
remedies that have minimal impact on noncompliant homes. For 
example, one nursing home was assessed only the minimum per 
instance CMP of $1,000 during a period of noncompliance that included 
a deficiency of widespread immediate jeopardy relating to quality of 
care.20   According to CMS, per instance CMPs may be used when high 
CMPs are warranted in an effort to avoid putting nursing homes out of 
business. A closure would displace numerous beneficiaries, potentially 
disrupting their care.21 
Total Impositions. Impositions for combined per day and per instance 
CMPs rose above $20,000 in less than 25 percent of cases (939 of   
4,253 cases) and above $50,000 in less than 10 percent of cases (384 of 
4,253 cases). This may also be the result of CMSs requirement to 
consider the nursing homes financial status when determining 
imposition rates.22 
  OEI-06-02-00720  NURSING HOME ENFORCEMENT:  THE USE OF CIVIL MONEY PENALTIES  15  F I N D I N G S  

FIGURE 4:  Appealed Cases Took Significantly Longer to Collect 
Source:  Office of inspector General, Analysis of Appealed CMP Cases2003 
The Social Security Act 
Cases not appealed took over 6 months  stipulates that imposition of 
to collect; appealed cases took  remedies should be designed 
to minimize the time 
substantially longer. 
between the identification of 
violations and final imposition of the remedies.23  For CMPs imposed 
(excluding appealed cases) in 2000 and 2001, it took approximately 197 
days (over 6 months) after a deficiency was found to actually collect the 
money.24  Much of this time is the result of procedures that are required 
of CMS.  
Required procedures increase the time between identification of violation 
and collection of the CMP. 
For most CMPs (i.e., per day CMPs), final amounts cannot be calculated 
until compliance is achieved, as determined through a revisit.25  For 
nonappealed cases, the final revisit affirming compliance (often 
retrospectively) occurred an average of 74 days (n = 3,376) after the 
survey initially finding a deficiency(ies).  Once compliance is achieved, 
the State survey team must forward the information to the CMS 
regional office, which is then responsible for notifying the nursing home 
of the final CMP amount and due date.  In addition, nursing homes 
must be granted 60 days, during which the nursing home may request 
an appeal for one or more deficiencies or may waive its right to appeal.  
In most circumstances, the CMP will not become due until at least 15 
days after the expiration of the 60-day period or until an appeal request 
  OEI-06-02-00720  NURSING HOME ENFORCEMENT:  THE USE OF CIVIL MONEY PENALTIES  16  F I N D I N G S  
or waiver is received by CMS.  On average, it took 89 days (n=3,077) 
from the final revisit until the CMP was due.  Payments were made an 
average of 32 days (n = 1,482) after the actual due date.26 
Appealed cases took significantly longer to collect than cases not appealed.   
Excluding time intervals that were exceptionally long, appealed cases 
took an average of 420 days to collect, a 110 percent increase in time 
over nonappealed cases (n = 399).27  (See Figure 4.)  The increase 
appears to be entirely attributable to abeyances resulting from the 
appeals process.  The CMPs do not become due until the appeal is 
settled, or a decision is reached.   Consequently, nursing homes are 
insulated from the repercussions of enforcement by well over a year. 
For appealed cases, the collection time line may be significantly 
underestimated, as  payment dates were missing from 50 percent of 
cases.  Those cases were likely still in the appeals process at the point 
that our data collection efforts ended.  The HHS Departmental Appeals 
Board staff explained that the steps in the appeals process include time 
needed by the parties to prepare their cases or to negotiate. 
Additionally, the time period from the final revisit to the CMP due date 
includes some portion of the 60 days during which the nursing home 
may request a hearing, and another 60 days after the Administrative 
Law Judges decision to request Board review.28 
  OEI-06-02-00720  NURSING HOME ENFORCEMENT:  THE USE OF CIVIL MONEY PENALTIES  17  In this inspection, we found significant reductions in CMP amounts due
and paid. These reductions, however, are permissible and many are
required under the current regulations. While CMPs were designed to
allow great flexibility in the amount imposed, in practice, the majority
are imposed at the low end oftheir allowable range. Further, we found
that process delays substantially extend the time for collection of CMP
payments; and in some cases, collections did not appear to be pursued.
CMPs are the most widely used discretionary remedies by CMS and are
often the only enforcement action noncompliant nursing homes will
experience. As stated in the regulations, CMPs, along with other
