Phase 2 of CMS Final Rule and the Trump Administration

Episode 52
Categories: Regulations

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This is the Nursing Home Abuse Podcast. This show examines the latest legal topics and news facing families whose loved ones have been injured in a nursing home. It is hosted by lawyers Rob Schenk and Will Smith of Schenk Law LLC, a personal injury law firm based in Atlanta, Georgia. Welcome to the show.

Schenk: Hello out there and welcome to the Nursing Home Abuse Podcast. My name is Rob Schenk.

Smith: And I’m Will Smith.

Schenk: And we are nursing home abuse lawyers in the state of Georgia, and we happen to be your co-hosts for this episode. As this goes to air, it is January 22, 2018, and as we are recording it, it’s probably 15 degrees outside.

Smith: Very cold.

Schenk: It’s the kind of cold like I’m cold natured – at any time in my apartment, it’s 63 degrees always. And I actually have to layer up when I go out when it’s 15 degrees. Like when you go out, it’s 50 degrees, no problem, short sleeves.

Smith: Oh yeah.

Schenk: This type of weather, no way. You actually have to bundle up. It’s impossible.

Smith: Yeah.

Schenk: You’ve got to put them on in layers – jackets, the whole deal. What’s not cold – no, I don’t even know how to segue out of that. Talking about a lot of interesting things on the horizon for this episode – so if you’re any type of habitual or veteran listener of this podcast, you’ll know that on several occasions we’ve talked about CMS and what has been called the Final Rule. And these are a series of systematic changes over the course of a few years – we still have some to go potentially – that CMS has instituted for any facility that accepts Medicare/Medicaid funding.

And it began in 2016. On September 28th, 2016, CMS released updated federal nursing home regulations. This was the first comprehensive revision to the regulations since 1991. The Final Rule, as it’s known, it’s basically an updated rule on the regulations from this stance that it’s been called the Final Rule – I don’t know why it’s called the Final Rule. Do we have any opinions on that? I don’t know why they would call it that. But anyways, it was to be implemented in three different phases. The first phase was in November of 2016. The second phase was in November of last year.

Smith: And just so you guess the pattern here, it rolls out every November, so November 2016, November 2017 and the phase three will be November 2018.

Schenk: Actually phase three will be 2019 – 2019, according to this document that I have.

Smith: Oh, okay.

Schenk: So actually that throws us for a loop on that one. But anyways, that’s right. So what we wanted to talk about on this episode because based on the news and the things that have come across our desk in the last few months, we haven’t had a chance on this podcast to talk about phase two. We’ve talked extensively about phase one, and phase one, which came out in 2016, had a lot to do with mandatory arbitration.

Smith: Right. And unfortunately – I don’t know, whatever. Just cut that out.

Schenk: It had to do with arbitration. So in that initial phase one rollout, CMS basically said to nursing homes, assisted living facilities, any facilities that accept Medicare/Medicaid funding that not only were you not allowed to make arbitration mandatory upon admission, that you couldn’t have it at all. And that was the first phase one rollout. And we’ll talk about the actual how it turned out to be after we go through the phase two here. I want to keep the suspense on the listener.

But some of the things in phase two, which rolled out in November of last year, and when I say phase two, there are certain codified regulations that have to do with how nursing homes run their facilities, and they’re codified in the Federal Codes and Regulations 42CFR. And so we’re going to talk about in the next few minutes some of the regulations that have completely changed. Some of them have been modified and some of them are completely new.

Smith: Like if you can imagine though, just to set the stage for you, over the past couple of decades, this started in 1987 under Ronald Reagan when they passed the Nursing Home Reform Act. Before that, and I had the chance to talk to a couple of old veteran nursing home ombudsmen.

Schenk: Like cigars?

Smith: Cigars in their mouth.

Schenk: Grizzled.

