State Operations Manual 
Chapter 10  Survey and Enforcement Process for Home 
Health Agencies
 
Table of Contents 
(Rev. 114, Issued: 04-25-14) 
 
Transmittals for Chapter 10 
 
10000 - Introduction 
10000.1 - Expectations of the Regulations 
10001 - Definitions and Acronyms 
10002 - Home Health Agencies  Citations and Description 
10002.1 - Citations 
10002.2 - Description 
10002.3 - Home Health Services 
10003 - Emphasis, Components, and Applicability 
10003.1 - Introduction 
10003.2 - Survey and Certification Responsibility 
10004 - Survey Team 
10004.1 - Survey Team Size 
10004.2 - Survey Team Composition 
10004.3 - Length of Survey 
10004.4 - Surveyor Qualifications 
10005 - Conflicts of Interest for Federal and State Employees 
10005.1 - Introduction 
10005.2 - Conflicts of Interest 
10005.3 - Examples of Potential Conflicts of Interest 
10005.4 - Report and Investigation of Improper Acts 
10006 - Survey Protocol 
10006.1 - Introduction 
10006.2 - Types of Surveys 
10006.3 - Standard Survey 
10006.4 - Initial Certification Surveys 
10006.5 - Recertification of Participating Facilities  
10006.6 - Post Survey Revisit (Follow-Up) 
10006.7 - Abbreviated Standard Survey 
10006.7A - Complaint Investigations 
10006.7B - Substantial Changes in an HHAs Organization and Management 
10006.8 - Partial Extended Survey 
10006.9 - Extended Survey 
10007 - Survey Frequency 
10007.1 - Citations 
10008 - Unannounced Surveys 
10008.1 - Citations  10008.2 - Scheduling Requirements 
10008.3 - CMS Review of State Scheduling Procedures 
10008.4 - Penalty for Announcing a Survey 
10009 - Informal Dispute Resolution (IDR) 
10009.1 - Introduction 
10009.2 - Purpose 
10009.3 - Mandatory Elements of IDR 
10010 - Alternative Sanctions for Home Health Agencies 
10010.1- Statutory Basis 
10010.2 - General Provisions 
10010.3 - Effect of Sanctions on HHAs that participate in Medicare via Deemed 
Status through an Accrediting Organization  
10010.4 - Effect of Sanctions on HHA Branches 
10010.5 - Available Sanctions 
10010.6 - Factors to be considered in selecting sanctions 
10011 - Action when deficiencies pose immediate jeopardy 
10011.1 - Statutory and Regulatory Basis 
10011.2 - Purpose 
10012 - Enforcement Action When Immediate Jeopardy Exists 
10013 - Action When Deficiencies are Condition-level But Do Not Pose Immediate 
Jeopardy. 
10014 - Guidance for Individual Sanctions 
10015 - Temporary Management 
10015.1 - Introduction 
10015.2 - Purpose 
10015.3 - Authority of Temporary Manager 
10015.4 - Selection of Temporary Manager 
10015.5 - Conditions of Temporary Management 
10015.6 - Orienting and Supervising Temporary Manager 
10015.7 - Notice of Imposition of Temporary Management 
10015.8 - Duration of Temporary Management 
10016 - Suspension of Payment for All New Medicare Admissions 
10016.1 - Introduction 
10016.2 - Notice of Sanction 
10016.3 - Effect of Sanction on Patients Admitted before the Effective Date of 
Sanction 
10016.4 - Duration 
10017 - Civil Money Penalties 
10017.1 - Basis for Imposing Civil Money Penalties  
10017.2 - Determining Amount of Civil Money Penalty 
10017.3 Adjustments to penalties 
10018 - Range of Penalty Amounts 
10018.1 - Upper range of penalty 
10018.2 - Middle range of penalty 
10018.3 - Lower range of penalty 
10018.4 - Per instance civil money penalty  10018.5 - Decreased penalty amounts 
10018.6 - Increased penalty amounts 
10018.7 - Considerations in determining the penalty amount 
10019 - Suggested Penalty Amounts 
10019.1 - Upper Range Civil Money Penalties for Immediate Jeopardy Citations 
10019.2 - Middle Range Penalties for Non-Immediate Jeopardy Citations 
10019.3 - Lower Range Penalties for Structure and Process Citations Not Directly 
Related to Patient Care 
10020 - Procedures 
10020.1 - Notice of imposition of civil money penalty 
10020.2 - Sending the Notice 
10020.3 - Appeal of Noncompliance That Led to Imposition of Civil Money Penalty 
10020.4 - HHA Waives Right to a hearing 
10020.5 - Accrual and duration of per day penalty 
10020.6 - Amount of per instance penalty 
10020.7 - Duration of Civil Money Penalty 
10020.8 - Duration of per day penalty when there is immediate jeopardy 
10020.9 - Duration of penalty when there is no immediate jeopardy 
10020.10 - When Penalty Is Due and Payable 
10021 - Notice of Amount Due and Collectible 
10021.1 - Computation and notice of total penalty amount 
10021.2 - When a penalty is due and payable 
10021.3 - Method of Payment 
10021.4 - Settlement of Civil Money Penalty 
10021.5 - Offsets  
10022 - Disbursement of Recovered CMP funds 
10023 - Directed plan of correction 
10023.1 - Introduction 
10023.2 - Purpose 
10023.3 - Imposition of a Directed Plan of Correction 
10023.4 - Elements of a Directed Plan of Correction 
10023.5 - Achieving Compliance 
10023.6 - Notice of Imposition of Directed Plan of Correction 
10024 - Directed In-service Training 
10024.1 - Introduction 
10024.2 - Purpose  
10024.3 - Appropriate Resources for Directed In-Service Training Programs 
10024.4 - Further Responsibilities 
10024.5 - Notice of Imposition of Directed In-Service Training 
10025 - Effect of termination on the HHAs patients  10000 - Introduction 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
Chapter 10 implements the home health agency (HHA) survey, certification, and enforcement 
regulations at 42 CFR Part 488. No provisions contained in this chapter are intended to 
create any rights or sanctions not otherwise provided in law or regulation. 
 
To participate as an HHA in the Medicare program, an agency or organization must meet the 
definition of an HHA as defined in section 1861(o) of the Social Security Act (the Act). 
Additionally, HHAs must meet the requirements in section 18101(a) of the Act. The regulations 
implementing sections 1861(o) and 18101(a) of the Act are known as health and safety 
standards, or conditions of participation (CoPs), for HHAs and are codified in 484. 
 
The Secretary has the responsibility to promote quality of care and the health and safety of 
patients receiving services through Medicare certified HHAs by ensuring that providers maintain 
compliance with the CoPs. The survey and certification process provides a method for CMS to 
evaluate HHA compliance with the CoPs, ensuring that patient services provided meet the 
minimum health and safety standards and a basic level of quality. This process is explained in 
Appendix B of this manual. 
 
10000.1 - Expectations of the Regulations 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
The HHA survey, certification, and enforcement provisions of the Act and regulations establish 
several expectations. The first is that providers remain in substantial compliance with Medicare 
program requirements as well as State law. The regulation emphasizes the need for continued, 
rather than cyclical compliance. The enforcement processes require that policies and 
procedures be established to correct deficient practices and to ensure that correction is lasting; 
specifically, that HHAs take the initiative and responsibility for continuously monitoring their 
own performance to sustain compliance. 
 
The second expectation is that all deficiencies will be addressed promptly. The standard for 
program participation mandated by the regulation is substantial compliance, which is defined at 
488.705 as compliance with all condition-level requirements, as determined by CMS or the 
State. The State and the CMS regional office will take steps to bring about compliance quickly. 
In accordance with 42 CFR 488.800  488.865, in addition to termination of the HHAs 
provider agreement, sanctions such as civil money penalties, suspension of payment for all new 
admissions, temporary management, directed plans of correction, directed in-service training, 
and/or additional State alternative sanctions recommended and approved by CMS can be 
imposed when HHAs are out of compliance with Federal requirements. See also section 
18101(f)(2)(B) of the Act. 
 
The third expectation is that the individuals under the care of the HHA will receive the care and 
services they need to attain and maintain their highest practicable functional capacity. The 
process detailed in these sections provides incentives to HHAs for the continued compliance 
needed to enable these individuals to reach these goals.   
Throughout this chapter, references to the State would be applicable, as appropriate, to the 
CMS RO when the CMS RO is the surveying entity. Alternative sanctions are recommended 
by the SA and the CMS RO reviews the recommendation to ensure that it is supported by the 
SA findings. 
 
It should be noted that failure of CMS or the State to act timely does not invalidate otherwise 
legitimate survey and enforcement determinations. It should also be noted that in cases 
where the State is authorized by CMS, the State may provide notice of imposition of certain 
sanctions on CMSs behalf, within applicable notice requirements. 
 
The Automated Survey Processing Environment (ASPEN) Enforcement Manager (AEM) is the 
data system used by CMS and all States for data entry and reporting on home health survey and 
enforcement activities. 
 
10001 - Definitions and Acronyms 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
Abbreviated standard survey means a focused survey other than a standard survey that gathers 
information on an HHAs compliance with fewer specific standards or conditions of 
participation. An abbreviated standard survey may be based on complaints received, a change of 
ownership or management, or other indicators of specific concern such as reapplication for 
Medicare billing privileges following a deactivation. (42 CFR 488.705) 
 
An abbreviated standard survey is a focused survey that examines any standard(s) related to the 
reason for the survey. 
 
AEM  ASPEN Enforcement Manager. 
 
AO  national Accreditation Organization whose program is approved by CMS. ASPEN  
Automated Survey Processing Environment. 
 
Certification of Compliance means that the HHA is in at least substantial compliance and is 
eligible to participate in the Medicare and Medicaid programs. (42 CFR 488.740) 
 
Certification of Noncompliance means that the HHA is not in substantial compliance and is 
not eligible to participate in in the Medicare and Medicaid programs. (42 CFR 488.740) 
 
CFR - Code of Federal Regulations. CMP - Civil money penalty. 
 
Complaint survey means a survey that is conducted to investigate specific allegations of 
noncompliance. (42 CFR 488.705) 
 
Condition-level deficiency means noncompliance as described in 42 CFR 488.24 of this 
part. A condition-level deficiency is any deficiency of such character that substantially limits 
the providers or suppliers capacity to furnish adequate care or which adversely affects the  health or safety of patients. SAs and ROs should refer to the State Operations Manual (SOM), 
Appendix B for further guidance on how surveyors determine condition-level and standard-level 
deficiencies. (42 CFR 488.705) 
 
Credible allegation of compliance is a statement or documentation that is realistic in terms of 
the possibility of the corrective action being accomplished between the exit conference and the 
date of the allegation; and that indicates resolution of the problems. (See 3016A) 
 
Deficiency is a violation of the Act and regulations contained in 484, subparts A through C of 
this chapter, is determined as part of a survey, and can be either standard or condition-level. 
(42 CFR 488.705) 
 
Directed plan of correction means CMS or the temporary manager (with CMS/SA approval) 
may direct the HHA to take specific corrective action to achieve specific outcomes within 
specific timeframes. If a temporary manager establishes a plan of correction, then this is 
considered a directed plan of correction and the imposition of this sanction needs to be 
entered into AEM. (42 CFR 488.805) 
 
Enforcement action means the process of imposing one or more of the following remedies: 
termination of a provider agreement; denial of participation; suspension of payment for all 
new admissions; temporary manager; civil money penalty; directed plan of correction; directed 
in-service training; transfer of patients; closure of the agency and transfer of patients; or other 
CMS-approved alternative State remedies. 
 
Extended survey means a survey that reviews additional conditions of participation not 
examined during a standard survey. It may be conducted at any time but must be conducted 
when substandard care is identified. (42 CFR 488.705) 
 
Immediate jeopardy means a situation in which the providers noncompliance with one or more 
requirements of participation has caused, or is likely to cause serious injury, harm, 
impairment, or death to a patient(s). (42 CFR 488.805) 
 
New admission means an individual who becomes a patient or is readmitted to the HHA on or 
after the effective date of a suspension of payment sanction. (42 CFR 488.805) 
 
Noncompliance means any deficiency found at the condition-level or standard-level. (42 CFR 
488.705) 
 
Partial extended survey means a survey conducted to determine if deficiencies and/or deficient 
practice(s) exist that were not fully examined during the standard survey. The surveyors may 
review any additional requirements which would assist in making a compliance finding. (42 
CFR 488.705) 
 
Per instance means a single event of noncompliance identified and corrected through a 
survey, for which the Act authorizes CMS to impose a sanction. (42 CFR 488.805). 
  Plan of correction means a plan developed by the HHA and approved by CMS that is the 
HHAs written response to survey findings detailing corrective actions to cited deficiencies and 
specifies the date by which those deficiencies will be corrected. (42 CFR 488.805) 
 
Repeat deficiency means a condition-level citation that is cited on the current survey and is 
substantially the same as or similar to, a finding of a standard-level or condition-level 
deficiency cited on the most recent previous standard survey or on any intervening survey 
since the most recent standard survey. (42 CFR 488.805) 
 
Standard-level deficiency means noncompliance with one or more of the standards that make 
up each condition of participation for HHAs. SAs and ROs should refer to the State Operations 
Manual (SOM), Appendix B for further guidance on how surveyors determine condition-level 
and standard-level deficiencies. (42 CFR 488.705) 
 
Standard survey means a survey conducted in which the surveyor reviews the HHAs 
compliance with a select number of standards and/or conditions of participation in order to 
determine the quality of care and services furnished by an HHA as measured by indicators 
related to medical, nursing, and rehabilitative care. (42 CFR 488.705) 
 
State survey agency (SA) means the entity responsible for conducting most surveys to certify 
compliance with the Medicare and Medicaid participation requirements. 
 