remedies, are designed to ensure prompt compliance with quality of care
and safety standards. Our findings of routine reductions, combined
with impositions at the lower end ofthe dollar range, and delays in
collections suggest that current usage patterns could be improved.
We make the following recommendations to CMS in an effort to improve
CMS's ability to utilize the CMP as an enforcement tool.
Provide written guidance to CMS staff and States regarding appropriate dollar
The current guidelines in
ranges for individual scope and severity ratings. 
the State Operations Manual group three to four individual scope and
severity ratings into a single allowable dollar range; in practice, most
CMPs are imposed at the lower end of their range. CMS's central offce
should revise the current guidance to encourage CMS regional offces to
fully utilize the designated ranges. While maintaining the flexibility to
address extreme situations or a nursing home s compliance history, the
guidance should indicate how individual scope and severity ratings
relate to specific dollar amounts or narrower dollar ranges, such that
the full range of the scale is utilized. CMS's regional offces should then
begin regular reviews for a sample of CMP impositions to ensure that
this guidance is being followed.
Provide written guidance to CMS staff to clarif procedures with respect to past
due CMPs and conduct an internal process review that would enable CMS and
It is our understanding that CMS'
States to streamline CMP processing. 
regional offces do not always track CMP collection efforts after the
nursing home is notified that payment is due. Without reliable
information on outstanding balances, CMS cannot utilize its most
effective means of collection, withholding payments. Outstanding CMPs
should be systematically referred to fiscal intermediaries and State
agencies for collections. In addition, required procedures increase the
OEI.06.02-00720 NURSING HOME ENFORCEMENT: THE USE OF CIVIL MONEY PENALTIES R E C O M M E N D A T I O N S  
time between identification of violations and collection of the CMP to 
almost six months.  Scrutiny of the processes may reveal opportunities 
to minimize this time, as required by the Social Security Act. 
Agency Comments 
CMS concurred with our recommendations.  The agency further 
commented that it has already begun work to promote consistent 
imposition of CMPs and to develop appropriate policy guidance 
regarding responsibility for collection of past-due CMPs and 
streamlined CMP processing.   
CMS noted that we included required reductions for appeal waivers, 
appeals, and settlements in a discussion of CMP amounts imposed and 
paid. CMS suggested that an Office of Inspector General (OIG) analysis 
of the collection process should more properly begin with the amount 
remaining after accounting for these required reductions and that doing 
otherwise may imply OIG criticism of CMS performance. 
We recognize that reductions for appeal waivers, appeals, and 
settlements are required by Federal regulations, and we appreciate 
CMSs concern in this matter.  For this reason, we have made certain to 
clearly denote throughout the report which reductions are obligatory.  
CMS also provided technical comments for which we made revisions 
where appropriate.  The full text of CMSs comments is presented in 
Appendix D. 
  OEI-06-02-00720  NURSING HOME ENFORCEMENT:  THE USE OF CIVIL MONEY PENALTIES  19    E N D N O T E S   
1 Sections 1819(f)(1) and 1919(f)(1) of the Social Security Act. 
2 In situations that are not deemed to pose a threat of serious injury and 
where no historical pattern of noncompliance is found, the State may 
afford the facility an opportunity to correct prior to recommending 
remedies to CMS.  If deficiencies are not corrected or if an 
opportunity to correct is denied, the State should then send the case 
to CMS with a recommendation for particular enforcement remedies to 
be imposed. Cases that do show a pattern of noncompliance and cases 
that are found to pose a threat of serious injury must be reported to 
CMS immediately so that action can be taken. 
3 Some of those variations include: 
 Category 1 remedies are generally imposed by the State at the time of 
the initial notification to the facility.  Formal notice is not required 
for this class of action. 
 Revisits may occur at any time during the process.  A finding of

substantial compliance during a revisit will always end the 

enforcement cycle.  On average, two revisits are performed during

each enforcement cycle.

 Revisits finding improvements or worsening of deficiencies could 
result in a change in effective dates or CMP amounts, thus requiring 
additional notifications and giving the facility an additional 
opportunity to establish substantial compliance. 
 Additional steps may be taken to resolve an unacceptable Plan of 

Correction or a disagreement between the State and CMS.