Smith: Grizzled, been doing this for like 40 years, and they were saying before 1987, it was the Wild West. If you’ve ever seen “One Flew Over the Cuckoo’s Nest,” that is essentially what a nursing home was. It was Nurse Ratched, people throwing things around, people just going crazy. It was a madhouse. 1987 comes along. They pass the Nursing Home Reform Act. Nursing home residents have rights. They start, as governments do, they start regulating it more and more and more because they’re getting money from the government, and so now we’re at the current stage we are where they’re saying we’re even going to go above and beyond that, so they passed out phase one in 2016, and now we’re deep in phase two.

Schenk: Phase two. It’s almost like this is – what is it? The Marvel movies. This is like now we’re getting into Ant-Man, the more secondary characters.

Smith: It is exactly like that.

Schenk: I mean it couldn’t be more exact.

Smith: I don’t know the difference between the two things – the passage of resident’s rights and ensuring that our elderly are protected and comic book movies.

Schenk: And comic movies, yeah. So the first one is going to be in 42CFR483.12. So this has to do with reporting. So for the first time, facilities must have policies and procedures ensuring that any reasonable suspicion of a crime is reported by covered individuals to the state survey agency and one or more law enforcement entities. And covered individuals include the actual facility owners, the operators and any employee manager agent of the facility. If they not just observe a crime but if there’s reasonable suspicion that a crime is taking place, they have to report it, not only to a state agency but actually to a law enforcement agency so the local cops or whatever it is. That is a completely new regulation that has been added in phase two.

And more specifically, the timeframe for an employee, for example, would have to report a crime will depend on what happened. So if there’s a bodily injury, the report must be made immediately but no later than two hours after the suspected crime.

Smith: Yeah.

Schenk: If there is no bodily injury, the report must be made no later than 24 hours after the suspected crime. And in addition, the facilities have to prevent and prohibit retaliation against covered individuals for lawfully reporting and post a notice about the employee rights related to reporting. So basically this is almost kind of like – and we’ll talk about this in some of the upcoming episodes – but this is almost kind of like giving a little bit of whistleblower protection for the actual reporting.

So some states don’t protect whistleblowing in a private company. So for example, in Georgia, I remember my employee law class, we learned that there’s no state – if you work at McDonald’s and you’re like, “Hey guys, you know there’s pink slime in the hamburgers,” and you report that, then you can be fired in the state of Georgia because there’s no protection in the state of Georgia. Now there are protections…

Smith: There aren’t protections in the state of Georgia – not to get off topic here – for non-public employees.

Schenk: Correct. Correct.

Smith: Right. There are still protections for public…

Schenk: I’m just saying McDonald’s is the example here, but you might be protected under federal law for talking about the pink slime.

Smith: It’s also like the creation of a duty for covered persons reporting sexual abuse in certain circumstances. It gives you a whole list of people who have to report that – psychiatrists, school counselors, etc. Here we have the same thing. It’s going to be directors of nursing. It’s going to be the staff. It’s going to be certified nursing aides. They have a duty now, and once you have a legally created duty, you can commit negligence. They have a duty, if they know of a crime, especially if it’s one – and this is where it’s going to be most important, if it does involve physical injury and if it does involve sexual abuse in the nursing home, that they have to report it. So if they suspect that one resident had an unwanted sexual encounter by another resident, they have two hours to call the cops. But at the same token, and we get a lot of calls about this – if it’s something like Ms. Johnson is missing money again or somebody keeps taking her favorite knitting needle, then they’ve got about 24 hours to report that one.

Schenk: Yeah, legal duties to report, legal duties to act on behalf of somebody that you don’t know, that’s an interesting area of the law because one of the first days in tort class in law school, you learn that walking down the street, if you see somebody drowning in the river, you have absolutely no duty to go and help that person, which I never really considered that before that day in torts even though the last episode of Seinfeld was based on that principle, do you remember that?

Smith: I do.

Schenk: Where they’re talking about nothing while somebody is getting robbed, and that town that they’re in, because they’re not in New York, they traveled somewhere – I don’t know why…

Smith: Connecticut or something like that.

