Notice: Draft OIG Supplemental Compliance Program Guidance For Nursing Facilities

20680 Federal Register / Vol. 73, No.
74 / Wednesday, April 16, 2008 / Notices
Control and Prevention (CDC) Office of the Director, CDC, 1600 Clifton 1. Electronically. You may submit
announces the aforementioned meeting: Road, NE., Mailstop E21, Atlanta, GA 30333, comments electronically on specific
Telephone (404) 498–1194. recommendations and suggestions
Time and Date: 1 p.m.–2:30 p.m., May 21, The Director, Management Analysis and
2008 (Closed). Services Office, has been delegated the
through the Federal eRulemaking Portal
Place: Teleconference. authority to sign Federal Register notices at http://www.regulations.gov.
Status: The meeting will be closed to the pertaining to announcements of meetings and (Attachments should be in Microsoft
public in accordance with provisions set other committee management activities, for Word, if possible.)
forth in Section 552b(c)(4) and (6), Title 5 both CDC and the Agency for Toxic 2. By regular, express, or overnight
U.S.C., and the Determination of the Director, Substances and Disease Registry. mail. You may send written comments
Management Analysis and Services Office, to the following address: Office of
CDC, pursuant to Public Law 92–463. Dated: April 9, 2008.
Matters To Be Discussed: The meeting will Elaine L. Baker, Inspector General, Department of Health
include the review, discussion, and and Human Services, Attention: OIG–
Director, Management Analysis and Services
evaluation of ‘‘Cardiometabolic Risk Factors Office, Centers for Disease Control and 126–PN, Room 5246, Cohen Building,
among Women of Reproductive Age, PEP Prevention. 330 Independence Avenue, SW.,
2008–R–07.’’
[FR Doc. E8–8164 Filed 4–15–08; 8:45 am]
Washington, DC 20201. Please allow
For Further Information Contact: Linda sufficient time for mailed comments to
Shelton, Program Specialist, Coordinating BILLING CODE 4163–18–P
be received before the close of the
Center for Health and Information Service, comment period.
Office of the Director, CDC, 1600 Clifton 3. By hand or courier. If you prefer,
Road, NE., Mailstop E21, Atlanta, GA 30333, DEPARTMENT OF HEALTH AND
Telephone (404) 498–1194. HUMAN SERVICES you may deliver, by hand or courier,
The Director, Management Analysis and your written comments before the close
Services Office, has been delegated the Office of Inspector General of the comment period to Office of
authority to sign Federal Register notices Inspector General, Department of Health
pertaining to announcements of meetings and Draft OIG Supplemental Compliance and Human Services, Cohen Building,
other committee management activities, for Program Guidance for Nursing 330 Independence Avenue, SW.,
both CDC and the Agency for Toxic Facilities Washington, DC 20201. Because access
Substances and Disease Registry. to the interior of the Cohen Building is
Dated: April 9, 2008. AGENCY: Office of Inspector General not readily available to persons without
(OIG), HHS. Federal Government identification,
Elaine L. Baker,
ACTION: Proposed notice. commenters are encouraged to schedule
Director, Management Analysis and Services
Office, Centers for Disease Control and SUMMARY: This Federal Register their delivery with one of our staff
Prevention. proposed notice seeks the comments of members at (202) 358–3141.
[FR Doc. E8–8133 Filed 4–15–08; 8:45 am] Inspection of Public Comments: All
interested parties on a draft
comments received before the end of the
BILLING CODE 4163–18–P supplemental compliance program
comment period are available for
guidance (CPG) for nursing facilities
viewing by the public. All comments
developed by the Office of Inspector
DEPARTMENT OF HEALTH AND will be posted on http://
General (OIG). When OIG publishes the
HUMAN SERVICES www.regulations.gov as soon as possible
final version of this guidance, it will
after they have been received.
Centers for Disease Control and supplement OIG’s prior CPG for nursing Comments received timely will also be
Prevention facilities issued in 2000. This proposed available for public inspection as they
notice contains new compliance are received at Office of Inspector
Disease, Disability, and Injury recommendations and an expanded General, Department of Health and
Prevention and Control Special discussion of risk areas. The proposed Human Services, Cohen Building, 330
Emphasis Panel (SEP): Economic notice takes into account Medicare and Independence Avenue, SW.,
Incentives for Weight Loss in the Work Medicaid nursing facility payment Washington, DC 20201, Monday
Place—A Pilot Study, Potential systems and regulations, evolving through Friday of each week from 8:30
Extramural Project (PEP) 2008–R–26 industry practices, current enforcement a.m. to 4 p.m. To schedule an
priorities (including the Government’s appointment to view public comments,
In accordance with Section 10(a)(2) of heightened focus on quality of care),
the Federal Advisory Committee Act phone (202) 619–0335.
