Department of Health and Human Services 


OFFICE OF 

INSPECTOR GENERAL 

NURSING HOME ENFORCEMENT:


THE USE OF 


CIVIL MONEY PENALTIES


Inspector General 

April 2005 

OEI-06-02-00720 
Office of Inspector General 
 http://oig.hhs.gov 

The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, 

as amended, is to protect the integrity of the Department of Health and Human Services 

(HHS) programs, as well as the health and welfare of beneficiaries served by those 

programs. This statutory mission is carried out through a nationwide network of audits, 

investigations, and inspections conducted by the following operating components: 

Office of Audit Services 

The OIG's Office of Audit Services (OAS) provides all auditing services for HHS, either by 

conducting audits with its own audit resources or by overseeing audit work done by others. 

Audits examine the performance of HHS programs and/or its grantees and contractors 

in carrying out their respective responsibilities and are intended to provide independent 

assessments of HHS programs and operations in order to reduce waste, abuse, and 

mismanagement and to promote economy and efficiency throughout the department. 

Office of Evaluation and Inspections 

The OIG's Office of Evaluation and Inspections (OEI) conducts short-term management 

and program evaluations (called inspections) that focus on issues of concern to the 

department, the Congress, and the public. The findings and recommendations contained 

in the inspections reports generate rapid, accurate, and up-to-date information on the 

efficiency, vulnerability, and effectiveness of departmental programs. The OEI also 

oversees State Medicaid fraud control units, which investigate and prosecute fraud and 

patient abuse in the Medicaid program. 

Office of Investiga ions t

The OIG's Office of Investigations (OI) conducts criminal, civil, and administrative 

investigations of allegations of wrongdoing in HHS programs or to HHS beneficiaries 

and of unjust enrichment by providers. The investigative efforts of OI lead to criminal 

convictions, administrative sanctions, or civil monetary penalties. 

Office of Counsel to the Inspector General 

The Office of Counsel to the Inspector General (OCIG) provides general legal services to 

OIG, rendering advice and opinions on HHS programs and operations and providing all 

legal support in OIG's internal operations. The OCIG imposes program exclusions and 

civil monetary penalties on health care providers and litigates those actions within the 

department. The OCIG also represents OIG in the global settlement of cases arising 

under the Civil False Claims Act, develops and monitors corporate integrity agreements, 

develops compliance program guidances, renders advisory opinions on OIG sanctions to 

the health care community, and issues fraud alerts and other industry guidance. 
∆ E X E C U T I V E S U M M A R Y 

OBJECTIVE 

To describe reduction, assessment, and collection patterns for civil 

money penalties (CMP) imposed by the Centers for Medicare & 

Medicaid Services (CMS) in calendar years 2000 and 2001. 

BACKGROUND 

The CMPs are one of eight discretionary remedies CMS may use to 

address deficiencies in quality of care or safety standards. The CMPs 

may be assessed per day of noncompliance or per instance of 

noncompliance. Additionally, CMPs have required dollar ranges that 

correspond to the seriousness of harm to the patient(s). 

We analyzed 100 percent of data from CMS’s regionally-based LongTerm Care Enforcement Tracking System for enforcement cases 

beginning in 2000 and 2001 in which a CMP was imposed. These data 

were supplemented with information from the CMP Tracking System, 

housed in CMS’s central office. We also interviewed staff at CMS’s 

regional offices and the Department of Health and Human Services, 

Departmental Appeals Board. 

FINDINGS 

While $81.7 million in CMPs was imposed during 2000 and 2001, 

$34.6 million (42 percent) was paid by December 2002. The 

difference is primarily attributable to reductions authorized by 

regulation and delays in making and collecting payments. Although 

CMPs are used quite frequently (51 percent of CMS enforcement cases), 

the CMP amounts originally imposed are often substantially decreased 

before payment is due. Under current regulations, systematic 

reductions, appeals, settlements, and bankruptcies are the main factors 

contributing to this decrease. 

Seventy percent of CMP cases (2,973) received a reduction from the full amount 

imposed prior to payment request. Every nursing home is entitled to a 

35 percent reduction for waiving its right to appeal. Appeal waivers and 

appeal settlements account for $22.7 million in reductions. 

Fourteen percent of cases with CMPs due remained uncollected as of 

December 2002; bankruptcies and inconsistencies in the collections 

process were the primary causes. At the end of our tracking period, 

550 cases, totaling $11.7 million in CMPs due, were still outstanding. 

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EXECUTIVE SUMMARY 

The most frequent reasons for nonpayment were bankruptcies and cases 

for which there was no documentation that CMS attempted to collect. 

Eight percent of all CMP cases were not yet due by December 2002. By the end 

of our data tracking period, 339 cases had been delayed for more than a 

year, almost exclusively the result of processing appeals and/or 

bankruptcies. 

CMS does not utilize the full dollar range allowed for CMPs; 

impositions tend toward the lower ends of the ranges. The median 

per day imposition amount for the most severe (immediate jeopardy) 

cases was about $4,000, at the 15th percentile of the allowable range 

($3,050 to $10,000). The median per day imposition amount for less 

severe cases involving a CMP was $250, at the 7th percentile of the 

allowable range ($50 to $3,000). 

Cases not appealed took over 6 months to collect; appealed cases 

took substantially longer. The Social Security Act specifies that 

remedies should be designed “. . . to minimize the time between the 

identification of violations and final imposition of the remedies.” 

Required procedures slow this timeframe for all CMP cases, and 

appealed cases took twice as long to collect as cases not appealed. In 

those cases, CMS’s collection efforts cease until an administrative 

decision is reached; therefore, total collection time in appealed cases 

includes the time attributed to the administrative appeals process. 

RECOMMENDATIONS 

This inspection highlights several conditions within the current 

enforcement system that could be improved. We recommend that CMS: 

○ Provide written guidance to CMS staff and States regarding 

appropriate dollar ranges for individual ratings of scope and 

severity. 

○ Provide written guidance to CMS staff to clarify responsibilities 

with respect to past due CMPs and to conduct an internal process 

review that would enable CMS and States to streamline CMP 

processing. 

Agency Comments 

CMS concurred with our recommendations. The agency further 

commented it has already begun work to promote consistent imposition 

of CMPs and to develop appropriate policy guidance regarding 

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EXECUTIVE SUMMARY

responsibility for collection of past-due CMPs and streamlined CMP 

processing. 

CMS noted that we included required reductions for appeal waivers, 

appeals, and settlements in a discussion of CMP amounts imposed and 

paid. CMS suggested that an Office of Inspector General (OIG) analysis 

of the collection process should more properly begin with the amount 

remaining after accounting for these required reductions and that doing 

otherwise may imply OIG criticism of CMS performance. We recognize 

that reductions for appeal waivers, appeals, and settlements are 

required by Federal regulations, and we appreciate CMS’s concern in 

this matter. For this reason, we have made certain to clearly denote 

throughout the report which reductions are obligatory. 

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∆ T A B L E O F C O N T E N T S 

EXECUTIVE SUMMARY ......................................... i 

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

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

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

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

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

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

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

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

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

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

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

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

ACKNOWLEDGMENTS ......................................... 34 
OEI- 06- 02- 00720

OBJECTIVE

To describe reduction, assessment, and collection patterns for civil

money penalties (CMP) imposed by the Centers for Medicare &

Medicaid Services (CMS) in calendar years 2000 and 2001.

