Pennsylvania Code › Title 55 - HUMAN SERVICES › Part III - MEDICAL ASSISTANCE MANUAL › Chapter 1181 - NURSING FACILITY CARE › Subchapter D - NURSING HOME REFORM-STATEMENT OF POLICY › APPEALS OF ADVERSE DETERMINATIONS › Appendix O - OBRA SANCTIONS

Current through Register Vol. 54, No. 28, July 13, 2024
I.
Federal Requirements
. OBRA-87
						requires the Department to implement six (6) specified remedies with respect to
						providers that are not in compliance with the provider participation
						requirements established by the Act:
1. Denial of payment under the State Plan with respect to
						new admissions.
2. Civil Monetary Penalties, assessed and collected with
						interest, for each day a provider facility is or was out of compliance with
						specified requirements under the Act.
(The Act provides for other civil monetary penalties
						against individuals which are to be administered by Federal agencies.
						(42 U.S.C.A. §§
												1320a-7a,
						1396r(b)(3)(B)(ii).
3. Appointment of Temporary Management to oversee
						operations in the event of an orderly closure of the facility or while
						improvements are made in order to bring the facility into compliance with the
						Act's requirements.
4. Authority, in the case of an emergency, to close the
						facility and/or to transfer the residents to another facility. (42 U.S.C.A. §
												1396r(h)(2)(A))
5. Denial of payment for new admissions of any provider
						facility which has not come into compliance with specified requirements of the
						Act within 3 months after the date on which that facility is found to be out of
						compliance. (42 U.S.C.A.
						§
												1396r(h)(2)(C))
6. Denial of payment for new admissions and continuous
						monitoring until the Department is satisfied that the facility will remain in
						compliance as to a facility which, on 3 consecutive standard surveys, has been
						found to have provided substandard quality of care. (42 U.S.C.A. §
												1396r(h)(2)(D))
In addition, the Act permits the States to implement
						additional remedies, such as directed plans of correction. (42 U.S.C.A. §§
												1396r(h)(1),
						1396r(h)(2)(A))
II.
Current State Law. Closure of Facilities and
						Removal of Jeopardy to Resident Health and Safety.
Under current State
						law, the Department of Health is authorized to close nursing facilities (other
						than ICFs/MR) in the event of emergencies and, where necessary, to require the
						transfer of residents to other nursing facilities and take any other steps
						required to remove jeopardy to resident health and safety (35 P. S.
						§§
												448.814-448.819). The Department
						of Public Welfare provides limited payment in such situations (55 Pa. Code
						§
											1181.58). Both Departments are
						required by law to coordinate their activities in such a situation
						(71
						P. S. §
												181), and such coordination can
						include delegation by the Department of Health to Department of Public Welfare
						staff to perform duties ordinarily assigned to staff of the Department of
						Health. The Department of Public Welfare has determined that these existing
						provisions of State law are sufficient to comply with the requirement that the
						State have the authority, in the case of an emergency, to close a provider
						facility and/or to transfer residents to other facilities, as required by
						42 U.S.C.A. §
												1396r(h)(2)(A)(iv).
						Therefore, no new statutes or regulations are required to meet this provision
						of the Act.
Denial of Payments for New Admissions.
Under current Department regulations, the Department may terminate or suspend a
						provider facility's participation in the MA Program (55 Pa. Code §
											1101.73 and
						1101.77). This includes
						termination or suspension of payments pending appeals (55 Pa. Code §§
											1101.73 and
						1101.77(c)). Such
						action may be taken if the Department determines that the provider facility has
						failed to comply with any requirements of 55 Pa. Code Chapters 1101 and 1181,
						including the requirements that such facilities conform with the requirements
						established by OBRA-87 (55 Pa. Code §§
											1101.77(a)(1) and
						1181.41(3)). The
						Department may also preclude admissions of certain applicants whom the
						Department determines cannot be adequately served by the facility because of
						the facility's noncompliance with certain Program standards (55 Pa. Code
						§§
											1181.82 and
						1181.548(3)). In
						addition, the Public Welfare Code authorizes the Department to make MA payments
						to nursing facilities subject to their meeting the requirements established by
						Title XIX of the Social Security Act for participation in the MA Program
						(62
						P. S. §
												443.1). Under this existing
						authority, the Department has precluded payments for new admissions pending
						correction of compliance deficiencies as an intermediate sanction. In addition,
						the Department of Health is authorized to preclude a facility from admitting
						additional patients as part of a plan of correction of licensing violations.
