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Deemed Status for Medicare and Medicaid Providers

Federal Requirements for Skilled Nursing Facilities

The Centers for Medicare and Medicaid Services (CMS) requires long-term care facilities to meet certain federal standards, known as the requirements of participation, in order to begin or continue to participate in and receive payment from the Medicare and Medicaid programs. These standards, which were promulgated to implement landmark Nursing Home Reform Law of 1987, play an integral role in helping to improve quality of care and quality of life for residents.

CMS requires facilities participating in the Medicare and Medicaid programs to be inspected once every 9 to 15 months by a state survey agency to ensure compliance with the requirements of participation. Facilities that have ongoing issues may be inspected more frequently. If a state survey agency determines during an inspection that a facility is not compliant with these standards, then CMS may impose penalties such as civil money penalties, suspension of payment for all new admissions, and/or directed plans of correction on the non-compliant facility.

Should a facility continue to be found non-compliant with the requirements of participation, CMS may terminate the facility's participation in the Medicare and Medicaid programs.

Deemed Status 

Currently, CMS allows other health care organizations and agencies that participate in the Medicare and Medicaid programs - such as hospitals and home health agencies - to qualify for exemption from federal requirements of participation (and, subsequently, regular inspections to ensure compliance with these requirements) through obtaining what is known as "deemed status." Deemed status can be obtained by a health care organization if they have received accreditation through a national accrediting organization that CMS has provided with deeming authority. 

National accrediting organizations may grant health care organizations accreditation if the health care organization completes a voluntary process where they are surveyed by the accrediting organization's staff and the staff determine that the entity provides quality services. Generally, the health care entity must also pay a fee to the accrediting organization in order to take part in the accreditation process. Once a health care entity receives accreditation through an accrediting organization that CMS has provided with deeming authority, they are exempt from federal inspections to ensure compliance with CMS requirements of participation.

Why Deemed Status is Harmful to Consumers

As accrediting organizations are private organizations - and, in many cases, for-profit organizations - it is problematic for them to be given the authority to not only determine the quality of health care organizations, but also grant health care organizations exemption from public inspections that ensure their compliance with federal regulations. These organizations often have a financial incentive in providing accreditation to certain health care entities, which compromises their ability to ensure a health care organization is providing consumers with quality care. Furthermore, unlike state survey agencies, accrediting organizations are not required by law to provide the public with results of any surveys they conduct to determine whether or not a health care organization is compliant with quality standards. They may or may not conduct regular inspections to ensure a health care organization that received accreditation is continuing to be compliant with such standards. 

Deemed Status and Long-Term Care Facilities 

Long-term care facilities are not currently eligible to receive deemed status. However, recent actions by CMS to clairfy and strengthen oversight of accrediting organizations (in a proposed rule released in April 2013) have led some advocates to believe that CMS is considering expanding the role of accrediting organizations by granting them deeming authority for long-term care facilities. Allowing private accrediting organizations to determine the quality of care and quality of life residents are receiving would undoubtedly compromise resident safety and result in poorer care and greater instances of abuse and neglect in long-term care facilities.

Long-term care facilities are responsible for the care of elderly and disabled persons, two especially vulnerable populations. Regular inspections conducted by federally-commissioned state survey agencies are vital to holding these facilities accountable and ensuring their compliance with the requirements of participation. Consumers and their family members rely upon publicly available results of such surveys to evaluate how well these facilities are complying with federal requriements. Should accrediting organizations be granted deeming authority over long-term care facilities, these individuals would no longer have access to public survey results. Facilities need to be held publicly accountable in order to better ensure the well-being and safety of long-term care consumers. 

Resources on the Issue of Deemed Status for Skilled Nursing Facilities

Centers for Medicare and Medicaid Services (CMS) Proposed Rule on Deemed Status (2013) 

Senate Special Committee on Aging Hearing (1982) on Nursing Home Survey and Certification

GAO Report (1999) on Private Accrediting Organizations

Siege Mentality: How the Defensive Attitude of the Long-Term Care Industry is Perpetuating Poor Care and an even Poorer Public Image: McGeorge Law Review Article by Eric Carlson (2000) 

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