BACKGROUND

Sections 1819 and 1919 of the Social Security Act establish the

requirements that nursing homes must meet to participate in the

Medicare and Medicaid programs. The Secretary is responsible for

ensuring that these requirements and their enforcement "are adequate

to protect the health, safety, welfare, and rights of residents and to

promote the effective and effcient use of public moneys.

Nursing Home Enforcement

The Omnibus Budget Reconciliation Act of 1987 (OBRA '87) established

a survey and certification process for States and CMS to verify that

Federal standards are maintained in Medicare and MedicarelMedicaid

dually-certified nursing homes. CMS contracts with State agencies to

survey and certify compliance with Federal standards no less than once

every 15 months. Additional surveys or abbreviated surveys are also

used to investigate complaints. Any deficiency that puts the nursing

home out of substantial compliance, as determined through the surveys

may initiate CMS enforcement action(s).

The State uses information from the surveys along with a nursing

home s past record of compliance to determine what action(s) to take

and/or to recommend. Specific remedies recommended by the State are

usually accepted and imposed by CMS. However, imposed remedies wil

not actually go into effect until after a formal notice period is observed

and the effective date given to the nursing home is reached. At any

time during this enforcement cycle , the State may conduct a "revisit" to

determine if deficiencies have been corrected. During revisits

surveyors may also revise (increase or decrease) deficiency rankings or

cite new deficiencies. Enforcement actions may be rescinded, new

actions imposed, or timeframes adjusted as a result of the revisit

findings.

Each enforcement case (from initial finding of deficiency to either

termination of the Medicare contract or substantial compliance) is

characterized by rigidity in timeframes, but flexibility in course of

action. The designed purpose is to create an environment in which

NURSING HOME ENFORCEMENT: THE USE OF CIVIL MONEY PENALTIES
INTRODUCTION 

enforcement staff may customize the process to appropriately address 

the uniqueness of each situation. 

The following flow chart (Figure 1) provides an overview of the 

enforcement process for Medicare and Medicare/Medicaid duallycertified nursing homes. Terms within the flowchart are defined in 

subsequent sections. A number of variations from this diagram can, 

and will, frequently occur.3 Regardless of any exceptions that may 

occur, immediate jeopardy is to be resolved within 23 days and all 

nursing homes must be in substantial compliance within 6 months or 

CMS is required to terminate the Medicare contract. 

 O E I - 0 6 - 0 2 - 0 0 7 2 0 NURSING HOME ENFORCEMENT: T HE USE OF CIVIL MONEY P ENALTIES 2 
INTRODUCTION

Figure 1: Flowchart of the Enforcement Process 

i i lity 

i ci i

i ; i 

i il ity 

i ci i

i ; i 

if i ili 

i

 i i i i

 i l i i i 

No 

No 

l

 i i

ifi ili 

li i l 

i

ifi f 

i i 

i i

 i i

i ili f ef i 

(s). 

i 

l l

i on 

No 

li i l 

i

i

i 

i

i 

li

ial

i i i 

li

i i s

No 

No 

S ur ve yo r fin ds 

a d e fic ien c y 

Im m ed iate 

J eo p ar dy 

D o ub le G 

R u le 

S ta te n otif e s fac 

o f d ef en c e s and m an da to ry 

re m ed es req u res P O C 

St at e n otif es fac

o f de f en c e s a nd m an dat o ry 

re m ed es req u res P O C. 

T he s ta te n ot e s t h e fa c ty 

an d CM S o f reco m m e nd at on 

t o m p ose m m e d a te rem ed e s,

n c ud n g t erm na t on o r 

t em pora ry m ana ge m en t.

 Yes 

Op p or tu nity 

to Co rr ec t 

Ye s 

Ye s 

Yes Cy cle E nd s S ub sta n tia l 

C o mp ian ce 

C M S m p oses re m ed es; 

no t es fa c t y 

F aci t y sub m t s P an of 

Corre ct on 

Re visit T e rm in atio n Im me d ia te 

Je o pa rd y 

Cy cle E nd s 

Su b sta ntia l 

C om p lia n ce 

Th e st at e no t es CM S o 

reco m m en da t on t o m po se 

re m ed es . N on m me d ia te 

J eo p ar dy 

D eficie nc ies 

C M S m p ose s re m ed e s; 

no t fi es fa c t y o fec t ve 

dat e

F ac lit y s ub m it s 

a ccep ta b e P an 

of C orrec t

R evisit 

C yc le En ds 

Su bs tan tial 

Co m plian c e 

Imm e dia te 

Je op a rd y 

No n im m ed iate 

Je op a rd y 

De fic ien cie s 

F aci t y sub m ts P an o f 

C orrect o n. 

Re visit 

Re m ed ies re sc n ded . 

Su bs tan tial 

Co m plian c e 

C yc le En ds 

Rem ed es t ake ef fe ct . 

N on m me d ia te 

Je o pa rd y 

D eficie nc ies 

Im me dia te 

Je o pa rd y 

Rem ed es t ake effect .

 Yes 

I f n on-c om p a nt for 3 m on th s

 D en o f Pa ym ents for New 

A d m s s ons g oes nt o ef fe c t. 

I f n on -com p a nt fo r 6 m on t hs, 

M ed ca re con tra ct te rm in ate d. 

Source: Office of Inspector General Analysis of Documents, Regulations, and Interviews with CMS 

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INTROD UCTION 

Scope and Severity 

The Scope and Severity Grid (Table 1) was created so that deficiencies 

could be ranked in accordance with outcomes, e.g., harm to patients, as 

required by regulations.4 The “severity” of the deficiency refers to the 

degree of harm, while the “scope” of the deficiency refers to the number 

of affected residents. These factors are combined to rank deficiencies on 

a scale from A through L. The ranking is then used to define specific 

levels of compliance and to select appropriate remedies. 

Table 1: Scope and Severity Grid for Deficiencies 

Deficiency Severity Deficiency Scope 

Isolated Pattern Widespread 

Actual or potential for 

death or serious injury 

(immediate jeopardy) 

J 

Category 3 

Optional: Category 1; 

Category 2 

K 

Category 3 

Optional: Category 1; 

Category 2 

L 

Category 3 

Optional: Category 1; 

Category 2 

G H I 

Actual harm that is not 

immediate jeopardy 

Category 2 

Optional: Category 1 

Category 2 

Optional: Category 1 

Category 2 

Optional: Category 1; 

Temporary 

Management 

Potential for more than 

minimal harm 

D 

Category 1 

Optional: Category 2 

E 

Category 1 

Optional: Category 2 

F 

Category 2 

Optional: Category 1 

Potential for minimal 

harm, substantial 

compliance exists 

A 

Substantial

Compliance 

B 

 Substantial 

Compliance 

C 

Substantial 

Compliance 

Source: CMS State Operations Manual 

As shown in Table 2 (next page), the category from which remedies will 

be chosen is determined by the highest “scope and severity” of the 

deficiencies (i.e., deficiencies with a scope and severity rating closest to 

L) rather than the number of deficiencies. However, for each category, 

there is an option to impose additional remedies from categories other 

than those indicated by the scope and severity rating, if that is 

determined to be appropriate. For example, a nursing home with at 

least one deficiency associated with “actual harm” (scope and severity 

ratings G through I) may receive one or more remedies from Category 2. 

Additional remedies from Category 1 may also be imposed. 