						The Department has determined that this existing authority is sufficient to
						comply with the requirement that the State have the authority to deny payments
						for new admissions at provider facilities determined to be out of compliance
						with OBRA-87 standards, as required by
						42 U.S.C.A. §
												1396r(h)(2)(A)(i), (C) and
						(D). Therefore, no new statutes or
						regulations are required to meet such provisions of the Act.
Monitoring Provider Operations to Assure
						Compliance.
Under existing Department regulations, the Department has
						the authority to monitor provider facility operations to review compliance with
						Program requirements and to preclude the participation of provider facilities
						which are not in compliance (55 Pa. Code §§
											1101.71,
						1101.77 and
						1181.83). The Department may also
						preclude the re-enrollment of a terminated provider until such time as it is
						satisfied that there will be no repetition of the violations which led to the
						provider's termination (55 Pa. Code §
											1101.82). In addition, the
						Department of Health is authorized to monitor facility compliance with the
						requirements of applicable State and federal regulations (35 P. S. §
												448.813). The Department has determined that
						these existing provisions of State law are sufficient to comply with the
						requirement that the State have the authority to monitor a provider facility in
						order to determine that the facility will remain in compliance with OBRA-87, as
						required by 42 U.S.C. §
												1396 r(h)(2)(D)(ii). Therefore, no new
						statutes or regulations are required to meet this provision of the Act.
Civil Monetary Penalties
. Under existing
						Department regulations, the Department has the authority to terminate or
						suspend provider facilities' participation in the MA Program, including the
						suspension of payments pending appeals. Under this existing authority, the
						Department has imposed administrative monetary penalties on providers as an
						alternative to termination. The Department has also utilized statistical
						samples, under 55 Pa. Code §
											1101.83(a), to
						determine restitution for services rendered contrary to Program requirements.
						The Department of Health is also authorized to impose civil monetary penalties
						in cases where provider facilities fail to promptly correct serious
						deficiencies which are also licensure requirements (35 P. S. §
												448.817(b)). The Department
						has determined that these existing provisions of State law are sufficient to
						comply with the requirement that the State have the authority to impose civil
						monetary penalties on provider facilities found to be out of compliance with
						Program requirements, as required by
						42 U.S.C.A. §
												1396r(h)(2)(A)(ii).
						Therefore, no new statutes or regulations are required to meet this provision
						of the Act.
Appointment of Temporary Management and Directed
						Plans of Correction
. Under existing State law, the Department of
						Health may petition the courts for the appointment of a temporary manager or
						master to oversee facility operations for a specified period of time or until
						violations of licensing standards or patterns of noncompliance are corrected
						and may also direct specific plans of correction for the facility
						(35
						P. S. §
												448.814). The Department of
						Public Welfare has the authority to terminate or suspend provider facilities'
						participation in the MA Program, including the suspension of payments pending
						appeals. Under this existing authority, the Department can, as a condition for
						the continuation of a provider agreement, require providers to permit the
						imposition of temporary management to oversee the operation of the facility and
						to assure the health and safety of the facility's residents and can direct
						specific plans of correction. The Department can also petition the courts for
						the appointment of a receiver in appropriate cases,
Tate v.
						P.T.C.
, 410 Pa. 490, 190 A.2d 316 (1963) (Receivers may be appointed
						to manage solvent as well as insolvent entities in appropriate cases); or, for
						injunctive relief to require the facility to conform with OBRA-87 requirements,
Rupel v. Bluestein
, 280 Pa. Super. 65, 421 A.2d 406 (1980)
						(Courts of equity may prevent or restrain the commission of acts contrary to
						law and prejudicial to the rights of individuals). The Department has
						determined that these existing provisions of State law are sufficient to comply
						with the requirement that the State have the authority to appoint temporary
						management to oversee facility operations and to assure the health and safety
						of residents in appropriate cases where such temporary management is needed
						during the closure of a facility or in order to assure necessary improvements
						to bring the facility into compliance with OBRA-87 standards, as required by
						42 U.S.C.A. §
												1396r(h)(2)(A)(iii).
