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SNFs – Are You Prepared for Mandatory Compliance?

Although compliance programs for skilled nursing facilities (SNFs) are not a new concept, the Patient Protection and Affordable Care Act, enacted March 23, 2010, requires nursing facilities to have a compliance and ethics program in operation by March 23, 2013, that effectively prevents and detects criminal, civil and administrative violations under the Social Security Act of 1935 and promotes quality of health care.

The act requires the following program components:

  • Compliance standards and procedures must be adopted and followed by employees and other agents who are reasonably capable of reducing the prospect of criminal, civil and administrative violations under the act.
  • Specific individuals with authority in the organization must be assigned overall responsibility to oversee compliance with the standards and procedures and have sufficient resources to assure compliance.
  • The organization must exercise due care to ensure the above authority is not delegated to an individual with a propensity to engage in criminal, civil and administrative violations under the act.
  • The organization must take steps to communicate and educate its employees and agents about the compliance program.
  • The organization must take reasonable steps to achieve compliance with its standards by using effective monitoring and auditing systems and must have in place and publicize a reporting system for employees and agents to report violations without fear of retribution.
  • The standards and procedures must be consistently enforced.
  • In the event an offense is detected, the organization must take all reasonable steps to respond appropriately and  prevent further similar offenses.
  • The organization must periodically reassess the compliance program and make changes necessary to reflect changes within the organization.

Is Your Program Effective?

Organizations that have implemented a compliance program will need to take a hard look at their program to determine if it is effective. In other words, does it include the required elements as outlined above? Organizations will need to change the mindset of having a compliance plan, which may include good written policies and procedures, and expand it to having an ongoing system and culture of compliance, ethical business practices and corporate conduct. When you “kick the tires” of your compliance program, are you identifying areas of vulnerability, finding problems and responding appropriately?

What Is the Silver Lining?

Organizations with an effective compliance program could realize the following benefits:

  • Ability to demonstrate to employees and the community the organization’s commitment to ethical business practices and corporate conduct
  • Ability to accurately assess employee behavior and identify and prevent unlawful or unethical behavior
  • Improve quality of care and efficiency of operation
  • Avoid overpayment or “upcoding” of claims
  • Potentially enhanced revenues by identifying underpayment situations
  • Improve internal communications and encourage reporting of potential compliance problems or fraudulent behavior
  • Reduce exposure to civil damages, penalties, criminal sanctions and administrative remedies
  • Demonstrate to other referral partners, i.e., hospitals, the organization’s commitment to compliance and quality of care, including reduction of hospital readmissions (This can increase referrals and position the organization to be a quality partner in an Accountable Care Organization.)

Is There Additional Guidance?

Over the years, the Office of Inspector General (OIG) has provided guidance for compliance programs for nursing facilities, including the following:

2000 Compliance Program Guidance for Nursing Facilities

2008 Supplemental Compliance Program Guidance for Nursing Facilities

In addition, the Secretary of Health and Human Services, working jointly with the OIG, was directed to promulgate regulations for effective compliance and ethics programs by March 23, 2012, and that such regulations may contain a model compliance program. To date, these regulations and guidance have not been published.

How Can BKD Help?

BKD consultants can assist you in developing and implementing an effective compliance program, including:

  • Program review and design
  • Risk assessments
  • Training and education
  • Compliance assessments—clinical documentation
  • Compliance assessments—billing

For more information and assistance with compliance and ethics programs for SNFs, contact your BKD advisor.

This post was written by: and

Brian, a partner with BKD National Health Care Group, has over 20 years of experience providing audit and consulting services for long-term care facilities. He assists clients with Medicare and Medicaid reimbursement consulting, including cost report preparation, review and analysis, rate component analysis and strategic planning.

Joe is a partner with more than 20 years of experience serving health care clients; he serves as the engagement executive for a large number of hospital, physician and long-term care facility clients. Joe provides financial statement audit services, Medicare and Medicaid consulting services and corporate integrity services.

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Recent Comment

  • Karen Vance says:
    This would be under §484.18 of the Conditions of Participation describing regulations for the Plan of Care. Below is the Standard that addresses your issue: "§484.18(b) - Agency professional staff promptly alert the physician to any changes that suggest a need to alter the plan of care." From the State Operations Manual (guidance for state surveyors) "The
    February 24, 2011 on Webinars

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