Centers for Medicare and Medicaid Services (CMS) and Michigan Department of Health and Human Services (MDHHS) prohibit the following uses of Civil Monetary Penalty (CMP) funding:
- Conflict of Interest Prohibitions: CMS will not approve projects for which a conflict of interest exists or the appearance of a conflict of interest. Similarly, CMS will generally not approve uses that commit CMP funding to very long-term projects (greater than 3 years). By obliging the State to fund a long and large multi-year expense, CMS considers such projects to raise the appearance of a conflict of interest where the levy of future CMPs could be construed to be done for the purpose of raising revenue rather than for the statutory purpose of deterring or sanctioning poor quality. CMS will, however, consider each project in light of the specifics of each individual case. Large projects may avoid the appearance of conflict, for example, to the extent that the applicant is able to demonstrate a plan for sustaining the project on a long-term basis without CMP funds.
- Duplication: Applicants may not request CMP funds to pay entities to perform functions for which they are already paid by State or Federal sources. CMP funds, for example, may not be used to enlarge an existing appropriation or statutory purpose that is substantially the same as the CMP project. Also, CMP funds may not be used to fund legislative directives for which no or inadequate funds have been appropriated.
- Capital Improvements: CMP funds may not be used to pay for capital improvements to a nursing facility, or to build a nursing facility, as the value of such capital improvement accrues to a private party (the owner). Federal and State payments already acknowledge the expense of capital costs, so the use of CMP funds for such a purpose would duplicate an existing responsibility of the nursing facility. Examples of prohibited uses:
- Building or Capital Redesign: CMP funds may not be used to build or redesign a nursing facility, including conversion to a Green House.
- Capital Expense: Replacing an aging boiler.
- Nursing Facility Services or Supplies: CMP funds may not be used to pay for nursing facility services or supplies that are already the responsibility of the nursing facility, such as laundry, linen, food, heat, or staffing costs. This prohibition, however, does not prevent the temporary payment of salary for an individual who will work in the nursing facility as part of an evaluated demonstration of a new service, skill set, or other innovation that the nursing facility has not previously had in place and which the nursing facility may sustain after the demonstration if resources permit. Examples might include new use of a wound specialist and adoption of new skin care techniques, new uses of advance practice nurses, or new methods of retention and training for certified nurse assistants.
- Temporary Manager Salaries: CMP funds may not be used to pay the salaries of temporary managers who are actively managing a nursing facility, as this is the responsibility of the involved nursing facility in accordance with 42 CFR §488.415(c).
- Supplementary Funding of Federally Required Services: CMP funds may not be used to recruit or provide Long-Term Care Ombudsman certification training for staff or volunteers or investigate and work to resolve complaints as these are among the responsibilities of Long-Term Care Ombudsman programs under the federal Older Americans Act (OAA), regardless of whether funding is adequate to the purpose. On the other hand, there is no prohibition to an Ombudsman program receiving CMP funds to conduct or participate in approved projects, or to carry out other quality improvement projects that are not within the Ombudsman program’s existing set of responsibilities under the OAA. Nor is there any prohibition to Ombudsman program staff or volunteers to participate in training that is paid by CMP funds but open to a broad audience, such as nursing facility staff, surveyors, consumers, or others.
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