						Therefore, no new statutes or regulations are required to meet this provision
						of the Act.
Other Remedies.
Any person or entity
						knowingly violating any of the Department's rules and regulations with respect
						to the MA Program can be prosecuted under
						62
						P. S. §
												483; and, if convicted, they
						shall be guilty of a misdemeanor and shall be sentenced to pay a fine not
						exceeding $100, or to undergo imprisonment not exceeding 6 months, or both. If
						a provider or the owner, agent, or employe of a provider is convicted of such a
						crime, the Department can preclude the participation of the provider and any
						other convicted person(s) in the MA Program for a period of 5 years (55 Pa.
						Code § 1101.77(b)(3)).
III.
Criteria for the Application of
						Remedies
. The Act requires the Department to provide for the
						enforcement of the OBRA-87 facility participation standards through the use of
						the remedies specified by the Act at
						42 U.S.C. §
												1396 r(h)(2) and the use of the Department's
						authority to terminate the facility's participation in the MA Program and to
						administer the Program (42
						U.S.C. §
												1396 r(h)(1) ). The Act vests
						the Department with broad discretion in the use of these remedies and other
						methods in order to provide the Department with the greatest flexibility to
						assure the health and safety of facility residents, to minimize the time
						between the identification of violations and the imposition of remedies, and to
						effectively deter and correct deficiencies.
The Act, however, directs the Department with respect to
						the application of certain remedies; and, where such direction exists, the
						Department shall apply the remedies as required by the Act. The Act requires
						the Department to impose incrementally more severe fines for repeated or
						uncorrected deficiencies; requires the Department to deny payment for new
						admissions in cases where providers fail to promptly correct deficiencies or
						have been found on 3 consecutive standard surveys to provide substandard
						quality of care; and requires the Department to monitor facilities which have
						been found on 3 consecutive standard surveys to provide substandard quality of
						care (42 U.S.C.A.
						§§
												1396r(h)(2)(A), (C) and
						(D).
Effective Date and Basis for the Imposition of
						Remedies
. While the Act focuses on the determination of provider
						facility compliance through the use of the survey and certification process, it
						permits the Department to impose most of the remedies required by the Act even
						where the Department finds noncompliance through some other method. Under
						current State law and regulations, the Department and the Department of Health
						can take action whenever they determine that a facility is not in compliance
						with applicable law.
Since the survey and certification process required by
						OBRA-87 is not yet in place due to delays in the required federal training
						program, the Department cannot presently make a determination that a provider
						facility has been found to have provided substandard quality of care on 3
						consecutive standard surveys, pursuant to
						42 U.S.C.A. §
												1396r(h)(2)(D), since no
						such surveys are presently being conducted. The imposition of this mandatory
						remedy must therefore be delayed until the survey process is in place. This
						limitation does not preclude or prevent the Department from monitoring provider
						facilities as already permitted under State laws and regulations or from
						utilizing other available remedies to assure continued provider facility
						compliance with OBRA-87 standards.
The Department will begin to apply and impose the
						sanctions required by OBRA-87 immediately
, along with any other
						remedies otherwise available under State law and regulations. Application of
						these remedies will not be restricted to the survey and certification process.
						The Department may cite a facility for violations of applicable OBRA-87
						standards and may require the provider facility to show cause why any of these
						remedies should not be imposed at any time. The Department shall continue to
						coordinate its efforts with those of other agencies involved in protecting the
						health, safety and welfare of provider facility residents.
Termination of Facility Participation in the
						Program
. A provider facility shall be terminated from participation in
						the MA Program in those cases where termination is required by Program
						regulations or otherwise by law (e.g., when such termination is directed by
						federal authorities pursuant to
						42 U.S.C.A.
						1320a-7 or when the provider is convicted of
						a Program-related crime or when the provider's license is suspended or
						revoked). A provider facility shall be terminated from participation in the MA
						Program as otherwise permitted by Program regulations whenever the provider
						facility has not shown cause for and agreed to the application of another
						remedy provided for in this appendix or otherwise in State law and regulations,
						including the application of the mandatory remedies required by
						42 U.S.C.A. §
												1396r(h)(2)(C)-(D). A
						provider facility shall be terminated from participation in the MA Program in
						any case in which the Department determines that compliance with Program
						standards and conditions of participation can most effectively be achieved by
						terminating the facility's participation, including those cases in which the
						facility has a history of repeated noncompliance with Program standards or
						conditions of participation for reasons within the control of the facility or
						its owners or where the facility or its owners have knowingly violated Program
						standards or conditions of participation or any Program regulation.