4 42 CFR  488.404. 
5 A number of changes resulted from OBRA 87.  These statutory changes 
eliminate the distinction between level A and level B participation 
requirements; add additional remedies for use in enforcement action; 
codify the informal dispute resolution process; offer one hearing to 
dispute findings; classify seriousness of deficiencies for the purpose of 
  OEI-06-02-00720  NURSING HOME ENFORCEMENT:  THE USE OF CIVIL MONEY PENALTIES  20  imposing a remedy through the use of scope and severity; establish 
and define substantial compliance; define substandard quality of 
care; establish two civil money penalty ranges; explain repeat 
deficiencies for purposes of increasing a civil money penalty; and 
establish a tie breaker rule, which applies when there are 
disagreements regarding enforcement between CMS and the State 
agency. 
6 Before the 1987 legislation, the only adverse actions available to [CMS] 
and the States against facilities that were determined to be out of 
compliance with Federal participation requirements included 
termination, nonrenewal, or automatic cancellation of provider 
agreements; denial of participation for prospective facilities; and 
denial of payment for new admissions in lieu of termination when the 
facilities had deficiencies that did not pose an immediate and serious 
threat to the health and safety of residents.  Source: 59 FR 56116, 
November 10, 1994. 
7 42 CFR  488.402 and 59 FR 56116, November 10, 1994. 
8 The collected money is divided between the Medicare general fund and 
the State Medicaid Agency in the same proportion as the split of 
Medicare and Medicaid beneficiaries in the offending facility.  The 
States use of these funds is limited to programs that assist 
noncompliant facilities in achieving regulatory standards. 
9 Nursing Homes:  Additional Steps Needed to Strengthen Enforcement 
of Federal Quality Standards (GAO/HEHS-99-46, March 1999). 
10 42 CFR  488.436(b). 
11 59 FR 56116, November 10, 1994. 
12 Aggregate numbers of nursing facility enforcement appeals were 
provided by the Departmental Appeals Board.  In the calendar years 
2000, 2001, and 2002, the numbers of hearing requests were 769, 773, 
and 710, respectively. 
13 States oversee licensure of individual facilities and certification of 
Medicaid facilities.  Failure to comply with State requirements may 
  OEI-06-02-00720  NURSING HOME ENFORCEMENT:  THE USE OF CIVIL MONEY PENALTIES  21  result in the application of remedies or sanctions including money 
penalties.  OIG may exclude providers or impose CMPs for failure to 
meet professionally recognized standards of care, licensure actions 
taken by the State, and certain civil and criminal convictions.    
14 Data cleaning is defined as the process of checking data for errors 
and correcting those errors whenever possible.  SPSS, Inc., 
Clementine 6.0 Users Guide; SPSS; Chicago, IL: 2001. p. 361. 
15 42 CFR  488.436(a) and 42 CFR  488.436(b). 
16 The percent of cases requesting waivers is much higher than the 
percent requesting hearings (59 percent vs. 20 percent).  However, for 
cases where the CMP imposed totals over $50,000, 49 percent 
requested hearings compared with 33 percent that requested waivers. 
17 Appeal rights and settlements are provided by regulation at 42 CFR     
 488.432, 498.40, and 488.444, respectively. 
18 42 CFR  488.438(f)(2). 
19 42 CFR  488.408. 
20 Case notes revealed that this Kansas facility filed for bankruptcy in the 
same year as the $1,000 CMP imposition and that the facility also 
received a discretionary denial of payments for new admissions. 
However, the facility was cited with an isolated immediate jeopardy in 
quality of care just months prior.  For those two enforcement cycles, 
the facility was in compliance only 3 weeks out of an 8-month period. 
21 CMS technical comments to draft report dated November 26, 2004. 
22 42 CFR  488.438(f)(2). 
23 Sections 1819(h)(2)(B) and 1919(h)(2)(A) of the Social Security Act. 
24 Cases for which the identified deficiency constituted only past 
noncompliance and cases that remained outstanding at the end of our 
tracking period were omitted from time analysis. 
  OEI-06-02-00720  NURSING HOME ENFORCEMENT:  THE USE OF CIVIL MONEY PENALTIES  22  25 In a few situations, a revisit is not required to assert compliance. 
26 The number of days attributed to each interval (e.g., survey dateto 
final revisit) d
 uring the collection process totals 197.  However, the 
number of days from the survey dateto the paid date
 averages

160 because the calculation is based on a different number of 

observations.  Payment dates were missing on approximately  

20 percent of the data; so the latter figure represents a smaller 

number of observations. 

