The systems improvement agreement is a new tool available to the Centers for Medicare & Medicaid Services to aid compliance with the conditions of participation in federal programs. Hospitals can request to enter into an SIA with the Centers if they are facing termination for immediate jeopardy findings that have not been fixed in the short time permitted.
SIAs give hospitals more leeway in fixing immediate jeopardy problems and avoid closure — a benefit to hospitals struggling with compliance. But their availability may lead to more findings of immediate jeopardy.
CMS is legally required to ensure that care provided to Medicare and Medicaid recipients meets standards for patient safety, care provision and respect for patients' rights. These standards are promulgated in the Code of Federal Regulations as the Conditions of Participation — minimum standards for hospitals that receive reimbursement through these federal programs. Enforcement of the CoPs is monitored through state surveys, including validation (post-accreditation) surveys and focused investigations in response to complaints or grievances.
Although adherence to all standards is expected, CMS defines certain lapses in adherence to the CoPs as particularly hazardous, creating an immediate jeopardy situation in which there is an immediate threat to safe patient care (see Conditions of Participation, State Operations Manual, Appendix Q, "Guidelines for Determining Immediate Jeopardy"). A notification of an immediate jeopardy finding requires a hospital to correct the problem (through submission of a "credible allegation of compliance" or corrective action plan) within 23 days of notice, or risk termination from Medicare and Medicaid participation.
The corrective action plan must be accepted by CMS, and state surveyors must return to validate that the immediate jeopardy threat has been abated. If it has not been abated, CMS is expected to terminate the hospital's participation in Medicare. Termination is a death sentence for almost any institution because a significant portion of revenue is CMS-derived, and most commercial payers mandate good standing with CMS as a minimal condition for plan participation.
Termination is a drastic step, but it has been taken at several hospitals due to unresolved immediate jeopardy concerns. The vast majority of terminated hospitals close because they cannot be sustained with the loss of Medicare funding. (See "Hospital Near-Death Experience" for an exception in a terminated community hospital's reinstatement case history.) When a hospital closes, the community suffers from the loss of critical health services, layoffs and less economic vitality. Because of these effects on the community, closing a hospital is an undesirable way to safeguard patients.
A Tool for Required Improvement
The SIA is CMS's new tool of choice. SIAs have been used in long-term care for some time but only recently are coming to the hospital compliance scene. The SIA is a negotiated agreement between CMS (usually the regional office) and a hospital in which CMS agrees to delay or refrain from termination in exchange for the hospital's commitment to correct all deficiencies within a defined period, usually a year. Additionally, the SIA requires that the hospital agree to use an outside consulting company for periodic monitoring of progress, assistance in correcting deficiencies, and reporting monthly progress to CMS. Although hospitals select their consultants, the consultants also must be approved by CMS.
The goal of the SIA is remediation of CoP compliance deficiencies. Through the periodic reporting (monthly, in cases to date), the regional CMS office can monitor progress and determine when the initial concerns that gave rise to the SIA have been addressed sufficiently. The culminating event is a survey by CMS surveyors to assure full CoP compliance, which terminates the SIA.
SIAs on the Rise
All indications are that CMS's use of SIAs will increase. In 2009, no hospitals reported using SIAs; in 2012 there have been half a dozen. And CMS has awarded a software development contract for a national SIA tracking and monitoring system. Clearly, such a system is required only if a volume increase in SIA implementations is anticipated.
Another indication that SIAs are growing in popularity is the CMS inspector general's report from 2011, which contains considerable commentary about the failure to assure sustainability of corrective actions after immediate jeopardy sanctions have been addressed successfully. This finding was acknowledged and even endorsed by then CMS leader Donald Berwick, M.D. Berwick asserted a renewed commitment by CMS to ensuring sustainability of improvements in participating organizations' compliance with CoPs. The tool for sustainable change would appear to be the longer-term implementation of oversight through an SIA as opposed to the more limited and focused response to immediate jeopardy findings.
Is this good news or bad? Anything that promotes compliance with minimum standards of safe care is a good thing for patients and their families. An alternative to termination is good for hospitals struggling to achieve consistent compliance and for their communities. However, the availability of a more reasonable alternative may mean that more immediate jeopardy findings are made.
The publicity, cost, degree of oversight and length of time required to fulfill the obligations of an SIA should motivate hospital leaders to avoid findings of noncompliance that result in the need for an SIA through proactive compliance efforts. Ensuring compliance is less costly than having to address it in a very public light.
Clearly, avoiding an immediate jeopardy finding and an SIA is the best way to go. Prevention is cheaper than the cure.
Kate Fenner, R.N., Ph.D., is the managing director of Compass Clinical Consulting in Cincinnati.