Milwaukee Journal Sentinel: Fines sometimes go unpaid by nursing homes

Ben Poston and Mary Zahn
July 27, 2008
Second of two parts
A Journal Sentinel analysis shows that since 2005, state regulators fined nursing homes in Wisconsin $8.7 million but $3 million in fines has not been collected, mostly because of lengthy appeals, state officials said. The amount of unpaid fines includes penalties issued to homes that have since closed.
The federal Centers for Medicare & Medicaid Services has also issued more than $5.3 million in penalties to state homes during the past three years but has yet to collect more than $500,000.
Bob Daly, manager of long-term care operations for the agency’s Chicago office, said the full amount of federal fines typically goes unpaid because nursing homes appeal or reach a settlement, which is not made public. If a nursing home fails to pay a fine, the federal agency deducts it from Medicare payments to that home, Daly said.
Fines can be a big hammer in the enforcement toolbox.
They can exceed $100,000, depending on whether the penalties are levied by federal or state regulators. In general, nursing home inspectors write two reports, one for federal violations and a second for state violations. Each carries its own fine and penalties.
Whether the fines are effective in forcing homes to provide better care is a sticking point with both industry officials and resident advocates. A bill pending in Congress called the Nursing Home Transparency and Improvement Act would increase the federal fines for serious violations.
Nursing home administrators and industry officials describe the inspection system as adversarial. They say it relies too heavily on fines and does little to improve homes already struggling with compliance and staffing issues.
Financial penalties should be used only as a last resort, said Tom Moore, executive director of the Wisconsin Health Care Association, which represents 180 of the 195 for-profit homes in the state.
“To suggest that increasing levels of financial punishment will in any way advance the cause of quality improvement is absurd at best,” Moore said. “Extracting scarce financial resources will only hamper lasting corrective and improvement efforts.”
Regulators can also stop government payments for new admissions, force homes to hire consultants or close bad facilities.
If a nursing home agrees to accept the financial penalties without appeal, the home is given an automatic 35% discount, even in the case of a death.
Toby Edelman, senior policy attorney with the Center for Medicare Advocacy, said that even when fines are levied, collection systems don’t seem to work.
“The fines get proposed and reduced and then they don’t get paid and go uncollected,” Edelman said.
A 2005 report by the inspector general of the U.S. Department of Health and Human Services showed that $82 million in civil monetary penalties were imposed against nursing homes for violations in a two-year period by federal regulators, but less than $35 million had been collected by the end of 2002. Congressional testimony last year indicated that the problem continues.

As of June, state forfeiture records show five Wisconsin nursing homes fined in the past two years that didn’t appeal still haven’t paid more than $29,000 in fines. Unpaid state forfeitures are referred to the state attorney general’s office, which can bring action against the nursing home, a state Department of Health Services spokeswoman said.

Click here to read part one of this story.

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