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Intermediate Sanctions for Noncompliant Home Health Agencies


To ensure compliance with Medicare conditions of participation by home health agencies (HHA), the Omnibus Budget Reconciliation Act of 1987 (OBRA 1987) directed the Centers for Medicaid & Medicare Services (CMS) to implement intermediate sanctions for noncompliant HHAs. Intermediate sanctions, such as civil money penalties, payment suspension, and appointment of temporary management, would provide CMS with important tools to enforce compliance. However, to date, CMS has not implemented these OBRA 1987 requirements. This early alert memorandum outlines the history and current status of CMS's efforts to implement HHA intermediate sanctions.


We reviewed documents published in the Federal Register related to CMS's efforts toward implementing HHA intermediate sanctions. We also reviewed CMS's responses to a 2008 OIG recommendation that CMS develop and implement the sanctions as required by OBRA 1987. Additionally, we met with CMS officials in December 2011 to discuss the intermediate sanctions.


More than 20 years after Congress directed CMS to implement intermediate sanctions for HHAs found to be out of compliance with the Medicare conditions of participation, CMS has not implemented such sanctions. CMS issued a Notice of Proposed Rulemaking (NPRM) in 1991 to implement intermediate sanctions, but never issued a final rule and withdrew the NPRM in August 2000. CMS indicated that legislative changes and other demands impeded promulgation of a final rule. Each year since the 2008 OIG report, CMS indicated limited progress toward drafting a new NPRM for implementing the sanctions. Most recently, CMS stated that a draft proposed rule containing alternative sanctions would be sent for clearance within CMS and that it anticipated publishing a new NPRM by September 2012.


Although this report does not contain new recommendations, we continue to recommend that CMS make HHA intermediate sanctions a high priority and complete their implementation as soon as possible.