Medicare Conditions of Participation
Survey, Certification, and Enforcement Procedures

2.) Survey, Certification, and Enforcement Procedures

        a.) General

                i.) National accreditation organizations

A national accreditation organization seeking approval for deeming authority for Medicare requirements must furnish detailed information and materials to CMS.24

A national accreditation program must provide reasonable assurance to CMS that it requires the providers or suppliers it accredits to meet requirements that are at least as stringent as the Medicare conditions when taken as a whole.25 In such a case, CMS may deem the providers or suppliers the program accredits to be in compliance with the appropriate Medicare conditions. These providers and suppliers are subject to validation surveys.

CMS must review national accreditation organizations to ensure that they comply with regulatory requirements.26 CMS may conduct an onsite inspection of the accreditation organization’s operations and offices to verify the organization’s representations and to assess the organization’s compliances with its own policies and procedures as part of the application review process, the validation review process, or the continuing oversight of an accreditation organization’s performance.27

                ii.) Providers, suppliers, and hospitals

In order to be approved for participation in or for coverage under the Medicare program, a prospective provider or supplier must meet statutory definitions under the Social Security Act and comply with long-term care regulatory requirements.28

Hospitals accredited by the Joint Commission on Accreditation of Healthcare Organizations (JCAHO) or American Osteopathic Association (AOA) are deemed to meet all of the Medicare conditions of participation for hospitals except: the requirement for utilization review; additional special staffing and medical records requirements related to psychiatric hospitals; and any other requirement that is considered as being higher or more precise than the requirements for accreditation.29

CMS may require a survey of an accredited provider or supplier to validate its organization’s accreditation process.30  If a validation survey results in a finding that a provider or supplier is out of compliance with one or more Medicare conditions, the provider or supplier will no longer be deemed to meet any Medicare conditions.

                iii.) State survey agencies

State and local agencies may perform the following functions: survey national accreditation organizations, conduct validation surveys of accredited facilities, perform other surveys and activities, and make recommendations regarding the effective dates of provider dates of provider agreements and supplier approvals.31

On the basis of state survey agency recommendations, CMS will determine whether a provider or supplier is eligible to participate in or be covered under the Medicare program or an accredited hospital is deemed to meet the Medicare conditions of participation or is subject to full review by the state survey agency.32

The findings of a state agency regarding each of the conditions of participation, requirements for skilled-nursing facilities, or conditions for coverage must be adequately documented.33

                iv.) Periodic reviews to determine compliance

CMS may make determinations on whether a provider or supplier is complying with conditions of participation as often as CMS deems necessary, which may be more or less than a 12 month period.34

A state agency will certify that a provider or supplier is not in compliance with the conditions of participation or conditions for coverage: where the deficiencies substantially limit the provider's or supplier's capacity to furnish adequate care or which adversely affect the health and safety of patients; or if CMS determines that an institution or agency does not qualify for participation or coverage because it is not in compliance with the conditions of participation or conditions for coverage.35

The decision as to whether there is compliance with a particular requirement, condition of participation, or condition for coverage depends upon the manner and degree to which the provider or supplier satisfies the various standards within each condition.36 A state survey agency must adhere to specific principles in determining compliance with participation requirements.

If a provider or supplier is found to be deficient with respect to one or more of the standards in the conditions of participation or conditions for coverage, it may participate in or be covered under the Health Insurance for the Aged and Disabled Program only if the facility has submitted an acceptable plan of correction for achieving compliance within a reasonable period of time acceptable to the Secretary.37

        b.) Special requirements

If a hospital is found to be out of compliance with one or more conditions of participation for hospitals, a temporary waiver may be granted by CMS.38 CMS may extend a temporary waiver only if such a waiver would not jeopardize or adversely affect the health and safety of patients. The waiver may be withdrawn earlier if CMS determines this action is necessary to protect the health and safety of patients.

A skilled nursing facility may request its registered nurses to work more than 40 hours a week only in limited circumstances and based upon documented findings of a state agency. 39

An end state renal disease facility and transplant centers that wishes to be approved for coverage must secure a determination by CMS.40

        c.) Reconsideration of adverse determinations, deeming authority for accreditation organizations and Clinical Laboratory Improvement Amendments (“CLIA”) exemptions of laboratories under state programs

A skilled-nursing facility must undergo a survey process to assess whether the quality of care prescribed by regulations and needed by residents is actually being provided in nursing homes.41 Facilities must continue to meet all applicable conditions and standards to participate in Medicare/Medicaid programs. The survey process will focus on resident outcomes and not solely on facility policies and procedures. Surveys must observe and interview residents in order to make that determination.

