CMS' Systems Improvement Agreement: A Last Chance Alternative to Medicare Termination?

In the past, when CMS conducted a survey and unfavorable findings led to a determination of immediate jeopardy, healthcare organizations had very little choice (prepare an acceptable corrective action plan or risk Medicare decertification) and very little time (23 days) to correct the deficiencies. For some healthcare organizations, failure to provide an acceptable corrective action plan following multiple citations of immediate jeopardy or repeated surveys with immediate jeopardy findings resulted in Medicare terminating the hospital's contract.  

An alternative to Medicare termination

The loss of Medicare payment would force most hospitals to close. Compass Clinical Consulting has termed this the "hospital near-death experience." Because this course of action has devastating effects for the community as well as the hospital's employees and medical staff, CMS proposed an alternative course of action — a systems improvement agreement.

What is an SIA?

An SIA is a time-limited contractual arrangement between a Medicare-accredited healthcare organization and CMS. SIAs have been used in nursing homes and organ transplant centers in the past and recently have been implemented in hospitals. 

Why enter into an SIA?

Entering into an SIA provides more time for a healthcare organization to fix its deficiencies than is typically allotted from a validation or for-cause survey. In some cases, the timeframe has been extended to as long as 19 months. Of course, CMS may rescind the pending termination sooner, especially when the hospital is found to be substantially in compliance with all of the CMS Conditions of Participation.

The SIA process

The SIA reads much like a legal document and stipulates the terms under which the healthcare organization agrees to:

  • Obtain independent consultative review (at its expense);
  • Submit the names of the proposed consultant companies and/or individuals (including their curriculum vitae);
  • Acquire expertise in the development and implementation of an effective quality assessment and performance improvement program;
  • Engage the services of an independent, full-time, on-site compliance officer for the duration of the agreement; and
  • Other terms specified by CMS including resurvey by CMS within six to 12 months.

In return, CMS agrees to suspend the execution of the scheduled termination order pending the healthcare organization's fulfillment of the agreement. The SIA specifies the qualifications and responsibilities of the independent consultant/group and stipulates the content and frequency of the reports that are to be submitted to CMS. Consultants' reports are released to the healthcare organization only after they are approved by CMS. At their discretion, CMS may elect to discuss the findings from the reports with the independent consultant/group by phone or in person at the healthcare organization's expense. The agreement itself is a public document — some examples of SIAs executed in the past couple of years are available on the Internet. Reports from the independent consultant/ group, though, are subject to federal and state privacy protections. 

The systems improvement agreement is not easy, but it provides time for hospital leaders to plan and fix serious problems without a 23-day CMS decertification hanging over their heads.

The purpose: Positive organizational change and compliance

The purpose of the SIA is to affect large-scale organizational change to attain compliance with all of the CMS CoPs or Emergency Medical Treatment and Labor Act standards, as applicable to the situation. Additionally, by entering into an SIA, the healthcare organization agrees to retain responsibility for compliance with the CMS requirements and to waive all rights to administratively or judicially challenge the findings described in the Statement of Deficiencies (Form CMS 2567).

Conditions that could lead to immediate jeopardy

To understand when CMS might offer this last chance to avoid Medicare decertification and withdrawal of funding, it is important to recognize the conditions that place a healthcare organization in immediate jeopardy. Immediate jeopardy is defined as "a situation in which the provider's non-compliance with one or more requirements of participation has caused or is likely to cause serious injury, harm, impairment or death" (42 CFR 489.3, 2010). 

There are several issues of non-compliance which may trigger immediate jeopardy: (a) "failure to protect from abuse," (b) "failure to prevent neglect," (c) "failure to protect from psychological harm," (d) "failure to protect from undue adverse medication consequences and/or failure to provide medications as ordered," (e) "failure to follow nationally accepted standards of practice for infection prevention," (f) "failure to correctly identify patients," (g) "failure to safely administer blood or blood products," (h) "failure to provide safety from fire, smoke and environmental hazards," and (i) "failure to comply with EMTALA requirements," according to the CMS State Operations Manual, Appendix Q - Immediate Jeopardy, 2004. At a workshop in Arkansas earlier this year, CMS indicated there were 6,089 instances of immediate jeopardy logged in its intake department in 2010. Hospitals comprised 8 percent (480) of the total complaints; long-term care facilities represented 44 percent; and the remaining 48 percent were others. Hospitals that receive an immediate jeopardy citation are ineligible for participating in the CMS value-based purchasing program. 

SIA considerations

The time and expense of entering into a SIA and affecting wide-scale organizational changes must be taken into consideration. However, should a healthcare organization opt not to accept or amend the terms of agreement, the alternatives are to voluntarily withdraw from participating in the Medicare program or have CMS terminate the organization's participation. 

Either way, the result would be devastating, creating a large crater, a healthcare void, in the community.

What success looks like

Once the healthcare organization is resurveyed and demonstrates substantial compliance with all of the CoPs, the pending termination is stopped, which releases the organization from the state agency's jurisdiction. CMS then restores the deemed status of the healthcare organization and dismisses the SIA.  

The SIA might be a last chance — but also a great chance — to create positive organizational change and make a real difference in improving patient care.

Victoria May Fennel, MSN, RN-BC, CPHQ, is the director of accreditation and clinical compliance for Compass Clinical Consulting.


More Articles on Immediate Jeopardy:

CMS Lifts Immediate Jeopardy Status for Iredell Memorial Hospital in North Carolina
Natividad Medical Center Issues Action Plan After CMS Finds Medication Safety Deficiencies
State Regulators Tagged NCH Healthcare as "Immediate Jeopardy" Twice Last Year

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