J-5_Recommendations_for_Sanctions_and_Alternative_Sanctions.docx

Attachment J-5 Recommendations for Sanctions and Alternative Sanctions

Table of Contents

I. Background and Authority

I.A. Background

Medicare’s ESRD coverage program initially operated under interim regulations published in the Federal Register on June 29, 1973 (38 FR 17210), which became effective July 1, 1973. In the July 1, 1975, Federal Register (40 FR 27782), CMS published a proposed rule that revised sections of the ESRD requirements. The Federal Register published the final rule on June 3, 1976 (41 FR 22501). Subsequently, the ESRD Amendments of 1978 (Pub. L. 95–292) amended Title XVIII of the Social Security Act by adding Section 1881.

Sections 1881(b)(1) and 1881(f)(7) of the Social Security Act further authorize the Secretary of Health and Human Services to prescribe health and safety requirements (now known as the Conditions for Coverage for End-Stage Renal Disease Facilities [ESRD CfCs]) that a facility providing dialysis and/or transplantation services to dialysis patients must meet to qualify for Medicare payment. Section 1881(c) of the Act also establishes ESRD Network areas and organizations to ensure that dialysis patients receive appropriate care.

CMS adopted the ESRD CfCs in 1976 (41 FR 22502); see 42 CFR, Part 494. To participate in and receive payment from Medicare, an ESRD facility must satisfy all provisions of Section 1881 of the Social Security Act and substantially comply with the requirements found in 42 CFR, Parts 488.3(a) and 494.

I.B. Authority and Applicable Law

Section 1881 of the Social Security Act establishes the scope of responsibility for the ESRD Networks.

Medicare classifies most health care delivery entities as either providers or suppliers (42 CFR §488.1). Although classified as suppliers, ESRD facilities are subject to the same application, survey, certification, and enforcement requirements that apply to providers (42 CFR §488.3[a][2]).

I.C. On-Site Facility Surveys

To determine if a facility meets the ESRD CfCs, the State Survey Agency (SA) performs an on-site survey of the facility, as if that facility were a provider of Medicare services. The SA performs the surveys “as often as CMS deems necessary,” which may be “more or less than a 12-month period,” to ensure it identifies deficiencies (42 CFR §488.20[a]).

If a survey indicates that a facility is in compliance with the CfCs and meets all other federal requirements, CMS certifies the facility to qualify for Medicare payment. Medicare payment for outpatient maintenance dialysis is limited to facilities meeting these conditions.

Section 1881(c)(2)(E) also requires the Network to conduct on-site reviews of facilities and providers as necessary—as determined by the Network’s Medical Review Board (MRB) or the Secretary of Health and Human Services. In conducting on-site reviews, the Network shall use standards of care established by the Network to identify facilities that fail to provide appropriate care (42 CFR §405.2112[i]).

I.D. Termination of Coverage

Except as otherwise provided in 42 CFR 488, Subpart H, if an ESRD supplier fails to meet one or more of the Conditions for Coverage set forth in 42 CFR §494, Medicare will terminate coverage for the suppliers’ services (42 CFR §488.604 [a]).

If a dialysis facility or other ESRD provider is deficient with respect to one or more standards, it may participate in the Medicare program only if:

· It has submitted a plan of correction acceptable to the Secretary for achieving compliance within a reasonable period of time (42 CFR §488.28[a]).

· The deficiencies “neither jeopardize the health and safety of patients nor are of such character as to seriously limit the provider’s capacity to render adequate care” (42 CFR §488.28[b]).

If the provider meets these criteria, the SA and CMS may grant the provider a reasonable time (usually 60 days) in which to achieve compliance. The time frame, however, depends on the nature of the deficiency and the SA’s judgment of whether the provider can provide adequate and safe care (42 CFR §488.28[c,d]).

