Civil Monetary Penalties and State Fines to
Promote Nursing Home Innovation
Cynthia Rudder, Ph.D.
Richard J. Mollot, Esq.
Long Term Care Community Coalition
Funded by the Commonwealth Fund,
Grant No. 20050012, 2005
1
PROJECT STAFF

LTCCC – CYNTHIA RUDDER AND
RICHARD MOLLOT

UCSF – CHARLENE HARRINGTON AND
THEO TSOUKALAS

NCCNHR – ALICE HEDT AND GAIL
MACINNES
2
Project Goal
To encourage states to appropriately
levy and use fines collected from
nursing home violations to support
innovative, resident centered
practices in nursing homes
3
Federal Requirements

State Licensing and Certification agencies are
authorized to recommend CMPs for federal violations
and to issue state fines for state violations
 States are allowed use CMPs collected from violations
of federal laws/regulations on:
– Maintaining the operations of a facility pending correction of
deficiencies or closure
– For receiverships and relocation of residents
– Reimbursing residents for personal funds lost
– For innovative projects that benefit facility residents
4
Need for the Project

Lack of information and knowledge about the
use of fines collected by states limits their
potential to be used for the benefit of NH
residents
 Used creatively, funds from CMPs/fines could
stimulate adoption of resident centered care in
nursing homes
 Existing state “best practices” on use of
CMPs/fines should be shared with states,
ombudsman, advocates, providers, policy
makers, and others
5
Civil Money Penalties—Background

Previous research on CMPs/fines was limited
– States spent less CMP dollars than they received
(Edelman, 1999);
– A few programs were funded with CMP dollars
(Hawes, 2002; White, et al. 2003);
– Most CMPs/fines [61%] were levied under state
regulations (Harrington, et al. 2004)

Previous research did not indicate amount of
CMPs/fines collected and did not address what
states did with their funds from CMP/fines 6
Specific Objectives
To inform state agencies, providers,
ombudsman, consumer groups, policy
makers, and the public about practices and
experiences in use of federal CMPs and
state fines
 To encourage appropriate and innovative
uses of funds from CMPs/fines to improve
nursing home resident care and/or quality
of life

7
Study Methodology



National telephone survey of state agency officials
to collect information on CMPs and state fines and
the use of state CMP funds (LTCCC and UCSF)
Telephone survey of stakeholders in 5-7 states
with special state programs (LTCCC and UCSF)
Telephone and mailed survey of ombudsman &
consumer advocates about the awareness of fines
and their potential use (NCCNHR)
8
Major Contribution
 To
give states ideas, methods, and
consumer- backed support for taking
action to ensure that there is
appropriate levying and creative use of
funds from NH CMPs/fines that will
stimulate and support the spread of
“culture change” through-out the
nation’s nursing homes.
9
National Advisory Committee
– Advise on the study design & help with
access to study respondents
– Review project findings and best practice
criteria
– Advise on guidelines for state use of
funds from CMPs/fines
– Review dissemination plan for findings
10
National Advisory Committee
– Carol Benner, NJ L&C program
– Rose Marie Fagan, Pioneer Network
– Donna Folkemer, NCSL
– Alice Hedt, NCCNHR
– Barbara Manard, AAHSA
– Sally Petrone, NASOP
– Brian Purtell, Wisc Health Care Assoc
– Jackie Woodruff, NALLTC Ombudsman
11
Data Analysis
Descriptive analysis of data from national
telephone survey of state agency officials
 Qualitative analysis from interviews with
key stakeholders in states with special
programs
 Descriptive analysis of data from the survey
of ombudsmen and consumer advocates
regarding consumer awareness and input
into expenditures of CMP funds.

12
Products
Article(s) in a peer review journal
 A paper describing 5-7 case studies
 A research brief written for consumers
 Guidelines for CMS - innovative state
practices
 An action plan detailing a set of
recommendations
 Guidelines for state officials for innovative
uses of CMP funds

13
Survey of State Use of Civil
Monetary Penalties and State
Fines and Use of Funds for
Special Programs
Charlene Harrington
Theo Tsoukalas
University of California San Francisco
Cynthia Rudder
Long Term Care Community Coalition
Funded by the Commonwealth Fund, Grant No.
20050012, 2005
14
Specific UCSF Study Aims
1.
Determine the extent to which states
collect CMP/fines and to identify and
describe policy barriers and how
states use CMPs/fines that are
collected
2.
Identify and describe 6 states that use
CMP/fines for special projects
15
Study Sample

All state Licensing & Certification agency
directors
– 33 states responded to the survey - 65%
– 10 states provided data under FOIA
– 8 states had other information available
– Total of 51 states and DC with some data