Substandard care means noncompliance with one or more conditions of participation identified 
on a standard survey, including deficiencies which could result in actual or potential harm to 
patients of an HHA. (42 CFR 488.705) 
 
Substantial compliance means compliance with all condition-level requirements, as 
determined by CMS or the State. SAs and ROs should refer to the State Operations Manual 
(SOM), Appendix B for further guidance on how surveyors determine condition-level and 
standard-level deficiencies. (42 CFR 488.705) 
 
Temporary management means the temporary appointment by CMS or by a CMS authorized 
agent, of a substitute manager or administrator based upon qualifications described in 484.4 and 
484.14(c). The HHAs governing body must ensure that the temporary manager has authority to 
hire, terminate or reassign staff, obligate funds, alter procedures, and manage the HHA to correct 
deficiencies identified in the HHAs operation. (42 CFR 488.805) 
 
10002 Home Health Agencies - Citations and Description 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
10002.1 - Citations 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
A HHA is defined in section 1861(o) of the Act. The conditions of participation for HHAs are 
found at 42 CFR 484.10  484.55. 
  10002.2 - Description 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
An HHA is a public agency or private organization or a subdivision of such an agency or 
organization, which: 
 
(1) is primarily engaged in providing skilled nursing services and other therapeutic services; 
 
(2) has policies, established by a group of professional personnel (associated with the agency or 
organization), including one or more physicians and one or more registered professional 
nurses, to govern the services (referred to in paragraph (1)) which it provides, and provides 
for supervision of such services by a physician or registered professional nurse; 
 
(3) maintains clinical records on all patients; 
 
(4) in the case of an agency or organization in any State in which State or applicable local law 
provides for the licensing of agencies or organizations of this nature, (A) is licensed pursuant to 
such law, or (B) is approved, by the agency of such State or locality responsible for licensing 
agencies or organizations of this nature, as meeting the standards established for such 
licensing; 
 
(5) has in effect an overall plan and budget that meets the requirements of subsection (z); 
 
(6) meets the conditions of participation specified in section 18101(a) and such other conditions of 
participation as the Secretary may find necessary in the interest of the health and safety of 
individuals who are furnished services by such agency or organization; 
 
(7) provides the Secretary with a surety bond 
 
(A)  effective for a period of 4 years (as specified by the Secretary) or in the case of a 
change in the ownership or control of the agency (as determined by the Secretary) during or 
after such 4- year period, an additional period of time that the Secretary determines 
appropriate, such additional period not to exceed 4 years from the date of such change in 
ownership or control; 
 
(B)  in a form specified by the Secretary; and 
 
(C)  for a year in the period described in subparagraph (A) in an amount that is equal to the 
lesser of $50,000 or 10 percent of the aggregate amount of payments to the agency under this 
title and title XIX for that year, as estimated by the Secretary that Secretary determines is 
commensurate with the volume of the billing of the supplier; and 
 
(8)  meets  such  additional  requirements  (including  conditions  relating  to  bonding  or 
establishing of escrow accounts as the Secretary finds necessary for the financial security of 
the program) as the Secretary finds necessary for the effective and efficient operation of the 
program;   
except that for purposes of part A such term shall not include any agency or organization 
which is primarily for the care and treatment of mental diseases. The Secretary may waive the 
requirement of a surety bond under paragraph (7) in the case of an agency or organization that 
provides a comparable surety bond under State law. 
 
NOTE: The surety bond requirement in the above paragraph is currently on hold. 
 
10002.3 - Home Health Services 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
Home health services are covered for the elderly and disabled under the Hospital Insurance 
(Part A) and Supplemental Medical Insurance (Part B) benefits of the Medicare program. 
Section 1861(m) o the Act defines the term home health services as items or services furnished 
to an individual, who is under the care of a physician, that must be furnished by, or under 
arrangement with, an HHA that participates in the Medicare program, under a plan (for 
furnishing such items and services to such individual) established and periodically reviewed by 
a physician, and must be provided on a visiting basis to the individuals home (unless provided 
on an outpatient basis, under arrangement by the HHA, at a hospital or skilled nursing facility, 
or at a rehabilitation center). Such items and services may include the following: 
 
  Part-time or intermittent skilled nursing care furnished by or under the supervision of a 
registered nurse. 
 
  Physical therapy, speech-language pathology, and occupational therapy. 
 
  Medical social services under the direction of a physician. 
 
  Part-time or intermittent home health aide services who have successfully completed an 
approved training program. 
 
  Medical supplies (other than drugs and biologicals  unless osteoporosis drugs) and 
durable medical equipment. 
 
  Medical services of interns and residents if the HHA is owned by or affiliated with a 
hospital that has an approved medical education program. 
 
  Services at hospitals, skilled nursing facilities, or rehabilitation centers when they involve 
equipment too cumbersome to bring to the home. 
  Survey Process 
 
10003 - Emphasis, Components, and Applicability 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
Home health agencies must be in compliance with the requirements in 42 CFR Part 484, 
Subparts A, B, and C to receive payment under Medicare. To certify a HHA, surveyors follow 
the procedures in Appendix B of this manual. 
 
10003.1 - Introduction 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
The Secretary is authorized to enter into an agreement with a State survey agency (SA) under 
section 1864(a) of the Act or a CMS-approved national accreditation organization (AO) under 
section 1865(a) of the Act, with oversight by CMS ROs, to determine whether HHAs meet the 
Federal participation requirements for Medicare. Sections 11002(a)(10) and (33)(B) of the 
Act provides for SAs to perform the same survey tasks for facilities participating in or seeking 
to participate in the Medicaid program. The results of Medicare and Medicaid-related 
surveys are used by CMS and the Medicaid State Agency, respectively, as the basis for a 
decision to enter into, deny, or terminate a provider agreement with the agency. To assess 
compliance with Federal participation requirements, surveyors conduct onsite inspections 
(surveys) of agencies. In the survey process, surveyors directly observe the actual provision 
of care and services to patients and the effect or possible effects of that care to assess 
whether  the  care  provided  meets  the  assessed  needs  of  individual  patients.  A  SA 
periodically surveys HHAs and certifies its findings to CMS and to the State Medicaid Agency 
if the HHA is seeking to acquire or maintain Medicare or Medicaid certification, respectively. 
The general requirements regarding the survey and certification process are codified at 42 
CFR Part 488 and specific survey instructions are detailed in the SOM, Chapter 2, sections 
2180- 2202, Appendix B and in policy transmittals. 
 
Certain providers and suppliers, including HHAs, can be deemed by CMS to meet the Federal 
requirements for participation if they are accredited and recommended for participation in 
Medicare by an AO whose program is approved by CMS to meet or exceed Federal requirements 
under section 1865(a) of the Act. These deemed providers and suppliers are subject to complaint 
and validation surveys under 488.7. 
 
10003.2 - Survey and Certification Responsibility 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
Surveyors conduct the HHA survey in accordance with the applicable protocols. They look to 
the requirements in the statute and regulations to determine whether a deficiency citation of non-
compliance is appropriate. Surveyors should base any deficiency on a violation of the statute or 
regulations, which is identified through clinical record reviews, interviews with the HHAs 
patients, staff, and others as appropriate and direct observations of the HHAs performance and 
practices. (See 2712.) 
 
  10004 - Survey Team 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
10004.1 - Survey Team Size 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
Survey team size will vary, depending primarily on the size of the agency being surveyed. The 
SA or CMS for Regional Office (RO) surveys determines how many members will be on the 
survey team. Survey team size is normally based upon the following factors: 
 
  The average patient census of the agency to be surveyed; 
  Whether the agency has a historical pattern of serious deficiencies or complaints; 
  Whether the agency has branches; and 
  Whether new surveyors are to accompany a team as part of their training. 
 
10004.2 - Survey Team Composition 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
Each home health survey team should include at least one RN with home health survey 
experience. Other qualified surveyors who have the expertise to determine whether the HHA 
is in compliance may be used as needed. 
 
10004.3 - Length of Survey 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
The length of a survey in terms of person hours is expected to vary, based on the actual patient 
census, presence of branches, number of home visits and travel time, and the number and 
complexity of concerns that need to be investigated. 
 
10004.4 - Surveyor Qualifications 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
Section 18101(c)(2)(C)(iii) of the Act requires that an individual who meets the 
minimum qualifications established by the Secretary to conduct a survey of an HHA. 
This means that each individual on a survey team must meet certain minimum 
qualifications. CMS criteria for surveyor minimum qualifications as well as circumstances 
that would disqualify a surveyor from surveying a particular agency are found at 
488.735. In addition, before any State or Federal surveyor may serve on an HHA survey 
team (except as a trainee), he/she must have successfully completed the relevant CMS-
sponsored Basic HHA Surveyor Training Course and any associated course 
prerequisites as determined by current CMS policy. New surveyors may accompany the 
team, in an observational role only, as part of their training prior to completing the 
CMS Basic HHA Surveyor Training Course. 
  10005 - Conflicts of Interest for Federal and State Employees 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
10005.1 - Introduction 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
Conflicts of interest may arise within the Medicare certification and survey process when 
public employees duties give them the potential for private gain (monetary or otherwise) or 
the opportunity to secure unfair advantages for outside associates. This includes all Federal and 
State surveyors and their supervisors. There are a number of Federal and State laws setting 
forth criminal penalties for abuses of privileged information, abuses of influence, and other 
abuses of public trust. Federal employees are required to make a declaration of any outside 
interests and to update it whenever such interests are acquired. The same should be 
required of State employees whose positions may produce possible conflicts of interest. Both 
CMS and the State are responsible for evaluating the need for preventive measures to protect the 
integrity of the certification program. When survey and certification work is performed by 
agencies other than CMS or the State, the State administrators and the sub-agency 
administrators have a shared responsibility for this surveillance. 
 
In the case of States, it is not necessary to inform CMS of all potential conflict situations. 
However, if an overt abuse requires corrective action, the CMS RO must be informed. 
 
10005.2 - Conflicts of Interest 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
Section 488.735(b) sets out the circumstances that would disqualify a surveyor from surveying a 
particular HHA. A surveyor is prohibited from surveying an HHA if the surveyor currently 
works, or within the past two years has worked for the HHA to be surveyed. Specifically, the 
surveyor could not have been a direct employee, employment agency staff at the HHA, or an 
officer, consultant or agent for the surveyed HHA regarding compliance with CoPs. A 
surveyor would also be prohibited from surveying an HHA if he or she has a financial interest 
or an ownership interest in that HHA. A financial interest is defined as salary, fees, 
commissions, honoraria, or any other source of income. The surveyor would also be 
disqualified if he or she has a family member who has a financial interest or ownership 
interest with the HHA to be surveyed or has an immediate family member who is a patient of the 
HHA to be surveyed. An immediate family member is defined in 488.301 as husband or wife; 
birth or adoptive parent, child, or sibling; stepparent, stepchild, stepbrother, or stepsister; 
father-in-law, mother-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law; 
grandparent or grandchild; and spouse of a grandparent or grandchild. 
 
10005.3 - Examples of Potential Conflicts of Interest 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
CMS and the States must consider all relevant circumstances that may exist beyond the 
benchmarks given in this section to ensure that the integrity of the survey process is preserved. 
For example, a surveyor may not have worked for the agency to be surveyed for more than two  years, but may have left the HHA under unpleasant circumstances, or, may not currently have an 
immediate family member who receives services from, but may have recently received services 
from the HHA who the surveyor considers to have received inadequate care. 
 
The following are typical of situations that may raise a question of possible conflicts of 
interest for Federal or State employees; however, they do not necessarily constitute conflicts of 
interest: 
 
i.  Participation in ownership of an HHA located within the employing State; 
 
ii.  Service as a director or trustee of an HHA; 
 
iii. Service on a utilization review committee for an HHA; 
 
iv. Private acceptance of fees or payments from a health facility or group of health facilities 
or association of health facility officers for personal appearances, personal services, 
consultant services, contract services, referral services, or for furnishing supplies to a 
health facility; 
 
v.  Participation in a news service disseminating trade information to a segment of the health 
industry; and 
 
vi. Having members of ones immediate family engaged in any of the above activities. 
 