I.E. Sanctions

Because dialysis facilities are mandated under 42 CFR §494.180(i) to “participate in Network activities and pursue Network goals,” a facility that has consistently failed to cooperate with Network plans and goals may be terminated or face one or more sanctions, including:

· Denial of payment for services furnished to patients first accepted for care after the effective date of the sanction as specified in the sanction notice

· Reduction of payments, for all ESRD services furnished by the supplier, by 20 percent for the 30-day period after the effective date of the sanction

· Withholding of all payments, without interest, for all ESRD services furnished by the supplier to Medicare beneficiaries is in effect until CMS finds that the supplier is in substantial compliance with the requirement to cooperate in the network plans and goals, or terminates coverage of the supplier's services for lack of compliance (42 CFR §405.2181[c]).

A facility dissatisfied with this determination is entitled to a hearing by an Administrative Law Judge (ALJ) (42 USC §1395 [g][3]; 42 CFR §498.55[b]).

In such a case, a facility, before the ALJ, must prove substantial compliance by a “preponderance of the evidence” (45 CFR §150.443[b]) once CMS has established a “prima facie case” that the supplier was not in substantial compliance with relevant statutory or regulatory provisions (45 CFR §150.443[a][1]).

In addition, 42 CFR §488.606 clarifies the basis for sanctions and alternative sanctions, while 42 CFR §§488.608 and 488.610 explain appeal rights for termination of coverage due to sanctions and alternative sanctions.

Section 1157(a) of the Act states that no one who provides information regarding the sanction to the ESRD Network will be liable as long as:

· The information is relevant to the performance of the Medicare contract

· The person providing the information believes the information is true and has no reason to believe it is false.

Section 1157(b) of the Social Security Act provides liability protection to ESRD Network employees or individuals who provide professional services to an ESRD Network during the performance of their duties, functions, or activities.

If the CMS Regional Office (RO) Division of Survey & Certification decides to impose a sanction or alternative sanction, it must inform the public of the sanction (42 CFR §488.608) and the provider of the right to appeal the sanction or alternative sanction (42 CFR §488.610).

II. Definitions

Alternative sanction: The term “alternate sanction” is similar in meaning to “intermediate sanction,” as used in Section 1846 of the Social Security Act. (See 42 CFR §493.2, Definitions.) An alternative sanction may be imposed if a dialysis facility or other ESRD provider fails to participate in the activities and pursue the goals of the ESRD Network in its geographic area (see 42 CFR, Part 488, Subpart H), but the failure does not jeopardize patient health and safety or justify termination from the Medicare program.

Comorbid condition: Two or more diseases or other pathological processes that occur in the same individual at the same time.

Conditions for Coverage (CfCs): Requirements suppliers must meet to participate in the Medicare program.

Physician: A doctor of medicine, osteopathy, dentistry, optometry, or podiatry or another individual who is authorized under state or federal law to practice medicine and surgery, osteopathy, dentistry, optometry, or podiatry.

Practitioner: An individual credentialed in a recognized health care discipline who provides the services of that discipline to patients. Practitioners include physicians, nurses, nurse practitioners, physicians’ assistants, physical therapists, occupational therapists, speech therapists, pharmacists, social workers, dietitians, certified nursing assistants/dialysis technicians, and other licensed providers of care.

Preponderance of the evidence: The greater weight of the evidence required in a civil (non-criminal) lawsuit for the trier of fact (jury or judge without a jury) to decide in favor of one side or the other.

Prima facie: (Latin for “at first look”) Self-evident; in legal terms, legally sufficient to establish a fact or a case unless disproved.

Provider: A hospital, dialysis facility, or other health care facility, organization, or agency that provides health care services covered in whole or part by Medicare.

Reasonable assurance: Assurance that an accreditation organization has demonstrated to CMS that its requirements, taken as a whole, are at least as stringent as those established by CMS, taken as a whole.

Sanctions: Penalties or other means of enforcement used to provide incentives for obedience with the law or with rules and regulations.

Standard: A subpart of a CfC. Each CfC is contained in a single regulation, which is divided into subparts called Standards. See 42 CFR §488.26(b).

State Survey Agency (SA): The state health agency or other appropriate state or local agency CMS uses to perform surveys and other review functions for the Medicare program.