27 Values for time intervals that were beyond three standard deviations 
from the mean were excluded so that questionable values did not 
affect our means. 
28 December 2002:  Telephone interview with Departmental Appeals 
Board staff. 
  OEI-06-02-00720  NURSING HOME ENFORCEMENT:  THE USE OF CIVIL MONEY PENALTIES  23    A P P E N D I X   ~   A
Discretionary Remedies 
Termination of the Provider Agreement (42 CFR  488.456)Facility 
ceases to provide care for Medicare residents;  Medicare residents must 
be transferred to another facility. 
Civil Money Penalties (42 CFR  488.430-488.444)A per day or per 
instance fine ranging from $50 to $10,000. 
Denial of Payments for New Admissions (42 CFR  488.417)Denial of 
payments for new Medicare or Medicaid admits. 
Denial of Payments for All Patients (42 CFR  488.418)Denial of 
payments for all Medicare and Medicaid residents by CMS. 
State Monitoring (42 CFR  488.422)Professional monitor identified 
by the State agency oversees the correction of cited deficiencies as a 
safeguard against further harm to residents. 
Directed Plan of Correction (42 CFR  488.424)A plan which the 
State or regional office develops to require a nursing home to take 
action within specified timeframes; differs from a traditional Plan of 
Correction in that an entity other than the nursing home develops it. 
Directed In-Service Training (42 CFR  488.425)Implementation of an 
educational program designed to increase the knowledge and skill of 
direct care staff regarding an issue of noncompliance. 
Closure of Facility or Transfer of Residents or Both (42 CFR 
 488.426)In emergency situations, a State may close a nursing 
home and transfer all residents including private pay patients. 
OEI-06-02-00720  NURSING HOME ENFORCEMENT:  THE USE OF CIVIL MONEY PENALTIES  24    A P P E N D I X   ~   B
Data Description and Cleaning 
The primary data for this study were obtained from the LTC and were 
supplemented with data from the CMPTS.  The primary functions of 
these databases are administrative, e.g., reporting and case tracking.   
Long-Term Care Enforcement Tracking System 
This system was developed by CMS region V office as a tool to assist in 
the implementation of the new enforcement regulations.1  The system 
was voluntarily adopted by several CMS regions in 1998 and 1999, with 
all regions required to use it by January 2000. 
The LTC database is believed by CMS staff to be the best electronic 
source of enforcement information in almost every region.  Combining 
basic nursing home descriptors with all aspects of the enforcement 
process and differentiating imposed and effected remedies, the LTC 
data contain significantly more information about the enforcement 
process than does the Online Survey, Certification, and Reporting 
database. 
Civil Money Penalty Tracking System 
The CMPTS is the centralized CMS database used for tracking the 
collection and allocation of CMP payments.  For analysis involving 
monetary collections, we found it beneficial to capture fields regarding 
CMP payments through the CMPTS data rather than the LTC data.  
The CMPTS data were additionally useful for matching CMP amounts 
with the specific scope and severity levels that were used to determine 
those amounts.  
Although payment information may be collected in LTC, the process is 
such that regional staff must independently look up collections through 
CMPTS and enter that information into LTC. Payments are received at 
the CMS central office in Baltimore, MD, and payment information is 
entered there.  Many CMS regional staff advised us that they do not 
consistently follow up with this information, or that they keep this 
information in a separate spreadsheet. 
1 New regulations refers to 42 CFR Chapter IV, Subpart F:  Enforcement of Compliance for 
Long-Term Care Facilities with Deficiencies. 
OEI-06-02-00720  NURSING HOME ENFORCEMENT:  THE USE OF CIVIL MONEY PENALTIES  25  A P P E N D I X ~ B  
LTC/CMPTS Match 
The CMPTS data were matched to the LTC data using a CMP 
Collection Number that was present (in parts or whole) in both 
databases.  Cases that did not match initially were examined, CMP 
Collection Numbers were added, wherever necessary, and cases were 
combined when information indicated that it was necessary. For 
example, in many cases the CMP information for a single cycle was split 
across several cases in CMPTS; and it was necessary to combine them to 
one case and delete the duplicate information.  Following the cleaning 
procedure, the databases were merged and slightly over a 99 percent 
match rate was achieved.  Only 9 cases in LTC did not match the 
CMPTS, and 18 cases were found only in the CMPTS database. 
Additional data cleaning was necessary to incorporate information 
typed in note fields and to address incorrectly entered data.   
Data Cleaning 
Data for 8,662 cases were in the original LTC file received for the years 
