Compliance Programs Mandatory for Skilled Nursing Homes and Nursing Facilities in 2013

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While it seems like compliance programs have been mandatory for skilled nursing homes and nursing facilities since the late 1990s, in reality they have, up until now, only been suggested by the Office of the Inspector General (OIG).  As part of the Affordable Care Act (the Act) they have become mandatory as of March 23, 2013.  Although the Act requires the Department of Health and Human Services and the OIG to establish core elements for these compliance programs, those elements were not created by the implementation deadline.

So what is a nursing home to do?

If you are a nursing home that has a compliance program that was created in the 1990s, now is a good time to take it off the shelf and dust if off by comparing your program to model compliance programs and Corporate Integrity Agreements which have been used by the OIG.  If you are a nursing home that does not currently have a compliance program, you should get one and fast.

Model Compliance Program – Key Components and Summary of Eight Key Elements

  1. The development and distribution of written standards of conduct, as well as written policies and procedures that promote the nursing home’s commitment to compliance (e.g., by including adherence to compliance as an element in evaluating managers and employees) and that address specific areas of potential fraud, such as claims development and submission processes, code gaming and financial relationships with physicians and other healthcare professionals.
  2. The designation of a Chief Compliance Officer and other appropriate bodies, e.g., a Corporate Compliance Committee, charged with the responsibility of operating and monitoring the compliance program, and who report directly to the Chief Executive Officer and the governing body.
  3. To eliminate the employment of/hiring of service providers that have been identified by federal or state agencies as sanctioned providers, a review of the sanctioned provider databases should be performed before hiring an employee or engaging a service provider and continue monthly through the employment or engagement.  Federal sites to review are:
  4. The development and implementation of regular, effective education and training programs for all affected employees and the Board.
  5. The maintenance of a process, such as a hotline, to receive complaints, and the adoption of procedures to protect the anonymity of complainants and to protect whistleblowers from retaliation.
  6. The development of a system to respond to allegations of improper/illegal activities and the enforcement of appropriate disciplinary action against employees who have violated internal compliance policies, applicable statutes, regulations or federal healthcare program requirements.
  7. The use of audits and/or other evaluation techniques to monitor compliance and assist in the reduction of identified problem areas.
  8. The investigation and remediation of identified organizational problems and development of policies addressing the non-employment of sanctioned individuals.

Even before this mandatory requirement, many benefits of maintaining a compliance program existed:

  • Concretely demonstrate to employees and the community at large the nursing home’s strong commitment to honest and responsible corporate conduct.
  • Provide a more accurate view of employee and contractor behavior relating to fraud and abuse.
  • Improve the quality of patient care.
  • Create a centralized source for distributing information on healthcare statutes, regulations and other program directives related to fraud, abuse and related issues.
  • Develop a methodology that encourages employees to report actual and potential problems.
  • Develop procedures that allow the prompt, thorough investigation of alleged misconduct by corporate officers, managers, employees, independent contractors, physicians, other healthcare professionals and consultants.
  • Initiate immediate and appropriate corrective action.
  • Through early detection and reporting, minimize the loss to the government from false claims, and thereby reduce the nursing home’s exposure to civil damages and penalties, criminal sanctions and administrative remedies, such as Medicare program exclusion.  Historically, in certain instances, reduced penalties have been given to organizations with strong compliance programs.

Once a nursing home has a compliance program in place, it is important to use the program as it was designed and to continually update the elements of the program.  At points in time it may be worthwhile for an external third party to perform a review of the program to determine if it is operating in the manner that is anticipated.

Although it will be difficult for the government to specifically target organizations for violations of the requirement for having a compliance program until the core elements have been adopted, it is only a matter of time before those will be created, and any other compliance issues that may occur at your facility will certainly result in harsher penalties if the facility does not have a compliance program in place.

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