Substandard care: Noncompliance with one or more CfCs identified on a standard survey, including deficiencies that could result in actual or potential harm to patients.

Supplier: For the purposes of this Attachment, a supplier of ESRD services is defined as any of the following: independent laboratory, portable x-ray service, physical therapist in independent practice, dialysis facility, transplant center, rural health clinic, Federally Qualified Health Center, chiropractor, or ambulatory surgical center.

III. Responsibilities of the Network

The Network is responsible for identifying dialysis facilities and other ESRD providers that are not helping meet Network goals. The Network shall help such providers develop appropriate plans for correction and report to the Secretary on ESRD providers that are not providing appropriate medical care. See §1881(c)(2)(G) of the Social Security Act.

The ESRD Networks are critical to achieving bold CMS goals for health care transformation. Successful Networks will be change agents, educators, and advocates for high quality patient care. They will lead transformation by serving as partners with ESRD patients; their family members and other caregivers; providers; physicians and other practitioners; and other stakeholders.

Networks can best serve beneficiaries by promptly identifying and resolving quality issues through a collaborative, collegial approach. This includes offering technical assistance and education for ESRD providers to support them in providing the highest possible level of care.

III.A. Circumstances for Sanction Recommendations

The Network should consider recommending a sanction if it identifies a dialysis facility or other ESRD provider not cooperating with the Network’s efforts to meet its goals and/or not providing appropriate medical care.

The CMS RO Division of Survey & Certification is responsible for implementing a sanction or alternative sanction. The Division of Survey & Certification will make the final determination whether to sanction a facility.

If uncertain whether there is enough evidence to recommend a sanction, the Network shall consult its Contracting Officer’s Representative (COR) for guidance.

When the Network confidently identifies a provider that is not participating in meeting Network goals and objectives, it shall forward to the COR a recommendation for imposition of a sanction or alternative sanction. The COR shall then forward documentation to the CMS RO Division of Survey & Certification, stating the basis for the Network’s recommendation.

The Network’s recommendation for a sanction or alternative sanction can be based on the provider’s:

· Consistent failure to cooperate with and meet performance expectations relating to Network plans or goals, as specified in the Network contract with CMS

· Consistent failure to follow recommendations of the Network MRB

· Failure without just cause to permit the Network staff or MRB to conduct an on-site review

· Failure to submit data as required so the Network can prepare its Annual Report.

Although the Network shall be committed to quickly identifying and correcting problems with providers, the time frame in which the Network shall intervene and recommend a sanction or alternative sanction shall be based on the severity of the issue and the rate at which the provider improves.

Generally, providers are allowed three months to improve once made aware of the issue, but this deadline could be shorter for critical or repeat issues.

The Network shall refer issues specific to physicians to the Quality Improvement Organization (QIO), State Medical Board, and/or the Office of Inspector General.

The Network shall refer all fraud and abuse cases to federal or state fraud and abuse enforcement agencies responsible for the investigation or identification of fraud or abuse in the Medicare or Medicaid Program (42 CFR §480.137).

The Network shall refer any identified regulatory issues to the SA.

III.B. Network Requirements for Recommending Sanctions

Sections C.4.1.C.1.and C.4.1.C.2.of the Statement of Work (SOW) in this contract require the Network to conduct reviews of dialysis facilities based on numbers of involuntary discharges (IVDs) and involuntary transfers (IVTs) per month and per quarter to ensure regulatory and statutory compliance.

In general, the Network shall look for patterns of noncompliance in dialysis facilities and other ESRD providers. The Network shall consider recommending sanctions or alternative sanctions for providers that endanger patients’ lives or engage in inappropriate practice patterns.

Patterns of noncompliance include, but are not limited to, the providers’ failure to:

· Accept the Network’s offers of technical assistance

· Adhere to Network recommendations

· Meet Network-determined benchmarks as required by CMS

· Meet CMS and Network goals relative to clinical performance measures and ESRD QIP measures

· Improve results from quality improvement activities for clinical areas in which the facility is not meeting benchmarked national standards.

