On March 18, 2011, the Centers for Medicare and Medicaid Services (CMS) issued its long-awaited final rule implementing portions of the federal Patient Protection and Affordable Care Act (the health care reform law) governing the imposition and collection of civil money penalties (CMPs) against nursing facilities found to have deficiencies during surveys. CMS published a proposed rule on this issue in July 2010, spawning an outcry from provider organizations.

In its final rule, CMS took note of some of those concerns and tossed providers a couple of “bones.” However, overall, the regulation dramatically alters how and when CMPs are collected, distributed and used by CMS. According to CMS, the rule has four major goals...