Arent Fox LLP
01/08/2025 | News release | Distributed by Public on 01/08/2025 12:09
At Long Last, the OIG Issues Its Compliance Program Guidance for Nursing Facilities
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The Nursing Facility ICPG outlines risk areas for nursing facilities, identifies recommendations and practical considerations for mitigating those risks, and offers other important information for nursing facilities to consider when they are reviewing their compliance programs. The Nursing Facility ICPG, which also may be instructive to third parties that do business with or provide financing to nursing facilities, should be used together with the OIG's General Compliance Program Guidance (GCPG).
What Is the Nursing Facility ICPG?
The OIG issued the Nursing Facility ICPG to help nursing facilities identify their own risks and implement an effective compliance program to reduce those risks. The Nursing Facility ICPG is an industry-specific resource and follows the GCPG issued by the OIG in November 2023. As mentioned in our previous article, the GCPG applies to all individuals and entities involved in the health care industry and largely tracks guidance previously issued by the OIG (e.g., focusing on the framework of the seven elements of an effective compliance program). The GCPG includes additional details on the OIG's specific expectations for how health care stakeholders can meet each element. Nursing facilities should use the Nursing Facility ICPG together with the GCPG when reviewing their compliance programs, along with any other applicable compliance resources, such as the compliance program guidelines issued by the US Department of Justice (DOJ).
Who Should Use the Nursing Facility ICPG?
The Nursing Facility ICPG was created for (1) skilled nursing facilities (SNFs) that meet the requirements of Section 1819 of the Social Security Act (the Act) (42 U.S.C. § 1395i-3) (i.e., facilities primarily engaged in skilled nursing care and related services or rehabilitation services for the rehabilitation of injured, disabled, or sick persons, and that meet certain other requirements), (2) a nursing facility that meets the requirements of Section 1919 of the Act (42 U.S.C. § 1396r) (i.e., facilities primarily engaged in skilled nursing care and related services, rehabilitation services for the rehabilitation of injured, disabled, or sick persons, or that on a regular basis, provide health-related care and services to individuals requiring such services, and that meet certain other requirements), (3) a dually-certified facility, and (4) single facilities, chains, managing and operating companies, and entities that own nursing facilities.
The Nursing Facility ICPG notes that other long-term and post-acute care providers other than SNFs and nursing facilities, such as assisted living facilities, may be subject to different laws, rules, and guidelines, and may have additional risk areas to consider. The OIG still encourages those other long-term and post-acute care providers to review the Nursing Facility ICPG and to establish and maintain their own compliance programs.
The Nursing Facility ICPG also may be beneficial to third parties in evaluating existing or potential relationships with nursing facilities. Those considering providing financing to or acquiring a nursing facility may find the guidance useful in structuring compliance-related due diligence. Similarly, hospitals or other provider organizations considering strategic relationships with nursing facilities should assess relevant compliance guidance in the Nursing Facility ICGP.
Risk Areas for Nursing Facilities and Recommendations and Practical Considerations for Mitigating Those Risks
The Nursing Facility ICPG identifies four key areas of compliance risk for nursing facilities: (1) quality of care and quality of life; (2) Medicare and Medicaid billing requirements; (3) the federal anti-kickback statute (the AKS), and (4) other risk areas such as related-party transactions, physician self-referral law, civil rights, and the Health Insurance Portability and Accountability Act (HIPAA).
1. Quality of Care and Quality of Life
The Nursing Facility ICPG emphasizes that nursing facilities are responsible under federal and state requirements for providing quality care and promoting quality of life to facility residents and that failure to do so poses a risk of fraud and abuse. If a nursing facility fails to meet its quality of care and quality of life obligations, any claims for reimbursement could be considered false. Indeed, the Nursing Facility ICPG notes that the OIG and the DOJ have increasingly used substandard quality of care as the basis for investigations and enforcement actions.
Some common risk areas for nursing facilities associated with quality of care and qualify of life concerns are: (a) staffing levels, shortages, and competencies; (b) appropriate resident care plans and resident activities; (c) challenges due to demographic changes in the resident profile, higher resident acuity levels, and behavioral health issues; (d) medication management; (e) appropriate use of medications; and (f) resident safety, including resident abuse and neglect, staff screening, emergency preparedness and life safety, infection control, and facility-initiated discharges.
In addition to detailed recommendations for mitigating each of these common risk areas, the Nursing Facility ICPG indicates that for all of these risk areas, nursing facilities should ensure regular, specific and comprehensive training for all members of the facility; consistently, proactively, and continually assess the facility's compliance with Medicare and Medicaid requirements, and not just recent survey deficiencies; review OIG resources for recommendations about integrating compliance and quality oversight; and monitor the OIG's nursing home featured topics page.