Closure of Facilities and Transfer of Residents
						and Intervention to Cure Immediate Threats to Resident Health and
						Safety
. In the event of an emergency, a provider facility shall be
						closed and its residents transferred to other facilities, as provided by
						Department regulations and as determined by the Department of Health in
						cooperation with the facility. All facilities are required by law to notify the
						Department of Health in the event of any intended closure and that Department
						is authorized to require closures in order to protect residents' health and
						safety (28 Pa. Code §
											201.23). Provider facilities must
						also notify the Department of Public Welfare of any impending strike or
						emergency requiring resident transfers (55 Pa. Code §
											1181.58). The Department of Public
						Welfare shall coordinate with the Department of Health in cases where there is
						a finding that there are deficiencies which immediately jeopardize the health
						and safety of residents to take immediate action to remove the jeopardy either
						by correcting the deficiencies, by transferring the residents, or by closing
						the facility temporarily or permanently. A provider facility's participation in
						the MA Program is not automatically terminated because of closures or transfers
						of residents in the case of an emergency.
Temporary Management
. The appointment of
						temporary management will be required to oversee the operation of a provider
						facility and to assure the health and safety of the facility's residents in the
						following six (6) cases:
(1) Where the facility, after notice by the Department or
						by the Department of Health of a violation of a Program standard and the
						acceptance of a plan of correction submitted by the facility, has failed to
						bring the facility into compliance in the time specified in the plan of
						correction (even in a case where the facility has determined in the interim to
						close);
(2) Where the facility has demonstrated a pattern of
						episodes of noncompliance such as would convince a reasonable person that any
						correction of violations would be unlikely to be maintained (even in a case
						where the facility has determined to close);
(3) Where the facility has failed to submit a plan of
						correction within thirty (30) days of notice of violations from the Department
						or the Department of Health (even in a case where the facility has determined
						to close);
(4) Where persons responsible for the facility's
						management are disqualified from participation in the Program;
(5) Where persons responsible for the facility's
						management are otherwise unable to perform and the facility has certified to
						the Department that it requires a temporary manager pending the hiring of new
						personnel; or,
(6) Where the facility has been denied renewal of its
						license and that determination has been timely appealed to the licensing agency
						(the grant of a provisional license shall not be construed as a denial of
						renewal of a license).
Civil Monetary Penalties
. Where the
						Department determines that a facility is out of compliance with any
						requirements of 42 U.S.C.
						§
												1396 r(b)-(d) and such noncompliance
						could have been prevented by the provider, the Department may require the
						facility to make payment at a rate of $100 per violation per day of
						noncompliance, plus interest at the legal rate, until paid; however, if the
						provider unreasonably fails to correct any such deficiency within ten (10) days
						of notice thereof (including notice from its own records or staff), then the
						rate shall be increased to $500 per violation per day of delayed compliance,
						plus interest at the legal rate, until paid.
Where the Department determines that a provider facility,
						within sixty (60) days, is again out of compliance with the same requirement of
						42 U.S.C.A. §
												1396r(b)-(d) as to which the
						Department has previously sought a civil monetary penalty and such repeated
						noncompliance could have been prevented by the provider, the Department may
						require the facility to make payment at a rate of $200 per violation per day of
						noncompliance, plus interest at the legal rate, until paid; however, if the
						provider unreasonably fails to correct any such deficiency within ten (10) days
						of notice thereof (including notice from its own records or staff), then the
						rate shall be increased to $500 per violation per day of delayed compliance,
						plus interest at the legal rate, until paid.
With respect to deficiencies involving screening,
						services or notices required for residents, the Department shall deem each
						resident that failed to receive the required notice or service or screening to
						be a separate violation.