Schenk: They’re in Connecticut or something like that and they go to jail because of the Good Samaritan law in that town, they had a legal obligation to help somebody, which is fictitious. But anyways, so that’s new.

Next one is we’re at 483.15 of the Code of Regulations here. So generally when a resident is admitted to a nursing home or has to leave a nursing home, for instance, to go to a hospital, there needs to be an assessment that’s done so we have an accurate documentation of the physical wellbeing of the individual as they come in or leave. What’s going on now is the requirements for documentation that are required have been strengthened – I thought that was your stomach for a second – have been strengthened and expanded.

So here we have the facility must provide the receiving institution or provider – so it’s a hospital or another nursing home or whatever it may be – with very specific detailed information about that resident. At minimum, this information must include contact information of the practitioner responsible for the care of the resident, resident representative information like who has the power of attorney, who holds the advance directive, that kind of information, all special instructions or precautions for ongoing care as appropriate, comprehensive care plan goals, so you know, not just the assessment but generally your MDS reports will have here’s where we’re at, here’s where the goal is but based on the physician’s assessment for the next 30 days, 90 days, whatever the case may be. So if we’re able to get to the edge of the bed, maybe in 30 days, we want to be able to stand up with the help of the walker, or if you’re at a two-person assist, maybe you want to get to a one-person assist. And then all other information to ensure and safe and effective transition of care including, if applicable, a copy of the resident’s discharge summary.

Smith: Yeah. So now they have 48 hours to do at the very least a baseline that meets PASSR reviews, and PASSR is the Pre-Admissions Screening and Resident Review requirements. So a baseline is, in legal talk, a baseline is just your minimum data set, like at a very minimum, what does Ms. Johnson need? She is a two-person assist. She is prone to wandering. She is prone to falling out of bed and she has thickened liquids. So that is the very baseline we need to know about Ms. Johnson, the things that we have to make sure we’re doing to make sure she doesn’t get severely injured.

They’ve got 48 hours to get the entire team on there, and it’s my understanding too that who is on the team has expanded, and I’m not really quite sure who has been added to the list, but you’ve always had the director of nursing. You’re always going to have somebody from dietary there. You’re going to have somebody who represents the staff at the floor level too, so somebody like a charge nurse or something is going to be there. And they’re going to discuss all the things that Ms. Johnson needs to make sure that she moves from a Monday to a Tuesday without getting injured.

Now what they can do now, which is to me makes perfect sense, is instead of doing a baseline in 48 hours, they can do a comprehensive screening and – what’s the word I’m looking for?

Schenk: Assessment?

Smith: No, but assessment, but what’s the whole point of an assessment? Care plan, sorry. Care plans are extremely important. A care plan is basically the Bible for every single individual resident.

Schenk: Blueprints.

Smith: It is everything you need to know about a resident. So now they can do a comprehensive care plan as long as it meets with PASSR, the Pre-Admission Screening and Review for Residents requirements, they can do that within 48 hours. But the main thing is within two days of a resident being there, they have to know everything, and this is important because I got a call just two weeks ago, or I think it was right at the beginning of the new year where the resident’s family were complaining that the resident had been at this nursing home for about a week and she fell. And when they talked to the charge nurse, the charge nurse had no idea who the resident even was. When she talked with the director of nursing, the director of nursing didn’t realize that she was prone to falls. Nobody knew what was going on. And it’s that type of ignorance that this new rule is trying to prevent. So within two days, everybody’s on board. You’ve got a baseline so you can at least protect Ms. Johnson.

Schenk: That’s right. And in your example, that was physical injury. And moving on, there have been additions to these regulations regarding behavioral health services. So according to Consumer Voice where I document where I’m reading from, for the first time, the regulations have an entire section focused on solely on behavioral health. CMS states that it has put these requirements in a second section to emphasize the importance of behavioral health and ensure that facilities address this issue. And in terms of the phases, the vast majority of the behavioral services are implemented in this particular phase two.