and lessons learned in the area of
(Pub. L. 92–463), the Centers for Disease FOR FURTHER INFORMATION CONTACT:
nursing facility compliance. When
Control and Prevention (CDC) Amanda Walker, Associate Counsel,
published, the final supplemental CPG Office of Counsel to the Inspector
announces the aforementioned meeting. will provide voluntary guidelines to General, (202) 619–0335; or Catherine
Time and Date: 1 p.m.–2 p.m., May 16, assist nursing facilities in identifying Hess, Senior Counsel, Office of Counsel
2008 (Closed). significant risk areas and in evaluating
Place: Teleconference. to the Inspector General, (202) 619–
and, as necessary, refining ongoing 1306.
Status: The meeting will be closed to the compliance efforts.
public in accordance with provisions set Background
forth in Section 552b(c)(4) and (6), Title 5 DATES: To ensure consideration,
U.S.C., and the Determination of the Director, comments must be delivered to the Beginning in 1998, OIG embarked on
Management Analysis and Services Office, address provided below by no later than a major initiative to engage the private
CDC, pursuant to Public Law 92–463. 5 p.m. on June 2, 2008. health care community in preventing
Matters To Be Discussed: The meeting will ADDRESSES: When commenting, please the submission of erroneous claims and
include the review, discussion, and refer to file code OIG–126–PN. Because in combating fraud and abuse in the
jlentini on PROD1PC65 with NOTICES
evaluation of ‘‘Economic Incentives for

Weight Loss in the Work Place—A Pilot
of staff and resource limitations, we Federal health care programs through
Study, PEP 2008–R–26.’’ cannot accept comments by facsimile voluntary compliance efforts. As part of
For Further Information Contact: Linda (FAX) transmission. You may submit that initiative, OIG has developed a
Shelton, Program Specialist, Coordinating comments in one of three ways (no series of CPGs directed at the following
Center for Health and Information Service, duplicates, please): segments of the health care industry:
VerDate Aug<31>2005 19:08 Apr 15, 2008 Jkt 214001 PO 00000 Frm 00073 Fmt 4703 Sfmt 4703 E:\FR\FM\16APN1.SGM 16APN1
Federal Register / Vol. 73, No. 74 / Wednesday, April 16, 2008 / Notices 20681
hospitals; clinical laboratories; home nursing facilities.4 Specifically, we are set of guidelines that nursing facilities
health agencies; third-party billing interested in suggestions regarding should consider when developing and
companies; the durable medical whether our original recommendations implementing a new compliance
equipment, prosthetics, orthotics, and for the basic elements of a compliance program or evaluating an existing one.
supply industry; hospices; Medicare program should be updated, and, if so, We are mindful that many nursing
Advantage (formerly known as how? 5 We are also seeking suggestions facilities have already devoted
Medicare+Choice) organizations; regarding specific measures of substantial time and resources to
nursing facilities; ambulance suppliers; compliance program effectiveness compliance efforts. For those nursing
physicians; and pharmaceutical tailored to nursing facilities. For facilities with existing compliance
manufacturers.1 It is our intent that example, we are considering including programs, this document may serve as a
CPGs encourage the development and measures similar to those in the roadmap for updating or refining their
use of internal controls to monitor Supplemental Hospital CPG and would compliance plans. For facilities with
adherence to applicable statutes, like comments on the usefulness of that emerging compliance programs, this
regulations, and program requirements. approach and on the specific supplemental CPG, read in conjunction
The suggestions made in these CPGs are effectiveness questions that might be with the 2000 Nursing Facility CPG,
not mandatory, and nursing facilities included. should facilitate discussions among
should not view the CPGs as exhaustive We will review comments received facility leadership regarding the
discussions of beneficial compliance within the above-cited timeframe, inclusion of specific compliance
practices or relevant risk areas. incorporate recommendations as components and risk areas.
