Civil Monetary Penalties and State Fines to Promote Nursing Home Innovation

1. 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

2. PROJECT STAFF • LTCCC – CYNTHIA RUDDER AND RICHARD MOLLOT • UCSF – CHARLENE HARRINGTON AND THEO TSOUKALAS • NCCNHR – ALICE HEDT AND GAIL MACINNES

3. 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

4. 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

5. 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

6. 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

7. 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

8. 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)

9. 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.

10. 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

11. 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

12. 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.

13. 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

14. 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

15. Specific UCSF Study Aims • 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 • Identify and describe 6 states that use CMP/fines for special projects

16. 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

17. 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 • Policy recommendations

18. 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

19. 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

20. 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

21. 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

22. 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)

23. 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

24. 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)

25. 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

26. 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-on-wheels 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

27. 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

28. 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

29. 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.

30. 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

31. 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.

32. 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)

33. 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.

34. 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, providers, and individuals with grantmaking experience.

35. 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.

36. 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.

37. 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

38. 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?

39. 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?

40. 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

41. 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)