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INTRODUCTION

Table 2: Discretionary Remedies by Category 

Category 1 Category 2 Category 3 

Directed Plan of Correction Denial of Payments for New 

 Admissions 

Temporary Management

State Monitoring Denial of Payments for All 

 Individuals 

Termination

Directed In-Service Training Civil Money Penalties 

 $50 - $3,000 per day

 $1,000 - $10,000 per instance

Optional: 

Civil Money Penalties

 $3,050 - $10,000 per day

 $1,000 - $10,000 per instance 

Source: CMS State Operations Manual 

Remedies 

The enforcement actions available to CMS include both mandatory and 

discretionary remedies. These remedies are used to bring nursing 

homes into compliance. The current remedy options are the result of 

the enforcement strategy established in OBRA ’87 and implemented in 

1995.5,6 

Mandatory remedies are those that must be imposed and take effect in 

accordance with statutory requirements, such as extended 

noncompliance ending in termination of the Medicare contract. 

Discretionary remedies are those that may be customized to address 

each nursing home’s circumstance; they are selected in accordance with 

the scope and severity grid. The stated purpose of remedies is “to 

ensure prompt compliance with program requirements.”7 Additional 

remedies may be imposed by individual States under their licensure 

authority and for Medicaid-only facilities; however, those will not be 

discussed within this report. 

CMS has at its disposal eight discretionary remedies to address 

deficiencies found during a survey. One such remedy is the civil money 

penalty, with fines ranging from $50 to $10,000. All eight discretionary 

remedies are described in Appendix A. 

Civil Money Penalties 

The CMPs can either be per day or per instance; the fine amount can 

vary depending on the scope and severity of the deficiency. (See 

Table 2.) Per day fines usually begin accumulating on the last day of 

the survey and continue accruing until substantial compliance is 

achieved (i.e., deficiencies are corrected to the scope and severity level of 

 O E I - 0 6 - 0 2 - 0 0 7 2 0 NURSING HOME ENFORCEMENT: T HE USE OF CIVIL MONEY P ENALTIES 5 
INTRODUCTION 

“C” or lower). Per instance CMPs (established in 1999) allow a set 

dollar amount to be imposed in relation to a particular deficiency. 

Per day and/or per instance CMPs were imposed in 51 percent of the 

8,309 enforcement cases referred to CMS during the years 2000 and 

2001. They were imposed almost twice as often as the second most 

utilized remedy, denial of payments for new admissions. 

Unlike other remedy options, CMPs have no notice requirement, and 

the effective date is usually retroactive to the last day of the survey. 

For many non-CMP remedies, the notice period and delayed effective 

date serve as an opportunity for nursing homes to achieve compliance 

and, consequently, preempt the remedy from going into effect. 

Once CMS notifies a nursing home of the CMP amount due and 

requests payment, remittance is expected within 15 days, unless a 

payment schedule is negotiated or the nursing home files an appeal. 

Monies not received within the specified timeframes will begin to accrue 

interest. If collection efforts fail, Medicare’s fiscal intermediary and the 

appropriate State agency should be notified to withhold payments from 

the home until the balance is paid.8 

Appeals 

Facilities have the right to contest survey findings through an 

administrative appeal and/or an informal dispute resolution process. In 

both cases, there is potential for one or more deficiencies to be 

eliminated, or for a scope and severity rating to be revised. 

Determinations made through an administrative appeal or informal 

dispute resolution are carried through to the enforcement actions 

pending or initiated. Remedies are retrospectively adjusted to reflect 

the new findings. 

The CMPs differ from other remedies in that CMPs cannot go into effect 

(i.e., monies are not collected) until an administrative appeal decision is 

reached (this does not apply to informal dispute resolutions, nor does it 

extend to judicial appeals that may follow an administrative appeal). 

For this reason, nursing homes may use the administrative appeal to 

delay payment of a CMP. Other types of remedies are not delayed 

during an administrative appeal. A Government Accountability Office 

(GAO) report in March 1999 tracked the imposition of CMPs for a 

sample of nursing homes with multiple survey deficiencies identified 

between 1995 and 1998. In GAO’s sample, 115 CMPs were imposed, but 

78 of those had not yet taken effect as of the report’s publication. Many 

of the 78 CMPs were still under appeal.9 

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INTRODUCTION 

Appeal Waivers 

Regulations require that CMS or the State reduce the amount of the 

penalty by 35 percent if the nursing home chooses to waive its right to 

appeal the deficiency.10 In issuing this regulation, CMS stated that 

“. . . the reduction . . . would reflect the savings to both the government 

and the provider of costs that would otherwise be incurred to formally 

adjudicate the dispute.”11 In spite of this waiver program, over 

700 nursing home enforcement administrative appeals have been 

requested each year since 2000. This represents approximately 

20 percent of CMP cases and 7 percent of cases not involving a CMP. 12 

METHODOLOGY 

This study relies on data from CMS’s Long-Term Care Enforcement 

Tracking System (LTC), its Civil Money Penalty Tracking System 

(CMPTS), and a set of interviews. Analysis was conducted on 

100 percent of the data for 9 of the 10 CMS regions (region II was 

excluded as the result of self-reported implementation difficulties), with 

the exception of cases eliminated because data were missing or 

incorrect. 

Scope 

This study is limited to the 4,253 cases involving CMPs imposed by 

CMS as the result of surveys or complaint visits during the years 

2000 and 2001. The cases were tracked through December 16, 2002. 

Any actions that occurred after that date are not included in this report. 

Also, the data include only those cases that States referred to CMS. 

This means that all cases found to have deficiencies with a scope and 

severity level of A, B, or C, cases in which the nursing home successfully 

corrected after being given an “opportunity to correct,” and any cases 

mistakenly not referred by the State are not included. Other 

enforcement authorities rest with the States and the Office of Inspector 

General for the Department of Health and Human Services (HHS); 

however, the authorities and actions based on them are beyond the 

scope of this study.13 

Long-Term Care Enforcement Tracking System 

The LTC database is a compilation of each CMS region’s nursing home 

enforcement case files. In the nine regions used, caseworkers update 

this information as enforcement actions occur. More detailed 

information about the LTC database is provided in Appendix B. 

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INTRODUCTION 

Significant cleaning of the data was necessary.14 The data cleaning 

process, detailed in Appendix B, included elimination of cases with 

questionable values or pertinent missing data during the affected 

analysis, correction of typographical errors and inconsistent 

information, and deletion of duplicate files. A total of 4 percent 

(353 records) was eliminated from all analysis. 

Civil Money Penalty Tracking System 

The CMPTS is the centralized CMS database used for tracking the 

collection and allocation of CMP payments. For analysis involving 

monetary collections, we found it beneficial to capture fields regarding 

CMP payments through the CMPTS data rather than the LTC data. 

The CMPTS data were additionally useful for matching CMP amounts 

with the specific scope and severity levels that were used to determine 

those amounts. 

After significant data cleaning, we found a match rate of more than 

99 percent between CMPTS and LTC. For calendar years 2000 and 

2001, we found 4,253 CMP cases included in both LTC and CMPTS. 

More detailed information about the CMPTS database is provided in 

Appendix B. 

Interviews 

CMS Regional Staff. Interviews with staff in all CMS regions regarding 

their use of the LTC database allowed us to better understand the 

operational differences between regions. 

Departmental Appeals Board. Interviews with staff at the Departmental 

Appeals Board allowed us to better understand administrative appeals 

as they relate to nursing home enforcement. Staff also supplied us with 

information on case status and outcomes for particular cases within the 

LTC database and with aggregate numbers on the appeals caseloads. 

Data Limitations 

The LTC data were determined to be the best source of comprehensive 

enforcement data, and therefore are the primary data in our analysis. 