OIG originally published a CPG for appropriate, and prepare a final version In drafting this supplemental CPG, we
the nursing facility industry on March of the guidance for publication in the considered, among other things, the
16, 2000.2 Since that time, there have Federal Register. The final version of public comments; relevant OIG and
been significant changes in the way the guidance will also be available on Centers for Medicare & Medicaid
nursing facilities deliver, and are our Web site. Services (CMS) statutory and regulatory
reimbursed for, health care services, as authorities (including CMS’s regulations
Draft OIG Supplemental Compliance
well as significant changes in the governing long-term care facilities at 42
Program Guidance for Nursing
Federal enforcement environment and CFR part 483, CMS transmittals,
Facilities
increased concerns about quality of care program memoranda, and other
in nursing facilities. In response to these I. Introduction guidance, and the Federal fraud and
developments, and in an effort to Continuing its efforts to promote abuse statutes, together with the anti-
receive initial input on this guidance voluntary compliance programs for the kickback safe harbor regulations and
from interested parties, OIG published a health care industry, the Office of preambles); other OIG guidance (such as
notice in the Federal Register on Inspector General (OIG) of the OIG advisory opinions, special fraud
January 24, 2008 seeking stakeholder Department of Health and Human alerts, bulletins, and other public
comments.3 We received four Services (Department) publishes this documents); experience gained from
comments, primarily from trade Supplemental Compliance Program investigations conducted by OIG’s
associations, generally suggesting that Guidance (CPG) for Nursing Facilities.6 Office of Investigations, the Department
any guidance recognize flexibility and This document supplements, rather of Justice (DOJ), and the State Medicaid
‘‘scalability’’ concerns due to variations than replaces, OIG’s 2000 Nursing Fraud Control Units; and relevant
in nursing facility sizes, and Facility CPG, which addressed the reports issued by OIG’s Office of Audit
encouraging a focus on resident safety fundamentals of establishing an Services and Office of Evaluation and
and employee screening. Some effective compliance program for this Inspections. We also consulted with
comments included legislative industry. 7 CMS, DOJ, and nursing facility resident
recommendations, which are beyond Neither this supplemental CPG, nor advocates.
the authority of this office. the original 2000 Nursing Facility CPG, A. Benefits of a Compliance Program
To ensure full and meaningful input is a model compliance program. Rather,
from all interested parties, we are the two documents collectively offer a A successful compliance program
publishing this supplemental CPG in addresses the public and private sectors’
draft form with a 45-day comment 4 See e.g., 70 FR 4858, 4874 (January 31, 2005), common goals of reducing fraud and
period. We are soliciting comments on ‘‘OIG Supplemental Compliance Program Guidance abuse, enhancing health care providers’
all aspects of the draft CPG. We are for Hospitals,’’ (Supplemental Hospital CPG) operations, improving the quality of
available on our Web site at http://oig.hhs.gov/ health care services, and reducing their
particularly interested in suggestions for fraud/docs/complianceguidance/
section IV, relating to structural 012705HospSupplementalGuidance.pdf. overall cost. Meeting these goals
elements for nursing facility compliance 5 See 2000 Nursing Facility CPG, supra note 2. benefits the nursing facility industry,
programs, as well as self-assessment of 6 For purposes of convenience in this guidance, the government, and residents alike.
compliance programs’ effectiveness by the term ‘‘nursing facility’’ or ‘‘facility’’ includes a Compliance programs help nursing
skilled nursing facility (SNF) and a nursing facility facilities fulfill their legal duty to
(NF) that meet the requirements of sections 1819
1 Copies of the CPG’s are available on our Web
and 1919 of the Social Security Act (Act) (42 U.S.C. provide quality care; to refrain from
site at http://www.oig.hhs.gov/fraud/ 1395i–3, 1396r), respectively, as well as entities that submitting false or inaccurate claims or
complianceguidance.html. own or operate such facilities. Where appropriate, cost information to the Federal health
2 See 65 FR 14289 (March 16, 2000), ‘‘Publication we distinguish SNFs from NFs. While long-term care programs; and to avoid engaging in
of the OIG Compliance Program Guidance for care providers other than SNFs or NFs, such as
Nursing Facilities,’’ (2000 Nursing Facility CPG) assisted living facilities, should find this CPG other illegal practices.