Six states were selected for case studies on
uses of funds for special projects from
CMPs/fines
– 25 stakeholders were interviewed
16
Study Methodology – Aim I
– Sent request to state L&C to participate in the study
– Emailed and mailed surveys to collect statistics on
CMPs/fines
 Number and amount CMPs issued & collected
 Whether a CMP account is established and the total
amount
 What CMP/fines were spent on
– Conducted structured telephone interviews to collect
qualitative data on the:
 Process of issuing and collecting CMPs/fines and barriers
 Use of CMPs/fines and process of using funds
 Effectiveness of intermediate sanctions
 State agency resources
17
 Policy recommendations
Other Data Sources

Because the response rate from state L&C
programs was poor, we also collected
additional statistical information from
– Freedom of Information Act Requests on
declining states


FOIA Request Return Rate: 10 states of 12 FOIA’d
(83% return rate)
Web searches of state documents and reports
– Other published information
18
Study Methodology – Aim 2
Using data from states, we identified 6
states that used funds from CMPs/fines for
resident projects
 Conducted case studies of 6 state
programs (KS, MA, MD, MI, NJ, NC)

–using telephone interviews of 25 stakeholders
–state officials, state ombudsman, state
provider associations, and consumer advocacy
groups
19
Data Analysis
Descriptive analysis of data from national
telephone survey of state agency officials
 Qualitative analysis from interviews with
state agency officials
 Qualitative analysis of stakeholder
interview data from selected states that
used funds for special projects

20
Preliminary Findings – CMPs
– Of 51 states with data on CMPs*:
 48 issue federal CMPs; 3 states do not (AK, SD, WY)
 50 issue state deficiencies (1 does not); 36 states issue
state fines (8 do not)
– In 2004
 22 states recommended 858 federal CMPs for $9.0 million
 17 states collected 443 federal CMPs for $5.6 million
 6 states issued and collected 22 CMPs for $458,137 for
Medicaid-only facilities
 11 states issued 1,527 state fines for $7.0 million and
collected 1,263 state fines for $2.9 million
21
Preliminary Findings –
Fund Accounts
– Of 49 states:
36 states report having funds in an account from
CMPs/fines (AZ, AR, CA, CO, FL, HI, ID, IL, IN, IA,
KS, KY, LA, ME, MD, MA, MI, MN, MO, MS, NE, NV,
NH, NJ, NC, ND, OH, OK, OR, PA, SC, TN, TX, VT,
WV, WI)
 1 state (NY) has new account but no funds yet
 7 states have a fund account but fund amount was
not reported (AL, DE, GA, NM, RI, VA, WA)
 5 states have no fund account (AK, CT, DC, SD,
WY)
– 2 states unknown (MT, UT)

22
Preliminary Findings –
Funds Available
– 36 states currently have $57,088,992
available in accounts from CMPs/fines
– Fund balances ranged from:
 $19,500 in HI to
 $8.3 million in CA
23
Preliminary Findings –
Use of Funds
– 26 of the total 32 states reporting using funds, use
funds for special projects
 (AZ, DE, FL, IA, IL, IN, KS, KY, LA, ME, MD, MA, MI,
MN, MO, MS, NJ, NC, OH, OK, OR, PA, SC, TN, TX,
WI)
– 6 states use funds for receiverships, relocation and
other licensing activities
 (CA, CO, ID, VT, WA, WV)
– (2 states use state fine funds for schools--NE, WI)
– (2 states put state CMPs/fines in the general fund –
GA, NY)
24
6 States Use of Funds
for Special Projects
– Kansas – 1999-2004
 Funded 8 projects for a total of $346,000
 Projects ranged from $340 to $168,000
 Funded AAA for relocation, Ombudsman training,
and a university research project
– Massachusetts – 2003-05
 Funded 43 programs for a total of $850,000
 About $22,000 per project
 Almost all went to nursing facilities for projects
25
Use of Funds
– Maryland – 2003-04
 Funded 7 projects for a total of $830,000
 Projects averaged $119,000 each
 Funded quality improvement and TA unit, NCCNHR
family councils, wellspring projects and pets-onwheels for facilities, and a hospice network
– Michigan – 1997-04
 Funded 3 programs for a total of $5.2 million
 Funded a special team for NH remediation and
closures (discontinued), a NH transition program,
and NH dining room assistant program
26
Use of Funds
– New Jersey – 1997-2004
 Funded 6 projects for a total of $589,000.
 Projects averaged $99,000 each
 Funded quality improvement, Eden Alternative
grants, resident satisfaction survey
– North Carolina – 2003-2005
 Funded 5 programs for a total of $1.1 million
 Funded quality improvement initiatives, a
university medication error study and, Eden
alternative, Pioneer Network and other projects
27
Conclusions

