Legal Alert

CMS to Audit Nursing Homes' Overuse of Antipsychotics

January 26, 2023


CMS has announced it is engaging in a new series of audits intended to address the agency’s concern that nursing homes could be miscoding schizophrenia to reduce their reported rates of antipsychotic use, and that as a result a facility’s score under the government’s Five-Star Quality Rating System could be inaccurate.

The Upshot

  • CMS is focusing on the overcoding of schizophrenia, since patients diagnosed with schizophrenia are not included in a metric that measures a nursing home’s rate of antipsychotic medications.
  • Nursing homes found to have inaccurate coding or insufficient documentation of schizophrenia will have their Five-Star Quality Rating System ratings reduced.
  • Facilities that are selected for an audit and know of possible deficiencies have the opportunity to avoid the audit process by self-disclosing relevant errors and implementing plans of correction.

The Bottom Line

Nursing home facilities selected for an audit will receive a letter from CMS, and should consult with a skilled health care attorney to better understand their compliance and documentation obligations.

The federal Centers for Medicare & Medicaid Services (CMS) announced that the agency will immediately begin conducting targeted off-site audits related to nursing home documentation, assessment, and coding of schizophrenia diagnoses. Where deficiencies are found, CMS intends to adjust nursing homes’ scores in the Five-Star Quality Rating System, which is part of the agency’s Nursing Home Care Compare Website and provides public information related to the quality of nursing homes.

The new audits are part of the Biden Administration’s ongoing effort to improve nursing home safety and quality of care. One objective of this initiative is to reinforce safeguards against unnecessary treatment and medication, including a specific new effort to identify problematic schizophrenia diagnoses and reduce potentially inappropriate use of antipsychotic medications. CMS previously determined that miscoding of schizophrenia increases the likelihood that a nursing home will subject residents to poor overall care and, more specifically, unnecessary antipsychotic medications.

One area that the Five-Star Quality Rating System measures is the percentage of long-stay residents who receive antipsychotic drugs (the lower the percentage, the better). This benchmark, however, excludes patients receiving antipsychotics who have been diagnosed with certain neurological conditions including schizophrenia, Huntington’s disease, or Tourette syndrome. CMS is concerned that some nursing homes may have masked their true rates of antipsychotic drug use and thus artificially inflated their quality ratings by overcoding schizophrenia.

CMS intends to significantly adjust the quality rating of nursing homes it finds have inaccurate coding or insufficient documentation of schizophrenia. Specifically, CMS will reduce a nursing home’s overall quality measure and long-stay quality measure ratings to one star for six months, which will in turn drop the facility’s overall star rating by one star. In addition, the facility’s short-stay quality measure rating will be suppressed for six months, and the facility’s long-stay antipsychotic quality measure will be suppressed for 12 months.

Nursing homes selected for audit will receive a letter from CMS explaining the audit process. Importantly, CMS will offer nursing homes an opportunity to avoid the audit process by self-disclosing relevant errors and implementing plans of correction. CMS will consider lesser penalties related to quality ratings for nursing homes that disclose miscoding issues prior to CMS audit.

Ballard Spahr attorneys in the firm’s Health Care Group are available to assist clients in complying with CMS documentation regulations and help nursing homes that are subject to CMS audits.

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