available on our Web site at http://oig.hhs.gov/ useful, we recognize that they may be subject to A nursing facility may gain important
authorities/docs/cpgnf.pdf. different laws, rules, and regulations and, additional benefits by voluntarily
3 See 73 FR 4248 (January 24, 2008), ‘‘Solicitation accordingly, may have different or additional risk implementing a compliance program,
of Information and Recommendations for Revising areas and may need to adopt different compliance
strategies. We encourage all long-term care
including:
the Compliance Program Guidance for Nursing
Facilities,’’ available on our Web site at http:// providers to establish and maintain effective • Demonstrating the nursing facility’s
oig.hhs.gov/authorities/docs/08/ compliance programs. commitment to honest and responsible
CPG_Nursing_Facility_Solicitation.pdf. 7See 2000 Nursing Facility CPG, supra note 2. corporate conduct;
20682 Federal Register / Vol. 73, No. 74 / Wednesday, April 16, 2008 / Notices
• Increasing the likelihood of this guidance to its own particular beneficiaries are those who require
preventing unlawful and unethical circumstances. skilled-nursing or rehabilitation services
behavior, or identifying and correcting In section II below, for contextual and receive the services from a
such behavior at an early stage; purposes, we provide a brief overview Medicare certified SNF after a
• Encouraging employees and others of the reimbursement system. In section qualifying hospital stay of at least three
to report potential problems, which III, entitled ‘‘Fraud and Abuse Risk days.9 The PPS rate is a fixed, per diem
permits appropriate internal inquiry and Areas,’’ we present several fraud and rate.10 The maximum benefit is 100 days
corrective action and reduces the risk of abuse risk areas that are particularly per ‘‘spell of illness.’’ 11
False Claims Act lawsuits, and relevant to the nursing facility industry. The PPS per diem rate is adjusted per
administrative sanctions (e.g., penalties, Each nursing facility should carefully resident to ensure that the level of
assessments, and exclusion), as well as examine these risk areas and identify payment made for a particular resident
State actions; those that potentially affect it. Next, in reflects the resource intensity that
• Minimizing financial loss to the section IV, ‘‘Other Compliance would typically be associated with that
government and taxpayers, as well as Considerations,’’ we offer resident’s clinical condition.12 This
corresponding financial loss to the recommendations for establishing an methodology, referred to as the
nursing facility; ethical culture and for assessing and Resource Utilization Group (RUG)
• Enhancing resident satisfaction and improving an existing compliance classification system, currently in
safety through the delivery of improved program. Finally, in section V, ‘‘Self- version RUG–III, uses beneficiary
quality of care; and Reporting,’’ we set forth the actions assessment data extrapolated from the
• Improving the nursing facility’s nursing facilities should take if they Minimum Data Set (MDS) to assign
reputation for integrity and quality, discover credible evidence of beneficiaries to one of the RUG–III
increasing its market competitiveness misconduct. groups.13 The MDS is composed of data
and reputation in the community. variables for each resident, including
OIG recognizes that implementation II. Reimbursement Overview diagnoses, treatments, and an evaluation
of a compliance program may not We begin with a brief overview of of the resident’s functional status,
entirely eliminate improper or unethical Medicare and Medicaid reimbursement which are collected via a Resident
conduct from nursing facility for nursing facilities as context for the Assessment Instrument (RAI).14 Such
operations. However, an effective subsequent risk areas section. This assessments are conducted at
compliance program demonstrates a overview is intended to be a summary established intervals throughout a
nursing facility’s good faith effort to only. It does not establish or interpret resident’s stay. The resident’s RUG
comply with applicable statutes, any program rules or regulations. assignment and payment rate are then
regulations, and other Federal health Nursing facilities are advised to consult adjusted accordingly for each interval.15
care program requirements, and may the relevant program’s payment, The PPS payments cover virtually all
significantly reduce the risk of unlawful coverage, and participation rules, of the SNF’s costs for furnishing
conduct and corresponding sanctions. regulations, and guidance, which services to Medicare beneficiaries
B. Application of Compliance Program change frequently. Any questions covered under Part A. Under the
regarding payment, coverage, or ‘‘consolidated billing’’ rules, SNFs bill
Guidance
participation in the Medicare or Medicare for most of the services
Given the diversity of the nursing provided to Medicare beneficiaries in
Medicaid programs should be directed
facility industry, there is no single SNF stays covered under Part A,
to the relevant contractor, carrier, CMS
’’best’’ nursing facility compliance including items and services that
office, or State Medicaid agency.
program. OIG recognizes the outside practitioners and suppliers
complexities of the nursing facility A. Medicare provide under arrangement with the
industry and the differences among Medicare reimbursement to SNFs and SNF.16 The SNF is responsible for
facilities. Some nursing facilities are NFs depends on several factors, paying the outside practitioners and
small and may have limited resources to including the character of the facility, suppliers for these services.17 Services
devote to compliance measures; others the beneficiary’s circumstances, and the covered by this consolidated billing
are affiliated with well-established, type of items and services provided.
large, multi-facility organizations with a Generally speaking, SNFs are Medicare- or after July 1, 1998). See also CMS, ‘‘Consolidated
widely dispersed work force and Billing,’’ available on CMS’s Web site at http://
certified facilities that provide extended www.cms.hhs.gov/SNFPPS/
significant resources to devote to skilled-nursing or rehabilitative care 05_ConsolidatedBilling.asp.
compliance. under Medicare Part A. They are 9 Sections 1812(a)(2) and 1861(i) of the Act (42
Accordingly, OIG does not intend this typically reimbursed under Part A for U.S.C. 1395d(a)(2), 1395x(i)).
supplemental CPG to be a ‘‘one-size-fits- the costs of most items and services,
10 Section 1888(e) of the Act (42 U.S.C.
all’’ guidance. OIG strongly encourages including room, board, and ancillary
1395yy(e)).
