Kusserow’s Corner: Time Running Out for SNF Compliance Programs

The fact is most skilled nursing facilities have not developed effectiveness compliance programs.  This is in spite of the fact that the HHS Office of Inspector General (OIG) has issued Compliance Program Guidance for Nursing Facilities going back to March 2000.  It further provided Supplemental Compliance Program Guidance in September 2008.  For many such organizations, the costs of hiring an experienced compliance officer and developing their compliance program has been viewed as cost prohibitive; and as such they have delayed making the commitment, but time may be running out.

The Patient Protection and Affordable Care Act (PPACA) (P.L. 111-148) (specifically sections 6102 and 6401) is a game changer.  The Act mandates that skilled nursing facilities (SNFs) and nursing facilities (NFs), as a condition of enrollment, establish and operate “a compliance and ethics program that is effective in preventing and detecting criminal, civil, and administrative violations [of law] and in promoting quality of care …” (42 USC 1128I).   The law states that within 36 months of enactment “a facility shall …have in operation a compliance and ethics program ….”  The Secretary of HHS was directed to issue regulations “for an effective compliance and ethics program for operating organizations, which may include a model compliance program.”  This requirement has been delegated by the Secretary to CMS.

The date for required promulgation of regulations for SNF/NF compliance programs was March 23, 2012; however this has yet to be done. However, it is becoming increasingly perilous for SNFs/NFs to continue avoiding taking steps to implement a program.  Any such organization that may come to the attention of the enforcement agencies will have a difficult time explaining why after more than a decade they have not taken steps to build a compliance program designed to avoid violating applicable laws and regulations.

What should SNF/NF organizations do?  The following are some thoughts:

  1. Expect that CMS-mandated compliance programs will build off of the existing voluntarily guidelines issued by the OIG.  Therefore, while awaiting final action in the form of regulations by CMS for mandated compliance programs, SNFs and NFs should still look to the OIG Compliance Program Guidance.  This is particularly important for those features that are currently part of the conditions of participation in Medicare/Medicaid, such as sanction screening of all employees and others engaged in the work place.  With the extremely high turnover in SNFs and NFs, not performing such screening is perilous, in that any portion of claims including any excluded person would be considered false and fraudulent.
  2. For most SNFs/NFs that are a single facility, hiring an experienced full-time compliance officer may be far more than is needed.  On the other hand, designating an existing professional to act as a compliance officer as a secondary duty is not a good idea and seldom works satisfactorily.  Invariably, the primary duties drive out time for the compliance responsibilities; and, quite frankly, healthcare compliance is ever-changing, complex, and challenging.  One possible solution is to consider using an expert as a Designated Compliance Officer (DCO) to quickly and efficiently build and manage the program. The OIG in its Compliance Program documents specifically recognizes that, “For those companies that have limited resources, the compliance function could be outsourced to an expert in compliance.” 

Richard P. Kusserow served as DHHS Inspector General for 11 years.  He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters.  His firm has a number of experienced health care consultants that act as both Designated and Interim Compliance Officers.  The SM sister company, Compliance Resource Center (CRC), provides a wide range of compliance tools, including sanction-screening. 

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Copyright © 2013 Strategic Management Services, LLC.  Published with permission.