10005.4 - Report and Investigation of Improper Acts 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
Any acts of employees in violation of Federal or State laws or regulations regarding conflicts of 
interest should be handled in accordance with applicable Federal or State procedures. In the 
case of State employees, conflicts of interest violations must be reported to the CMS RO, and 
the CMS RO must be kept advised of the corrective actions. States should ask for assistance 
or advice from CMS in the case of any impropriety involving a conflict of interest that cannot be 
handled immediately under an applicable State procedure. The regional office of the Inspector 
General, along with the CMS RO, will then work in close cooperation with the responsible State 
officials until the matter is resolved. 
 
10006 - Survey Protocol 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
10006.1 - Introduction 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
Surveys conducted on a HHA must be based upon protocols developed, tested, and validated by 
the Secretary under section 18101(c)(2)(C)(ii) of the Act. Survey protocols are established to 
provide guidance to surveyors of HHAs. They serve to clarify and/or explain the intent of the 
regulations. The purpose of the protocols and guidelines is to direct the surveyors attention to  avenues of investigation in preparing for the survey, conducting the survey, and evaluating the 
survey findings. All surveyors are required to reference the protocols in assessing compliance 
with Federal requirements. 
 
These protocols represent the policies of CMS on relevant issues that must be inspected or 
reviewed under each requirement. The use of these protocols promotes consistency in the survey 
process. The protocols assure that a HHAs compliance with the requirements is reviewed in a 
thorough, efficient, and consistent manner to produce sufficient information to make compliance 
decisions. The survey protocols are found in Appendix B of this manual. 
 
10006.2 - Types of Surveys 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
Sections 18101(c)(1)-(2) of the Act specify the requirements for types and frequency of surveys, 
identifying standard, and abbreviated standard, partial extended, and extended surveys. These 
surveys are generally defined in 488.705. 
 
10006.3 - Standard Survey 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
A standard survey is conducted not later than 36 months after the date of the previous standard 
survey, as is specified in section 18101(c)(2)(A) of the Act. A standard survey may also be 
conducted within 2 months of any change of ownership, administration, or management of the 
HHA to determine whether the change has resulted in any decline in the quality of care 
furnished by the HHA and it shall be conducted within 2 months of when a significant 
number of complaints have been reported as specified in section 18101 (c)(2)(B)(i) and (ii). 
Section 18101(c)(2)(C) of the Act requires that a standard survey, to the extent practicable, 
reviews a case-mix stratified sample of individuals to whom the HHA furnishes services. 
Actual visits to the homes of sampled patients must be conducted and a survey of the quality of 
services being provided as measured by indicators of medical, nursing, and rehabilitative 
care must be conducted. Minimum requirements for standard surveys are specified in 
488.710. 
 
Standard surveys are conducted for initial certifications and for re-certifications. During a 
standard survey, the surveyor reviews compliance with Level I standards as designated in the 
SOM Appendix B. 
 
Deficiency findings of any Level I standard will trigger a partial extended survey. Deficiencies 
at the condition-level will trigger an extended survey. 
 
10006.4 - Initial Certification Surveys 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
All HHAs are required to successfully complete an initial standard survey before they can be 
certified as meeting the Medicare requirements. The initial Medicare certification survey 
begins as a standard survey. Before this initial Medicare survey takes place, the prospective  HHA must send written documentation to the SA requesting an initial certification survey. 
Follow Appendix B - Guidance to Surveyors: Home Health Agencies for conducting initial 
certification surveys. 
 
10006.5 - Recertification of Participating Facilities 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
An HHA is subject to a recertification survey no later than 36 months from the previous 
recertification survey. All recertification surveys begin (and may end) as a standard survey, 
unless a problem is identified with a Level 1 standard as described in Appendix B of this manual. 
Each State must follow CMS instructions for survey frequency within this 36-month interval 
commensurate with the need to assure the delivery of quality home health services. Follow 
Appendix B - Guidance to Surveyors: Home Health Agencies for standard surveys. 
 
10006.6 - Post Survey Revisit (Follow-Up) 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
The SA follows up on all deficiencies cited in PoCs. In some cases, the cited deficiencies may 
be of a nature that a mail or telephone contact will suffice in lieu of an onsite visit (e.g., the HHA 
amended its written policies). A mail or telephone contact is acceptable as long as the SA has no 
reason to question the validity of the reported corrections. However, an onsite visit is generally 
required for deficiencies concerning quality of care. 
 
If the SA has cited condition level deficiencies, they must conduct a post survey revisit to 
determine if the HHA now meets the CoPs. 
 
At the time of the follow-up visit to verify corrections of deficiencies previously cited on Form 
CMS-2567 and/or when corrections are verifiable by telephone contact or mail, the SA 
completes Form CMS-2567B for the corrections that have been completed. The SA enters: 
 
1.  HHA identification information; 
2.  Date of the revisit or date of verification; 
3.  Data tag; 
4.  Corresponding regulatory reference cited on the original Form CMS-2567; and 
5.  Date the correction was accomplished. 
 
If documentation or onsite verification is warranted, the SA obtains appropriate verification 
before reporting a deficiency as corrected. The revisit requires that the SA complete a Post-
Certification Revisit Report (Form CMS-2567B). 
 
If possible, the revisit is to be conducted by a member(s) of the survey team who cited the 
original findings. The SA has the completed form initialed by the reviewing official and 
signed by the surveyor and retains the fourth copy for its provider file, mails a copy to the HHA, 
and forwards a copy to the RO or SMA, as appropriate. 
  If, at the time of the revisit, some deficiencies have not been corrected, follow the instructions at 
Section 2732B. 
 
10006.7 - Abbreviated Standard Survey 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
An abbreviated standard survey is limited in its scope and does not cover as many aspects of 
HHA operations and services as are covered in a standard, partial extended, or extended 
survey but rather concentrates on a particular area of concern(s). This survey focuses on 
particular tasks that relate, for example, to complaints received, or a change of ownership, 
management, or administration, or reapplying for Medicare billing privileges following a 
deactivation. The survey team (or surveyor) may investigate any area of concern and make a 
compliance decision regarding any regulatory requirement, whether or not it is related to the 
original purpose of the survey. 
 
10006.7A - Complaint Investigations 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
If the States review of a complaint allegation(s) identifies possible non-compliance with one or 
more of the requirements and only a survey can determine whether a deficiency(ies) exist, an 
abbreviated standard survey will be conducted. During an abbreviated standard survey, the 
standards identified as being related to the allegations of noncompliance are reviewed. If a 
condition is found to be out of compliance during the survey, the surveyor should move into a 
partial extended or extended survey depending on the findings identified. Follow the 
guidelines in Chapter 5: Complaint Investigations and Appendix B of this manual. 
 
If an accredited HHA is deemed to meet the requirements and a deficiency(ies) is found at the 
condition level during a complaint or validation survey, the RO will remove deemed status and 
oversight authority reverts back to the SA until the organization returns to substantial 
compliance with all requirements or is terminated. Once the HHA is in compliance, the RO 
will restore deemed status and turn oversight authority back to the AO. 
 
For example, S&C-010-08 (Question V-4) provides for two processes: 
 
1.  If the SA finds condition-level noncompliance as a result of a full survey conducted on a 
representative sample basis and the RO agrees with this finding, the provider/supplier 
is: 
 
notified of the deficiencies via the CMS 2567 and also of the removal of its deemed 
status; placed under the jurisdiction of the SA; and, placed on track for termination of its 
provider agreement. The RO also notifies the providers/suppliers AO of the removal of 
deemed status and that the facility has been placed on a termination track. CMS will 
terminate the provider agreement unless the provider/supplier submits an acceptable 
POC and the SA verifies through a revisit survey that the provider/supplier has come 
into compliance. The revisit survey focuses on the conditions that were previously 
deficient. The timeframe for coming into compliance depends on whether the deficiencies  posed an immediate jeopardy to patient health and safety. If the provider/supplier fails 
to make timely correction of its deficiencies, the RO terminates the provider agreement. 
If the provider/supplier has been determined to have achieved compliance, the RO notifies 
the provider/supplier that its deemed status has been reinstated. 
 
2.  If the SA finds condition-level noncompliance as a result of a validation survey based 
on a substantial allegation and the RO agrees with this finding, the provider/supplier is 
notified of the deficiencies via the CMS-2567 and also of the removal of its deemed status 
and placement under SA jurisdiction; the RO notifies the AO of its removal of deemed 
status. 
 
10006.7B - Substantial Changes in an HHAs Organization and 
Management 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
If an HHA notifies the SA of a change in organization or management, review the change to 
ensure compliance with the regulations. Request copies of the appropriate documents, e.g. 
written policies and procedures, personnel qualifications and agreements, etc., if they were not 
submitted with the notification. If changes in an HHAs organization and management are 
significant and raise questions of its continued substantial compliance, determine, through a 
survey, whether deficiencies have resulted.  Collect information about changes in the HHAs 
organization and management on the Medicare and other Federal Care Program General 
Enrollment, Form CMS-855A. 
 
10006.8 - Partial Extended Survey 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
The partial extended survey is conducted to determine if a deficiency (ies) and/or deficient 
practice exists at standard or condition levels in the CoPs that were not fully examined during the 
standard survey and there are indications that a more comprehensive review of the CoPs would 
determine if a deficient practice exists. The surveyors may review any additional standards or 
conditions which would assist in making a compliance decision. Partial extended surveys are 
also conducted when the surveyors off-site preparation determines a concern. At that point 
there is not a determination of a deficient practice. For example, the surveyor may have a 
concern about the HHAs transmission of OASIS data and want to review that area during the 
survey. 
 
During the partial extended survey, the surveyor reviews, at a minimum, the Level 2 standards 
under the same conditions which are related to the Level 1 standard(s) that are out of 
compliance. The surveyors may review any additional standard(s) under the same condition or 
other related or unrelated condition(s) which would assist in making a compliance decision. 
Follow the guidance in Appendix B of this manual. 
 
10006.9 - Extended Survey 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14)  The extended survey consists of a review of additional conditions of participation not reviewed 
during a standard survey. At a minimum, review any related conditions of participation or 
standards to the condition found to be deficient, as defined in Appendix B of the SOM. 
 
Extended surveys may be conducted at any time at the discretion of CMS or the SA, and must be 
conducted when any condition level deficiency is found. This survey also reviews the HHAs 
policies, procedures, and practices that produced the substandard care. An extended survey 
must be conducted not later than 14 calendar days after the completion of a standard survey 
which found the HHA out of compliance. 
 
10007 - Survey Frequency 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
10007.1 - Citations 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
Section 18101(c)(2) of the Act requires HHAs to be subject to a standard survey not later 
than every 36 months from the previous standard survey and the frequency of a standard survey to 
be commensurate with the need to assure the delivery of quality home health services. Surveys 
may be conducted as often as necessary to ascertain compliance or confirm correction of 
deficiencies. 
 
10008 - Unannounced Surveys 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
10008.1  Citations 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
Section 18101(c)(1) of the Act requires that standard surveys be unannounced. Moreover, under 
488.725, all HHA surveys must be unannounced, including standard surveys, complaint surveys 
and onsite revisit surveys. 
 
10008.2 - Scheduling Requirements 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
The SA has the responsibility for keeping surveys unannounced and their timing unpredictable. 
This  gives  the  SA  greater  ability  to  obtain  valid  information  because  it  increases  the 
probability that the surveys will observe conditions and care practices that are typically 
present.  While  the  Act  and  implementing  regulations  in  488.725  require  that  standard 
surveys be unannounced, it is CMSs intention and expectation to not announce any type of 
HHA survey such as an 
 
abbreviated standard, complaint, or onsite revisit surveys. Therefore, if CMS conducts standard 
surveys or validation surveys, the CMS RO must follow the same procedures as required of the 
SA to not announce surveys. 
  10008.3 - CMS Review of State Scheduling Procedures 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
Section 18101(c)(1) of the Act requires CMS to review State scheduling and survey procedures to 
ensure that the agency has taken all reasonable steps to avoid giving notice of impending surveys 
through these procedures. The CMS RO reviews annually each of its States procedures for 
assuring that HHA surveys are not announced through the methods by which they are 
scheduled or conducted. 
 
10008.4 - Penalty for Announcing a Survey 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
Section 18101(c)(1)of the Act provides that any individual who notifies (or causes to be 
notified) an HHA of the time or date of the standard survey is subject to a civil money penalty 
not to exceed $2,000. Section 488.725 reflects these requirements. 
 