11 Section 1812(a)(2)(A) of the Act (42 U.S.C.
nursing facilities to identify and focus items and services. In some 1395d(a)(2)(A)).
their compliance efforts on those areas circumstances (discussed further 12 Section 1888(e)(4)(G)(i) of the Act (42 U.S.C.
of potential concern or risk that are most below), SNFs may receive payment 1395yy(e)(4)(G)(i)).
relevant to their organizations. under Medicare Part B. Facilities that 13 Id.
Compliance measures adopted by a are not SNFs are not reimbursed under
14 Sections 1819(b)(3) and 1919(b)(3) of the Act
nursing facility to address identified (42 U.S.C. 1395i–3(b)(3), 1396r(b)(3)), and their
Part A. They may be reimbursed for implementing regulation, 42 CFR 483.20, require
risk areas should be tailored to fit the some items and services under Part B. nursing facilities participating in the Medicare or
unique environment of the facility Medicare pays SNFs under a Medicaid programs to use a standardized RAI to
(including its structure, operations, prospective payment system (PPS) for assess each nursing facility resident’s strengths and
resources, the needs of its resident needs.

beneficiaries covered by the Part A 15 See id.
population, and prior enforcement extended care benefit.8 Covered 16 Sections 1842(b)(6)(E) and 1862(a)(18) of the
experience). In short, OIG recommends Act (42 U.S.C. 1395u, 1395aa); Consolidated Billing,
that each nursing facility adapt the 8 Section 1888(e) of the Act (42 U.S.C. 1395yy(e)) supra note 8.
objectives and principles underlying (noting the PPS rate applied to services provided on 17 See id.
requirement include, by way of services, including therapy services, are following areas of significant concern
example, physical therapy, occupational not subject to consolidated billing.27 for nursing facilities: quality of care;
therapy, and speech therapy services; Either the supplier of the ancillary submission of accurate claims; Federal
certain non-self-administered drugs and service or the facility may bill the anti-kickback statute; other risk areas;
supplies furnished ‘‘incident to’’ a Medicare carrier for the Part B items and and Health Insurance Portability and
physician’s services (e.g., ointments, services directly.28 In these Accountability Act of 1996 (HIPAA)
bandages, and oxygen); braces and circumstances, it is the joint privacy and security rules.
orthotics; and the technical component responsibility of the facility and the This guidance does not create any
of most diagnostic tests.18 These items supplier to ensure that only one of them new law or legal obligations, and the
and services must be billed to Medicare bills Medicare. discussions in this guidance are not
by the SNF.19 Part B coverage for durable medical intended to present detailed or
The consolidated billing requirement equipment (DME) presents special comprehensive summaries of lawful or
does not apply to a small number of circumstances because the benefit unlawful activity. This guidance is not
excluded services, such as physician extends only to items furnished for use intended as a substitute for consultation
professional fees and certain ambulance in a patient’s home.29 DME furnished with CMS, a facility’s fiscal
services.20 These excluded services are for use in an SNF or in certain other intermediary or Program Safeguard
separately billable to Part B, by the facilities providing skilled care is not Contractor, a State Medicaid agency, or
individual or entity furnishing the covered by Part B. Instead, such DME is other relevant State agencies with
service. For example, professional covered by the Part A PPS payment or respect to the application and
services furnished personally by a applicable inpatient payment.30 In some interpretation of payment, coverage,
physician to a Part A SNF resident are cases, NFs that are not SNFs can be licensure, or other provisions that are
excluded from consolidated billing, and considered a ‘‘home’’ for purposes of subject to change. Rather, this guidance
are billed by the physician to the Part DME coverage under Part B.31 should be used as a starting point for a
B carrier.21 nursing facility’s legal review of its
Some Medicare beneficiaries reside in B. Medicaid
particular practices and for
a Medicare-certified SNF, but are not Medicaid provides another means for development or refinement of policies
eligible for Part A extended care benefits nursing facility residents to pay for and procedures to reduce or eliminate
(e.g., a beneficiary who did not have a skilled-nursing care, as well as room potential risk.
qualifying hospital stay of at least three and board in a nursing facility certified
days or a beneficiary who has exhausted by the Government to provide services A. Quality of Care
his or her Part A benefit). These to Medicaid beneficiaries. Medicaid is a By 2030, the number of older
beneficiaries—sometimes described as State and Federal program that covers Americans is estimated to rise to 71
being in ‘‘non-covered Part A stays’’— certain groups of low-income and million,32 making the aging of the U.S.
may still be eligible for Part B coverage medically-needy people. Medicaid also population ‘‘one of the major public
of certain individual services. helps residents dually eligible for health challenges we face in the 21st
Consolidated billing would not apply to Medicare and Medicaid pay their century.’’ 33 In addressing this
such individual services, with the Medicare premiums and cost-sharing challenge, a national focus on the
exception of therapy services.22 amounts. Because Medicaid eligibility quality of health care is emerging.