So at 42-CFR-483.45, we have pharmacy services. And what’s new is the monthly drug regiment review conducted by the pharmacists must include a review of the resident’s medical charts, and what has been modified is the regulations that previously applied just to anti-psychotic drugs have been expanded to apply to the much broader category of psychotropic drugs. Now psychotropic drugs may not be given to a resident unless they are necessary to treat a specific condition as diagnosed and documented in the clinical record. Psychotropic drugs are subject to gradual dose reductions and behavioral interventions in an effort to discontinue these drugs.

Smith: And about 20 percent, between 20 and 30 percent, and I want you to think about how big that number is – 20 and 30 percent of nursing home residents are on psychotropic drugs, which is a broader category than just anti-psychotics. Anti-psychotic drugs are psychotropic drugs, but that is a huge number.

And the problem – there are a couple of problems with having people on psychotropic drugs. One is you want people to be alive and to experience. You don’t want them to be zonked out, just out of their minds, for the remaining years of their life, unless they want to be. But then you have the other issue which is a lot of antipsychotic drugs, Haloperidol, for example, which was a big one about 15 years ago, just knock people out. So if you’ve got somebody who’s really hard to deal with – let’s say Mr. Johnson just keeps walking around and picking up things from the nursing station, keepings taking other people’s food, keeps going into other nursing home residents’ rooms and he’s taking their mugs or their pictures and he’s moving around and he’s just a pain in the neck, well if he’s got a PRN medication, which is as needed medication for some sort of anti-psychotic drug, nursing staff will tend to give him one of those shots just to knock him out and have him lay in bed all day, and the problem with that is it is a chemical restraint. It is no different than if they were like, “Mr. Johnson, we can’t take this anymore,” they sat him down on a chair and they tied his arms and legs to the chair and said, “You stay there now.” It’s the same thing.

Schenk: And Will, you talked about this at length in a great episode about this very topic. I think it’s Episode 47. If you want to know more about the dangers and the reasons why and the policies and rationale behind why this regulation is changed, go to Episode 47. Will had come back from the…

Smith: Oh, the Consumer Voice.

Schenk: We were hyped up.

Smith: Yeah. And that was one of the big issues at the Consumer Voice conference, and it’s probably because this is so heavy in the new regulations, which is the use of psychotropic drugs. There’s a huge push by the medical community, by resident rights advocates and by families to the extent possible to reduce the use of psychotropic drugs. And to go back to what I was talking about originally, if you’ve ever seen that movie, “One Flew Over the Cuckoo’s Nest,” you’ll remember that people were just sitting around drooling on their bibs. They were using electric shock therapy, whatever they needed to do to make people manageable. But there is a very difficult balance between making sure people are manageable and residents rights. Making sure people are manageable, if they’re a threat to themselves and others, you may have to use psychotropic drugs. If they’re an annoyance, no, not at all. They’re just an annoyance. Humans are annoying sometimes.

Schenk: They certainly are.

Smith: I think that was directed at me. Mr. Johnson, who has dementia and doesn’t know what’s going on is going to be annoying. Hire more staff. You don’t drug him up and set him in a dark room.

Schenk: So moving onto the next piece that’s been added and modified is dental services – 42CFR483.55. The nursing home facilities must now have a policy identifying when loss or damage of dentures is its responsibility. The facility may not charge residents for loss or damage if it’s determined to be the facility’s responsibility in accordance with the facility policy. A timeframe for referral and what the facility must do if that timeframe is not met has been added. The facility must refer residents with lost or damaged dentures for dental services within three days. If the referral does not occur within three days, the facility will be required to document the reasons for the delay and how it could ensure the resident could eat or drink adequately while waiting for dental services.

What was your experience with people’s teeth when you were doing that work?

Smith: Man.

Schenk: It’s probably not good.

Smith: This is so troubling.

Schenk: Yeah.