In recommending a sanction or alternative sanction for an ESRD provider, the Network shall:

· Provide documentation to support the sanction recommendation and associated investigation (see §30.4, “Network Requirements for Documenting Sanction Recommendations”)

· Provide full documentation to the provider of its failure to comply with Network goals and objectives, then alert the COR of its intent to recommend a sanction (see Exhibit A-2)

· Continually monitor provider performance

· Refer to the appropriate QIO any information collected during Network contract activities that indicates a practitioner/physician may be failing to meet obligations to provide professionally recognized standards of care

· Refer to the Office of Inspector General any information collected during the Network’s contract activities that indicates a physician, other practitioner, or ESRD provider may be failing to meet contract obligations and is involved in Medicare fraud.

III.C. Network Requirements for Ensuring Facility Participation in Network Goals

At a minimum, dialysis facilities and other ESRD providers should provide data to the Network to help CMS maintain accurate and complete data on ESRD patients, participate in Network activities, and pursue Network goals.

The Network shall establish a policy and procedure to ensure that it recommends to CMS the imposition of sanctions for dialysis facilities and other ESRD providers that fail to provide data, participate in Network activities, or pursue Network goals (42 CFR §§494.180[i] and 488.604–606).

The Network shall also have a plan to monitor the participation of dialysis facilities and other ESRD providers in Network activities that help meet Network goals. The Network must use its monitoring plan to identify providers that consistently fail to cooperate with Network plans and goals or to follow the recommendations of the Medical Review Board (MRB). The Network must notify providers of the potential for a sanction recommendation based on the failure to pursue Network goals.

The Network should consult its COR for guidance if it is uncertain whether there is enough evidence to recommend a sanction.

III.D. Network Requirements for Documenting Sanction Recommendations

Before it submits a sanction/alternative sanction recommendation to the COR, the Network shall document the details of the situation, including actions the Network has taken and the provider’s response or lack of response. The Network shall document the provider’s continued lack of compliance with Network goals and plans.

The Network will have collaborated/consulted with the SA about the status of the non-compliant provider’s activities, status level surveys, and/or complaint surveys.

The Network shall provide full documentation to the provider, in writing, of the provider's failure to comply with Network goals and objectives (see Exhibit A-2).

Through the COR, the Network shall submit two copies of its documentation and a cover letter to the Associate Regional Administrator (ARA) for the RO that oversees the Medicare services of the state/jurisdiction where the provider is located (see Exhibit A-3).

The Network must organize the information in notebook form with a chronological summary and a table of contents. The notebook shall contain the following information:

· The name, address, and Medicare provider number of the involved provider

· The Network goal(s) or objective(s) with which the provider has failed to comply

· A brief summary of the basis for the sanction/alternative sanction recommendation

· Compilation of the evidence, which includes details of chart reviews, site visits, provider patient outcomes, and provider Quality Improvement Plans with results.

· An outline of actions the provider must take and documentation it must submit to remove the sanction

· A Network contact name the RO can call for further information

· The name and phone number of the Network’s COR.

The Network shall notify its COR and document noncompliance with, at a minimum, the following:

· Evidence that the Network notified the provider in writing of the Network’s goals and objectives

· Detailed description of expectations the provider has failed to meet

· Description of the Network’s actions to inform the provider of its noncompliance (See Exhibit A-1 for a sample letter.)

· Evidence to demonstrate that the Network gave the provider an opportunity to make corrections

· Description of the Network’s follow-up actions to resolve the problem (e.g., documentation of phone calls or site visits to the provider, asking for specific information)

· Documentation of the provider’s failure to submit an action plan, submission of an unacceptable action plan, or failure to carry out an approved action plan.

The Network shall submit supporting documentation for a sanction to the COR, such as copies of written correspondence between the provider and the Network, written notes, and/or dated contact reports of telephone conversations.

The Network shall use professional judgment in deciding when it has provided enough assistance to a provider. It is not acceptable to allow provider noncompliance to continue for an extended period (i.e., more than six months). The Network shall discuss continued noncompliance with the COR to avoid unreasonable delay in addressing issues, based on their severity.