Physical therapy, occupational therapy, criteria, coverage limitations, and In cases that involve failure of care on
and speech language pathology services reimbursement rates are established at a systemic and widespread basis, the
furnished to SNF residents are always the State level, there is significant nursing facility may be liable for
subject to consolidated billing.23 Claims variation across the nation. Many States, submitting false claims for
for therapy services furnished during a however, offer a flat daily rate that reimbursement to the Government
non-covered Part A stay must be covers room, board, and routine care for under the Federal False Claims Act, the
submitted to Medicare by the SNF Medicaid beneficiaries. Civil Monetary Penalties Law (CMPL),
itself.24 Thus, according to CMS III. Fraud and Abuse Risk Areas or other authorities that address false
guidance, the SNF is reimbursed under and fraudulent claims or statements
the Medicare fee schedule for the This section should assist nursing
facilities in their efforts to identify areas made to the Government.34 Thus,
therapy services, and is responsible for
reimbursing the therapy provider.25 of their operations that present potential 32 Centers for Disease Control and Prevention
When a beneficiary resides in a risks of liability under several key (CDC), ‘‘The State of Aging and Health in America
nursing facility (or part thereof) that is Federal fraud and abuse statutes and 2007,’’ available on CDC’s Web site at http://
not certified as an SNF by Medicare, the regulations. This section focuses on www.cdc.gov/aging/pdf/saha_2007.pdf.
33 Id. (quoting Julie Louise Gerberding, M.D.,
beneficiary is not considered an SNF areas that are currently of concern to the
MPH, Director, Centers for Disease Control and
resident for Medicare billing enforcement community and is not Prevention, U.S. Department of Health and Human
purposes.26 Accordingly, ancillary intended to address all potential risk Services).
areas for nursing facilities. The 34 ‘‘Listening Session: Abuse of Our Elders: How
18 Section 1888(e) of the Act (42 U.S.C. 1395yy); identification of a particular practice or We Can Stop It: Hearing Before the Senate Special
Consolidated Billing, supra note 8. activity in this section is not intended Committee on Aging,’’ 110th Congress (2007)
19 Id. (testimony of Gregory Demske, Assistant Inspector
to imply that the practice or activity is General for Legal Affairs, Office of Inspector
20 Id.
21 Id.
necessarily illegal in all circumstances General, U.S. Department of Health and Human
22 Section 1888(e)(2)(A) of the Act (42 U.S.C.
or that it may not have a valid or lawful Services ), available at http://aging.senate.gov/
purpose. This section addresses the events/hr178gd.pdf; see also 18 U.S.C. 287
1395yy(e)(2)(A)); CMS, ‘‘MLN Matter SE0518,’’ (concerning false, fictitious or fraudulent claims);
available on CMS’s Web site at http:// 18 U.S.C. 1001 (concerning statements or entries
www.cms.hhs.gov/MLNMattersArticles/downloads/ 27 Id.
generally); 18 U.S.C. 1035 (concerning false
SE0518.pdf. 28 Id.
23 Id.
statements relating to health care matters); 18 U.S.C.
29 Section 1861(n) of the Act (42 U.S.C. 1395x(n)). 1347 (concerning health care fraud); 18 U.S.C. 1516
24 MLN Matter SE0518, supra note 22. 30 Section 1861(h)(5) of the Act (42 U.S.C. (concerning obstruction of a Federal audit); the
25 Id. 1395x(h)(5)). Federal False Claims Act (31 U.S.C. 3729–3733);
26 Id. 31 Section 1861(n) of the Act (42 U.S.C. 1395x(n)). Continued
compliance with applicable quality of 1. Sufficient Staffing methods used to assess staffing
care standards and regulations is OIG is aware of facilities that have accurately measure actual ‘‘on-the-
essential for the lawful behavior and systematically failed to provide staff in floor’’ staff rather than theoretical ‘‘on-
success of nursing facilities. sufficient numbers and with appropriate paper’’ staff. For example, payroll
Although many nursing facilities clinical expertise to serve their records that reflect actual hours and
make quality a priority, facilities that residents. Although most facilities strive days worked may be more useful than
fail to do so, and consequently fail to to provide sufficient staff, nursing prospectively generated staff schedules.
