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Centers for Medicare & Medicaid Services (CMS) Complaint Investigation Process Changes – What Every Hospital with Deemed Status Should Know

The Centers for Medicare & Medicaid Services (CMS) recently announced revisions to its State Operations Manual that change the complaint survey investigation process and typical timeline for resolution.

On April 19, 2013, the Centers for Medicare & Medicaid Services (CMS) released a survey and certification memo identifying a change in the survey process for substantiated complaint surveys (the April Letter).  The changes identified in the April Letter materially affect what until now has been a fairly predictable and regimented survey cycle structure for complaint surveys of deemed providers described in the CMS State Operations Manual (SOM). 

Prior to issuance of the April Letter, the complaint survey process followed a standard cycle.  While there were certain additional nuances, the general pattern, in summary, was as follows:

  • Step 1 – Complaint survey based on allegations (from one or more sources) of noncompliance with the Conditions of Participation (CoPs).  If noncompliance with the CoPs was identified, a Form 2567 was issued identifying the alleged deficiencies, deemed status was removed, and the facility was subject to Step 2.

  • Step 2 – Full survey on all CoPs.  If noncompliance with the CoPs was identified during the full survey, a Form 2567 was issued identifying the alleged deficiencies, and the facility was to submit a credible plan of correction (POC) identifying its corrective action plans for the findings of the complaint and full surveys; in addition, CMS or the state agency would identify a threatened termination date for the provider’s provider agreement with CMS, typically 90 days from the date of the survey (in cases of immediate jeopardy, the termination date is 23 days post-survey).  Once the POC was accepted, the provider moved on to Step 3.

  • Step 3 – A revisit or validation survey on the CoPs identified as out of compliance during the complaint and full surveys.  If this survey revealed substantial compliance with the identified CoPs, the survey cycle would end.  If not, providers generally had one more opportunity to come into compliance before the threat of termination of their provider agreement was acted upon by CMS.

Pursuant to the changes set forth in the April Letter, for deemed providers (including most hospitals in the United States), a substantiated complaint survey no longer guarantees that the hospital enters the survey cycle and undergoes a full survey.  Whether or not a full survey is done in these instances is now discretionary, with the CMS regional office (RO) at issue making the call.  Factors considered in determining whether a full survey is appropriate include the manner and degree of noncompliance identified, the provider’s compliance history, recent changes in the provider’s ownership or management, whether the resources to conduct a full survey are available in the timeframe needed and the length of time since the provider’s last accreditation survey.  These changes to the SOM were made effective immediately upon release of the April Letter.

The “discretionary” nature of the new survey process means that after the initial complaint survey, an RO may determine whether a full survey is needed.  If a full survey is determined to be unnecessary, the provider is still placed on a 90-day (or 23-day) termination track.  Deemed status is removed as in the prior process, and a POC is due in 10 calendar days.  After a POC is accepted, a revisit survey could occur within 45 days to determine whether or not the provider has come into compliance.  This new process, as summarized, is as follows:

  • Step 1 – Complaint survey based on allegations (from one or more sources) of noncompliance with the CoPs.  If noncompliance with the CoPs is identified, a Form 2567 is issued identifying the alleged deficiencies, deemed status is removed, and a provider may move on to Step 2 or instead be placed directly on a termination track, as determined by the RO, with a POC required within 10 days.

  • Step 2 – If the RO determines it to be appropriate, a full survey of all CoPs is conducted as was the case in the past, as a result of which a termination date would be identified along with the issuance of a Form 2567 if there is a finding of noncompliance.

  • Step 3 – Revisit or validation survey (within 45 days of the complaint survey if a full survey is not conducted, otherwise following the current schedule for revisits if after a full survey) for substantial compliance with identified CoPs identified in the complaint and full survey (if conducted).

© 2020 McDermott Will & EmeryNational Law Review, Volume III, Number 149


About this Author

Sandra DiVarco Healthcare Attorney Health Systems Lawyer McDermott Will Emery Law Firm

Sandra DiVarco is a partner in the law firm of McDermott Will & Emery LLP and is based in the Firm’s Chicago office. Sandy focuses her practice on the representation of hospitals and health systems. She has counseled health care facility and system clients regarding all aspects of health law transactions and health system restructurings. As a registered nurse, Sandy regularly advises clients on the legal aspects of clinical issues and policy/procedure matters. Sandy also has significant experience in assisting clients with...