If any individual has, in any way, given prior notification to a HHA of the date of a standard 
survey, the State or CMS is to contact the regional Office of the Inspector General and report the 
name of the individual and what has occurred. The Office of the Inspector General will further 
investigate and make a determination as to whether or not a Federal civil money penalty will be 
imposed. A civil money penalty of up to $2,000 may be imposed. The provisions of section 
1128A of the Act, other than subsections (a) and (b), apply to civil money penalties. The 
imposition of a civil money penalty applies only when a standard survey is announced. See 
1005 for policy developed by the Office of the Inspector General regarding administrative 
appeals of Federal civil money penalties. 
 
10009 - Informal Dispute Resolution (IDR) 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
10009.1 - Introduction 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
Section 488.745 offers HHAs, upon their receipt of the official Form CMS-2567, the option to 
request an informal opportunity to dispute condition-level survey findings warranting a 
sanction. This IDR will occur with the agency who conducted the survey. A State does not need 
to create any new or additional processes if its existing process meets the requirements 
described in this section. The IDR process, as established by the State or CMS RO, must be in 
writing so that it is available for review upon request. 
 
If the survey is conducted by the CMS RO, the RO may conduct the IDR. 
 
CMS has adopted the following elements to be incorporated in all cases involving deficiencies 
cited as a result of Federal surveys. They are designed to clarify and expedite the resolution 
process. States are free to incorporate these elements into their procedures. 
 
1.  Notice to the HHA will indicate that the IDR, including any face-to-face meetings,  constitutes an informal administrative process that in no way is to be construed as a 
formal evidentiary hearing. 
 
2.  Notice to the HHA will indicate that counsel may accompany the HHA. If the HHA 
chooses to be accompanied by counsel, then it must indicate that in its request for IDR, so 
that CMS may also have counsel present.  
 
3.  CMS will verbally advise the HHA of CMSs decision relative to the informal dispute, 
with written confirmation to follow. 
 
10009.2  Purpose 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
IDR offers a HHA the opportunity to refute one or more condition level deficiencies cited by 
the State on the Form CMS-2567 Statement of Deficiencies. An HHAs initiation of the IDR 
process or failure of CMS or the State, as appropriate, to complete an IDR will not postpone or 
otherwise delay the effective date of any enforcement action. 
 
10009.3 - Mandatory Elements of IDR 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
Upon their receipt of the official Form CMS-2567, agencies must be offered one informal 
opportunity, if they request it in writing, to dispute condition level deficiencies. Deficiencies 
cited at the standard level are not subject to the IDR process. 
 
The following elements must be included in each IDR process offered: 
 
1.  Agencies may not use the IDR process to delay the formal imposition of sanctions or to 
challenge any other aspect of the survey process, including: 
 
  The severity assessment of a deficiency(ies) at the standard level that constitutes 
substandard care or immediate jeopardy; 
 
  Sanctions imposed by the enforcing agency; 
 
  Alleged failure of the survey team to comply with a requirement of the survey process; 
 
  Alleged inconsistency of the survey team in citing deficiencies among agencies; and 
 
  Alleged inadequacy or inaccuracy of the IDR process. 
 
2.  HHAs must be notified of the availability of IDR in the letter transmitting the official Form 
CMS-2567. (See Exhibit 1310 in this manual for transmission of Form CMS-2567.) The 
letter should inform the agency of the following: 
 
  It may request the opportunity for IDR, and that if it requests the opportunity, the  request must be submitted in writing; 
 
  The written request must include an explanation of the specific deficiencies that are being 
disputed; 
 
  The written request must be made within the same 10 calendar day period the HHA 
has for submitting an acceptable plan of correction to the surveying entity; 
 
  The name and address, e-mail and phone number of the person to contact in order to 
request the IDR; 
 
  The IDR process that is followed in that State, e.g., telephone conference, written 
communication, or face-to-face meeting; and 
 
  The name and/or position title of the person who will be conducting the IDR, if known. 
 
NOTE: IDR is a process in which State agency officials make determinations of 
noncompliance. SAs should be aware that CMS holds them accountable for the legitimacy 
of the process including the accuracy and reliability of conclusions that are drawn with 
respect to survey findings. This means that while the SA may have the option to involve 
outside persons or entities they believe to be qualified to participate in this process, it is 
the SA, not outside individuals or entities that are responsible for IDR decisions. When 
an outside entity conducts IDR, the results of the IDR process may serve only as a 
recommendation of noncompliance or compliance to the SA. The SA will then make the IDR 
decision and notify the HHA of that decision. CMS will look to the SA to assure the viability 
of these decision-making processes, and holds the SA accountable for them. 
 
Since CMS has ultimate oversight responsibility relative to a SAs performance, it may be 
appropriate for CMS to examine specific IDR decisions or the overall IDR process to 
determine whether the decision is consistent with CMS policy. For dually participating or 
Medicare-only agencies, informal dispute findings are in the manner of recommendations to 
CMS and, if CMS has reason to disagree with those findings, it may reject the conclusions 
from IDR and make its own binding determinations of noncompliance. 
 
3.  Failure to complete IDR timely will not delay the effective date of any enforcement action 
against the agency. 
 
4.  When an HHA is unsuccessful during the process at demonstrating that a deficiency 
should not have been cited, the SA must notify the agency in writing that it was 
unsuccessful. 
 
5.  When an HHA is successful during the IDR process at demonstrating that a deficiency 
should not have been cited or should be revised: 
 
  The deficiency citation should be marked deleted, or revised as appropriate, 
and signed and dated by a supervisor of the surveying entity; and   
  Any enforcement action(s) imposed solely because of that deleted or revised deficiency 
citation should be rescinded. 
 
NOTE: The HHA has the option to request a clean (new) copy of the Form CMS-2567. 
However, the clean copy will be the releasable copy only when a clean (new) plan of 
correction is both provided and signed by the agency. The original Form CMS-2567 is 
disclosable when a clean plan of correction is not submitted and signed by the agency. 
Deficiencies pending IDR should be entered into AEM but will not be uploaded to the 
Certification and Survey Provider Enhanced Reporting system (CASPER) until IDR has been 
completed. 
 
6.  An agency may request IDR for each survey that cites condition-level deficiencies. 
However, if IDR is requested for deficiencies cited at a subsequent survey, an HHA may 
not challenge the survey findings of a previous survey for which the HHA either received 
IDR or had an opportunity for it. Condition-level deficiencies that are not corrected and 
that are carried forward on a subsequent survey are not eligible for the IDR process. 
Condition-level deficiencies identified on a subsequent survey that are new are eligible to 
be reviewed through the IDR process. 
 
Enforcement Process 
 
10010 - Alternative Sanctions for Home Health Agencies  
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
10010.1 - Statutory Basis 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
Sections 18101(e)-(f) of the Act authorizes the Secretary to utilize varying enforcement 
mechanisms to terminate participation and to impose alternative sanctions if HHAs are found 
out of compliance with the Medicare home health conditions of participation. Prior to the 
implementation of alternative sanctions, the only sanction that CMS used for enforcement 
actions of HHAs that were not meeting the participation requirements was termination within 
100 days. The imposition of alternative sanctions specified in 488.805 would allow for 
noncompliant HHAs to have additional time to come into compliance with the CoPs before being 
terminated. 
 
10010.2 - General Provisions 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
Under section 18101(e)(1) of the Act, if CMS or a SA determines that the HHAs condition-level 
deficiencies immediately jeopardize the health or safety of its patients, then CMS must take 
immediate action to notify the HHA of the jeopardy situation and the HHA must correct the 
deficiencies. If the IJ is not removed because the HHA is unable or unwilling to correct the 
deficiencies, CMS will terminate the HHAs provider agreement. In addition, CMS may impose 
one or more specified alternative sanctions, including but not limited to civil money  penalties and suspension of all Medicare payments before the effective date of termination. 
These provisions are incorporated in 488.810. The purpose of enforcement sanctions is to 
ensure prompt compliance with program requirements in order to protect the health and 
safety of individuals under the care of an HHA. 
 
Sections 18101(e)(1) and (2) of the Act provide that if CMS finds that an HHA is not in 
compliance with the Medicare home health CoPs and the deficiencies involved do not 
immediately jeopardize the health and safety of the individuals to whom the agency furnishes 
items and services, CMS may terminate the provider agreement, impose an alternative 
sanction(s), or both. While section 18101(e)(2) of the Act provides for termination of the HHAs 
provider agreement as an enforcement option in non-immediate jeopardy situations, CMS 
provides incentives for HHAs to achieve and maintain full compliance with the participation 
requirements before termination becomes necessary. 
 
The decision to impose one or more sanctions would be based on condition-level deficiencies or 
repeat deficiencies found in an HHA during a survey. Determinations on deficiencies would 
not be limited to findings from the mandated surveys specified in the statute or the 
regulations. Rather, deficiency findings that are based on other reporting or evaluative 
programs, procedures, or mechanisms, such as OASIS reporting and validated complaints, 
would be sufficient to determine whether Medicare requirements are met. 
Survey agencies should make a recommendation to the RO on which sanction(s) may be 
effective in prompting the HHA to return to compliance. The RO considers the SAs 
recommendations and makes a determination to agree with or impose a different sanction(s) 
for the HHA. 
 
10010.3 - Effect of Sanctions on HHAs that participate in Medicare via 
Deemed Status through an Accrediting Organization 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
HHAs can acquire certification for participation in Medicare via a SA survey or via deemed 
status through a CMS-approved AO. Deemed status through a CMS-approved AO is voluntary 
and not necessary to participate in Medicare. Deemed status HHAs remain under the 
jurisdiction of their AO rather than SAs for oversight of their ongoing compliance with health 
and safety standards, unless SAs conducting a validation survey at the direction of CMS find 
evidence of serious noncompliance. In such case, the HHA is placed under the jurisdiction of 
the SA. 
 
A deemed HHA loses its deemed status when a condition-level finding is cited on a complaint or 
validation survey. When a condition-level deficiency (ies) is found, the RO returns oversight of 
the accredited HHA back to the SA until the HHA can demonstrate compliance with the CoPs. 
During the time that the SA has jurisdiction over the HHA, the SA, not the AO, will follow the 
procedures for recommending the imposition of sanctions, if appropriate. Once the HHA 
returns to compliance with the Medicare conditions and has not been terminated, the RO will 
restore its deemed status and return oversight to the AO.  In accordance with 42 CFR 488.7, 
CMS may require a survey of an accredited HHA to validate the AOs accreditation process.  
  There are two types of validation surveys: 
 
  Surveys conducted on a representative sample basis, which may be either comprehensive 
surveys of all Medicare conditions or focused surveys on a specific condition or 
conditions; or 
 
  Surveys in response to a substantial allegation  generally a complaint. These surveys 
focus on those Medicare conditions related to the allegations. 
 
SAs conduct validation surveys of accredited providers/suppliers only when they are specifically 
authorized to do so by the RO. In the case of representative sample surveys, CMS selects the 
providers/suppliers to be surveyed and the RO assigns the SA to conduct the validation survey 
within 60 days of the AO survey. In the case of substantial allegations, most complaints are 
received by the SA, which then forwards to the RO complaints that they believe make substantial 
allegations of noncompliance with Medicare conditions. The RO reviews the complaint and 
determines whether it will authorize the SA to conduct a survey, and also determines which 
conditions the SA should focus its survey on. CMS also receives complaints directly. 
Information raising substantial allegations of noncompliance may also come to CMS 
attention via means other than complaints, such as press reports. In such cases the RO 
reviews the information and makes a determination as to whether the SA should conduct a 
validation survey, and of which conditions. (See Section 5100 of the SOM for more details about 
procedures for substantial allegation surveys of accredited, deemed providers/suppliers). 
 
10010.4 -Effect of Sanctions on HHA Branches 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
An HHAs branch office is part of the HHA and is located sufficiently close to share 
administration, supervision, and services in a manner that renders it unnecessary for the branch 
independently to meet the conditions of participation as an HHA. An HHAs branch location 
may be included in, or be the focus of, the unannounced standard survey of a parent HHA, and 
any deficiencies found at a branch of the HHA will apply to the entire HHA. Therefore, 
regardless of whether the deficiency or deficient practice is identified at the branch or the 
parent location, all sanctions imposed would apply to the parent HHA and its respective 
branches. For example, if a deficient practice is found in one branch of an HHA and CMS 
imposes sanctions, the sanctions would apply to the parent and all branch offices that are 
affiliated with that HHA. However, these sanctions would not apply to any non-branch subunit 
that was associated with an HHA since a subunit is independently required to meet the 
CoPs for HHAs. Such subunit instead could have sanctions imposed on it based on deficient 
practices found at that subunit. 
 
For HHAs that operate branch offices in multiple states, CMS would base enforcement 
decisions on surveys conducted by the State in which the parent office is located. 
 