III.E. Referring Physician Sanction Recommendations to QIO

Sanction recommendations are facility-focused, not physician-focused. When the Network identifies a physician who is failing to comply with the Network’s performance goals to the extent that physician is failing to meet obligations to provide an acceptable level of quality care, the Networks shall refer him/her to the QIO or Office of Inspector General in the appropriate state/jurisdiction for investigation and possible action.

Before referring a physician to the QIO, the Network shall contact its COR for individual case discussion to determine the best course of action. At a minimum, the Network shall note all cases, including status, on its monthly report to CMS.

Physician/practitioner sanction referrals are based on the physician’s/practitioner’s failure to provide health care items or services that are:

· Medically necessary;

· Of a quality that meets professionally recognized standards of care; and/or

· Supported by evidence of medical necessity and quality.

The QIO may decide to make a sanction referral to the Office of Inspector General pursuant to §1156 of the Social Security Act. Networks can find an outline for procedures about these referrals in the QIO Manual, Chapter 9, “Sanction and Abuse Issues.” The QIO will conduct a quality of care review (peer review) of the medical records in question, afford the physician/practitioner his or her due process rights, provide the research to demonstrate the failure of care (omission or commission), and determine if it should refer the case to the OIG for sanction review.

IV. Duration and Removal of Alternative Sanctions

An alternative sanction will remain in effect until the provider substantially complies with the requirement to participate in the Network’s activities and pursue the Network’s goals or until the provider is terminated from the Medicare Program for lack of compliance. The RO Division of Survey & Certification will remove the sanction when the provider demonstrates and documents that the reason for the alternative sanction is eliminated through documentation provided by the Network.

The evidence or proof of compliance required to remove the alternative sanction will depend on the reasons for applying the sanction. The RO will likely ask the Network to validate the provider’s compliance by submitting appropriate evidence.

Exhibit J-5-1: Sample Noncompliance Letter to Dialysis Facility

[ESRD Network letterhead] [Date of correspondence] [Name and address of dialysis facility/unit]

Dear [Dr./Mr./Ms./other] [Name of Facility Administrator]:

The purpose of this notice is to inform you that the Medical Review Board for [name of ESRD Network], the ESRD quality Improvement organization for the [state/Commonwealth/other] of [name of state/jurisdiction], has reviewed the performance of [name of dialysis facility/unit] and found the facility deficient in [area of deficiency, e.g., meeting or working toward Network goals].

As a requirement of your Medicare certification, your facility must comply with the Conditions for Coverage, as stated in Section 1881(c) of the Social Security Act and 42 CFR, Part 494. Your facility must also participate in Network activities, as stated in 42 CFR §494.180(i). Network activities reflect the national ESRD Network Program goals established by the Centers for Medicare & Medicaid Services (CMS) as part of the ESRD Network contract. The Network distributes the Network’s goals annually to all dialysis facilities in the Network region and posts them on the Network Web site ([Network Web address]) for ongoing reference.

[Facility/unit name] has failed to meet the following:

[List of unmet expectations]

You are required to provide the Network with a Quality Improvement Plan (QIP) to address how you intend to correct these deficient practices, a timeline for implementation, and the method you will use to determine the effectiveness of your efforts. You must submit your QIP by [date] for the Network’s approval and report the results of your QIP to the Network no later than [date]. If you have any questions, need assistance with developing the QIP, or need to request a change in dates, contact the Network at [Network phone number] and ask for [name of the appropriate staff member] by [date].

Thank you for your prompt attention to this matter. We look forward to hearing from you by [date]. Failure to promptly and completely respond to this notification letter can potentially lead to a recommendation to CMS for a sanction against your provider status.