Smith: Yeah, this is not something you want to hear about. But like I’ve said before, I was a CNA in nursing homes, eight years. I have worked in nursing homes all across the state of Georgia, and I have worked in some nursing homes that definitely needed to be shut down by either the GBI or the FBI, just absolutely horrible places. And I guess I didn’t really realize that until later on in life. At the time, I just thought it was kind of that’s what nursing homes are. But like dentures are not a huge concern in some of the worst places. You’ll find them mixed up, meaning that people will grab any dentures and throw them in a resident’s mouth. They are frequently lost because they’re not very large. I mean they fit in the palm of your hand. You’ve got a lot of residents who need them to masticate and chew, but they may not be fully with it, so they’re not paying attention to where their dentures are, and you’ve got staff who are changing every eight to 16 hours that just – not that they don’t care about these people as humans, they don’t have enough staff to do that. So their main concern is am I going to be able to change everybody and get them food. As to whether or not they can keep track of these tiny dentures, it just doesn’t happen all the time. So you’ll have residents wearing improperly fitting dentures. Not only does that hurt their quality of life, but it limits what they can eat, and that is a nutritional problem, which is a health problem as well.

Schenk: That’s right. So that’s just a few of the highlights from a lot of the changes to the CMS regulations. So here’s the scoop. Here’s the rub. Here’s what’s grinding my gears now. So let’s go on back to phase one, which basically disallowed arbitration agreements in nursing home admission documents.

So at first, the nursing home industry banded together and sought and were awarded an injunction against that phase or that portion of that phase, the arbitration agreements, coming into effect. Then the administration changed, and the administration basically said, “You know what? Let’s just not worry about that part of the phase one. Let’s not worry about arbitration agreements. If you want to use arbitration agreements, nursing homes, go right ahead. We don’t care. In fact, our opinion is that’s bad for business,” and remember, we are in an administration that’s all about deregulating and pro-business. So now I mean basically that portion of phase one, it’s almost like it was never written.

Smith: If it has no enforcement, it has no teeth, it’s pointless to have it as a law. Remember that. And that’s how administrations can affect law is by saying, “We’re not going to enforce it.” For example, there was a law in the individual mandate under the Affordable Care Act that required you to get health insurance, and if you didn’t, there was a tax penalty. They were not able to change the law for “Obamacare,” but what they were able to do is say, “We’re no longer going to enforce that individual mandate,” which effectively guts that entire law. Same thing here with these CMS rules. So if they say, “Okay, well we don’t have a clear ruling from the courts on Medicare, but the standing to bring these claims is ours and ours alone, so we’re not going to bring it. You guys have arbitration clauses, okay. We’re the ones that have standing to sue you to have you take it out, but we’re not doing it.”

Schenk: “We’re not doing it.” They just gave up on it.

Smith: Yeah.

Schenk: Okay. So with phase two now, what’s going on now is of all the modifications and additions that we have outlined, including other ones that we have not talked about on this podcast, the current administration, the current heads of CMS have granted an 18-month reprieve on following any of the new requirements. In other words, there will be no fines levied against the nursing homes for failing to comply with implementing base care plans, the dental issues that we just talked about, any of that stuff. You’ve got 18 months to not follow the rules or at least not be fined for it.

Smith: And understand where this comes from – special interest groups. The healthcare industry, in other words, the businesses that provide these services, nursing home companies primarily lobbied Congress to delay implementation of these rules, so you had a huge special interest group with a lot of money lobbying your Congressmen and women saying, “Hey, we realize these new rules are going to come out, but can we delay their implementation so we can remove all of their teeth?”

Schenk: Right. And because the administration is marching arm and arm with the nursing home industry, CMS’s position is that the purpose of the delay, the 18-month delay, is to educate facilities about specific stage two standards. I mean like how long do you need, because these changes are years in the making.