Definitions for parent HHA, branch office, and subunit are found at 42 CFR 484.2. 
See also section 2182 for additional information on parent, branch and subunit. 
  10010.5 - Available Sanctions 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
In accordance with 488.820, the following sanctions in addition to termination of the provider 
agreement are available: 
 
 Civil money penalties; 
 Suspension of payment for all new admissions; 
 Temporary management of the HHA; 
 Directed plan of correction; and 
 Directed in-service training. 
 
10010.6 - Factors to be considered in selecting sanctions 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
Consistent with section 18101(f)(3) of the Act, procedures for selecting the appropriate sanction, 
including the amount of any fines and the severity of each sanction have been designed to 
minimize the time between the identification of deficiencies and the final imposition of 
sanctions. 
 
In order to select the appropriate sanction(s) for an agencys noncompliance, the seriousness 
of  the  deficiencies  must  first  be  assessed  and  the  determination  made  as  to  whether  the 
deficiencies pose immediate jeopardy to patient health and safety. The factors CMS considers 
include: 
 
I.  The extent to which the deficiencies pose immediate jeopardy to patient health and 
safety. 
 
II.  The nature, incidence, manner, degree, and duration of the deficiencies or non-
compliance. 
 
III.  The presence of repeat deficiencies, the HHAs overall compliance history and any 
history of repeat deficiencies at either the parent or branch location. 
 
IV. The extent to which the deficiencies are directly related to a failure to provide 
quality patient care. 
 
V.  The extent to which the HHA is part of a larger organization with performance 
problems. 
 
VI. An indication of any system-wide failure to provide quality care. 
 
In addition, CMS reviews other factors including, but not limited to, the history of the HHAs 
compliance with the CoPs, specifically with reference to the cited deficiencies. 
  10011 - Action when Deficiencies Pose Immediate Jeopardy. 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
10011.1 - Statutory and Regulatory Basis 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
Sections 18101(e)(1) of the Act and 488.825 provide how situations involving immediate jeopardy 
will be processed. In addition, Appendix Q of this manual discusses immediate jeopardy. 
 
10011.2 - Purpose 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
Immediate action is required to remove the immediate jeopardy to patient health or safety and to 
subsequently correct the deficiencies. Termination is required to address immediate jeopardy 
situations and occurs within 23 days if the immediate jeopardy is not removed. CMS may also 
choose to impose alternative sanctions in addition to termination. While the use of alternative 
sanctions in addition to termination is permitted, the Act makes it clear that the enforcement 
action for noncompliant agencies with immediate jeopardy deficiencies is intended to be swift. 
The imposition of alternative sanctions in addition to termination would not extend the 
timeframe that the HHA has to abate the immediate jeopardy situation. 
 
10012 - Enforcement Action When Immediate Jeopardy Exists 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
When the State identifies immediate jeopardy to patient health or safety, the State must notify the 
RO and follow the procedures in Appendix Q of this manual. When immediate jeopardy exists, 
the HHAs provider agreement is immediately terminated in accordance with4810.53 and 
488.825. In addition to termination, one or more alternative sanctions may be imposed. 
 
10013 - Action When Deficiencies are Condition-level But Do Not 
Pose Immediate Jeopardy. 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
If the HHA is no longer in compliance with the CoPs, either because the deficiency(ies) 
substantially limit the HHAs capacity to furnish adequate care but do not pose immediate 
jeopardy, or because the HHA has repeat noncompliance that results in a condition level 
deficiency based on the HHAs failure to correct and sustain compliance, CMS will either 
terminate the provider agreement following the 100 day termination track or impose one or more 
alternative sanctions as an alternative to termination. If alternative sanctions are imposed, CMS 
terminates the HHAs provider agreement within 6 months of the last day of the survey if the 
HHA is not in substantial compliance with the CoPs and the condition level deficiencies are not 
corrected. 
 
10014 - Guidance for Individual Sanctions 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14)   
The following sections describe each possible alternative sanction and procedures for imposing 
them. In addition, the CMS RO and SA follow the procedures in Chapter 3 of the SOM if an 
adverse action is likely to be initiated against a Medicare participating provider. 
 
10015 - Temporary Management 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
10015.1- Introduction 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
This sanction is established pursuant to 18101 of the Act and 488.835.CMS may choose to 
impose temporary management in situations where the failure to comply with the CoPs is 
directly related to poor management or lack of management such that it is likely to impair the 
HHAs ability to correct deficiencies and return the agency to full compliance within the 
necessary timeframe. 
 
10015.2- Purpose 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
A temporary manager may be imposed if it is determined that an agency is not in substantial 
compliance. The maximum period for use of the temporary manager is six months. It is the 
temporary managers responsibility to oversee correction of the deficiencies and assure the 
health and safety of the agencys patients while the corrections are being made. A temporary 
manager may also be imposed to oversee orderly closure of an agency including the proper and 
safe transfer of patients to another local HHA. 
 
10015.3 - Authority of Temporary Manager 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
A temporary manager has the authority to hire, terminate, or reassign staff; obligate agency 
funds; alter agency policies and procedures; and otherwise manage an agency to correct 
deficiencies identified in the agencys operation. 
 
10015.4 - Selection of Temporary Manager 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
Each SA should compile a list of individuals who are eligible to serve as temporary managers. 
When CMS decides to impose this sanction, it considers the SAs recommendation for a 
temporary manager whose work experience and education qualify the individual to oversee the 
correction of deficiencies to achieve substantial compliance. The temporary management will not 
exceed a period of six months. 
 
The SA should reject a candidate who has demonstrated difficulty maintaining compliance in the 
past. 
  10015.5 - Conditions of Temporary Management 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
CMS notifies the HHA that a temporary manager is being appointed. The HHAs management 
must agree to relinquish authority and control to the temporary manager and to pay his/her salary 
before the temporary manager can be installed in the HHA. A contract or memorandum of 
understanding should be completed between the temporary manager and the HHA prior to the 
temporary manager beginning any work or incurring any costs. Failure to relinquish 
authority and control to the temporary manager will result in termination of the HHA. 
 
The HHA cannot retain final authority to approve changes of personnel or expenditures of HHA 
funds and be considered to have relinquished control to the temporary manager. The temporary 
manager must be given access to all HHA bank accounts. If the HHA does not relinquish 
control to the temporary manager and/or provide access to bank accounts and available assets, 
the HHA will be terminated. It should be noted that the HHAs governing body remains 
ultimately responsible for achieving compliance. The responsibility does not transfer to the 
temporary manager, SA, or CMS. 
 
The temporary managers salary must be at least equivalent to the prevailing annual salary of 
HHA administrators in the HHAs geographic area (Geographic Guide by the Department of 
Labor, BLS Wage Data by Area and Occupation), plus any additional costs that would have 
reasonably been incurred by the HHA if the temporary manager had been in an employment 
relationship, e.g., the cost of a benefits package, prorated for the amount of time that the 
temporary manager spends in the HHA. The HHA is also responsible for any other costs 
incurred by the temporary manager in furnishing services under such an arrangement or as 
otherwise set by the State. Failure to pay the salary and other costs is considered a failure to 
relinquish authority and control to temporary management. 
 
10015.6 - Orienting and Supervising Temporary Manager 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
The State should provide the temporary manager with an appropriate orientation that includes a 
review of the HHAs deficiencies and compliance history. The State may request that the 
temporary manager periodically report on the actions taken to achieve compliance and on the 
expenditures associated with these actions. 
 
10015.7 - Notice of Imposition of Temporary Management 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
A temporary manager may be imposed 15 calendar days after the HHA receives notice in non-
immediate jeopardy situations and 2 calendar days after the HHA receives notice in immediate 
jeopardy situations. 
 
10015.8 - Duration of Temporary Management 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
  Temporary management continues until a HHA is terminated, or achieves substantial 
compliance and is capable of remaining in substantial compliance, or decides to discontinue the 
sanction and reassume management control before it has achieved substantial compliance. If 
the HHA reassumes control before achieving substantial compliance, CMS would initiate 
termination of the provider agreement and could impose additional sanctions during the time 
period between HHA resumption of management and termination. Temporary management will 
not exceed six months from the date of the survey identifying noncompliance. 
 
10016 - Suspension of Payment for All New Medicare Admissions 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
10016.1 - Introduction 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
Sections 18101(f)(2)(A)(ii) of the Act and 488.840 provide for the suspension of payment for all 
new Medicare admissions when a HHA is not in substantial compliance, regardless of whether 
cited deficiencies pose immediate jeopardy to patient health and safety. This suspension of 
payment for new admissions may be imposed alone or in combination with other sanctions to 
encourage prompt compliance. 
 
10016.2 - Notice of Sanction 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
Suspension of payment for new admissions may be imposed anytime a HHA is found to be out of 
substantial compliance, as long as the HHA is given written notice at least 2 calendar days 
before the effective date in immediate jeopardy situations and at least 15 calendar days before 
the effective date in non-immediate jeopardy situations. The notice of suspension of payment for 
new admissions must include the following: the nature of the non-compliance; the effective 
date of the sanction; and the right to appeal the determination leading to the sanction. In 
addition to notifying the HHA of this proposed sanction, CMS will also notify the State Medicaid 
Agency if the HHA is dually certified. 
 
10016.3 - Effect of Sanction on Patients Admitted before the Effective Date of 
Sanction 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
The patients status on the effective date of the suspension of payment sanction is the controlling 
factor. This sanction would not apply to patients who have been receiving care from the HHA 
before the effective date of this sanction. This sanction would apply only to new Medicare 
admissions. CMS will suspend payments for new Medicare patient admissions to the HHA that 
are made on or after the effective date of the imposition of the sanction for the duration of the 
sanction. Payments for individuals who are already receiving services could continue. In 
accordance with 488.805, CMS define a new admission as the following: 
 
  A patient who is admitted to the HHA under Medicare on or after the effective date of a 
suspension of payment sanction; or   
  A patient who was admitted and discharged before the effective date of the suspension of 
payment and is readmitted under Medicare on or after the effective date of suspension of 
payment sanction. 
 
As part of this sanction, the HHA would be required to notify any new patient admission, before 
care is initiated, of the fact that Medicare payment would not be available to this HHA 
because  of  the  imposed  suspension.  The  HHA  would  be  precluded  from  charging  the 
Medicare patient for those services unless it could show that, before initiating the care, it had 
notified the patient or representative both orally and in writing in a language that the patient or 
representative can understand that Medicare payment is not available. 
 
The suspension of payment sanction will end when CMS finds that the HHA is in substantial 
compliance with all of the CoPs or when the HHA is terminated. That is, the suspension of 
payment sanction would end when the HHA has corrected all condition-level deficiencies. Any 
Medicare patients admitted during the suspension of payment time period would require a 
new start of care (SOC) date after the suspension of payment for new admissions has ended. This 
is required for the HHA to begin receiving payments for those patients. 
 
10016.4 - Duration 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
The suspension of payment would end when CMS terminates the provider agreement or when 
CMS finds, in accordance with section 18101(f)(2)(C) of the Act and 488.840(c), the HHA to 
be in substantial compliance with all of the CoPs. If CMS terminates the provider agreement or 
determines that the HHA is in substantial compliance with the CoPs, the HHA would not be able 
to recoup any payments for services provided to Medicare patients admitted during the time the 
suspension was in place. 
 
Generally, if the HHA achieves substantial compliance and it is verified by CMS, CMS will 
resume payments to the HHA prospectively from the date it determines that substantial 
compliance was achieved. No payments are made to reimburse the HHA for the period of time 
between the date the sanction was imposed and the date that substantial compliance was 
achieved. CMS accomplishes the suspension of payment sanction through written instructions to 
the appropriate Medicare Administrative Contractor (MAC). The RO will send the letter with 
instructions to the MAC. 
 
10017 - Civil Money Penalties 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
10017.1 - Basis for Imposing Civil Money Penalties 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
Under sections 18101(e) and 18101(f)(2)(A)(i) of the Act and 488.845, CMS may impose a civil 
money penalty against an HHA that is determined to be out of compliance with one or more 
CoPs, regardless of whether the HHAs deficiencies pose immediate jeopardy to patient health  and safety. CMS may impose a civil money penalty for the number of days that a HHA is not in 
substantial compliance with one or more CoPs, or for each instance that a HHA is not in 
substantial compliance. The civil money penalty amount cannot exceed $10,000 for each day of 
non-compliance. 
 
CMS defines per instance in 488.805 as a single event of noncompliance identified and 
corrected during a survey, for which the statute authorizes CMS to impose a sanction. While 
there may be a single event which leads to noncompliance, there can also be more than one 
instance of noncompliance identified and more than one civil money penalty imposed during a 
survey. For penalties imposed per instance of noncompliance, CMS has established penalties 
from $500 to $10,000 per instance. The sum of all penalties cannot exceed $10,000 per day. 
Such penalties would be assessed for one or more singular events of condition-level 
noncompliance that were identified at the survey and where the noncompliance was corrected 
during the onsite survey. Since the range of possible deficiencies is great and depends upon the 
specific circumstances at a particular time, it would be impossible to assign a specific monetary 
amount for each type of noncompliance that could be found. SAs and ROs may use the chart 
found in section 10020 of this chapter for guidance in determining a per instance amount.  A 
per-day and a per instance civil money penalty cannot be used simultaneously for the same 
deficiency. However, both types of civil money penalties may be used during a noncompliance 
cycle if more than one survey takes place and the per day penalty was not the civil money 
penalty initially imposed. 
 