Sincerely, [Signature] [Name] Executive Director [Name of ESRD Network]

Exhibit J-5-2: Sample Sanction Recommendation Letter to Dialysis Facility

[Date of correspondence] [Name and address of dialysis facility/unit]

Dear [Dr./Mr./Ms./other] [Name of facility Administrator]:

The purpose of this notice is to inform you that the Medical Review Board for [name of the ESRD Network], the ESRD Quality Improvement Organization for the [state/Commonwealth/other] of [name of state/jurisdiction], has reviewed the performance of [name of the dialysis facility/unit] and found the facility deficient in [area of deficiency, e.g., meeting or working toward the Network goals] as required in the Medicare Conditions for Coverage and described to you in our correspondence dated [date of Exhibit 12-1].

Consequently, the members of the Medical Review Board have [unanimously (if applicable)] determined that [facility/unit name] is out of compliance with Section 1881(c) of the Social Security Act and 42 CFR, Part 494, and are recommending that the Centers for Medicare & Medicaid Services (CMS) impose a sanction on [facility name].

Specifically, [facility/unit name] failed to: [description of failure, e.g., the facility failed to submit a Quality Improvement Plan (QIP), the facility failed to submit an acceptable QIP, or the facility was unwilling or unable to work toward meeting Network goals].

[Name and title of Network contact person] is available to discuss the reasons for this recommendation and subsequent action. [She/He] can be reached at [Network phone number].

Sincerely, [Signature] [Name] Executive Director [Name of ESRD Network]

Exhibit J-5-3: Sample Letter to CMS Requesting Sanction

[Date of correspondence]

[Name and address of the ARA in the Regional Office that has jurisdiction over the problematic facility] Through: [Name of Network’s Project Officer]

Dear [ARA name]:

Recommendation:

After [time period] of working with [name of facility], it has become apparent to the [Executive Board/Board of Directors] and Medical Review Board (MRB) of the [name of ESRD Network] that [facility name] is out of compliance with statutory requirements, as follows: [list ways in which the facility has failed to meet statutory obligations. For example:

· Consistent failure to cooperate with Network plans or goals as specified in the Network contract

· Consistent failure to follow the recommendations of the MRB, which have been approved by CMS

· Failure, without just cause, to permit an on-site review by members of the Network MRB

· Failure to submit data as required].

[Network name]’s [Executive Board/Board of Directors] and MRB, after reviewing and giving due consideration, to the performance of [facility name] and the outcomes of actions taken to correct performance deficiencies, recommend that a sanction be imposed upon [facility name].

[Network name] has been monitoring [facility name] since [date] because [facility name] [short summary of problems and actions taken, to include:

· Supporting information for recommendation

· Deficient Clinical Performance Measures outcome data

· Other causes for concern, e.g., high mortality ratio, high number of grievances

· Actions, including facility Quality Improvement Plan (QIP) activities, the Network monitored and assessed to determine noncompliance].

The deficient practices identified above, which may contribute to poor patient outcomes, represent the failure of [facility name] to [description of the overarching problem, e.g., follow the MRB’s recommendations to implement a QIP] [Network name] understands that only CMS has the authority to impose and remove sanctions and that the responsibility for the appeals process lies with CMS. [Network name] is willing and available to serve in an advisory capacity as CMS makes its decisions regarding [facility name]. [Network name] is available to discuss the findings described in the enclosed summary report and to provide additional information, if necessary.

[Network name]’s contact person is [Executive Director or designee].

Sincerely, [Signature] [Name of Executive Director] On behalf of [Executive Board/Board of Directors] and Medical Review Board, [name of ESRD Network] cc: [CMS Central Officer ESRD Network Program Director] [Centers for Medicaid and State Operations contact person]

Enclosures:

· Facility characteristics [Name, certification number, certification date , address, phone, FAX, affiliation, back-up hospital, services provided, number of stations, number of shifts, days of operation, patient census, availability of other facilities in the immediate geographic area, and names of the Chief Executive Officer, Medical Director, Administrator, Nurse Manager, and Social Worker]

· History of Network efforts to work with [facility name] [Summary of efforts made and facility response]

· Supporting evidence for this recommendation [Details of chart reviews, site visits, facility patient outcomes, facility Quality Improvement Plans and results, etc.]