What Is Involved With a Healthcare CMS Inspection?

Amber Ratcliffe
Professionals reviewing reports to prepare for a healthcare CMS inspection

A healthcare CMS inspection, or survey, evaluates providers’ adherence to state/federal regulations and guidelines at both the individual and organizational levels. These expectations help to ensure patient safety and quality of care within CMS’s state- and federally-funded programs. 

To help you navigate inspection preparations, let’s begin with some resources on the scope of a CMS inspection and why passing is so important — a follow-up post will dive deeper into checklists and reporting. 


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What Is the Scope of a CMS Inspection?

The scope of a CMS survey or inspection varies depending on each healthcare organization’s funded program/s. Additionally, CMS’s guidelines, or Conditions of Participation/Conditions for Coverage (CoPs/CfCs), are specific to each type of covered health care facility, along with regulations pertaining to each organization’s state and locality. Below are a variety of resource links to refer to for more information as you equip yourself with the knowledge needed to pass a survey. 

Medicare (Federal) and Medicaid (State) Programs:

Types of CMS Covered Facilities:

Why Is Passing a Healthcare CMS Inspection Important?

Certification. If you want to obtain or retain CMS certification and reimbursement for services provided to patients with a Medicare/Medicaid health plan, you must comply with the Health Insurance Portability and Accountability Act of 1996 (HIPAA) rules and regulations. If you receive reimbursements from Medicare/Medicaid, you are considered a “covered entity.” Examples of covered entities include health plans, clearinghouses, and certain health care providers including but not limited to: doctors, clinics, psychologists, dentists, chiropractors, nursing homes, and pharmacies.

Accreditation. There are several accrediting organizations that require facilities to meet or exceed Medicaid and Medicare guidelines. These include bodies such as the Accreditation Association for Ambulatory Health Care (AAAHC), the National Committee for Quality Assurance (NCQA), and URAC. The Joint Commission (TJC) is another national accreditation organization, whereby a healthcare facility that has met Medicare’s requirements and passed a survey can achieve “deemed status.” 

Compliance. Organizational compliance is essential to any healthcare facility’s day-to-day operations. Compliance isn’t just about meeting state or federal requirements; it’s about maintaining clean and easy-to-access policies, incident reports, safety plans, HR documents, and more. A well-oiled compliance program with proper documentation not only helps you prepare for a healthcare CMS inspection, but also supports patient and staff safety, enabling a healthy work environment and the highest quality of care. 

What Are the Consequences of Noncompliance With CMS Guidelines?

Contractual. CMS may terminate an agreement with a provider of services if it is determined that the provider: 

  • Is not compliant with the terms of the agreement, the provisions of title XVIII of the Social Security Act, or other known regulations 
  • Has failed to produce the necessary documentation needed to determine whether payments are or were due and their amounts
  • Refuses to permit examination of fiscal and other records (including medical records) necessary for the verification of claiming payment under Medicare
  • Refuses to permit photocopying of any records or other information necessary to verify compliance with CMS participation requirements

Financial. Civil Monetary Penalties (CMPs) are a possible consequence of not abiding by contract rules with Medicare and Medicaid. These fines can be costly, ultimately reducing your overall revenue and acting as a detriment to your financial goals.   

Reputational. Issues of noncompliance and penalties as a result of a failed survey are generally made public knowledge through enforcement actions. CMS wants the industry and public to be fully informed. Transparency is a primary pillar of CMS in order to encourage and promote safe and ethical patient care. 

Legal. There are a number of laws built to fight against Medicare/Medicaid noncompliance and fraud. These transgressions can include receipt of governmental funds for reimbursement of services that do not qualify or were not rendered, amongst others. Breaking the law can inevitably result in not only fines, but hefty legal burdens (time and money), and even jail time. 

Next: What You Need To Stay Prepared

After you understand the scope of a healthcare CMS inspection, it’s time to review your documentation and data via tracking and reporting. Whether you’re preparing for a survey, presenting to your board, or conducting an internal audit, compiling the right reports is essential. Part two of this blog post provides specific tips, checklists, and which reports you need to be survey-ready.