10017.2 - Determining Amount of Civil Money Penalty 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
In determining the amount of the civil money penalty, CMS considers certain factors in 
addition to those listed in 488.815 which include: 
 
  The size of the agency and its resources; 
 
  Accurate and credible resources such as PECOS and Medicare cost reports and claims 
information, that provide information on the operations and the resources of the 
HHA; and 
 
  Evidence that the HHA has a built-in, self-regulating quality assessment and performance 
improvement system to provide proper care, prevent poor outcomes, control patient 
injury, enhance quality, promote safety, and avoid risks to patients on a sustainable 
basis that indicates the ability to meet the conditions of participation and to ensure 
patient health and safety. 
 
When several instances of noncompliance are identified at a survey, more than one per-day or 
per-instance civil money penalty could be imposed as long as the total civil money penalty did 
not exceed $10,000 per day. 
  The regional office consults with the regional attorneys office to ensure compliance with section 
1128A of the Act and Department of Justice requirements. Section 1128A of the Act requires 
CMS to offer a hearing before collecting, but not before imposing, a civil money penalty. 
 
10017.3 - Adjustments to penalties 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
CMS has the discretion to increase or reduce the amount of the civil money penalty during the 
period of noncompliance depending on whether the level of noncompliance changed at the 
time of a revisit survey.  
 
CMS may increase a civil money penalty based on the following: 
 
  The HHAs inability or unwillingness to correct deficiencies; 
  The presence of a system-wide failure in the provision of quality care; or 
  A determination of immediate jeopardy with actual harm versus immediate jeopardy with 
potential for harm. 
 
CMS may decrease a civil money penalty to the extent that it finds, pursuant to a revisit, that 
substantial and sustainable improvements have been implemented even though the HHA is not 
yet in full compliance with the conditions of participation. 
 
No penalty assessment shall exceed $10,000 for each day of noncompliance. 
 
10018 - Range of Penalty Amounts  
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
10018.1- Upper range of penalty 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
Penalties in the upper range of $8,500 to $10,000 per day of noncompliance are imposed for a 
condition-level deficiency that is immediate jeopardy. The penalty in this range will continue 
until compliance can be determined. In the event of noncompliance with the CoPs, a credible 
allegation of compliance is required before a revisit is conducted. Once the credible 
allegation of compliance has been received, the SA will conduct a revisit. If the HHA makes an 
additional credible allegation that the deficiency(ies) is corrected following an earlier revisit or 
between the 46th and 100th calendar day prior to the effective date of termination, the RO must be 
notified by telephone. The SA submits all evidence or documentation regarding the HHAs 
allegation and its recommendation regarding the HHAs alleged compliance. The RO makes a 
determination whether a second revisit is appropriate. (See 3016A.) 
 
During the revisit survey, the SA will determine if the immediate jeopardy situation has been 
abated. If the immediate jeopardy situation has been abated, but condition level deficiencies still 
exist, the penalty amount may be decreased to the middle or lower range of penalties based 
on the deficiency. The civil money penalty ranges are set forth in 488.845(b)(3)(i),(ii), and 
(iii) and are as follows:   
a.  $10,000 per day for a deficiency or deficiencies that is determined to be immediate 
jeopardy and that results in actual harm; 
 
b.  $10,000 per day for a deficiency or deficiencies that is determined to be immediate 
jeopardy and that result in a potential for harm; and 
 
c.  $8,500 per day for an isolated incident of noncompliance that is in violation of 
established HHA policies and procedures 
 
Note: The following examples contain findings that could become a part of an HHAs 
immediate jeopardy citation. Please note that the citation of immediate jeopardy is only 
made after careful investigation of all relevant factors as detailed in Appendix Q. An IJ 
decision requires a determination that the situation meets all required IJ components. 
 
1.  The SA considers recommending a $10,000 per day civil money penalty for a deficiency 
or deficiencies that is determined to be immediate jeopardy and that results in actual 
harm. Examples: HHA fails to report to physician episodes of severe hyperglycemia, 
resulting in ketoacidosis and hospitalization of diabetic patient; HHA fails to timely and 
accurately assess a patients pressure ulcers, which deteriorate to Stage 4 and sepsis 
prior to their recognition. 
 
2.  The SA considers recommending a $10,000 per day civil money penalty for a deficiency 
or deficiencies that is determined to be immediate jeopardy and that result in a potential 
for harm. Examples: HHA fails to intervene after patient verbal threats of suicide, 
resulting in potential for self-harm; HHA fails to administer ordered intravenous 
antibiotic to patient with diagnosed infection, resulting in potential for development of 
sepsis. 
 
3.  The SA considers recommending $8,500 per day for an isolated incident of 
noncompliance that is in violation of established HHA policies and procedures. 
Example: One of the HHAs nurses did not follow the HHAs infection control policies 
and procedures when performing wound care. Patient developed infection which could 
not be controlled at home and hospitalization was needed. 
 
10018.2 - Middle range of penalty 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
Civil money penalties imposed in the range of $1,500 to $8,500 per day of noncompliance are 
imposed for a repeat and/or condition-level deficiency that does not constitute immediate 
jeopardy, but is directly related to poor quality patient care outcomes. 
 
10018.3 - Lower range of penalty 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
  Civil money penalties in the range of $500 to $4,000 per day of non-compliance are imposed 
for a repeat and/or condition-level deficiency that does not constitute immediate jeopardy and that 
is related predominately to structure or process-oriented conditions (such as OASIS submission 
requirements) rather than directly related to patient care outcomes. 
 
10018.4 - Per instance civil money penalty 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
Penalties imposed per instance of noncompliance may be assessed for one or more singular 
events or instances of condition-level noncompliance that are identified and where the 
noncompliance was corrected during the onsite survey. The terminology per instance is not 
used to suggest that only one instance of noncompliance may be the basis to assess a civil money 
penalty. There can be more than one instance of noncompliance identified during a survey.  
When penalties are imposed for per instance of noncompliance, or for multiple instances of 
noncompliance, the penalties will be in the range of $500 to $10,000 per instance, and will not 
exceed a total of $10,000 for each day of noncompliance. 
 
10018.5 - Decreased penalty amounts 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
If a penalty was imposed in the upper range and the immediate jeopardy is removed or abated 
but the HHA continues to have condition-level noncompliance that is not immediate jeopardy, 
CMS will shift the penalty amount imposed per day from the upper range to the middle or lower 
range based on the conditions that are out of compliance. SAs and ROs should follow the same 
guidelines above to determine new penalty amount. An earnest effort to correct any systemic 
causes of deficiencies and sustain improvement must be evident. 
 
10018.6 - Increased penalty amounts 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
Following the imposition of a lower level penalty amount (either the middle range or the lower 
range), CMS may increase the per day penalty amount for any condition-level deficiency or 
deficiencies which become sufficiently serious to pose potential harm or immediate jeopardy. 
 
CMS increases the per day penalty amount for deficiencies that are not corrected and 
found again at the time of revisit survey(s) for which a lower level penalty was 
imposed. 
 
For repeated noncompliance with the same condition-level deficiency or for uncorrected 
deficiencies from a prior survey, CMS may impose an increased civil money penalty amount 
 
10018.7 - Considerations in determining the penalty amount 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
SAs and ROs should review all applicable findings and consider the factors in 488.845 in 
determining the final amount of the CMP to be imposed.   
10019- Suggested Penalty Amounts 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
10019.1 - Upper Range Civil Money Penalties for Immediate Jeopardy 
Citations 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
Immediate Jeopardy  results in harm  $10,000 
Immediate Jeopardy  results in a potential for  $10,000 
harm 
Immediate Jeopardy  isolated event of non-  $8,500 
compliance in violation of an established HHA 
policy 
 
10019.2 - Middle Range Penalties for Non-Immediate Jeopardy Citations 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
  Amount  1st Revisit  2nd Revisit 
imposed in  Survey  Survey 
Recertification 
Survey 
Repeat Deficiency related to direct patient  $5,000 -  $6,000 -  $8,500 
care. Consider citing for the following  $6,000  $7,000 
conditions: 
 
 484.18 Acceptance of patients, plan of care, 
and medical supervision 
 484.30 Skilled Nursing Services 
 484.32 Therapy Services 
 484.34 Medical Social Services 
 484.36 Home Health Aide Services 
 484.38 Qualifying to Furnish Outpatient 
Physical Therapy or Speech Pathology 
Services 
 484.55 Comprehensive Assessment of 
Patients 
Initial Citation related to direct patient care.  $2,000 -$3,000  $3,000 -  $5,500 
Consider citing for the following conditions:  $4,000 
 484.18 Acceptance of patients, plan of care, 
and medical supervision 
 484.30 Skilled Nursing Services 
 484.32 Therapy Services   484.34 Medical Social Services 
 484.36 Home Health Aide Services 
 484.38 Qualifying to Furnish Outpatient 
Physical Therapy or Speech Pathology 
Services 
 484.55 Comprehensive Assessment of 
Patients 
Citation for structure or process deficiencies.  $1,500 - $2000  $2,000 -  $3,500 
Consider citing for the following conditions:  $3,000 
 484.10 Patient Rights 
 484.12 Compliance with federal, state, and 
local laws, disclosure and ownership 
information, and accepted professional 
standards and principles. 
 484.14 Organization, services, and 
administration 
 484.48 Clinical records 
 
10019.3 Lower Range Penalties for Structure and Process Citations Not 
Directly Related to Patient Care 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
  Amount imposed  1st  2nd Revisit 
in Recertification  Revisit  Survey 
Survey  Survey 
Repeat Deficiency related to structure or  $2,000  $3,000  $4,000 
process deficiencies. Consider citing for the 
following conditions: 
 484.11 Release of patient identifiable OASIS 
information 
 484.16 Group of professional personnel 
 484.20 Reporting OASIS information 
 484.52 Evaluation of the agencys program 
Initial Citations of structure or process  $500 - $800  $800 -  $1,500 
deficiencies. Consider imposing for  $1,000 
deficiencies related to CoPs: 
 484.11 Release of patient identifiable OASIS 
information 
 484.16 Group of professional personnel 
 484.20 Reporting OASIS information 
 484.52 Evaluation of the agencys program 
 
10020  Procedures 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
  10020.1 - Notice of imposition of civil money penalty 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
If CMS or the SA imposes a civil money penalty, it provides the HHA with written notice of the 
intent to impose the sanction, including the amount of the civil money penalty being imposed, 
the basis for such imposition and the proposed effective date of the sanction. The notice 
includes: 
 
I.  The nature of the noncompliance (regulatory requirements not met); 
 
II.  The statutory basis for the civil money penalty; 
 
III. The amount of the penalty per day of noncompliance or the amount of the penalty per 
instance of noncompliance during a survey; 
 
IV. The factors that were considered in determining the amount of the civil money 
penalty; 
 
V.  The date on which the per day civil money penalty begins to accrue; 
 
VI. A statement that the per day civil money penalty will accrue until substantial compliance is 
achieved or until termination from participation in the program occurs. 
 
VII.   When the civil money penalty is collected; 
 
VIII.  Instructions for responding to the notice, including a statement of the HHAs right 
to a hearing and information about how to request a hearing; and 
 
IX. Implications of waiving the right to a hearing and information about how to waive the 
right to a hearing (see 10021.4 below). 
 
10020.2 - Sending the Notice 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
The notice shall be in writing and shall be addressed directly to the HHA; or to an individual, an 
officer, managing or general agent, or other agent authorized by appointment or law to 
receive the notice. 
 
The notice shall be dispatched through first-class mail, or other reliable means. Other 
reliable means refers to the use of alternatives to the United States mail in sending notices. 
Electronic communication, such as facsimile transmission or email, is equally reliable and 
on occasion more convenient than the United States mail. If electronic means are employed 
to send notice, the sender should maintain a record of the transmission to assure proof of 
transmission if receipt is denied. 
 
  10020.3 - Appeal of Noncompliance That Led to Imposition of Civil Money 
Penalty 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
Before collecting a civil money penalty, section 1128A of the Act requires the Secretary 
(CMS) to conduct a hearing for an HHA that properly requests. An HHA may request a 
hearing with the Administrative Law Judge (ALJ) on the determination of the noncompliance 
that is the basis for imposition of the civil money penalty. The procedures to request a 
hearing specified in 42 C.F.R. 4108.40 are followed when CMS imposes a civil money 
penalty on an HHA. Once an appeal hearing is requested, CMS cannot collect the CMP until 
a final agency determination. 
 