The provider shall be held liable for violations caused
						by the acts and omissions of its officers, agents and employes; however, the
						provider shall not automatically be held liable for violations caused by the
						criminal acts of such persons, but may be liable in cases where the provider is
						also liable for such acts. Where the Department determines that a provider
						facility is knowingly out of compliance with any Program regulation or
						requirement, it shall refer the matter to the Office of Attorney General for
						review as to possible prosecution under the Public Welfare Code or other
						applicable laws, as well as, where appropriate, to relevant licensing
						agencies.
Denial of Program Payment for New
						Admissions
. The Department will require a provider facility to waive
						Program payments with respect to new admissions (either in general or limited
						to those requiring certain kinds or levels of care):
(1) Where the provider facility has been out of
						compliance with any requirement of
						42 U.S.C.A. §
												1396r(b)-(d) for a period of
						3 months after the date the facility is found to be out of compliance with any
						such requirement and continues to be out of compliance;
(2) Where the provider facility has been found on 3
						consecutive standard surveys conducted under
						42 U.S.C.A. §
												1396r(g)(2) to have provided
						substandard quality of care and the Department has not made a subsequent
						determination that the facility is or will remain in compliance with the
						requirements of 42 U.S.C.A.
						§
												1396r(b)-(d);
(3) Where the Department has determined that the facility
						is not currently in compliance with requirements of
						42 U.S.C.A. §
												1396r(b)-(d) and is not able
						to provide services in compliance with the requirements of
						42 U.S.C.A. §
												1396r(b)-(d) for such
						additional residents;
(4) Where the Department determines that the facility is
						not able to provide services in compliance with the requirements of
						42 U.S.C.A. §
												1396r(b)-(d) for such
						additional residents; or,
(5) Where the Department has not approved the admission
						of such additional residents through the pre-admission screening processes
						established by law.
Monitoring Facilities With Repeated Substandard
						Care
. Where a provider facility has been determined on 3 consecutive
						standard surveys conducted under
						42 U.S.C.A. §
												1396r(g)(2) to have provided
						substandard quality of care, the Department shall require the facility to
						permit the Department to monitor the facility, consistent with the requirements
						of 42 U.S.C.A. §§
												1396r(g)(4)(B) and
						(h)(2)(D)(ii), until the facility has
						demonstrated to the satisfaction of the Department that it is in compliance
						with the requirements of 42
						U.S.C.A. §
												1396r(b)-(d)
						and that it will remain in compliance with such requirements. Nothing in this
						paragraph shall be construed to limit the Department's rights to monitor
						provider facility operations as required by
						42 U.S.C.A. §
												1396r(g)(4)(B) or as
						otherwise permitted by law or otherwise.
IV.
Relationship of Remedies and Rights During
						Appeals
. When the Department determines that a provider facility is
						subject to the remedies discussed in this appendix, it will issue a notice to
						the provider facility, as required by
						42 CFR
						431.154, of the Department's intent to take
						action and requesting the provider for a response to inform the Department as
						to any errors in the Department's findings, as well as with respect to the
						appropriate remedy. If the provider facility fails to respond to such advance
						notice, the Department will terminate the provider facility's participation in
						the MA Program by a subsequent notice, effective as of the date specified in
						the advance notice. If the provider does timely respond to the advance notice,
						the Department will consider the information submitted and will advise the
						provider facility of the Department's decision with respect to the matter in a
						subsequent notice to be issued prior to the effective date of any
						termination.
The Department's advance notice will include alternative
						remedies to termination which the Department will consider, which alternatives
						shall be based on the criteria in this appendix. If the provider facility
						agrees to the suggested alternative remedy, the Department shall enter an order
						permitting the provider facility's continued participation in the Program
						subject to the alternative remedy. Such an order shall require compliance with
						the alternative remedy even though the provider may still be contesting the
						basis for the Department's findings and determination; however, such an order
						shall not require the provider to make payment of any civil monetary penalty
						until and unless the Department's determination is sustained by a final
						order.
If the provider facility's appeal of the Department's
						determination is sustained by a final order, the provider facility may obtain
						payment for residents admitted to the facility after the effective date of any
						limitation on new admissions, as permitted by such final order, under 55 Pa.
						Code §
											1101.77(c)(3)(i).
						The costs of providing temporary management pursuant to
						42 U.S.C.A. §
												1396r(h)(2)(iii) are borne
						by the Department.