2000 and 2001 and 8,309 cases remained after the cleaning procedure, 
of which 51 percent had CMPs imposed.   
Cleaning actions were based on information obtained from various 
sources. Staff at all 10 regional offices were interviewed to gather 
information about the use of the LTC at the regional level.  Information 
obtained included the data entry processes and the extent of use of the 
various screens and data fields within each region. As analyses were 
performed, outliers and questionable values were examined on an 
individual case basis. Information used to verify the validity of data 
included alternative fields in both databases and the notes written in 
the LTC file.   
Scope of the Data 
Regional office interviews resulted in the omission of all data from one 
region.  Staff from region II reported that there were database 
implementation difficulties.  Exploration of data from this region 
indicated that there were excessive missing data and obvious data entry 
errors, raising concerns about reliability and validity.  For these 
reasons, data from region II were omitted from all analyses (253 cases).   
Analyses included only data from cycles in which the first visit was 
conducted in the years 2000 and 2001.  We based our decision to use 
those years on two factors:  (1) not all regions were consistently entering 
information in the LTC prior to 2000 and (2) data from 2002 were not 
yet complete, since many cycles were still in progress. 
OEI-06-02-00720  NURSING HOME ENFORCEMENT:  THE USE OF CIVIL MONEY PENALTIES  26  A P P E N D I X ~ B  
Additional Data Cleaning Actions 
Listed below are the additional actions that were taken to clean the 
data. 
Some cases were not included in all files.  The data were structured in 
multiple relational databases.  Some cases were deleted in the primary 
database, but were not deleted across all files. Seventy-seven cases 
were deleted for this reason. 
Nonenforcement cases were deleted.  Eighteen cases were referred or 
entered inappropriately and did not require enforcement actions.  These 
cases were deleted because they were outside the scope of this study. 
Duplicate cases were corrected and deleted.  Five cases that were 
duplicated in the LTC during the database implementation process 
were deleted. There were also 34 duplicate records in the CMPTS, for 
which the total due and paid for a single cycle had been dispersed across 
several records.  These amounts were combined into a single record, and 
the duplicates were deleted. 
Cases in which the CMP status was designated incorrectly were 
corrected.  There were 241 cases for which the CMP was rescinded after 
an Informal Dispute Resolution reduced the scope and severity of the 
deficiencies.  In addition, 53 cases were marked as CMP cases in error. 
For another 126 cases, the CMP was never imposed because the nursing 
home came into compliance quickly, paperwork was too late, the 
nursing home was having financial difficulty, the CMP was past the 
statutory limit of two survey cycles, or the CMP was rescinded.  These 
cases had originally been marked in the LTC as CMP cases and were 
recoded to indicate that they were not.  Associated information was 
deleted from the CMPTS so that monetary totals would not be 
inappropriately included in analyses, because technically there was 
never an amount due.  The CMP indicator variable was recoded for 
three cases where CMPs had been imposed, and they were not coded as 
CMP cases. 
Missing and incorrect dates were added or corrected.  Many of the dates 
necessary for analysis were available from more than one source.  When 
analyses indicated the date was not correct, alternative data sources 
were reviewed.  Date corrections were made for 81 cases.  
Dollar amounts were corrected.  Corrections were made to the amount 
imposed for 41 cases in the LTC, for which the amount was missing or 
entered in error. Information regarding the amount of the CMP due 
OEI-06-02-00720  NURSING HOME ENFORCEMENT:  THE USE OF CIVIL MONEY PENALTIES  27  A P P E N D I X ~ B  
and collected was available from both the LTC and CMPTS. 
Mismatches between the amounts due and paid often indicated that 
data were entered into the wrong CMPTS fields.  One-hundred thirty 
corrections were made using information contained in the LTC.   
The amount due was deleted in 12 cases because the CMPs had been 
excused for bankruptcy or as the result of an appeal.  Corrections were 
made for 77 appealed cases that had been settled or dismissed, and the 
final amount due had not been entered.  Payment information entered 
in error was corrected for 82 cases. 
Notes and other sources of information indicated that a variable was 
miscoded.  Information from alternative sources facilitated       
1,106 corrections for miscoded or missing information.  These 
corrections included denoting bankruptcy cases, recoding the CMP 