Certain limitations to the data are noted; however, they do not 

compromise the quality of our findings. The data include only 9 of the 

10 regions, and only cases actually referred from States (rationale for 

excluding region II is included in Appendix B). 

Estimation errors could result from the omission of cases with missing 

information in certain analyses. Of particular concern are dismissed 

CMPs and payment dates. The case notes in many files indicated that 

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INTRODUCTION 

revocation of a CMP resulting from a bankruptcy settlement or an 

appeal determination was reflected in the data by deleting the CMP 

from the case record. Therefore, both the aggregate impositions and 

reductions may be understated. Also, the data required for computing 

the time between the date the CMP was considered due and the date 

the CMP was paid were available for only 2,605 of the 3,850 applicable 

cases. We believe that these dates were missing because the cases were 

still in process at the end of our data tracking period. For this reason, 

the collection time may be significantly underestimated. 

Terminology 

A list of defined terms is located in Appendix C. This section 

establishes operational definitions, as well as the fundamental 

vocabulary used in the field of long-term care enforcement. For 

example, the term “actual harm” (customarily defined as scope and 

severity levels G, H, and I) is expanded to include scope and severity 

level F. These distinctions are important for precise interpretation of 

our findings. 

Quality Standards 

This study was conducted in accordance with the Quality Standards for 

Inspections issued by the President’s Council on Integrity and 

Efficiency. 

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∆ FINDINGS 


While $81.7 million in CMPs was imposed during 

2000 and 2001, $34.6 million (42 percent) was 

paid by December 2002. The difference is 

primarily attributable to reductions authorized 

by regulation and delays in making and 

collecting payments. 

 Although CMPs are used 

frequently (51 percent, 4,253, of all 

8,309 enforcement cases), the CMP 

amounts originally imposed are 

often substantially decreased before 

payment is due. Under current 

regulations, systematic reductions, 

appeals, settlements, and bankruptcies are the main factors 

contributing to this decrease. Of the $81.7 million that was imposed by 

CMS during the years 2000 and 2001, $34.6 million (42 percent) was 

paid by nursing homes. The unpaid portion, $47.1 million (58 percent), 

was most affected by reductions to amounts imposed and by delays in 

due dates. (See Table 3.) 

Table 3: Reductions and Delays in Due Dates Most Affected CMP Amounts 

(in millions) 

$81.7 

$34.6 (42% of imposed) 

$47.1 (58% of imposed) 

Total Paid 

Total Imposed 

Difference 

Difference of $47.1 is attributable to: 

$22.7 48% of difference 

Appeal Waivers $11.8 

Appeals and Settlements $10.8 

Other $0.1 

Reductions in Amount Due 

$12.7 27% of difference 

Appeal $8.5 

Bankruptcy in Process $3.7 

Other $0.5 

Not Yet Due 

$3.3 7% of difference 

Installment: Not Fully Due $1.8 

Remainder Due is Late $1.3 

Other $0.2 

Partial Payment Made 

$8.4 18% of difference 

Late $5.3 

Bankruptcy* $2.9 

Extended Due Date $0.2 

No Payment Made 

Source: Office of Inspector General Analysis of LTC and CMPTS data, 2003 

*For this subgroup, available data indicated that the CMPs were due and payable; however, some may be uncollectable. 

Either the case was incorrectly entered into CMPTS as due or the facility is unable to pay subsequent to the resolution of 

the bankruptcy case. 

The unpaid portion included $11.8 million in reductions resulting from 

nursing homes waiving their right to appeal and $10.8 million in 

settlements and reductions resulting from appeals. An additional 

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FINDING S 

$12.7 million was not yet due, generally as the result of delays caused 

by appeals or bankruptcy proceedings. Nonpayment of collectable 

CMPs accounted for only 14 percent ($6.6 million) of the $47.1 million in 

uncollected CMPs during the years 2000 and 2001; $5.3 million from the 

category No Payment Made/Late and $1.3 million from Partial Payment 

Made/Remainder Due is Late. 

Seventy percent of CMP cases received a reduction from the full amount 

imposed prior to a payment request. 

For 70 percent of cases (2,973 of 4,253 cases), an average reduction of 

43 percent of the imposed amount occurred. Reductions to the amounts 

imposed were the results of nursing homes waiving their rights to 

appeal, appeals, and settlements. 

Table 4: Reductions for Immediate Jeopardy Cases Were the Most Significant 

Average Amount 

Imposed Average Amount Due Average Reduction 

Immediate 

Jeopardy $37,088 $18,695 50% 

Actual Harm $12,796 $8,154 36% 

Source: Office of Inspector General Analysis of LTC and CMPTS data (4,119 cases) 

On average, as Table 4 shows, the cases with more serious immediate 

jeopardy deficiencies (scope and severity ratings of J, K, and L) received 

a higher percentage reduction to imposition amounts than the less 

serious actual harm cases. 

Appeal Waivers. For the sample years 2000 through 2001, 59 percent of 

all cases (2,498 of 4,253) elected to waive their right to appeal; in return, 

they received a 35 percent reduction in their CMP amount as required 

by regulation. The waiver option and reduction amount are granted to 

nursing homes through Federal regulations.15 Reductions from the 

appeal waiver totaled $11.8 million for the sample years, with an 

average reduction of $4,717 per case. Facilities with higher dollar 

CMPs imposed were less likely to use the waiver, opting for the formal 

appeals process.16 The mean CMP imposed for cases that waived their 

rights to appeal was $13,489, while the mean CMP imposed for cases 

requesting appeals was $41,873. 

Appeals and Settlements. Appeals and settlements reduced fine amounts 

in 11 percent of all CMP cases (466 of 4,253).17 Combined, appeals and 

settlements reduced CMP impositions by $10.8 million during the 

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FINDING S 

2-year sample period. Appeals were requested more frequently in cases 

involving a CMP (20 percent) than in non-CMP cases (7 percent). 

Appeals have the potential to alter the scope and severity of the 

deficiencies that are driving enforcement or to eliminate one or more 

deficiencies altogether. If the deficiencies driving enforcement action 

are changed, the remedies must be modified to appropriately address 

the newly-defined circumstance. Of the 632 appealed CMP cases from 

2000 and 2001 for which the final decision is known, 74 percent resulted 

in dollar amount reductions. The average reduction was 56 percent of 

the imposed amount (including pretrial settlements). Even those 

nursing homes that do not prevail at the hearing benefit by significant 

delays in due dates, deferring direct financial costs. 

Bankruptcies. Bankruptcies are another source of dollar amount 

reductions that is not fully apparent in Table 3. CMS is required to 

consider the financial condition of the nursing home prior to imposing a 

CMP.18 For this reason, CMS may reduce the CMP amount 

recommended by the State or decide not to impose a CMP at all. When 

a CMP is imposed, a nursing home facing financial difficulties will likely 

choose the appeal waiver and receive a 35 percent reduction or will 

request a formal appeal, often resulting in a reduction. We did not 

consider these reductions to be a direct result of the bankruptcy, but 

realize that financial condition may influence the nursing home’s 

behavior. Additionally, bankruptcy settlements often result in the CMP 

being discharged or reduced. 

Overall, 14 percent of cases where CMPs were imposed involved nursing 

homes that filed for bankruptcy or were part of a chain that filed for 

bankruptcy (608 of the 4,253 CMP cases). Eighteen million dollars in 

CMPs (22 percent of the total amount imposed) were imposed on these 

nursing homes. These facilities paid only 50 percent of the amount that 

was due ($4.3 million of $8.7 million), and only 24 percent of the amount 

that was originally imposed ($4.3 million of $18 million). 

