Immediate jeopardy: True or false?

Probably no two words strike more fear in the hearts and minds of nursing home owners and operators than “immediate jeopardy.” And, for good reason. When immediate jeopardy is alleged by a survey team, a cascade of painful consequences is about to unfold. 

When a survey team cites immediate jeopardy, it must notify the Centers for Medicare and Medicaid Services (CMS). The clock begins to tick: CMS will terminate a nursing home’s Medicare provider agreement within 23 calendar days if the immediate jeopardy is not removed.

Termination as a Medicare provider will lead to removal from the Medicaid program as well, and few nursing facilities can survive once that happens. In addition to possibly losing their business, nursing facilities cited with immediate jeopardy face huge civil money penalties (CMP), frequently exceeding $1 million.

Immediate Jeopardy

Federal regulations define immediate jeopardy as “a situation in which the provider's noncompliance with one or more requirements of participation has caused, or is likely to cause, serious injury, harm, impairment, or death to a resident.” (42 CFR 488.301). Thus, in order for immediate jeopardy to exist, there must have been noncompliance with a requirement of participation that either: 1) caused serious injury, harm or death to a resident, or 2) “is likely” to cause such harm.

The first part of the definition is usually simple to determine: Either a facility’s noncompliance, also called a “deficiency,” caused serious harm or death, or it did not. But the second prong of the definition, whether an alleged deficiency was “likely” to cause harm, often becomes a legal battle that is fought and resolved in the various stages of an appeal.

CMS publishes the State Operations Manual (SOM) as “guidance” to surveyors. The SOM helps surveyors interpret and understand the regulations, but it does not have the force of law. CMS has published Appendix Q of the SOM, Guidelines for Determining Immediate Jeopardy in order to help surveyors understand what constitutes immediate jeopardy.

Appendix Q notes that there are three components to immediate jeopardy: 1) harm – either actual or that which “is likely” to occur, 2) culpability, and 3) “immediacy.” Notably, Appendix Q informs surveyors that if serious harm or death has not already occurred, it is considered “likely” if it is likely to occur “in the very near future.” Appendix Q repeats the phrase “in the very near future” multiple times.

If something has not occurred for a year or say, seven months, is it really “likely to occur in the very near future”? CMS thinks so. In spite of its explicit guidance in Appendix Q, CMS has been known to argue that immediate jeopardy existed for many months even if there is no harm at any level during that period.

The problem for providers is that in such cases, CMS has often already imposed a CMP in excess of $1 million, which must be collected and placed in escrow. Unfortunately, an appeal can take years before a final decision is rendered.

Getting Justice

There is a silver lining for providers who wish to challenge immediate jeopardy determinations where CMS claims that immediate jeopardy existed for many months even in the complete absence of any harm or even a minor bruise to any resident.

In a recent case litigated by the author, CMS alleged that immediate jeopardy existed from September of 2012 to April of 2013. There was no harm to any resident during those seven months, and CMS did not allege that any resident was harmed from September to April.

Yet, CMS chose to demand a CMP of more than $700,000, to be paid by the provider years before the resolution of the case, which was then appealed. In 2017, when a final decision was rendered, the judge agreed that immediate jeopardy had existed, but only for several days—not seven months. The judge ordered CMS to repay the provider most of the CMP it had collected.

But, the story gets better. The Affordable Care Act contains a provision that requires CMS to repay any CMP it collected following a successful appeal by a provider—and pay interest on the amount held in escrow. In the case above, CMS had to repay the provider more than $600,000—with interest payments at the federal rate, totalling an additional $53,250!

In another current appeal filed by the author, the amount of the CMP is more than $4 million, compiled from three separate per-day CMPs. As noted above, where CMS escrows a CMP and a provider prevails at appeal, CMS would be required to return the escrowed money plus interest.

It depends on what the meaning of “is” is

Words matter. Since the federal regulation governing immediate jeopardy states that a provider’s noncompliance must have caused death or serious harm to a resident or that serious harm or death “is likely” to result from noncompliance, a closer examination of “is likely” may be helpful. Note that the regulation does not state that serious harm or death may be likely; it must be likely if immediate jeopardy exists. And, as noted above, the guidance CMS provides to surveyors defines the “immediacy” component as having to occur “in the very near future.” Immediate jeopardy should not be based on a theoretical or abstract level of harm that is not likely to occur in the very near future.

