Nursing home operators are concerned about the expanded civil monetary penalties (CMPs) introduced in the 2025 Skilled Nursing Facility Prospective Payment System (SNF PPS) final rule. Initially, operators welcomed the Medicare payment increase, but their enthusiasm has turned to apprehension due to the new financial pressures from added labor costs and the federal minimum staffing mandate.
Concerns Over New CMP Rules
Industry experts believe the new CMP rules from the Centers for Medicare & Medicaid Services (CMS) are unnecessary and will increase provider uncertainty. Brian Ellsworth, Vice President for Public Policy and Payment Transformation with Health Dimensions Group (HDG), fears the expanded CMPs might lead to more lawsuits, given that the Chevron doctrine now gives courts more power to interpret unclear federal rules.
Ellsworth said, "You're creating much risk for facilities rather than investing in systems of long-term care and systemic quality improvement." He emphasized that instead of providing resources, the final rule creates significant regulatory risk, which could deprive facilities of much-needed resources.
Industry Reaction
Amy Greer, Director of Quality Innovations for Zimmet Healthcare Services Group, expressed her frustration, noting that the CMP expansion feels like a further burden on facilities still recovering from the impacts of COVID-19. Greer highlighted the irony in CMS's rationale for creating uniformity nationwide, pointing out that facilities often face delays in health inspections, leading to potential retroactive fines.
Greer stated, "The irony is now [CMS] will come in and find an issue from over 18 months ago, and now want to find a way to find [the facility retroactively per diem from when that issue was found."
Regulatory Risks and Financial Strain
The expanded CMP rule allows CMS to impose more per-instance and per-day penalties while remaining within statutory limits. CMS also has the discretion to consider a facility's financial condition when determining fines. Ellsworth warns that this could starve nursing homes of essential resources.
Ellsworth noted that state Medicaid programs are investing more in quality incentive programs, which could serve as a better model. These programs provide positive incentives and necessary resources rather than increasing fines.
Potential Legal Challenges
The expanded CMPs might lead to more litigation as operators challenge the fines. With the Chevron decision empowering courts, there could be a surge in legal battles against these penalties. Ellsworth pointed out that fighting these fines in court diverts resources from improving care systems.
Alternatives and Recommendations
Nursing home leaders suggest focusing on other regulatory tools, such as scope and severity designations, admissions bans, and directed plans of correction, which have been effective during the COVID-19 pandemic. Ellsworth recommends enhancing programs targeting chronic repeat offenders before expanding CMPs.
Ellsworth concluded, "State Medicaid programs' quality incentive measures are a much more effective way to drive quality than just penalizing folks in an uncertain framework."
In summary, while the expanded CMPs aim to create uniformity and compliance, they introduce significant financial and regulatory challenges for nursing homes. Industry leaders advocate for more supportive measures that provide positive incentives and resources to improve care quality.
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