Fourteen percent of cases with CMPs due remained uncollected as of 

December 2002; bankruptcies and inconsistencies in the collections 

process were the primary causes. 

For 2000 and 2001, nearly 550 cases, totaling $11.7 million in CMPs 

that were due and payable, were still outstanding as of December 2002 

($3.3 million for partial payments and $8.4 million for no payments). 

The most frequent reasons for nonpayment were bankruptcies 

(168 cases, which were included in the discussion above of bankruptcy, 

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FINDINGS 

paid part or none of the amount due) and cases in which the data 

revealed no apparent collection effort (184 cases). 

According to the centralized tracking system for CMP payments, the 

CMPTS, at least 174 of the 550 unpaid cases with data available 

(including some cases with collection activity and some without) 

remained outstanding for more than 1 year. The majority of the 

174 cases had no payment as of December 2002. In cases of 

nonpayment, CMS may advise the fiscal intermediary and State agency 

to withhold or offset payments for services rendered up to the amount 

that is owed. However, according to interviews with CMS staff, this is 

not routinely done in all regions. It appears that some regions accept 

the onus of CMP collection efforts, while other regions expressed that 

their role ends after entering the necessary information into CMPTS 

and that the CMS central office is then responsible. There is 

opportunity for CMPs to remain uncollected for extended amounts of 

time. 

Eight percent of all CMP cases were not yet due by December 2002. 

Of the 4,253 CMP cases, 339 cases (almost exclusively appeal and/or 

bankruptcy cases) had been delayed for more than a year as the result 

of required abeyances (temporary inactivity). A CMP in the process of 

an appeal or bankruptcy cannot be collected until a decision is made as 

to whether all or a portion of the imposed amount should be dismissed. 

These cases (representing $12.7 million in CMPs imposed) were 

initiated by a survey performed during the years 2000 or 2001. 

However, there was no “amount due” entered into CMPTS as of 

December 2002, the end of our data tracking period, nor was there 

evidence of collection efforts by CMS regional offices in the databases 

analyzed. Although the majority of these cases will likely have some 

reduction to their CMPs, reduction amounts are unknown. 

CMS does not utilize the full dollar range The CMP dollar amounts are 

required to be imposed within 

defined ranges, according to the 

allowed for CMPs; impositions tend toward the 

lower ends of the ranges. 

degree of harm caused by the 

deficiency, i.e., scope and severity rating.19 The ranges are inclusive of 

multiple scope and severity ratings and leave a great deal of discretion 

to regional enforcement staff. In practice, the allowable ranges are not 

utilized to their fullest extent. 

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FINDINGS 

Figure 2: Per Day Imposition Amounts for Actual Harm and Immediate Jeopardy 

Source: Office of Inspector General Analysis of LTC and CMPTS data, 2003 

Per Day CMPs. Forty percent of documented immediate jeopardy cases 

had CMPs imposed at the bottom of the allowable per day range— 

$3,050 (259 of 630 cases). In actual harm cases, over 80 percent of cases 

had CMPs imposed below the 15th percentile of the allowable range— 

$500 or less (1,856 of 2,229 cases). The median-imposed CMP for 

immediate jeopardy cases was $4,000 (the 14th percentile of the 

allowable range). The median-imposed CMP for actual harm cases was 

$250 (the 7th percentile of the allowable range). The distributions are 

displayed in Figure 2 (next page). 

The CMPs were imposed at the maximum amount in 8 percent of 

immediate jeopardy cases versus 1.2 percent of actual harm cases. In 

many of the immediate jeopardy cases for which the highest CMP 

amount was utilized, noncompliance was resolved within only a few 

days. (Deficiencies constituting immediate jeopardy are often corrected 

before the surveyors leave the nursing home.) 

Per instance CMPs. Per instance CMPs do not accrue over time and 

may be imposed in amounts between $1,000 and $10,000. In immediate 

jeopardy cases, where per day CMP totals could rise to tens or even 

hundreds of thousands of dollars, per instance CMPs were chosen in 

over half the cases. Two-thirds of per instance CMPs were imposed at 

nonaccruing amounts of $5,000 or less, and over 30 percent of actual 

harm cases were imposed at the minimum amount of $1,000. The 

distributions are displayed in Figure 3 (next page). 

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FINDINGS 

Figure 3: Per Instance Imposition Amounts for Actual Harm and Immediate 

Jeopardy 

Source: Office of Inspector General Analysis of LTC and CMPTS data, 2003 

The dollar ranges and availability of per instance CMPs allow CMS to 

customize remedies to address the unique circumstances of each 

instance of noncompliance; however, these options also allow for 

remedies that have minimal impact on noncompliant homes. For 

example, one nursing home was assessed only the minimum per 

instance CMP of $1,000 during a period of noncompliance that included 

a deficiency of widespread immediate jeopardy relating to quality of 

care.20 According to CMS, per instance CMPs may be used when high 

CMPs are warranted in an effort to avoid putting nursing homes out of 

business. A closure would displace numerous beneficiaries, potentially 

disrupting their care.21 

Total Impositions. Impositions for combined per day and per instance 

CMPs rose above $20,000 in less than 25 percent of cases (939 of 

4,253 cases) and above $50,000 in less than 10 percent of cases (384 of 

4,253 cases). This may also be the result of CMS’s requirement to 

consider the nursing home’s financial status when determining 

imposition rates.22 

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FINDINGS 

FIGURE 4: Appealed Cases Took Significantly Longer to Collect 

Source: Office of inspector General, Analysis of Appealed CMP Cases2003 

The Social Security Act 

stipulates that imposition of 

remedies should be designed 

Cases not appealed took over 6 months 

to collect; appealed cases took 

“to minimize the time substantially longer. 

between the identification of 

violations and final imposition of the remedies.”23 For CMPs imposed 

(excluding appealed cases) in 2000 and 2001, it took approximately 197 

days (over 6 months) after a deficiency was found to actually collect the 

money.24 Much of this time is the result of procedures that are required 

of CMS. 

Required procedures increase the time between identification of violation 

and collection of the CMP. 

For most CMPs (i.e., per day CMPs), final amounts cannot be calculated 

until compliance is achieved, as determined through a revisit.25 For 

nonappealed cases, the final revisit affirming compliance (often 

retrospectively) occurred an average of 74 days (n = 3,376) after the 

survey initially finding a deficiency(ies). Once compliance is achieved, 

the State survey team must forward the information to the CMS 

regional office, which is then responsible for notifying the nursing home 

of the final CMP amount and due date. In addition, nursing homes 

must be granted 60 days, during which the nursing home may request 

an appeal for one or more deficiencies or may waive its right to appeal. 

In most circumstances, the CMP will not become due until at least 15 

days after the expiration of the 60-day period or until an appeal request 

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FINDINGS 

or waiver is received by CMS. On average, it took 89 days (n=3,077) 

from the final revisit until the CMP was due. Payments were made an 

average of 32 days (n = 1,482) after the actual due date.26 

Appealed cases took significantly longer to collect than cases not appealed. 

Excluding time intervals that were exceptionally long, appealed cases 

took an average of 420 days to collect, a 110 percent increase in time 

over nonappealed cases (n = 399).27 (See Figure 4.) The increase 

appears to be entirely attributable to abeyances resulting from the 

appeals process. The CMPs do not become due until the appeal is 

settled, or a decision is reached. Consequently, nursing homes are 

insulated from the repercussions of enforcement by well over a year. 

