In their April 2, 2018 letter to CMS Administrator Seema, Republican leaders of the House Energy and Commerce Committee express serious concern about “recent media reports describing horrific instances of abuse, neglect, and patient harm allegedly occurring at SNFs and NFs across the country.” They focus particular attention on Dr. Jack Michel, an owner of Hollywood Hills, the Florida nursing facility where 14 residents died when the facility’s air conditioning system failed during Hurricane Irma. In 2006, they note, Dr. Michel had been an owner of another health care facility that had been subject to a civil settlement under the False Claim Act.
Although Dr. Michel’s 2006 settlement included a Corporate Integrity Agreement (CIA), the CIA is no longer available on the Inspector General’s homepage. In fact, it is impossible to learn what that settlement was about and whether Dr. Michel and his co-owners complied with the terms of the CIA or were found to have been in default.
The lack of information led the Center for Medicare Advocacy to look into CIAs, particularly as they are used in settlement of False Claims Act cases about quality of care in nursing homes (also known as “worthless services” cases).
Quality of Care Corporate Integrity Agreements
The Office of Inspector General (OIG) signs quality of care CIAs with health care providers in exchange for not excluding the providers from Medicare, Medicaid, and other health care programs under its permissive exclusion authority. CIAs usually last five years and require an external monitor of quality of care, who visits facilities subject to the CIA, “analyzes available data, observes facility and corporate level committee meetings, and reviews relevant documents.” Monitors submit “regular written reports to the provider and OIG.”
The only information about quality of care CIAs that are currently in effect, however, is the press release announcing settlement of the case and the CIA itself.
For example, an October 10, 2014 News Release of the U.S. Department of Justice describes “the largest failure of care settlement with a chain-wide skilled nursing facility in the department’s history” – a settlement by the United States and eight states with Extendicare resolving allegations that the corporation “billed Medicare and Medicaid for materially substandard nursing services that were so deficient that were effectively worthless and unnecessary rehabilitation therapy services.” The settlement requires the corporation to pay $38 million to the Federal Government and eight states and to “have a comprehensive compliance program with systems to address the quality of resident care” and “retain an independent monitor, selected by the OIG, who will regularly visit Extendicare’s facilities and report to the OIG.” In addition, an independent review organization “will perform annual reviews of Extendicare’s claims to Medicare.” The CIA appears to apply to Extendicare’s 146 skilled nursing facilities in 11 states.
The OIG’s website includes the 69-page CIA with Extendicare, which, among other obligations, requires Extendicare to
- provide the Monitor with monthly reports of deaths or injuries related to restraints, psychotropic medications, abuse or neglect of residents, “any other incident that involves or causes actual harm to a resident when such incident is required to be reported to any local, state, or federal government agency,”
- “within 30 days after discovery,” notify the OIG, in writing, “of any ongoing investigation or legal proceeding known to Extendicare conducted or brought by a governmental entity or its agents involving an allegation that Extendicare has committed a crime or has engaged in fraudulent activities,”
- “within 15 days after notification,” notify OIG “in writing, of any adverse final determination made by a federal, state, or local government agency or accrediting or certifying agency (e.g., Joint Commission) relating to quality of care issues.”
The CIA sets out Breach and Default Provisions, including stipulated penalties, and authorizes “exclusion for material breach of this CIA.”
Nothing else about the CIA with Extendicare is public.
In a 2009 report, the Inspector General evaluated 15 nursing home corporations, with 1104 nursing facilities, whose CIAs began between June 2000 and December 2005. While the OIG said it could not assess the quality of care of facilities under CIAs, it analyzed survey deficiency data for 47 tags that CMS used to identify substandard quality of care (SQC) and calculated an Index Score for each corporation. Table 9 in Appendix D showed that corporations with CIAs generally continued to be cited with SQC deficiencies at rates higher than other facilities during the terms of their CIAs. In other words, OIG seems to have reported that CIAs did not improve the quality of care at the nursing facilities where they were in effect.
Questions and Recommendations
The Center for Medicare Advocacy questions whether secrecy about CIAs is appropriate when the Government chooses CIAs instead of exclusion in a quality of care/worthless services case. This concern is intensified by the OIG’s report indicating that CIAs have not improved care for residents.