10020.4 - HHA Waives Right to a hearing 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
An HHA may waive the right to a hearing, in writing, within 60 days from the date of the notice 
imposing the civil money penalty. If an HHA timely waives its right to an appeal hearing 
within 60 calendar days of their receipt of CMS' notice imposing the civil money penalty, 
CMS will approve the waiver and reduce the CMP by thirty five percent (35%). Payment of 
the reduced CMP must be made within 15 days of the HHA's receipt of CMS's notice approving 
the waiver and reducing the CMP. If the HHA does not waive its right to an appeal hearing 
in writing within 60 calendar days of their receipt of CMS original request for payment under 
488.845(c)(2)(ii), it will not receive the CMP reduction. 
 
NOTE: Each time a survey is conducted within an already running noncompliance cycle and 
a civil money penalty is imposed, the HHA is given appeal rights and may exercise its waiver 
of right to a hearing. 
 
When a per day civil money penalty is imposed and then is increased or decreased at subsequent 
surveys during an already running noncompliance cycle, an HHA may elect to either appeal each 
separate imposition of civil money penalty or waive the right to appeal each imposition. 
Each civil money penalty imposition is computed separately for a set number of days. The 
final civil money penalty amount is established after the final administrative decision. 
 
Example: An HHA is cited on the original recertification survey for non-compliance with 42 
CFR 484.18, Acceptance of patients, plan of care, medical supervision. Findings include 
evidence that the HHA did not follow the plan of care (G158), the plan of care did not 
include all pertinent diagnoses (G1510) and the HHA failed to notify the physician of 
changes in the patients condition (G164). On the first revisit survey, the incidence of these 
deficiencies increased. On both surveys, the condition is cited as out of compliance and 
CMPs are imposed. The CMP will be increased following the revisit survey. The HHA may 
choose to appeal one or both of the citations, or waive one or both citations, or waive one 
citation and appeal the other. 
  When several per instance civil money penalties are imposed during a noncompliance cycle, an 
HHA may choose to appeal or waive the right to appeal one or more of the civil money 
penalties, in the same manner as illustrated above for the per day civil money penalties. 
 
After the facility achieves substantial compliance or its provider agreement is terminated, it is 
notified of the revised civil money penalty amount due. 
 
10020.5 - Accrual and duration of per day penalty 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
The per-day civil money penalty would begin to accrue on the last day of the survey that 
identified the noncompliance and would continue to accrue until the HHA achieves substantial 
compliance with all requirements or the date of termination, whichever occurs first. 
 
10020.6 - Amount of per instance penalty 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
A civil money penalty is imposed for each instance of noncompliance based on a 
deficiency(ies) during a specific survey. It is applied to as many instances as is deemed 
appropriate and in a specific amount for that particular deficiency(ies), $10,000with an 
amount not to exceed $10,000 each day. 
 
NOTE: The per-day and per-instance CMP would not be imposed simultaneously for the 
same CoPs in a survey. In no instance will the period of noncompliance be allowed to extend 
beyond 6 months from the last day of the original survey that determined the HHAs 
noncompliance. If the HHA has not achieved substantial compliance with all the 
participation requirements within those 6 months, CMS will terminate the HHA. The accrual 
of the per day CMP stops on the day the HHAs provider agreement is terminated or the 
HHA achieves substantial compliance, whichever is earlier. 
 
Example: When the per instance civil money penalty is used on the original survey, the revisit is 
considered another survey to determine compliance. If noncompliance is identified at the revisit 
and a civil money penalty is selected as the enforcement response, either the per instance or 
per day remedy may be selected. 
 
10020.7 - Duration of Civil Money Penalty 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
The per day civil money penalty accrues for the number of days of noncompliance from the date 
that the deficiency starts until the date that the HHA achieves substantial compliance or, if 
applicable, the date of termination. For example, if a HHA is found in substantial compliance 
or its provider agreement is terminated on May 18, the accrual of the civil money penalty stops 
on May 17. 
  The per instance civil money penalty is imposed for each instance of noncompliance based on a 
deficiency during a specific survey. It is applied to as many instances as is deemed appropriate 
during a specific survey up to a total of $10000. 
 
EXAMPLE: When the per instance civil money penalty is used on the original survey, the 
revisit is considered another survey to determine compliance. If noncompliance is identified 
and a civil money penalty is selected as the enforcement response, either the per instance or per 
day penalty may be selected. 
 
a.  Revisit Identifies New Noncompliance and Same Data Tag is Selected - If the same 
data tag is selected to identify noncompliance, the State (or regional office) could 
choose to utilize either the per instance or per day civil money penalty. It would not 
matter whether the same data tag was selected to identify the new noncompliance. 
The issue is whether noncompliance is present and whether the deficient practice 
rises to a level that will support selecting a civil money penalty as a sanction. For 
instance, noncompliance was identified at Tag G100 during the original survey. 
During the revisit survey, a different problem dealing with the patient rights of three 
patients was cited at Tag G100. The per instance or per day civil money penalty 
would be selected for the noncompliance identified at Tag G100. If the per instance 
civil money penalty was used, the amount of the civil money penalty might be 
influenced by factors relating to the violations of patient rights. However, only one 
per instance civil money penalty would be appropriate. It would not be appropriate 
to assign a separate civil money penalty for each of the violations related to patient 
rights (findings) identified at Tag G100. 
 
b.  Revisit Identifies New Noncompliance and a Different Data Tag is Selected - If a 
revisit identifies new deficiencies at a different data tag, either a per instance or 
per day civil money penalty could be selected as a sanction. 
 
c.  Noncompliance - Immediate Jeopardy Does Not Exist - For noncompliance that does 
not pose immediate jeopardy, the per day civil money penalty is imposed for the days 
of noncompliance, i.e., from the day the penalty starts (and this may be prior to the 
notice), until the HHA achieves substantial compliance or the provider agreement is 
terminated. However, if the HHA has not achieved substantial compliance at the end 
of 6 months from the last day of the original survey, the regional office terminates the 
provider agreement. The accrual of the civil money penalty stops on the date that the 
provider agreement is terminated. 
 
For noncompliance that does not pose immediate jeopardy, the per instance civil money 
penalty is imposed for the number of deficiencies during a survey for which the civil 
money penalty is determined to be an appropriate sanction. For example, Tag G330 
and Tag G320 were cited on a survey. A civil money penalty of $2,000 is imposed for 
Tag G320 and a civil money penalty of $8,000 is imposed for Tag G330. No civil 
money penalty could then be imposed for additional deficiencies because the total per 
instance civil money penalty may not exceed $10,000 for each survey. 
  d.  Noncompliance - Immediate Jeopardy Exists - For noncompliance that poses 
immediate jeopardy, CMS must terminate the provider agreement within 23 
calendar days after the last day of the survey that identified the immediate 
jeopardy if the immediate jeopardy is not removed. The accrual of the per day 
civil money penalty stops on the date that the provider agreement is terminated. 
 
10020.8 - Duration of per day penalty when there is immediate jeopardy 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
In the case of noncompliance that poses immediate jeopardy, CMS must terminate the provider 
agreement within 23 calendar days after the last date of the survey if the immediate jeopardy is 
not removed. 
 
A penalty imposed per day of noncompliance will stop accruing on the day the provider 
agreement is terminated or the HHA achieves substantial compliance, whichever occurs first. 
 
10020.9 - Duration of penalty when there is no immediate jeopardy 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
In the case of noncompliance that does not pose immediate jeopardy, the daily accrual of per 
day civil money penalties is imposed for the days of noncompliance, i.e., from the day the 
penalty starts (and this may be prior to the notice), until the HHA achieves substantial 
compliance based on a revisit or the provider agreement is terminated, but for a period of no 
longer than 6 months following the last day of the survey. 
 
If the HHA has not achieved substantial compliance with all of the conditions of 
participation, CMS will terminate the provider agreement. The accrual of civil money penalty 
stops on the day the HHA agreement is terminated or the HHA achieves substantial 
compliance, whichever is earlier. 
 
10020.10 - When Penalty Is Due and Payable 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
1. After Final Administrative Decision 
 
When CMS imposes a civil money penalty, a final administrative decision includes an 
Administrative Law Judge decision and review by the Departmental Appeals Board, if the HHA 
requests a review of the Administrative Law Judge decision. Payment of a civil money 
penalty is due 15 calendar days after a final administrative decision, upholding the 
imposition of the civil money penalty, when: 
 
a.  The HHA achieved substantial compliance before the final administrative decision; or 
 
b.  The effective date of termination occurred before the final administrative decision. 
 
2. No Hearing Requested   
Payment of a civil money penalty is due 15 calendar days after the time period for requesting a 
hearing has expired and a hearing request was not received when: 
 
a.  The HHA achieved substantial compliance before the hearing request was due; or 
b.  The effective date of termination occurred before the hearing request was due. 
 
3. After Request to Waive Hearing 
 
Payment of a civil money penalty is due 15 calendar days after receipt of the HHAs written 
waiver of a right to a hearing when: 
 
a.  The HHA achieved substantial compliance before receipt of the HHAs written waiver of 
its right to a hearing; 
 
b.  A per instance civil money penalty has been imposed. Since no opportunity to correct is 
available for the noncompliance against which a per instance civil money penalty is 
imposed, allowing time for the HHA to achieve substantial compliance is not a factor in 
determining when the civil money penalty is due; or 
 
c.  The effective date of termination occurred before receipt of the HHAs written waiver of 
its right to a hearing. 
 
4. After Substantial Compliance Is Achieved 
 
Payment of a per day civil money penalty is due 15 calendar days after substantial compliance is 
achieved when: 
 
a.  A final administrative decision, upholding the imposition of the civil money penalty, is 
made before the HHA achieved substantial compliance; 
 
b.  The HHA did not file a timely hearing request before it achieved substantial 
compliance; or 
 
c.  The HHA waived its right to a hearing before it achieved substantial compliance. 
However, the period of noncompliance covered by the civil money penalty may not 
extend beyond 6 months from the last day of the survey. 
 
5. After Effective Date of Termination 
 
Payment of a civil money penalty is due 15 calendar days after the effective date of 
termination, if before the effective date of termination: 
 
a.  The final administrative decision was made upholding the imposition of the civil money 
penalty; 
 
b.  The time for requesting a hearing has expired and the HHA did not request a hearing;  or 
 
c.  The HHA waived its right to a hearing. 
 
10021 - Notice of Amount Due and Collectible 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
1.  Contents of Notice 
 
The following information is included in a notice of the amount due which is sent to the HHA 
after the final amount due and collectible is determined: 
 
a. The amount of the penalty per day or the amount of the penalty per instance; 
 
b. For the per day civil money penalty, the number of days involved; 
 
c. The total amount due; 
 
d. The due date of the penalty; and 
 
e. The rate of interest to be assessed on the unpaid balance on the due date as follows: 
 
The rate of interest is the higher of either the rate fixed by the Secretary of the Treasury after 
taking into consideration private consumer rates of interest prevailing on the date of the notice 
of the penalty amount due and this rate is published quarterly in the Federal Register by the 
Department of Health and Human Services under 45 CFR 30.13(a); or the current value of 
funds rate which is published annually in the Federal Register by the Secretary of the 
Treasury, subject to quarterly revisions. (The regional office contacts CMS Central Office for 
the rate of interest information.) 
 
2.  Method of Payment 
 
a. The civil money penalty is payable by check to CMS if the check is rendered by the due 
date. 
 
b. After the due date of the penalty, the regional office or the State Medicaid Agency 
deducts the civil money penalty plus any accrued interest from money owed to the 
HHA. 
 
10021.1 - Computation and Notice of Total Penalty Amount 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
When a civil money penalty is imposed on a per day basis and the HHA achieves compliance 
with the conditions of participation as determined by a revisit survey, CMS sends a final notice to 
the HHA containing all of the following information: 
    The amount of penalty assessed per day. 
 
  The total number of days of noncompliance. 
 
  The total amount due. 
 
  The due date of the penalty. 
 
  The rate of interest to be assessed on any unpaid balance beginning on the due date. The 
rate of interest is the higher of either the rate fixed by the Secretary of the Treasury after 
taking into consideration private consumer rates of interest prevailing on the date of the 
notice of the penalty amount due and this rate is published quarterly in the Federal 
Register by the Department of Health and Human Services under 45 CFR 30.13(a); 
or the current value of funds rate which is published annually in the Federal 
Register by the Secretary of the Treasury, subject to quarterly revisions. (The regional 
office contacts CMS Central Office for the rate of interest information.) 
 
  Instructions for submitting payment to CMS CO with the reference number on the 
check. 
 