Smith: Yeah. I want you to for a second to comprehend what is going on here. The Centers for Medicare and Medicaid Services are there to protect nursing home residents. Beginning in 1987 when we passed the Nursing Home Reform Act under Ronald Reagan all the way to now to November of 2017 where we passed phase two, the whole purpose of this has been to create an environment that is safe for your elderly loved ones to live out their remaining years. CMS is to nursing home residents what the Environmental Protection Agency, the EPA, is to the environment. So imagine the EPA comes out with like a rule that says, “Hey, no more sludge in drinking water. No more sewer runoff in drinking water,” and sewer treatment facilities were like, “Is there any way we can like delay your enforcement of that rule for about two years?” and the EPA was like, “Sure. Sure.”

Schenk: Yeah, sounds good.

Smith: “I’ll tell you what we’re going to do. We’re going to pass the new rule that says you can’t put sewage in drinking water, but we’re going to take about a year and a half to talk to you guys about how you might prevent that from happening.” Who’s side are they on?

Schenk: And so, again, under the new policy, CMS is discouraging state agencies from issuing per day fines for violations that occur before an inspection. Per instance penalties, which tend to be much smaller, are now the recommended approach by CMS. The new guidance outlined in a 2017 memo reversed the policy under the Obama administration, which preferred daily funds. There was a second guidance letter that came out a little later in 2017 also aimed at softening the penalties. This time the agency directed state survey directors to consider a number of variables, such as whether a violation was a “one-time mistake or accident” or was an intentional action before imposing immediate sanctions.

Smith: So I want you to also think about this. There is a problem that is being addressed with these regulations. These regulations don’t just come out of the blue, all of these nursing home residents were doing okay, all their families are extremely happy with their treatment, and CMS just on its own, for no reason other than the love of regulation decided, “Hey guys, we’re going to come up with some new rules.” No. These rules came about after years of complaints from residents…

Schenk: And research and evaluation.

Smith: Research, ombudsmen, resident advocates addressing these issues and CMS going, “Okay, okay. Well listen, since we’re paying for a lot of these services, we’re going to implement – if you want to get our money, which comes from tax money, we’re going to implement these rules and stop the neglect and abuse of these residents.” So there’s already a problem. The problem is preexisting. And that means that these nursing homes weren’t addressing it in the first place. Did they not know that it’s important to make sure you have a pre-admission screening? Did they not know that it’s important that somebody has dentures? Did they not know it’s important to report crimes that happened? Of course they knew all these things, but they don’t have adequate staffing because staffing is not their main priority. Making money is, right? So that’s the first aspect of what I want you to think about.

The second is now that these rules are here, they’re saying, “Well hold on, hold on. You’re going to put these rules on us, at least give us two years or so to really figure out how to not do these despicable things.” It’s absurd. It’s absolutely absurd that – and you can look this up and maybe we should put this on the website or something, but there’s a whole list of Congressmen and women who voted in favor of this delayed implementation, and if you have a loved one in a nursing home, you need to make sure you know whether or not your representative is on that list.

Schenk: Jean.

Smith: Jean?

Schenk: Jean, we’ll have you put that up as Will was explaining that as a document that has the information that you need. And we’ll make that available to you on the website as well.

Smith: Yeah.

Schenk: So speaking of absurd, it’s crazy absurd that we’ve come to the conclusion of this particular episode of the Nursing Home Abuse Podcast. As you know, you can either watch this podcast on our YouTube channel or on, or you can listen. How can you listen to this podcast, Will?

Smith: You can listen on iTunes, Stitcher, wherever podcasts are available or…

Schenk: But also?

Smith: Spotify.

Schenk: Spotify.

Smith: So when you’re at the gym working out and you need something to motivate you, you can listen and get indignant about nursing home abuse and neglect. That’s what I do.

Schenk: Yeah, you can lift that weight just a little bit more.

Smith: Yeah, absolutely.

Schenk: All right, guys, and with that, we’ll see you next time.

Smith: See you next time.

Thanks for tuning into the Nursing Home Abuse Podcast. Please be sure to subscribe to this podcast on iTunes or Stitcher and feel free to leave us some feedback. And for more information on the topics discussed on this episode, check out the show website – That’s See you next time.