Nursing Facility Survey Trends - Directed Plans of Correction, Privacy Violations and FTag 520 Quality Assurance Committee Citations

by Poyner Spruill LLP

Directed Plans of Correction, or DPOCs, have long been part of the arsenal of enforcement sanctions available to the Centers for Medicare & Medicaid Services for survey deficiencies, just like civil money penalties (CMPs); denial of payment for new admissions and termination. However, over the years, we’ve rarely seen CMS or the Division of Health Service Regulation (DHSR) use them, but that appears to be changing.

In several recent surveys we’ve reviewed or appealed, CMS has imposed a DPOC as a remedy. Every SNF provider knows what a POC is—four elements you must address to explain 1) how you corrected an alleged deficiency for the affected resident(s); 2) how you identified other residents who may be at risk from the same deficient practice; 3) systemic changes you implemented to avoid harm or the risk of harm to those residents; and 4) what system of internal monitoring you’ve developed to ensure that those “fixes” actually work and stick. In a DPOC, the CMS does all that for you, by telling you how to fix the problem, prevent its recurrence and monitor your improvements. In the ones we’ve seen so far, the DPOCs come directly from CMS in the facility’s Notice of Imposition (along with other remedies such as civil money penalties), not from DHSR.

In the recent DPOCs we’ve seen, both in North Carolina and other Region IV states, CMS goes way beyond the normal four elements of a normal POC. In at least two cases we’ve seen or heard about, CMS (not DHSR, mind you) has required a facility to develop a “root cause analysis” not just of the deficiencies cited during the survey, but also of prior deficiencies cited at other facilities operated by the same owner or management company. In at least one such case, the facility’s deficiency history wasn’t egregious.  Said differently, this wasn’t a “poor-performing facility” by any definition CMS has ever developed and released.  In another, CMS required the facility operator to retain an outside expert to assist with analyzing the suspected cause of a deficiency and to provide specified training.


Our latest experience with DPOCs involved an alleged HIPAA violation in which a resident’s protected health information (lab results) was allegedly texted to a physician, specifically at the doctor’s request. No unauthorized third party ever saw the information, and no allegation to that effect was included in the survey report. For this, the facility received an “E”-level deficiency (no actual harm but potential for more than minimal harm) at FTag 164, a privacy rule that makes no mention at all of HIPAA or state or federal privacy laws. Nonetheless, CMS imposed a 10-point directed plan of correction that included:

  • The hiring of an outside independent contractor, who had to be preapproved by CMS and not related to the facility’s owners, operations or management, to train staff, the governing body and all primary care physicians who provided care to any resident during an “on-site, in-person, face-to-face” training session;
  • Revised HIPAA policies and procedures, including training on identity theft, which was not an issue in the cited deficiency;
  • Designation of a facility HIPAA compliance officer;
  • In-service training for all staff;
  • A letter to all residents and families informing them of the alleged HIPAA violation and steps being taken to remedy it and prevent its recurrence, among  multiple other steps the facility was required to take.

The facility was given 15 days to implement this expansive set of “remedies” before a discretionary denial of payment for new admissions would take effect. The facility was also required to address how it planned to handle “the loss of PHI” through employees who no longer worked at the facility.” Neither of these elements was included in CMS’s DPOC, nor was there ever any allegation in the CMS 2567 that any PHI was “lost,” only that it was communicated in isolated instances between a facility nurse and an attending physician, both of whom were authorized to received such information under HIPAA.

So, what’s up with these DPOCs?  We’re not really sure.  We’ve heard some rumors that CMS Region IV is “experimenting” with DPOCs. They certainly have the right to use them under applicable statutes and regulations governing the survey process. But, why now, all of a sudden? And why now in facilities that haven’t demonstrated a pattern of being unable to develop and successfully implement their own effective POCs? And why is CMS using them, at least in many cases, for isolated deficiencies at low scope and severity levels in facilities with relatively good survey histories? 

Honestly, we haven’t seen enough of these to call it a strong trend.  But we’ve seen enough to recognize that this is something different.  We’ve also heard reports from other providers and long term care attorneys in Region IV of the same sorts of DPOCs.  And we’ve brought this issue to the attention of leaders at the  American Health Care Association along with other providers and counsel in Region IV. We also know from our contacts in other Region IV states and across the country that CMS is focusing on HIPAA and privacy issues. Stay tuned; there’s definitely more to come on both of these issues.

Ken Burgess and Elizabeth Johnson of Poyner Spruill will be speaking at the NCHCFA Summer Symposium and, among other topics, will address HIPAA risks and risk management tips and provide more information on DPOCs and F520 deficiency avoidance and correction.

F520 Quality assurance committee deficiencies.

Finally, on the survey side,  here’s a head’s up—we are starting to see frequent deficiency citations by the Division of Health Service Regulation under FTag 520 governing Quality Assurance Committees. Our recent experience reflects that when DHSR cites a facility for a deficiency at a scope and severity level of “G” or higher, the facility may also receive a corresponding deficiency at the same scope and severity level as the underlying deficiency if the facility did not self-identify the issue and take it to the QA Committee and then have a robust and thorough treatment of the issue by the QA Committee.  We’ve rarely seen F520 tags in Region IV surveys or in North Carolina until recently, but we’re starting to see them now. We also understand from conversations with DHSR personnel that F520 tags can also result from repeat deficiencies that indicate ongoing systems issues or uncorrected problems.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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