DEPARTMENT OF HEALTH AND HUMAN SERVICES 
Centers for Medicare & Medicaid Services 
7500 Security Boulevard, Mail Stop S2-26-12 
Baltimore, MD 21244-1850 
 
Center for Medicaid, CHIP and Survey & Certification 
 
CMCS Informational Bulletin 
 
 
DATE:  July 12, 2010 
 
FROM:  Cindy Mann, Director 
    Center for Medicaid, CHIP and Survey and Certification (CMCS) 
 
SUBJECT:  Publication of Proposed Rule Civil Money Penalties for Nursing Homes  
    CMS-2435-P 
 
 
We wish to alert you to the recent publication of a proposed rule Civil Money Penalties for 
Nursing Homes.   The Notice of Proposed Rule-Making (NPRM) was published in the Federal 
Register on Monday, July 12, 2010. The public has 30 days to comment on the proposed 
regulatory document.   
 
Sections 6111 of the Patient Protection and Affordable Care Act (the Affordable Care Act) (Pub. 
L. 111-148), enacted on March 23, 2010, amended sections 1819(h) and 1919(h) of the Social 
Security Act to incorporate specific provisions pertaining to the imposition and collection of civil 
money penalties (CMPs) when facilities do not meet Medicare and Medicaid participation 
requirements.  These new provisions are intended to improve efficiency and effectiveness of the 
nursing home enforcement process, particularly as it relates to civil money penalties imposed by 
CMS.  These proposed regulations would: 
 
  After the conclusion of any informal dispute resolution, permit CMS to collect and place 
CMPs into an escrow account pending the resolution of any formal appeal. 
 
  Provide an opportunity for an Independent Informal Dispute Resolution (IDR) when a 
CMP has been imposed.  Per day CMPs would be effective and continue to accrue but  
would not be collected during the time that a CMP is subject to the Independent IDR 
process. 
 
  Provide for the collection of the CMP upon the earlier of: 1) completion of an 
Independent IDR, or 2) 90 days after notice of the imposition of the CMP. 
 
  Establish that when a facility is successful in a formal appeal, the applicable portion of 
any CMP amount being held in escrow will be returned to the facility with interest.  
 
  Establish new authority for CMS to reduce a CMP it imposes by 50 percent when CMS 
determines that a facility has self-reported and promptly corrected its noncompliance, and 
waived its right to a hearing.  Noncompliance constituting immediate jeopardy, a pattern  
  Page 2  State Survey Agency Directors 
 
of harm, widespread harm, or resulting in a residents death would not be eligible for this 
CMP reduction. In addition, the reduction would not apply for facilities that have 
repeated noncompliance for which a penalty reduction under this provision was received 
during the previous year.  A facility receiving this 50% reduction may not also receive 
the 35% reduction for waiving its right to a hearing under current regulations.  
 
  Provide a facility with the opportunity to participate in an Independent IDR if a CMP is 
imposed against the facility.  The IIDR must be requested by the facility within 30 days 
of notice of the imposition of the CMP and must be completed within 60 days of the 
imposition of the CMP.  
 
  Provide that a portion of the CMP attributable to Medicare, which is currently conveyed 
to the U.S. Treasury, may instead be used for the protection or benefit of nursing home 
residents.  Establish new acceptable uses of CMPs collected by CMS.  Additionally, the 
specified use of such funds must be approved by CMS.  
 
The proposed rule can be found on the Federal Register website at 
http://edocket.access.gpo.gov/2010/pdf/2010-16927.pdf. 
 
CMCS CONTACT:  If you have any questions regarding this bulletin, please contact Lorelei 
Chapman at Lorelei.Chapman@cms.hhs.gov