Feb 2, 2019

North Carolina Should Use the Funds to Increase Staffing

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North Carolina Health News reported that North Carolina has $29 million dollars in the CMS fines/penalties fund that is sitting mostly unused. The money — including $13 million during the past three fiscal years — has accrued from fines as large as $1.16 million levied by federal regulators against individual North Carolina nursing homes.  Nursing homes or other parties can get grants from the money, known as “civil money penalty,” or CMP funds, after approval from DHHS and the federal Centers for Medicare and Medicaid Services, or CMS.

The growing millions in the fund are supposed to be spent on programs to ensure better lives for the people who live in the state’s 429 nursing homes. But during the past three years, only $406,057 — about 1.4 percent of the current stash — was spent. The money went mostly to a handful of smaller-scale “culture change” projects designed to improve residents’ lives at individual nursing homes.

A recent email from Becky Wertz, section chief at the Division of Health Service Regulation, Nursing Home Licensure & Certification Section in the state’s Department of Health and Human Services sought new proposals on how to spend the money.  The email went to more than 30 nursing-home administrators, advocates for older people and others with a stake in the welfare of long-term care residents.

More than $25 million in  fund has gone unused at a time when the state’s 60-plus generation is projected to outnumber those younger than 18 this year.  Advocates have argued in vain to the General Assembly that people older than 60 require help — such as transportation and Meals on Wheels — that would add millions to the state’s budget.

“The idea that you use money from fines to improve quality is a good idea,” said Thomas Konrad, a former health policy and research professor at UNC-Chapel Hill who continues to study and consult in long-term care issues. “Preventing people from having to go to nursing homes might be a good use of this money.”

To put the $28.9 million in perspective, it amounts to about two-thirds of the $44 million annual budget of the state’s Division of Aging and Adult Services, which saw its state appropriation fall between the  2016-17 and 2018-19 fiscal years. And more than 10,000 people annually sit on waiting lists (for monetary aid to help them to remain in their homes) paid for in part by the $30-million-plus that North Carolina contributes to Home and Community Care Block Grant services. That block grant, which also receives federal funding, pays for programs that have a goal of keeping people out of long-term care.

According to CMS, each state develops its own plans on how it will “reinvest” the fines paid by its nursing homes. However, the federal agency must approve plans and also has to check annually on whether and how a state is using its pot of money, a CMS spokesman said.

“Each project idea and budget must be reviewed for reasonableness, which may cause rejection of project ideas that do not meet state or CMS criteria,” the spokesman said.

Each state must spend a “reasonable” amount of its penalty funds annually, but no percentage is spelled out.

In addition, states are required to publicize the use of civil money penalties, making known how much is approved for projects, the identities of contractors and the results of projects that receive the funds.


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