So, if no harm—let alone serious harm or death—has not occurred in many months or a year, is it really “likely” to occur? Common sense may suggest otherwise.

How likely is “likely”?

The Health and Human Services’ Departmental Appeals Board (DAB or Board) decides appeals of CMS enforcement actions. The DAB has defined “likely” in the context of immediate jeopardy as a word that is “ordinarily or commonly used to describe an outcome or result that is ‘probable’ or reasonably to be expected though ‘less than certain.’”

The DAB noted that Black’s Law Dictionary defines “likely” to mean “probable” which implies a greater degree of probability that a particular event will occur than do the terms “possible” or “potential.”  According to the DAB, “probable” means that there is more evidence than not that an event will occur. On the other hand, “possible” is defined as “capable of existing” and “free to happen or not,” according to the DAB.

In explaining what “likely” means in the context of immediate jeopardy, and distinguishing between “probable” and “possible” the DAB stated that “In this regard, we have emphasized that a ‘mere risk’ of serious harm is not equivalent to a ‘likelihood’ of such harm.”

It is a well-established axiom of law that when the meaning of words is explicit and unambiguous, effect should be given to the plain meaning of words as expressed in a statute or regulation.

Providers face a significant legal obstacle according to the Administrative Law Judges who decide appeals of CMS enforcement actions. CMS’ determination of immediate jeopardy is “presumed correct.” The legal standard for a provider to successfully challenge allegations of immediate jeopardy is to demonstrate to the satisfaction of the judge that CMS’ determination was “clearly erroneous.” That places a high, but not insurmountable burden on providers.

In the past few years, CMS has increasingly taken the position that immediate jeopardy exists as of the date there was an alleged deficient practice and continuing through to the survey and beyond—even if the period is for many months—and there is an absence of harm or even the likelihood of harm. Recall that “likely” is synonymous with “probable” or “more likely than not” to occur.  Gentle reader, if something has not happened day after day, for months on end, can it truly be said to be likely to happen? The answer lies in understanding the distinction between probable and possible.

Apart from the frequently enormous financial burden the penalties for immediate jeopardy place on a nursing facility, there are other adverse and negative consequences, not the least of which, is demoralizing the staff and upsetting residents. Providers would be encouraged if CMS considered the literal meaning of the word “likely” as used in the federal regulations.   As noted above, the DAB has emphasized that, “a mere risk of serious harm is not equivalent to a ‘likelihood’ of such harm.” Thus, it logically follows that a “mere risk of serious harm” is not tantamount to immediate jeopardy.

The question often isn’t whether immediate jeopardy existed at all. That analysis is usually straightforward. The issue is whether, in the absence of serious harm for many months or even a year, can immediate jeopardy truly exist? If one strikes a match, a flame will immediately appear. However, if one rubs two sticks together, a flame may eventually appear or may never appear. Therein lies the difference between likely and possibly.

After the inception of this article and numerous complaints about the exorbitant amounts of per-day CMPs based on months of alleged immediate jeopardy, CMS modified its CMP policy. In a Survey and Certification Memo addressed to all State survey agency directors dated July 7, 2017, CMS stated that “per instance CMPs [are] the default for noncompliance that existed before the survey.”¹ (The difference between a per-instance and a per-day CMP can be in the millions of dollars.) However, the same CMS Survey and Certification Memo also indicated that per day CMPs should be issued where immediate jeopardy “was cited with actual harm to a resident.”

1. Revision of Civil Money Penalty (CMP) Policies and CMP Analytic Tool, Ref: S &C: 17-37-NH (July 7, 2017), available at: https://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/SurveyCertificationGenInfo/Downloads/Survey-and-Cert-Letter-17-37.pdf

Alan C. Horowitz

Alan C. Horowitz, Esq., is a partner at Arnall Golden Gregory LLP, where he focuses his legal practice on regulatory compliance for skilled nursing homes, hospices and home health agencies and manages cases where the Centers for Medicare and Medicaid Services (CMS) has imposed an enforcement action. He is a former assistant regional counsel Office of the General Counsel, U.S. Department of Health and Human Services. As counsel to CMS, he was involved with hundreds of enforcement actions and successfully handled appeals before administrative law judges, the HHS Departmental Appeal Board and in federal court. He also has clinical healthcare experience as a registered respiratory therapist and registered nurse. He can be reached at alan.horowitz@agg.com.