payment status, correcting remedies imposed and effectuated, inserting 
CMP collection numbers, denoting immediate jeopardy cases, and 
adding hearing outcomes. This was possible because multiple indicators 
were present.  For example, cases with a scope and severity rating of J, 
K, or L but having no designation as an immediate jeopardy case were 
revised to appropriately designate the case as immediate jeopardy. 
Questionnable dates were deleted from time analysis.  Questionnable 
dates were found to be problematic in time-related analysis.  They 
skewed the distribution so that the average time to collect CMPs 
appeared to be inflated. Also, they did not appear to be legitimate for 
one reason or another.  For these reasons, observations with values 
beyond three standard deviations from the mean were omitted from 
individual analysis. 
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Terminology 
For the purposes of this study, we used the following terms and 
definitions: 
Actual HarmActual harm is typically used to describe deficiencies 
with scope and severity ratings of G, H, and I.  For the purposes of this 
report, the term actual harm refers to deficiency findings of (1) actual 
harm that is not immediate jeopardy and (2) a widespread potential for 
more than minimal harm.  This term is used to represent all deficiencies 
that qualify for Category 2 remedies.  Scope and severity ratings of  F, 
G, H, and I are included. 
CaseA case includes all the enforcement activity that happens with 
respect to a particular nursing home during a single period of 
noncompliance. Enforcement staff refer to this as a cycle.  A nursing 
home may have more than one case in our analysis and a case may have 
more than one CMP. 
Double G RuleCases in which nursing homes were cited for 
deficiencies of a level of G or higher on the scope and severity scale on 
the current survey and also the previous standard survey or any 
intervening survey require immediate action by CMS.   
DueRefers to cases for which the final amount of the CMP has been 
decided (hearing waiver received, settlement reached, or the date to 
waive a hearing or file an appeal has passed) and the date for which the 
CMP is listed as due and payable in the CMPTS.  If this information is 
not available in the CMPTS, an alternative date is used that equates to 
15 days after the date of the last regional office letter to the nursing 
home stating that the CMP is due.  
Immediate JeopardyDeficiency findings that constitute an actual or 
potential for death or serious injury. This term is used to represent all 
deficiencies that qualify for Category 3 remedies. Scope and severity 
ratings of J, K, and L are included. 
Nursing HomeA Medicare or Medicare/Medicaid dually certified 
skilled nursing facility.  A nursing home may also be referred to as a 
facility. 
Opportunity to CorrectA period of time (usually 60 days or less) 
afforded to noncompliant nursing homes during which they can return 
to compliance without the involvement of the CMS regional offices. 
OEI-06-02-00720  NURSING HOME ENFORCEMENT:  THE USE OF CIVIL MONEY PENALTIES  29  A P P E N D I X ~ C  
Facilities with immediate jeopardy deficiencies or a historical pattern of 
noncompliance are denied this opportunity. 
Paid, UnpaidIs limited to payments entered into the CMPTS prior to 
December 16, 2002. This represents a functional limitation of our data 
collection period.   
Plan of CorrectionA formal statement by the nursing home informing 
the State and CMS of actions that will be taken to address deficiencies 
identified through a survey. 
RevisitAn abbreviated survey used to check the status of identified 
deficiencies. 
Substantial ComplianceCompliance with Medicare regulations or 
deficiencies in the A, B, or C level. 
UncollectableUncollectable cases include those currently in an 
appeals process or bankruptcy status. 
OEI-06-02-00720  NURSING HOME ENFORCEMENT:  THE USE OF CIVIL MONEY PENALTIES  30    A P P E N D I X   ~   D
Agency Comments to Draft Report 
OEI-06-02-00720  NURSING HOME ENFORCEMENT:  THE USE OF CIVIL MONEY PENALTIES  31  A P P E N D I X ~ D  

OEI-06-02-00720  NURSING HOME ENFORCEMENT:  THE USE OF CIVIL MONEY PENALTIES  32  A P P E N D I X ~ D  

OEI-06-02-00720  NURSING HOME ENFORCEMENT:  THE USE OF CIVIL MONEY PENALTIES  33  This report was prepared under the direction of Judith V. Tyler
Regional Inspector General for Evaluation and Inspections in the Dallas
regional offce, and Kevin Golladay, Assistant Regional Inspector
General. Other principal Offce of Evaluation and Inspections staff who
contributed include:
Amy Ashcraft, Project Leader
Clark Thomas, Program Analyst
Susan Wolfe, Program Analyst
Sandy Khoury, Program Specialist
Barbara Tedesco, Mathematical Statistician
OEI.06.02.00720 NURSING HOME ENFORCEMENT: THE USE OF CIVIL MONEY PENALTIES