CMPs/fines represent a substantial resource that
can be used for quality improvement projects
 There is wide variation among states in issuing,
collecting, & using CMPs/fines
 Slightly over half of the states reported using
CMPs/fines for projects to improve nursing home
care
 States’ use CMPs/fines show a wide variety of
types of improvement projects but few projects
have been evaluated for effectiveness
28
NCCNHR
ALICE HEDT
GAIL MACINNES
Descriptive analysis of data from the
survey of ombudsmen and consumer
advocates regarding consumer
awareness and input into expenditures of
CMP funds.
29
Preliminary Findings –
Ombudsmen
– Ombudsman respondents were overwhelmingly
aware of fines but many fewer know about how
much is collected or how the funds are used.
– 27% of the state ombudsman respondents and
15% of local ombudsman respondents make
CMP information available to the public
– A strong majority favor having the information
made public
30
Preliminary Findings – Ombudsmen
(continued)
- Almost two thirds of state ombudsman
respondents indicated that they are not involved
in decisions about the use of CMP/fine funds in
their states.
- Many ombudsman respondents shared ideas for
the role ombudsmen could play in this process.
31
Preliminary Findings –
Citizen Advocacy Groups (CAGs)
– All of the CAG respondents were familiar
with state CMPs/fines, and most were
familiar with federal CMPs.
– Very few knew the amounts of CMPs/fines
levied or collected.
– 27% of CAG respondents provide
information to the public about CMPs. (ex.
website, newsletters)
32
Recommendations for Changes in
Policies and Practices

State agencies should share CMP/fine
information with the public in at least the same
way deficiency information is shared, and
routinely share it with ombudsmen and
advocates.
 States should include ombudsmen and advocates
in the decision making process on the use of
funds and in the subsequent assessment of
resulting programs and projects.
33
Draft Project Guidelines for States
on Use of Funds from CMPs/Fines
Procedures
 Make sure the part of the agency that levies the CMPs/fines
retains control and access over the funds so the
projects/activities/programs proposed for funding will be
evaluated properly.

Expend funds for projects/activities/programs that benefit
nursing home residents (i.e., not general fund, school fund,
etc.).

Involve a wide range of knowledgeable stakeholders in
setting the criteria for and planning for the use of funds
including residents and family members, ombudsmen, family
council members, members of citizen advocacy groups,
34
providers, and individuals with grantmaking experience.
Draft Guidelines for States on Use of
Funds from CMPs/Fines
Procedures Con’d

Establish an open process and timeline for applications for funds for
innovative projects and an objective review process for making decisions
about projects.

Establish an evaluation process for all projects.

Allocate sufficient funds for projects/activities/programs so that they can
make a substantial, lasting impact and potential widespread impact.

Broaden any statutes that restrict the use of these funds and do not allow
the funds to be used for projects to improve quality.
35
Draft Guidelines for States on Use of
Funds from CMPs/Fines
Project Types

Authorize funds for innovative projects that go beyond
regulatory requirements and ordinary budget items to
improve the quality of care and quality of life, encourage
person directed care, promote consumer advocacy and
involvement and stimulate and support the spread of “culture
change.”

Target consumer focused projects such as work with family
councils, resident councils, etc.
36
Draft Guidelines for States on Use of
Funds from CMPs/Fines
Project Qualities

Allocate funds for projects that are practical, can be
replicated and can be sustained or replicated after
the funding has ended

Encourage projects to be jointly developed with
academic organizations, consumers (or their
representatives) and established experts
37
Draft Project Guidelines for CMS on
Use of Funds from CMPs/Fines

Collect information on the recommended and
collected CMPs for federal CMPs and state fines by
establishing clear procedures at the state and
federal levels for data collection
– How many of each type are issued?
– How much CMP funds are collected?
38
Draft Guidelines for CMS on Use of
Funds from CMPs/Fines Cont’d

Develop and maintain a centralized database on the
use of CMPs and fines by each state
– Is there a special account set up?
– How much money is in the account on a quarterly basis?
– What is the process for applying to use the funds?
– How were the funds used?
39
Draft Guidelines for CMS on Use of
Funds from CMPs/Fines Cont’d

Publicize collected information on recommended
and collected CMPs/fines on an annual basis
– Publicize the state use of CMPs and fines

Require states to follow draft guidelines above
40
Dissemination Strategy








A web-based “project status board” (NCCNHR)
Advisory Committee to assist with dissemination and
action
Survey instruments posted on the web
Short project status updates in consumer newsletters
An academic article in a peer-reviewed journal
Mailings to participants of final products and action plan
Presentations at national meetings
Conference calls discussing the findings to citizen action
groups and ombudsmen (NCCNHR)
41