2. Medicare and Medicaid Billing Requirements
The Nursing Facility ICPG states that ensuring compliance with Medicare and Medicaid billing requirements should be a core function of compliance programs for nursing facilities. Nursing facilities should be proactive and conduct regular reviews and perform regular internal billing and coding audits to ensure billing and coding practices are current and accurate.
Some risk areas related to Medicare and Medicaid billing requirements for nursing facilities include: (a) the SNF prospective payment system; (b) value-based payment models and programs; (c) Medicare Advantage and Medicaid Managed Care; (d) Medicare Part D; and (e) Medicare health enrollment for nursing facility residents, including inappropriate steering to a particular plan or enrollment decision. The OIG provides more information for these risk areas in its Nursing Facility ICPG Supplement: Reimbursement Overview.
3. The AKS
Nursing facilities must comply with the AKS. The Nursing Facility ICPG highlights several risk areas related to the AKS for nursing facilities including: (a) free (or below fair market value) goods and services; (b) discounts, including price reductions and swapping; (c) arrangements for services and supplies, in particular physician and nonphysician practitioner services and services and supplies from outside suppliers and providers; (d) arrangements with long-term care pharmacies, consultant pharmacists, hospitals, and hospices; (e) care coordination and value-based care arrangements; and (f) joint ventures.
The Nursing Facility ICPG provides some recommendations for mitigating fraud under the AKS, such as structuring arrangements to meet a safe harbor whenever possible; ensuring there is a legitimate need for the services or supplies, the nursing facility has not engaged more providers than necessary for legitimate business purposes, services or supplies are actually provided, compensation is commensurate with the skill level and experience reasonably necessary to perform the services, compensation is fair market value, and the arrangement is not related in any manner to the volume or value of referrals; documenting the factors that mitigate the risk of fraud and abuse; maintaining contemporaneous documentation of the arrangement such as time logs; monitoring the arrangement to ensure it continues to comply with the AKS; and implementing recommendations from the GCPG related to financial arrangements tracking.
4. Other Risk Areas
The Nursing Facility ICPG also includes information on other risk areas for nursing facilities, including related-party transactions; the physician self-referral law; anti-supplementation; HIPAA privacy, security, and breach notification rules; and civil rights.
Other Important Information the OIG Believes Nursing Facilities Should Consider
The Nursing Facility ICPG provides that, for nursing facilities that are part of a system or chain, the highest level of the business entity or management organization should develop and maintain compliance programs and responsibility for corporate compliance should be assigned to a compliance officer at the highest level of the business. Similarly, the OIG recommends that governing bodies, their members, owners, investors, operators, and executive leadership (Responsible Individuals) demonstrate their commitment to corporate-level compliance and that investors should continuously question whether their operating and management companies are complying with their compliance programs. Accordingly, Responsible Individuals should have an oversight role and demonstrate a formal commitment to compliance.
The Nursing Facility ICPG also recommends that the compliance officer have sufficient experience with managing compliance programs and with quality assurance; the Compliance Committee should support collaboration and alignment between compliance and quality functions; nursing facilities should have competency-based training to ensure staff are trained to deliver high-quality care and promote quality of life; nursing facilities should develop and implement a centralized annual risk assessment, internal review, and monitoring process; and nursing facilities should create processes to ensure the integrity and accuracy of federal and state reporting.
Are the Compliance Guidelines Mandatory?
No, the compliance guidelines set forth in the Nursing Facility ICPG are not mandatory and the OIG emphasizes that the Nursing Facility ICPG and the GCPG are voluntary, nonbinding guidance and are not a one-size-fits-all resource. However, because nursing facilities are required as a requirement of participation under Medicare and Medicaid to maintain a compliance program, the Nursing Facility ICPG and the GCPG can be used by nursing facilities in developing programs to meet such requirement.
Next Steps
All nursing facilities and other stakeholders may want to review their compliance program in light of the new Nursing Facility ICPG and the GCPG. Although the guidance is voluntary, nursing facilities should still review and consider the guidance to ensure "best practices" and because investors and lenders may require nursing facilities to maintain compliance programs that meet these standards. Similarly, third parties evaluating existing or prospective relationships with nursing facilities may find the Nursing Facility ICGP helpful in undertaking due diligence, structuring relationships, and assessing nursing facility compliance on an ongoing basis.
For any questions related to the Nursing Facility ICPG or the GCPG, please contact Michele, Anne, Jill, or another member of ArentFox Schiff's Health Care team.