A national accreditation organization dissatisfied with a determination that its accreditation standards do not provide reasonable assurance that the entities accredited meet applicable long-term care requirements is entitled to a reconsideration.42 A state dissatisfied with a determination that the requirements it imposes on laboratories do not provide reasonable assurance that laboratories meet CLIA requirements is entitled to a reconsideration.43

        d.) Survey and certification of long-term care facilities

Incentives and sanctions

A state may establish a program to reward nursing facilities (“NFs”) that provide the highest quality care to Medicaid residents through public recognition or incentive payments.44

A state has the following powers against non-state operated NFs: termination of the provider agreement; temporary management; denial of payment for new admission; civil money penalties; transfer of residents; closure of the facility and transfer of residents; state monitoring; directed plan of correction; directed in-service training; and alternative or additional state remedies.45

State surveys

State survey agencies must comply with requirements for its standard surveys for each skilled nursing facility (“SNF”) and NF.46 All standard surveys must be unannounced.47 An individual who notifies a SNF or NF of the time or date on which a standard survey is scheduled to be conducted may be penalized up to $2,000. The survey agency must conduct a standard survey of each SNF and NF every 15 months or more if necessary to determine a facility’s compliance with participation requirements.48

The purpose of an extended survey is to identify the policies and procedures that caused the facility to furnish substandard quality of care.49 The survey agency must conduct an extended survey not later than 14 calendar days after completion of a standard survey which found that the facility had furnished substandard quality of care.

CMS considers survey performance to be inadequate if the state survey agency: indicates a pattern of failure to identify deficiencies, cite only valid deficiencies, conduct surveys in accordance with regulatory requirements, or use federal standards specified by CMS; or fails to identify an immediate jeopardy situation.50

CMS assesses the performance of the state’s survey and certification program annually. When a state demonstrates inadequate survey performance, CMS notifies the survey agency of the inadequacy and reduces federal financial participation (FFP) and provides training of survey teams.

A state survey agency surveys all facilities for compliance or noncompliance with requirements for long term care facilities.51 The survey by the state survey agency may be followed by a federal validation survey. Regardless of the state entity doing the certification, its decision is final except on a complaint, a validation survey conducted by CMS, or CMS review of the state’s findings.  A facility may dispute survey findings upon the facility’s receipt of the official statement of deficiencies.52

A state must conduct periodic educational programs for the staff and residents of SNFs and NFs to present current regulations, procedures, and policies on the survey, certification, and enforcement process.53

Public information

The following information must be made available to the public, upon the public's request, by the state or CMS for all surveys and certifications of SNFs and NFs: statements of deficiencies and providers' comments; a list of isolated deficiencies that constitute no actual harm, with the potential for minimal harm; approved plans of correction; statements that the facility did not submit an acceptable plan of correction or failed to comply with the conditions of imposed remedies; final appeal results; notice of termination of a facility; Medicare and Medicaid cost reports; names of individuals with direct or indirect ownership interest in a SNF or NF; and names of individuals with direct or indirect ownership interest in a SNF or NF who have been found guilty by a court of law of a criminal offense in violation of Medicare or Medicaid law. 54

Complaints

A state survey agency must establish procedures and maintain adequate staff to investigate complaints of violations of participation requirements.55 The state survey agency must take appropriate precautions to protect a complainant’s anonymity and privacy. The state survey agency may conduct on-site monitoring when: a facility is not in substantial compliance with the requirements and is in the process of correcting deficiencies; a facility has corrected deficiencies and verification of continued substantial compliance is needed; or the survey agency has reason to question the substantial compliance of the facility with a requirement of participation.

A state must review all allegations of resident neglect and abuse and misappropriation of resident property.56 The state must have written procedures for the timely review and investigation of allegations of resident abuse and neglect and misappropriation of resident property.

        e.) Enforcement of compliance for long-term care facilities with deficiencies

CMS or the state may sanction facilities to address noncompliance found during surveys.57 In order to select the appropriate remedy to apply to a facility with deficiencies, CMS and the state must determine the seriousness of the deficiencies and consider other factors like the relationship of one deficiency to other deficiencies resulting in noncompliance and the facility’s prior history of noncompliance.58 In addition to termination of the provider agreement, the following remedies are available: temporary management; denial of Medicare/Medicaid payment; civil money penalties; state monitoring; transfer of residents; closure of the facility and transfer of residents; directed plan of correction; directed in-service training; and alternative or additional state remedies approved by CMS.59 CMS or the state may deny Medicare or Medicaid payment for all new admissions or all residents when a facility is not in substantial compliance with requirements.60

Each facility that has deficiencies must submit a plan of correction for approval by CMS or the survey agency.61 A facility is not required to submit a plan of correction when it has deficiencies that are isolated and or has the potential for minimal harm.

CMS may continue payments to a facility not in substantial compliance if the state survey agency finds that it is more appropriate to impose alternative remedies than to terminate the facility, the state has submitted a plan and timetable for corrective action approved by CMS, and the facility agrees to repay the federal government payments received if corrective action is not taken in accordance with the approved plan and timetable for corrective action.62

        f.) Termination of Medicare coverage and alternative sanctions for end-stage renal disease (“ESRD”) facilities

Failure of a supplier of ESRD services to meet one or more of the conditions for coverage will result in termination of Medicare coverage of the services furnished by the supplier.63 CMS may, as an alternative to termination of Medicare coverage, impose one of the following sanctions: denial of payment for services furnished to patients; reduction of payments; and withholding of all payments.64 CMS must give notice to a supplier and the general public of the alternative sanction and of the effective date of the sanction.65 If CMS proposes to apply an alternative sanction, CMS must give the facility notice of the sanction and an opportunity to request a hearing.66