The Center suggests that the Government should make information about CIAs more transparent and publicly available. Transparency would both enable the monitor to receive comprehensive, timely information that is relevant to determining the company’s compliance with the CIA (or whether there has been a material breach) and inform the public about the ongoing status of the company’s compliance. The Center understands that, as CIAs are currently structured, monitors sign contracts solely with the health care providers and do not have contracts with, or act as agents for, the Inspector General.
Nevertheless, the Center asks whether some or all of the following actions would be appropriate and could better protect residents whose facilities are under CIAs.
- Nursing Home Compare could include information to indicate that a facility is operating under a CIA and what the CIA means.
- OIG could inform state survey agencies in all states with facilities operating under a CIA that there is a CIA, and its terms.
- State survey agencies could automatically send copies of all survey reports for facilities operating under a CIA to the monitor and to OIG during the term of the CIA.
- OIG and Nursing Home Compare could include on their websites
- Information about how the public can submit concerns about a particular facility under a CIA to the monitor for that company/facility and to the OIG
- Any enforcement action taken under the CIA
- Reports about the company’s compliance with the CIA could be made publicly available on the OIG website and Nursing Home Compare.
- OIG’s website could continue to list health care providers that had CIAs, even after the conclusion of the term of the CIA.
The Center has an additional concern about the OIG’s exercise of its exclusion authority. The Government presumably chooses not to exclude large nursing home chains with multiple facilities because of the difficulty and complexity of taking over many facilities at one time – the chains are seen as “too big to fail.” However, the Center questions whether principals of facilities or chains that are under CIAs could be personally excluded from federal payment programs, under the reasoning of the Department of Justice memorandum “Individual Accountability for Corporate Wrongdoing” (Sep. 9, 2015).
Nursing home residents and their advocates want residents to receive the care and services they need and are promised by federal law. Having timely and meaningful information about facilities under CIAs could better enable them to choose and monitor facilities.
May 7, 2018 – T. Edelman
 OIG,” Corporate Integrity Agreements,” https://oig.hhs.gov/compliance/corporate-integrity-agreements/index.asp.
 The OIG has authority to exclude a provider from federal health care programs for many reasons, including the provision of services of “a quality which fails to meet professionally recognized standards of care.” 42 U.S.C. §1320a-7(b)(6)(B). See Office of Inspector General, “Quality of Care Corporate Integrity Agreements,” https://oig.hhs.gov/compliance/corporate-integrity-agreements/quality-of-care.asp.
 74 Fed. Reg. 52964, 52965 9Oct. 15, 2009), OIG: “Notice for Potential Monitors for Quality-of-Care Corporate Integrity Agreements.”
 U.S. Department of Justice, “Extendicare Health Services Inc. Agrees to Pay $38 Million to Settle False Claims Act allegations Relating to the Provision of Substandard Nursing Care and Medically Unnecessary Rehabilitation Therapy; Company Also Required to Enter Five Year Chain-wide Corporate Integrity Agreement” (Oct. 10, 2014), https://www.justice.gov/opa/pr/extendicare-health-services-inc-agrees-pay-38-million-settle-false-claims-act-allegations.
 https://oig.hhs.gov/fraud/cia/agreements/Extendicare_10032014.pdf. p. 27, Section III.E.6. c. I, ii, iv, viii
 Id., p. 33, Section III.H.
 Id. p. 46, Section X.
 Id. p. 49, Section X.E.
 OIG, Nursing Home Corporations under Quality of Care Corporate Integrity Agreements, OEI-06-06-00570 (Apr. 2009), https://oig.hhs.gov/oei/reports/oei-06-06-00570.pdf.
 Id. Appendix D, Table 9, p. 44.
 https://www.justice.gov/archives/dag/file/769036/download. The memorandum, by Deputy Attorney General Sally Quillian Yates, states, “One of the most effective ways to combat corporate misconduct is by seeking accountability from the individuals who perpetrated the wrongdoing.” In cases of criminal and civil corporate wrongdoing, Yates set out six steps, including “(4) absent extraordinary circumstances or approved departmental policy, the Department will not release culpable individuals from civil or criminal liability when resolving a matter with a corporation.”