deliver quality health care, risk facilities must be mindful that Federal 2. Comprehensive Resident Care Plans
becoming the target of governmental law requires sufficient staffing necessary
investigations. Highlighted below are Development of comprehensive
to attain or maintain the highest resident care plans is essential to
common risk areas associated with the practicable physical, mental, and
delivery of quality health care to reducing risk. Prior OIG reports revealed
psychosocial well-being of residents.36 that a significant percentage of resident
nursing facility residents that frequently Thus, staffing numbers and staff
arise in enforcement cases. care plans did not reflect residents’
competency are critical. actual care needs.39 Through its
These include sufficient staffing, The relationship between staff ratios,
comprehensive care plans, appropriate enforcement and compliance
staff competency, and quality of care is monitoring activities, OIG continues to
use of psychotropic medications, complex.37 No single staffing model will
medication management, and resident see insufficient care plans and their
suit every facility. A staffing model that impact on residents as a risk area for
safety. This list is not exhaustive. works in a nursing facility today may
Moreover, nursing facilities should nursing facilities.
not meet the facility’s needs in the Medicare and Medicaid regulations
recognize that these issues are often future. Nursing facilities, therefore, are
inter-related. Nursing facilities that require nursing facilities to develop a
strongly encouraged to assess their comprehensive care plan for each
attempt to address one issue will often staffing patterns regularly to evaluate
find that they must address other areas resident that addresses the medical,
whether they have sufficient staff who nursing, and mental and psychosocial
as well. The risk areas identified in are competent to care for the unique
sections III.B. (Submission of Accurate needs for each resident and includes
acuity levels of their residents. reasonable objectives and timetables.40
Claims), III.C. (Anti-Kickback), and III.D. Important considerations for assessing
(Other Risk Areas) below are also Nursing facilities should ensure that
staffing models include, among others, care planning includes all disciplines
intertwined with quality of care risk staff skill levels, staff-to-resident ratios,
areas and should be considered as well. involved in the resident’s care.41
staff turnover,38 staffing schedules, Perfunctory meetings or plans
As a starting point, nursing facilities disciplinary records, payroll records,
should familiarize themselves with 42 developed without the full clinical team
timesheets, and adverse event reports may create less than comprehensive
CFR part 483 (part 483), which sets forth (e.g., falls or adverse drug events), as
the principal requirements for nursing resident-centered care plans.
well as interviews with staff, residents, Inadequately prepared plans make it
facility participation in the Medicare and residents’ family or legal guardians.
and Medicaid programs. It is essential less likely that residents will receive
Facilities should ensure that the coordinated, multidisciplinary care.
that key members of the organization
understand these requirements and Insufficient plans jeopardize residents’
25_ODF_SNFLTC.asp; CMS, State Operations
support their facility’s commitment to Manual, available on CMS’s Web site at http://
well-being and risk the provision of
compliance with these regulations. www.cms.hhs.gov/Manuals/IOM/list.asp; see also inadequate care, medically unnecessary
Targeted training for care providers, Medicare Quality Improvement Community, care services, or medically
‘‘Medicare Quality Improvement,’’ available at inappropriate services.
managers, administrative staff, officers, http://www.medqic.org. Nursing facilities may also
and directors on the requirements of To reduce these risks, nursing
find it useful to review the CMS Quality
part 483 will enable nursing facilities to Improvement Organizations Statement of Work, facilities should design measures to
ensure that they are fulfilling their available at http://www.cms.hhs.gov/ ensure an interdisciplinary and
obligation to provide quality health
QualityImprovementOrgs/04_9thsow.asp. comprehensive approach to developing
36 Sections 1819(b)(4)(A) and 1919(b)(4)(A) of the
care.35 care plans. Basic steps, such as
Act (42 U.S.C. 1395i–3(b)(4)(A), 1396r(b)(4)(A)); 42
CFR 483.30.
appropriately scheduling meetings to
section 1128A of the Act (42 U.S.C. 1320a–7a) 37 For example, State nursing facility staffing accommodate the full interdisciplinary
(concerning civil monetary penalties); section standards, which exist for the majority of States, team, completing all clinical
1128B(c) of the Act (42 U.S.C. 1320a–7b(c)) vary in types of regulated staff, the ratios of staff, assessments before the meeting is
(concerning false statements or representations with and the facilities to which the regulations apply. convened,42 opening lines of
respect to condition or operation of institutions). In See Jane Tilly, et al., ‘‘State Experiences with
addition to the Federal criminal, civil, and Minimum Nursing Staff Ratios for Nursing
39 See, e.g., OIG, OEI Report OEI–02–99–00040,
administrative liability for false claims and Facilities: Findings from Case Studies of Eight
kickback violations outlined in this CPG, nursing States’’ (November 2003) (joint paper by The Urban ‘‘Nursing Home Resident Assessment Quality of
facilities also face exposure under State laws, Institute and the Department), available at http:// Care,’’ January 2001, available on our Web site at
including criminal, civil, and administrative aspe.hhs.gov/daltcp/reports/8statees.htm. http://oig.hhs.gov/oei/reports/oei–02–99–00040.pdf.