For appealed cases, the collection time line may be significantly 

underestimated, as payment dates were missing from 50 percent of 

cases. Those cases were likely still in the appeals process at the point 

that our data collection efforts ended. The HHS Departmental Appeals 

Board staff explained that the steps in the appeals process include time 

needed by the parties to prepare their cases or to negotiate. 

Additionally, the time period from the final revisit to the CMP due date 

includes some portion of the 60 days during which the nursing home 

may request a hearing, and another 60 days after the Administrative 

Law Judge’s decision to request Board review.28 

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In this inspection, we found significant reductions in CMP amounts due

and paid. These reductions, however, are permissible and many are

required under the current regulations. While CMPs were designed to

allow great flexibility in the amount imposed, in practice, the majority

are imposed at the low end oftheir allowable range. Further, we found

that process delays substantially extend the time for collection of CMP

payments; and in some cases, collections did not appear to be pursued.

CMPs are the most widely used discretionary remedies by CMS and are

often the only enforcement action noncompliant nursing homes will

experience. As stated in the regulations, CMPs, along with other

remedies, are designed to ensure prompt compliance with quality of care

and safety standards. Our findings of routine reductions, combined

with impositions at the lower end ofthe dollar range, and delays in

collections suggest that current usage patterns could be improved.

We make the following recommendations to CMS in an effort to improve

CMS's ability to utilize the CMP as an enforcement tool.

Provide written guidance to CMS staff and States regarding appropriate dollar

ranges for individual scope and severity ratings. The current guidelines in

the State Operations Manual group three to four individual scope and

severity ratings into a single allowable dollar range; in practice, most

CMPs are imposed at the lower end of their range. CMS's central offce

should revise the current guidance to encourage CMS regional offces to

fully utilize the designated ranges. While maintaining the flexibility to

address extreme situations or a nursing home s compliance history, the

guidance should indicate how individual scope and severity ratings

relate to specific dollar amounts or narrower dollar ranges, such that

the full range of the scale is utilized. CMS's regional offces should then

begin regular reviews for a sample of CMP impositions to ensure that

this guidance is being followed.

Provide written guidance to CMS staff to clarif procedures with respect to past

due CMPs and conduct an internal process review that would enable CMS and

States to streamline CMP processing. It is our understanding that CMS'

regional offces do not always track CMP collection efforts after the

nursing home is notified that payment is due. Without reliable

information on outstanding balances, CMS cannot utilize its most

effective means of collection, withholding payments. Outstanding CMPs

should be systematically referred to fiscal intermediaries and State

agencies for collections. In addition, required procedures increase the

OEI. 06. 02- 00720 NURSING HOME ENFORCEMENT: THE USE OF CIVIL MONEY PENALTIES
RECOMMENDATIONS 

time between identification of violations and collection of the CMP to 

almost six months. Scrutiny of the processes may reveal opportunities 

to minimize this time, as required by the Social Security Act. 

Agency Comments 

CMS concurred with our recommendations. The agency further 

commented that it has already begun work to promote consistent 

imposition of CMPs and to develop appropriate policy guidance 

regarding responsibility for collection of past-due CMPs and 

streamlined CMP processing. 

CMS noted that we included required reductions for appeal waivers, 

appeals, and settlements in a discussion of CMP amounts imposed and 

paid. CMS suggested that an Office of Inspector General (OIG) analysis 

of the collection process should more properly begin with the amount 

remaining after accounting for these required reductions and that doing 

otherwise may imply OIG criticism of CMS performance. 

We recognize that reductions for appeal waivers, appeals, and 

settlements are required by Federal regulations, and we appreciate 

CMS’s concern in this matter. For this reason, we have made certain to 

clearly denote throughout the report which reductions are obligatory. 

CMS also provided technical comments for which we made revisions 

where appropriate. The full text of CMS’s comments is presented in 

Appendix D. 

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∆ E N D N O T E S 

1 Sections 1819(f)(1) and 1919(f)(1) of the Social Security Act. 

2 In situations that are not deemed to pose a threat of serious injury and 

where no historical pattern of noncompliance is found, the State may 

afford the facility an “opportunity to correct” prior to recommending 

remedies to CMS. If deficiencies are not corrected or if an 

“opportunity to correct” is denied, the State should then send the case 

to CMS with a recommendation for particular enforcement remedies to 

be imposed. Cases that do show a pattern of noncompliance and cases 

that are found to pose a threat of serious injury must be reported to 

CMS “immediately” so that action can be taken. 

3 Some of those variations include: 

• Category 1 remedies are generally imposed by the State at the time of 

the initial notification to the facility. Formal notice is not required 

for this class of action. 

• Revisits may occur at any time during the process. A finding of

substantial compliance during a revisit will always end the 

enforcement cycle. On average, two revisits are performed during

each enforcement cycle.

• Revisits finding improvements or worsening of deficiencies could 

result in a change in effective dates or CMP amounts, thus requiring 

additional notifications and giving the facility an additional 

opportunity to establish substantial compliance. 

• Additional steps may be taken to resolve an unacceptable Plan of 

Correction or a disagreement between the State and CMS.

4 42 CFR § 488.404. 

5 A number of changes resulted from OBRA ’87. These statutory changes 

eliminate the distinction between level A and level B participation 

requirements; add additional remedies for use in enforcement action; 

codify the informal dispute resolution process; offer one hearing to 

dispute findings; classify seriousness of deficiencies for the purpose of 

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imposing a remedy through the use of scope and severity; establish 

and define “substantial compliance;” define “substandard quality of 

care;” establish two civil money penalty ranges; explain “repeat 

deficiencies” for purposes of increasing a civil money penalty; and 

establish a “tie breaker” rule, which applies when there are 

disagreements regarding enforcement between CMS and the State 

agency. 

6 “Before the 1987 legislation, the only adverse actions available to [CMS] 

and the States against facilities that were determined to be out of 

compliance with Federal participation requirements included 

termination, nonrenewal, or automatic cancellation of provider 

agreements; denial of participation for prospective facilities; and 

denial of payment for new admissions in lieu of termination when the 

facilities had deficiencies that did not pose an immediate and serious 

threat to the health and safety of residents.” Source: 59 FR 56116, 

November 10, 1994. 

7 42 CFR § 488.402 and 59 FR 56116, November 10, 1994. 

8 The collected money is divided between the Medicare general fund and 

the State Medicaid Agency in the same proportion as the split of 

Medicare and Medicaid beneficiaries in the offending facility. The 

State’s use of these funds is limited to programs that assist 

noncompliant facilities in achieving regulatory standards. 

9 Nursing Homes: Additional Steps Needed to Strengthen Enforcement 

of Federal Quality Standards (GAO/HEHS-99-46, March 1999). 

10 42 CFR § 488.436(b). 

11 59 FR 56116, November 10, 1994. 

12 Aggregate numbers of nursing facility enforcement appeals were 

provided by the Departmental Appeals Board. In the calendar years 

2000, 2001, and 2002, the numbers of hearing requests were 769, 773, 

and 710, respectively. 

13 States oversee licensure of individual facilities and certification of 

Medicaid facilities. Failure to comply with State requirements may 

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result in the application of remedies or sanctions including money 

penalties. OIG may exclude providers or impose CMPs for failure to 

meet professionally recognized standards of care, licensure actions 

taken by the State, and certain civil and criminal convictions. 

14 “Data cleaning” is defined as “the process of checking data for errors 

and correcting those errors whenever possible.” SPSS, Inc., 

Clementine 6.0 Users Guide; SPSS; Chicago, IL: 2001. p. 361. 

