Nursing Homes Fined for Infection Control Should Not Receive COVID-19 "Performance Based" Relief Funds

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act), created a $175 billion Provider Relief Fund (PRF) for health care providers.  In May 2021, health care providers estimated that $24.5 billion of the $175 billion remain in the Fund, with a June 30, 2021 deadline rapidly approaching for spending the money.[1]  On May 11, 2021, 77 Members of Congress wrote to HHS Secretary Xavier Becerra, asking that the deadline for spending PRF be extended to June 20, 2022.[2]  The CARES Act specifically identified $21 billion for nursing facilities.[3]  Some of that money apparently remains available.

On May 22, 2020, the Centers for Medicare & Medicaid Services (CMS) HHS announced that all certified skilled nursing facilities (SNFs) with six or more certified beds were eligible to receive $50,000 per facility plus $2,500 per bed.  More than 13,000 certified SNFs received a total of $4.9 billion.[4]  The Washington Post estimated in August 2020 that “the average distribution was $315,000, with some larger facilities receiving $3 million or more.”[5]

On September 3, 2020, the Centers for Medicare & Medicaid Services (CMS) announced that in the third phase of distribution of Provider Relief Funds to nursing facilities, $2 billion would be distributed as “performance-based incentive payments.”[6]  To qualify, a facility was required to meet two criteria: (1) a COVID-19 infection rate below the rate of infections in the county in which the facility is located and (2) a COVID-19 death rate below a nationally-established performance threshold for mortality among nursing home residents infected with COVID-19. 

How have performance-based incentive payments worked in practice?  Facilities with deficiencies in infection prevention and control and many resident deaths from COVID-19 have nevertheless received incentive payments.  In some instances, these “performance-based” payments exceed the civil money penalties that CMS imposed against the same facilities for infection control deficiencies.

The Colorado Sun reports that 132 Colorado nursing facilities were both fined for poor infection control practices and received performance-based incentive payments (because they had fewer COVID-19 cases than their community and fewer COVID-19 deaths than a national benchmark).  One hundred seventeen of the 132 facilities, which also experienced a COVID outbreak, received more than $10.3 million more than they were fined in federal COVID-19 relief money.[7] 

For example, The Colorado Sun reports that CMS cited Sierra Vista Healthcare, a Colorado nursing facility, in August 2020 and again in December 2020 for poor infection control practices, including staff’s not wearing masks correctly or properly washing their hands.  CMS imposed fines of $39,484.25 from January 2020 to April 2021 for infection control deficiencies at the facility, where eight residents died.  However, the facility received $183,840.79 in performance-based payments in 2020, before the December 2020 coronavirus outbreak, “because its COVID infection rate was lower than Larimer County’s and the mortality rate was lower than a national standard during a three-month period last fall.”

A similar report from Michigan finds that nursing facilities in the state received performance-based payments even after residents died from COVID-19 and the facilities were cited with violations in infection prevention and control requirements.[8]  

The Center for Medicare Advocacy believes that facilities cited by CMS with infection prevention and control deficiencies should not be eligible for “performance-based incentive payments.”  The definition of performance-based incentive payments does not accurately describe or identify high-performing (and poor performing), facilities.

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[1] Danielle Brown, “Operators might get more time to spend Provider Relief Funding,” McKnight’s Long-Term Care News (May 13, 2021), https://www.mcknights.com/news/operators-might-get-more-time-to-spend-provider-relief-funding/.
[2] Letter to Secretary Becerra, https://axne.house.gov/sites/axne.house.gov/files/Axne%20and%20Miller-Meeks%20PRF%20Deadline%20Letter%20to%20HHS.pdf.
[3] See CMA, Special Report: Nursing Facilities Have Received Billions of Dollars in Direct Financial and Non-Financial Support During Coronavirus Pandemic (Mar. 17, 2021), https://medicareadvocacy.org/report-snf-financial-support-during-covid/.
[4] HHS, “HHS Announces Nearly $4.9 billion Distribution to Nursing Facilities Impacted by COVID-19” (News Release, May 22, 2020), https://www.hhs.gov/about/news/2020/05/22/hhs-announces-nearly-4.9-billion-distribution-to-nursing-facilities-impacted-by-covid19.html.
[5] Debbie Cenziper, Joel Jacobs and Shawn Mulcahy, “Nursing home companies accused of misusing federal money received hundreds of millions of dollars in pandemic relief,” The Washington Post (Aug. 4, 2020), https://www.washingtonpost.com/business/2020/08/04/nursing-home-companies-.
[6] CMS, “Nursing Home Quality Incentive Program Methodology” (Dec. 7, 2020), https://www.hhs.gov/sites/default/files/nursing-home-qip-methodology.pdf.
[7] Zack Newman and Kevin Vaughn, “117 Colorado nursing homes with COVID outbreaks received both fines and financial assistance from the federal government,” The Colorado Sun (May 9, 2021), https://coloradosun.com/2021/05/09/colorado-nursing-home-fines-coronavirus/.
[8] “Michigan nursing homes rewarded thousands of dollars after not following COVID protocols; Hundreds of nursing homes cited,” (May 25, 2021), https://www.clickondetroit.com/news/local/2021/05/24/michigan-nursing-homes-rewarded-thousands-of-dollars-after-not-following-covid-protocols/.