The following rules apply when CMS and the State disagree over findings of noncompliance or application of remedies in a non-State operated NF or dually participating facility:

(a) Disagreement over whether facility has met requirements.

(1) The State's finding of noncompliance takes precedence when—

(i) CMS finds that a NF or a dually participating facility is in substantial compliance with the participation requirements; and

(ii) The State finds that a NF or dually participating facility has not achieved substantial compliance.

(2) CMS's findings of noncompliance take precedence when—

(i) CMS finds that a NF or a dually participating facility has not achieved substantial compliance; and

(ii) The State finds that a NF or a dually participating facility is in substantial compliance with the participation requirements.

(3) When CMS's survey findings take precedence, CMS may—

(i) Impose any of the alternative remedies specified in §488.406;

(ii) Terminate the provider agreement subject to the applicable conditions of §488.450; and

(iii) Stop FFP to the State for a NF.

(b) Disagreement over decision to terminate.

(1) CMS's decision to terminate the participation of a facility takes precedence when—

(i) Both CMS and the State find that the facility has not achieved substantial compliance; and

(ii) CMS, but not the State, finds that the facility's participation should be terminated. CMS will permit continuation of payment during the period prior to the effective date of termination not to exceed 6 months, if the applicable conditions of §488.450 are met.

(2) The State's decision to terminate a facility's participation and the procedures for appealing such termination, as specified in §431.153(c) of this chapter, takes precedence when—

(i) The State, but not CMS, finds that a NF's participation should be terminated; and

(ii) The State's effective date for the termination of the NF's provider agreement is no later than 6 months after the last day of survey.

(c) Disagreement over timing of termination of facility. The State's timing of termination takes precedence if it does not occur later than 6 months after the last day of the survey when both CMS and the State find that—

(1) A facility is not in substantial compliance; and

(2) The facility's participation should be terminated.

(d) Disagreement over remedies.

(1) When CMS or the State, but not both, establishes one or more remedies, in addition to or as an alternative to termination, the additional or alternative remedies will also apply when—

(i) Both CMS and the State find that a facility has not achieved substantial compliance; and

(ii) Both CMS and the State find that no immediate jeopardy exists.

(2) Overlap of remedies. When CMS and the State establish one or more remedies, in addition to or as an alternative to termination, only the CMS remedies apply when both CMS and the State find that a facility has not achieved substantial compliance.

(e) Regardless of whether CMS's or the State's decision controls, only one noncompliance and enforcement decision is applied to the Medicaid agreement, and for a dually participating facility, that same decision will apply to the Medicare agreement.