15 42 CFR § 488.436(a) and 42 CFR § 488.436(b). 

16 The percent of cases requesting waivers is much higher than the 

percent requesting hearings (59 percent vs. 20 percent). However, for 

cases where the CMP imposed totals over $50,000, 49 percent 

requested hearings compared with 33 percent that requested waivers. 

17 Appeal rights and settlements are provided by regulation at 42 CFR 

§§ 488.432, 498.40, and 488.444, respectively. 

18 42 CFR § 488.438(f)(2). 

19 42 CFR § 488.408. 

20 Case notes revealed that this Kansas facility filed for bankruptcy in the 

same year as the $1,000 CMP imposition and that the facility also 

received a discretionary denial of payments for new admissions. 

However, the facility was cited with an isolated immediate jeopardy in 

quality of care just months prior. For those two enforcement cycles, 

the facility was in compliance only 3 weeks out of an 8-month period. 

21 CMS technical comments to draft report dated November 26, 2004. 

22 42 CFR § 488.438(f)(2). 

23 Sections 1819(h)(2)(B) and 1919(h)(2)(A) of the Social Security Act. 

24 Cases for which the identified deficiency constituted only past 

noncompliance and cases that remained outstanding at the end of our 

tracking period were omitted from time analysis. 

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25 In a few situations, a revisit is not required to assert compliance. 

26 The number of days attributed to each interval (e.g., survey date to 

fin l re i a vis t) during the collection process totals 197. However, the 

number of days from the survey date to the pa e id dat averages

160 because the calculation is based on a different number of 

observations. Payment dates were missing on approximately 

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

number of observations. 

27 Values for time intervals that were beyond three standard deviations 

from the mean were excluded so that questionable values did not 

affect our means. 

28 December 2002: Telephone interview with Departmental Appeals 

Board staff. 

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∆ APPENDIX ~ A 

Discretionary Remedies 

Termination of the Provider Agreement (42 CFR § 488.456)—Facility 

ceases to provide care for Medicare residents; Medicare residents must 

be transferred to another facility. 

Civil Money Penalties (42 CFR §§ 488.430-488.444)—A per day or per 

instance fine ranging from $50 to $10,000. 

Denial of Payments for New Admissions (42 CFR § 488.417)—Denial of 

payments for new Medicare or Medicaid admits. 

Denial of Payments for All Patients (42 CFR § 488.418)—Denial of 

payments for all Medicare and Medicaid residents by CMS. 

State Monitoring (42 CFR § 488.422)—Professional monitor identified 

by the State agency oversees the correction of cited deficiencies as a 

safeguard against further harm to residents. 

Directed Plan of Correction (42 CFR § 488.424)—A plan which the 

State or regional office develops to require a nursing home to take 

action within specified timeframes; differs from a traditional Plan of 

Correction in that an entity other than the nursing home develops it. 

Directed In-Service Training (42 CFR § 488.425)—Implementation of an 

educational program designed to increase the knowledge and skill of 

direct care staff regarding an issue of noncompliance. 

Closure of Facility or Transfer of Residents or Both (42 CFR 

§ 488.426)—In “emergency” situations, a State may close a nursing 

home and transfer all residents including private pay patients. 

OEI-06-02-00720 NURSING HOME ENFORCEMENT: T HE USE OF CIVIL MONEY P ENALTIES 24 
∆ APPENDIX ~ B 

Data Description and Cleaning 

The primary data for this study were obtained from the LTC and were 

supplemented with data from the CMPTS. The primary functions of 

these databases are administrative, e.g., reporting and case tracking. 

Long-Term Care Enforcement Tracking System 

This system was developed by CMS region V office as a tool to assist in 

the implementation of the new enforcement regulations.1 The system 

was voluntarily adopted by several CMS regions in 1998 and 1999, with 

all regions required to use it by January 2000. 

The LTC database is believed by CMS staff to be the best electronic 

source of enforcement information in almost every region. Combining 

basic nursing home descriptors with all aspects of the enforcement 

process and differentiating imposed and effected remedies, the LTC 

data contain significantly more information about the enforcement 

process than does the Online Survey, Certification, and Reporting 

database. 

Civil Money Penalty Tracking System 

The CMPTS is the centralized CMS database used for tracking the 

collection and allocation of CMP payments. For analysis involving 

monetary collections, we found it beneficial to capture fields regarding 

CMP payments through the CMPTS data rather than the LTC data. 

The CMPTS data were additionally useful for matching CMP amounts 

with the specific scope and severity levels that were used to determine 

those amounts. 

Although payment information may be collected in LTC, the process is 

such that regional staff must independently look up collections through 

CMPTS and enter that information into LTC. Payments are received at 

the CMS central office in Baltimore, MD, and payment information is 

entered there. Many CMS regional staff advised us that they do not 

consistently follow up with this information, or that they keep this 

information in a separate spreadsheet. 

1 ‘New regulations’ refers to 42 CFR Chapter IV, Subpart F: Enforcement of Compliance for 

Long-Term Care Facilities with Deficiencies. 

OEI-06-02-00720 NURSING HOME ENFORCEMENT: T HE USE OF CIVIL MONEY P ENALTIES 25 
APPENDIX~B 

LTC/CMPTS Match 

The CMPTS data were matched to the LTC data using a “CMP 

Collection Number” that was present (in parts or whole) in both 

databases. Cases that did not match initially were examined, CMP 

Collection Numbers were added, wherever necessary, and cases were 

combined when information indicated that it was necessary. For 

example, in many cases the CMP information for a single cycle was split 

across several cases in CMPTS; and it was necessary to combine them to 

one case and delete the duplicate information. Following the cleaning 

procedure, the databases were merged and slightly over a 99 percent 

match rate was achieved. Only 9 cases in LTC did not match the 

CMPTS, and 18 cases were found only in the CMPTS database. 

Additional data cleaning was necessary to incorporate information 

typed in note fields and to address incorrectly entered data. 

Data Cleaning 

Data for 8,662 cases were in the original LTC file received for the years 

2000 and 2001 and 8,309 cases remained after the cleaning procedure, 

of which 51 percent had CMPs imposed. 

Cleaning actions were based on information obtained from various 

sources. Staff at all 10 regional offices were interviewed to gather 

information about the use of the LTC at the regional level. Information 

obtained included the data entry processes and the extent of use of the 

various screens and data fields within each region. As analyses were 

performed, outliers and questionable values were examined on an 

individual case basis. Information used to verify the validity of data 

included alternative fields in both databases and the notes written in 

the LTC file. 

Scope of the Data 

Regional office interviews resulted in the omission of all data from one 

region. Staff from region II reported that there were database 

implementation difficulties. Exploration of data from this region 

indicated that there were excessive missing data and obvious data entry 

errors, raising concerns about reliability and validity. For these 

reasons, data from region II were omitted from all analyses (253 cases). 

Analyses included only data from cycles in which the first visit was 

conducted in the years 2000 and 2001. We based our decision to use 

those years on two factors: (1) not all regions were consistently entering 

information in the LTC prior to 2000 and (2) data from 2002 were not 

yet complete, since many cycles were still in progress. 

OEI-06-02-00720 NURSING HOME ENFORCEMENT: T HE USE OF CIVIL MONEY P ENALTIES 26 
APPENDIX~B 

Additional Data Cleaning Actions 

Listed below are the additional actions that were taken to clean the 

data. 