When a civil money penalty is assessed per instance of noncompliance, a notice is sent to the 
HHA containing all of the following information: 
 
  The amount of the penalty or penalties that was assessed; 
 
  The total amount due; 
 
  The due date of the penalty; 
 
  The rate of interest to be assessed on any unpaid balance beginning on the due date. The 
rate of interest is the higher of either the rate fixed by the Secretary of the Treasury after 
taking into consideration private consumer rates of interest prevailing on the date of the 
notice of the penalty amount due and this rate is published quarterly in the Federal 
Register by the Department of Health and Human Services under 45 CFR 30.13(a); or 
the current value of funds rate which is published annually in the Federal Register by 
the Secretary of the Treasury, subject to quarterly revisions. (The regional office 
contacts CMS Central Office for the rate of interest information); and 
 
  Instructions for submitting payment to CMS CO with the reference number on the check. 
 
10021.2 - When a penalty is due and payable 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
Total civil money penalty amounts are computed after a final administrative decision; that is, 
after: 
 
I.  Compliance is verified;  II.  The HHA provider agreement is involuntarily terminated; or 
III. Administrative remedies have been exhausted. 
 
When the regional office imposes a civil money penalty, a final administrative decision 
includes an Administrative Law Judge decision and review by the Departmental Appeals 
Board, if the facility requests a review of the Administrative Law Judge decision. A civil 
money penalty is due and payable 15 days from the final administrative decision upholding the 
imposition of the penalty when (1) the facility achieved substantial compliance before the final 
administrative decision, or (2) the effective date of termination occurred before the final 
administrative decision. 
 
Final administrative decision is when: The time to request a hearing has expired and a 
hearing request was not received when the HHA achieved substantial compliance before the 
hearing request was due or the effective date of termination occurred before the hearing request 
was due; 
 
  CMS receives a request from the HHA waiving its right to appeal the initial 
determination and (1) the HHA achieved substantial compliance before CMSs receipt 
of the request, or (2) a per instance penalty has been imposed and the facility has 
achieved substantial compliance before CMSs receipt of the request; or (3) the effective 
date of termination occurred before receipt of the HHAs written request waiving its 
right to a hearing; 
 
  A final decision of an Administrative Law Judge and/or Departmental Appeals Board 
Appellate Board upholding the imposition of the penalty; or 
 
  The HHA is terminated from the program and, if before the effective date of termination, 
 
(1)  the final administrative decision was made upholding the imposition of the 
penalty, 
 
(2)  the time for requesting a hearing has expired and the HHA did not request a 
hearing, or (3) the HHA waived its right to a hearing. 
 
A request for hearing will not delay the imposition of the civil money penalty, but can only 
affect the collection of any final amounts due to CMP. If an HHA timely waives its right to a 
hearing, CMS reduces the final CMP amount by 35%. This reduction would be reflected once 
the CMP stops accruing: when the HHA achieves substantial compliance before CMS 
receives its request to waive a hearing; or the effective date of the termination occurs before 
CMS received the waiver request. 
 
The final penalty receivable amount would be determined when the per-day CMP accrual 
period ends (either when the HHA achieves substantial compliance or is terminated). 
 
An HHA has two options for action following the imposition of a penalty: 
    The HHA could pay the fine in full for all CMPs imposed prior to the date a CMP is due 
and payable; or 
 
  The HHA could request a hearing based on the determination of noncompliance with 
Medicare CoPs. 
 
Within 60 days of receipt of the notice of imposition of a penalty, the HHA may file a request 
directly to the Departmental Appeals Board in the Office of the Secretary, Department of 
Health and Human Services with a copy to the State and CMS. In accordance with 
4108.40(b), the HHAs appeal request would identify the specific issues of contention, the 
findings of fact and conclusions of the law with which the agency disagreed, and the specific 
basis for contending that the survey findings and determinations were invalid. A hearing 
would be completed before any penalty was collected. However, sanctions would continue 
regardless of the timing of any appeals proceedings if the HHA had not met the CoPs. 
Requesting an appeal would not delay or end the imposition of a sanction. A civil money 
penalty would begin to accrue on the last day of the survey which identified the noncompliance. 
These include penalties imposed on a per day basis, as well as penalties imposed per instance 
of noncompliance. 
 
10021.3  -  Method of Payment 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
The civil money penalty is payable by check to CMS if the check is rendered by the due date. 
After the due date of the penalty, the regional office deducts the civil money penalty plus any 
accrued interest from money then or later owed to the HHA by CMS or the State Medicaid 
Agency (see section 10022 below). 
 
10021.4 - Settlement of Civil Money Penalty 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
The regional office has the authority to settle civil money penalty cases at any time prior to 
a final administrative decision. If a decision is made to settle, the settlement should not be 
for a better term than had the HHA opted for a 35 percent reduction. 
 
10021.5 - Offsets 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
If payment was not received by the established due date, CMS will collect the civil money 
penalty through offset of monies then owed or later owing to the HHA. To initiate such an offset, 
CMS will instruct the appropriate Medicare Administrative Contractors/Fiscal 
Intermediaries and, when applicable, the State Medicaid agencies to deduct unpaid civil money 
penalty balances from any money owed to the agency. To maintain consistency in recovering 
a civil money penalty among other types of providers who are subject to a civil money 
penalty, the amount of any penalty can be deducted (offset) from any sum CMS or the State 
Medicaid Agency owes to the HHA. 
  Interest would be assessed on the unpaid balance of the penalty beginning on the due date. 
The rate of interest assessed on any unpaid balance would be based on the Medicare interest 
rate published quarterly in the Federal Register, as specified in 405.378(d). 
 
Those civil money penalty amounts not recovered due to HHA failure to pay or inadequate 
funds for offset will be collected through the Debt Collection Improvement Act of 110106 
which requires all debt owed to any Federal agency that is more than 180 days delinquent to be 
transferred to the Department of the Treasury for debt collection services. 
 
10022 - Disbursement of Recovered CMP funds 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
The CMP amounts and any corresponding interest recovered will be divided between the 
Medicare and Medicaid programs, based on a proportion that is commensurate with the 
comparative Federal expenditures under Titles XVIII and XIX of the Act, using an average of 
years 2007 to 20010 based on Medicaid Statistical Information System (MSIS) and HHA 
Prospective Payment System (PPS) claims. Based on the proportions of HHA claims 
attributed to Medicare and Medicaid, respectively, for the FY 2007-20010 period, 
approximately 63 percent of the CMP amounts recovered would be deposited as 
miscellaneous receipts to the U.S. Department of the Treasury and approximately 37 percent 
will be returned to the State Medicaid Agency to improve the quality of care for those who need 
home-based care. Beginning one year after the effective date of 488.845 (which is July 1, 
2014), these proportions shall be updated annually based on the most recent 3-year fiscal 
period in which the CMP is imposed, for which CMS determined that the Medicare and 
Medicaid expenditure data were essentially complete. The portion corresponding to Medicare 
payments is returned to the Department of Treasury as miscellaneous receipts and the portion 
corresponding to Medicaid payments is returned to the State Medicaid Agency. Penalty funds 
may not be used for survey and certification operations nor can it be used as the States 
Medicaid non-Federal medical assistance or administrative match. 
 
10023 - Directed Plan of Correction 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
10023.1  Introduction 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
These  procedures  implement  the  regulatory  requirements  at  488.850  for  imposing  a 
directed plan of correction. A directed plan of correction is one of the sanctions that the CMS 
regional  office  can  select  when  it  finds  a  HHA  out  of  compliance  with  Federal 
requirements. 
 
10023.2 - Purpose 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
The purpose of the directed plan of correction is to achieve correction and continued 
compliance with Federal requirements. A directed plan of correction is a plan that the  State, with RO approval, or the RO develops to require a HHA to take corrective action to 
achieve specific outcomes within specified time frames. 
 
Whether it has standard-level or condition-level deficiencies, an HHA must submit an 
acceptable plan of correction to CMS. If the HHA is unable to develop an acceptable plan of 
correction, CMS may impose a directed plan of correction for condition level deficiencies. 
 
10023.3 - Imposition of a Directed Plan of Correction 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
The HHAs directed plan of correction may be imposed by CMS when the HHA has deficiencies 
that warrant directing the HHA to take a specific action(s) or when the HHA fails to submit an 
acceptable plan of correction for condition level deficiencies. 
 
10023.4 - Elements of a Directed Plan of Correction 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
A directed plan of correction should address all of the elements required for a HHA-
developed plan of correction. These elements include, but are not limited to, the following: 
 
I.  How an HHA has or will correct each deficiency; 
II.  How the HHA will act to protect patients in similar situations; 
III. How the HHA will ensure that each deficiency does not recur; 
IV. How the HHA will monitor performance to sustain solutions; and 
V.  Under what timeframe corrective actions will be taken. 
 
10023.5 - Achieving Compliance 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
Achieving compliance is the agencys responsibility, whether or not a directed plan of 
correction is followed. If the HHA fails to achieve compliance within the timeframes 
specified in the directed plan of correction, CMS may impose one or more additional 
alternative sanctions until the HHA achieves compliance or is terminated from the Medicare 
program. 
 
10023.6 - Notice of Imposition of Directed Plan of Correction 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
CMS must provide written notification of the intent to impose a directed plan of correction 
sanction. 
 
A directed plan of correction may be imposed 15 calendar days after the HHA receives notice 
in non-immediate jeopardy situations and 2 calendar days after the HHA receives notice in 
immediate jeopardy situations. The date the directed plan of correction is imposed, that is, the 
date the sanction becomes effective, does not mean that all corrections must be completed by 
that date.   
10024 - Directed In-Service Training 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
10024.1 - Introduction 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
These instructions implement 488.855. Directed in-service training is one of the sanctions 
the SA may recommend and the RO may select when it finds an HHA out of compliance with 
Federal requirements. 
 
10024.2 - Purpose 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
Directed in-service training is a remedy that may be used when the State, CMS, or the temporary 
manager believe that education is likely to correct the deficiencies and help the HHA achieve 
substantial compliance. Directed in-service training requires the staff of the HHA to attend a 
specific in-service training program. The purpose of directed in-service training is to 
provide basic knowledge to achieve and remain in compliance with Federal requirements. 
For example, in circumstances where some, but not all, compliance problems are a result 
of a lack of knowledge on the part of the health care provider relative to advances in health 
care technology and expectations of favorable patient outcomes, directed in-service training 
would benefit the agency. Also, directed in-service could be used in situations where staff 
performance results in deficient practice. A directed in-service training program would correct 
this deficient practice through retraining the staff in the use of clinically and professionally 
sound methods to produce quality outcomes. 
 
10024.3 - Appropriate Resources for Directed In-Service Training 
Programs 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
Home health agencies should use programs developed by well-established centers of health 
education and training such as continuing education programs offered by schools of medicine, 
nursing, public health, community colleges, state health departments, centers for the aging, 
and other available area centers which have established continuing education programs for 
health professionals. The programs may also be conducted by consultants with 
background in education and training with Medicare HHA providers, or as deemed 
acceptable by CMS and/or the SA (by review of a copy of the curriculum vitas and/or 
resumes/references in order to determine the educators qualifications). The SA or RO may 
also compile a list of resources that can provide directed in-service training and may make 
this list available to HHAs. 
 
10024.4 - Further Responsibilities 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
  The HHA bears the expense of the directed in-service training for its staff. After the training 
has been completed, the SA will assess whether substantial compliance has been achieved. 
If directed in-service training was the sanction imposed and the HHA does not achieve 
substantial compliance, CMS may impose one or more additional sanctions as specified in 
488.808. 
 
10024.5 - Notice of Imposition of Directed In-Service Training 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
Directed in-service training may be imposed 15 calendar days after the HHA receives notice 
in non- immediate jeopardy situations and 2 calendar days after the HHA receives notice in 
immediate jeopardy situations. 
 
10025 - Effect of Termination on the HHAs patients 
(Rev. 114, Issued: 04-25-14, Effective: 04-25-14, Implementation: 04-25-14) 
 
Under the provisions of 1866(b)(2)(A) and (B) of the Act (also 42 CFR 4810.53), the 
Secretary may terminate an agreement with a provider of services if it is determined that 
the provider fails to comply substantially with the terms of the provider agreement, the 
provisions of title XVIII, or regulations promulgated thereunder, and that the provider fails 
to meet the applicable provisions of section 1861. 
 
Under 488.830 (e), an HHA that has its provider agreement terminated is required to 
appropriately and safely transfer its patients to another local HHA within 30 days of 
termination. The HHA is responsible for providing information, assistance and any 
arrangements necessary for the safe and orderly transfer of its patients. The SA is required to 
work with all HHAs that are terminated to ensure the safe discharge and orderly transfer of all 
patients to another Medicare-approved HHA. Payment to terminated HHAs for services for 
current patients is provided up to 30 days after termination pursuant to 4810.55(b).  Transmittals Issued for this Chapter 
 
Rev #  Issue Date  Subject  Impl Date  CR# 
R114SOM 04/25/2014  New to State Operations Manual (SOM) Chapter 10  04/25/2014  N/A