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Medicare’s about to shift its new punishment policy into gear.

Next month is when the rubber hits the road for new home health agency survey penalties. Will you be ready for them?

Background: Currently, home health agencies that are in survey trouble face only one punishment — termination. In its home health prospective payment system final rule for 2013, the Centers for Medicare & Medicaid Services set a July 1, 2013 implementation date for three new intermediate or alternative sanctions — temporary management, directed plan of correction, and directed inservice training (see more details in box below). Two more sanctions considered much more punishing, civil money penalties and payment suspensions, will go into effect July 1, 2014. So will the new Informal Dispute Resolution (IDR) process that providers are welcoming.

"How the surveys are handled shouldn’t be that new for HHAs," points out attorney Troy Brooks with Brooks Acevedo in Houston. "The post-survey process is what is changing."

"The stakes for HHAs are definitely higher as a result of these sanctions," notes Washington, D.C.-based healthcare attorney Elizabeth Hogue. "Agencies that are not up to snuff have an added incentive to get their houses in order."

Observers expect more home health agencies to face punishment for survey performance under the new policy. Surveyors may have been reluctant to pull out the big guns of Medicare termination, but will feel much more comfortable imposing lesser sanctions, they predict.

And when CMP and payment suspension sanctions take effect next year, that could prove crippling. "While deficiencies and plans of correction have always produced a lot of stress for staff and gobbled up resources, the pressure will really be on now to avoid serious survey problems that may now translate readily into dollars and cents," Hogue forecasts.

Lack of Interpretive Guidance Won’t Delay Sanctions

At press time, CMS had not yet issued the interpretive guidance for surveyors that will explain how to deploy the new sanctions, a CMS official confirmed to Eli.

But don’t expect that to delay the sanctions’ implementation date. "Providers should always keep in mind that they are bound by the regulations, even in the absence of interpretive guidance," says attorney Marie Berliner with Joy & Young in Austin, Texas. "Even where something may be unclear (and later the subject of interpretive guidance), providers must make a good faith effort to comply with the spirit of the regulation under a reasonable reading."

However, surveyors may informally be less aggressive in pursuing the use of the new sanctions until CMS issues the guidance, experts agree.

How much the sanctions impact you may depend on the state in which you are located. "It will be interesting to see how [the sanctions] are applied from state to state," Brooks says. "I expect there to be a tremendous amount of communication between CMS regional offices and survey agencies."

States that already apply an array of sanctions on the Medicaid side may be more ready to hop into imposing Medicare sanctions, predicts attorney Robert Markette Jr. with Hall Render in India-napolis. Surveyors also may be comfortable using sanctions first in cases that would normally otherwise lead to termination.

No one’s safe: Even agencies that have had clean survey records may find themselves affected by the new sanctions. That’s due to a combination of surveyors reaching for intermediate sanctions for lesser offenses and the environment of increased regulatory scrutiny for HHAs.

The new sanctions starting July 1 "are not nearly as threatening as the fines" that will go in next year, says Chicago-based regulatory consultant Rebecca Friedman Zuber. But temporary management can be "quite disruptive," Zuber warns.

Note: The final rule containing the alternative sanctions provisions is at .