Some cases were not included in all files. The data were structured in 

multiple relational databases. Some cases were deleted in the primary 

database, but were not deleted across all files. Seventy-seven cases 

were deleted for this reason. 

Nonenforcement cases were deleted. Eighteen cases were referred or 

entered inappropriately and did not require enforcement actions. These 

cases were deleted because they were outside the scope of this study. 

Duplicate cases were corrected and deleted. Five cases that were 

duplicated in the LTC during the database implementation process 

were deleted. There were also 34 duplicate records in the CMPTS, for 

which the total due and paid for a single cycle had been dispersed across 

several records. These amounts were combined into a single record, and 

the duplicates were deleted. 

Cases in which the CMP status was designated incorrectly were 

corrected. There were 241 cases for which the CMP was rescinded after 

an Informal Dispute Resolution reduced the scope and severity of the 

deficiencies. In addition, 53 cases were marked as CMP cases in error. 

For another 126 cases, the CMP was never imposed because the nursing 

home came into compliance quickly, paperwork was too late, the 

nursing home was having financial difficulty, the CMP was past the 

statutory limit of two survey cycles, or the CMP was rescinded. These 

cases had originally been marked in the LTC as CMP cases and were 

recoded to indicate that they were not. Associated information was 

deleted from the CMPTS so that monetary totals would not be 

inappropriately included in analyses, because technically there was 

never an amount due. The CMP indicator variable was recoded for 

three cases where CMPs had been imposed, and they were not coded as 

CMP cases. 

Missing and incorrect dates were added or corrected. Many of the dates 

necessary for analysis were available from more than one source. When 

analyses indicated the date was not correct, alternative data sources 

were reviewed. Date corrections were made for 81 cases. 

Dollar amounts were corrected. Corrections were made to the amount 

imposed for 41 cases in the LTC, for which the amount was missing or 

entered in error. Information regarding the amount of the CMP due 

OEI-06-02-00720 NURSING HOME ENFORCEMENT: T HE USE OF CIVIL MONEY P ENALTIES 27 
APPENDIX~B 

and collected was available from both the LTC and CMPTS. 

Mismatches between the amounts due and paid often indicated that 

data were entered into the wrong CMPTS fields. One-hundred thirty 

corrections were made using information contained in the LTC. 

The amount due was deleted in 12 cases because the CMPs had been 

excused for bankruptcy or as the result of an appeal. Corrections were 

made for 77 appealed cases that had been settled or dismissed, and the 

final amount due had not been entered. Payment information entered 

in error was corrected for 82 cases. 

Notes and other sources of information indicated that a variable was 

miscoded. Information from alternative sources facilitated 

1,106 corrections for miscoded or missing information. These 

corrections included denoting bankruptcy cases, recoding the CMP 

payment status, correcting remedies imposed and effectuated, inserting 

CMP collection numbers, denoting immediate jeopardy cases, and 

adding hearing outcomes. This was possible because multiple indicators 

were present. For example, cases with a scope and severity rating of J, 

K, or L but having no designation as an immediate jeopardy case were 

revised to appropriately designate the case as immediate jeopardy. 

Questionnable dates were deleted from time analysis. Questionnable 

dates were found to be problematic in time-related analysis. They 

skewed the distribution so that the average time to collect CMPs 

appeared to be inflated. Also, they did not appear to be legitimate for 

one reason or another. For these reasons, observations with values 

beyond three standard deviations from the mean were omitted from 

individual analysis. 

OEI-06-02-00720 NURSING HOME ENFORCEMENT: T HE USE OF CIVIL MONEY P ENALTIES 28 
∆ APPENDIX ~ C 

Terminology 

For the purposes of this study, we used the following terms and 

definitions: 

Actual Harm—Actual harm is typically used to describe deficiencies 

with scope and severity ratings of G, H, and I. For the purposes of this 

report, the term actual harm refers to deficiency findings of (1) actual 

harm that is not immediate jeopardy and (2) a widespread potential for 

more than minimal harm. This term is used to represent all deficiencies 

that qualify for Category 2 remedies. Scope and severity ratings of F, 

G, H, and I are included. 

Case—A case includes all the enforcement activity that happens with 

respect to a particular nursing home during a single period of 

noncompliance. Enforcement staff refer to this as a cycle. A nursing 

home may have more than one case in our analysis and a case may have 

more than one CMP. 

Double G Rule—Cases in which nursing homes were cited for 

deficiencies of a level of G or higher on the scope and severity scale on 

the current survey and also the previous standard survey or any 

intervening survey require “immediate” action by CMS. 

Due—Refers to cases for which the final amount of the CMP has been 

decided (hearing waiver received, settlement reached, or the date to 

waive a hearing or file an appeal has passed) and the date for which the 

CMP is listed as due and payable in the CMPTS. If this information is 

not available in the CMPTS, an alternative date is used that equates to 

15 days after the date of the last regional office letter to the nursing 

home stating that the CMP is due. 

Immediate Jeopardy—Deficiency findings that constitute an actual or 

potential for death or serious injury. This term is used to represent all 

deficiencies that qualify for Category 3 remedies. Scope and severity 

ratings of J, K, and L are included. 

Nursing Home—A Medicare or Medicare/Medicaid dually certified 

skilled nursing facility. A nursing home may also be referred to as a 

facility. 

Opportunity to Correct—A period of time (usually 60 days or less) 

afforded to noncompliant nursing homes during which they can return 

to compliance without the involvement of the CMS regional offices. 

OEI-06-02-00720 NURSING HOME ENFORCEMENT: T HE USE OF CIVIL MONEY P ENALTIES 29 
APPENDIX~C 

Facilities with immediate jeopardy deficiencies or a historical pattern of 

noncompliance are denied this “opportunity.” 

Paid, Unpaid—Is limited to payments entered into the CMPTS prior to 

December 16, 2002. This represents a functional limitation of our data 

collection period. 

Plan of Correction—A formal statement by the nursing home informing 

the State and CMS of actions that will be taken to address deficiencies 

identified through a survey. 

Revisit—An abbreviated survey used to check the status of identified 

deficiencies. 

Substantial Compliance—Compliance with Medicare regulations or 

deficiencies in the A, B, or C level. 

Uncollectable—Uncollectable cases include those currently in an 

appeals process or bankruptcy status. 

OEI-06-02-00720 NURSING HOME ENFORCEMENT: T HE USE OF CIVIL MONEY P ENALTIES 30 
∆ APPENDIX ~ D 

Agency Comments to Draft Report 

OEI-06-02-00720 NURSING HOME ENFORCEMENT: T HE USE OF CIVIL MONEY P ENALTIES 31 
APPENDIX~D 

OEI-06-02-00720 NURSING HOME ENFORCEMENT: T HE USE OF CIVIL MONEY P ENALTIES 32 
APPENDIX~D 

OEI-06-02-00720 NURSING HOME ENFORCEMENT: T HE USE OF CIVIL MONEY P ENALTIES 33 
OEI. 06. 02. 00720

This report was prepared under the direction of Judith V. Tyler

Regional Inspector General for Evaluation and Inspections in the Dallas

regional offce, and Kevin Golladay, Assistant Regional Inspector

General. Other principal Offce of Evaluation and Inspections staff who

contributed include:

Amy Ashcraft, Project Leader

Clark Thomas, Program Analyst

Susan Wolfe, Program Analyst

Sandy Khoury, Program Specialist

Barbara Tedesco, Mathematical Statistician

NURSING HOME ENFORCEMENT: THE USE OF CIVIL MONEY PENALTIES