40 42 CFR 483.20(k).
sanctions. 38 Nursing facilities operate in an environment of
35 The requirement to deliver quality health care 41 42 CFR 483.20(k)(2)(ii) (requiring an
high staff turnover where it is difficult to attract,
is a continuing obligation for nursing facilities. As train, and retain an adequate workforce. Turnover interdisciplinary team, including the physician, a
regulations change, so too should the training. among nurse aides, who provide most of the hands- registered nurse with responsibility for the resident,
Therefore, this recommendation envisions more on care in nursing facilities, means that residents and other disciplines involved in the resident’s
than an initial employee ‘‘orientation’’ training on are constantly receiving care from new staff who care).
the nursing facility’s obligations to provide quality often lack experience and knowledge of individual 42 Nursing facilities with residents with mental
health care. CMS has multiple resources available residents. Furthermore, research correlates staff illness or mental retardation should ensure that
to assist nursing facilities in developing training shortages and insufficient training with substandard they have the Preadmission Screening and Resident
programs. See CMS, ‘‘Sharing Innovations in care. See OIG, OEI Report OEI–01–04–00070, Review (PASRR) screens for their residents. See 42
Quality, Resources for Long Term Care,’’ available ‘‘Emerging Practices in Nursing Homes,’’ March CFR 483.20(m). In addition, for residents who do
on CMS’s Web site at http://siq.air.org/default.aspx; 2005, available on our Web site at http:// not require specialized services, facilities should
CMS, ‘‘Skilled Nursing Facilities/Long-Term Care oig.hhs.gov/oei/reports/oei–01–04–00070.pdf ensure that they are providing the ‘‘services of
Open Door Forum,’’ available on CMS’s Web site at (reviewing emerging practices that nursing facility lesser intensity’’ as set forth in CMS regulations.
http://www.cms.hhs.gov/OpenDoorForums/ administrators believe reduce their staff turnover). See 42 CFR 483.120(c). Care plan meetings can
communication between direct care for the quality of drug therapy provided should be mindful of potential quality
providers and interdisciplinary team in the facility. Facilities are prohibited of care problems when adopting and
members, involving the resident and the from using any medication as a means implementing policies and procedures
residents’ family members or legal of chemical restraint for ‘‘purposes of to provide these services. A failure to
guardian,43 and documenting the length discipline or convenience, and not manage pharmaceutical services
and content of each meeting, may assist required to treat the resident’s medical properly can seriously jeopardize
facilities with meeting this requirement. symptoms.’’ 50 In addition, resident drug resident safety, and even result in
Another risk area related to care plans regimens must be free from unnecessary resident deaths.
includes the involvement of attending drugs.51 For residents who specifically Nursing facilities can promote
physicians in resident care. Although require antipsychotic medications, CMS compliance by having in place proper
the role and responsibilities of attending regulations also require, unless medication management processes—
physicians are governed by specific contraindicated, that residents receive including appropriate training of staff
regulations,44 the nursing facility also gradual dose reductions and behavioral involved in all aspects of
has a critical role—ensuring that a interventions aimed at reducing pharmaceutical care in the nursing
physician supervises each resident’s medication use.52 facility—that advance patient safety,
care.45 Facilities must also include the In light of these requirements, nursing minimize adverse drug interactions, and
attending physician in the development facilities should ensure that there is an ensure that irregularities in a resident’s
of the resident’s care plan.46 To fulfill adequate indication for the use of the drug regimen are promptly discovered
these requirements, facilities should medication and should carefully and addressed. These kinds of policies
develop processes to ensure physician monitor, document, and review the use and procedures may also safeguard
involvement in resident care, including of each resident’s psychotropic drugs. against potential tainting of
regular resident visits that involve a Compliance measures could include pharmaceutical decisions by improper
meaningful evaluation of the resident.47 educating care providers regarding kickbacks.57
In addition, facilities should develop appropriate monitoring and CMS regulations require that nursing
systems to ensure that irregularities documentation practices and auditing facilities employ or obtain the services
noted during drug regimen reviews are drug regimen reviews 53 and resident of a licensed pharmacist to ‘‘provide
reported to attending physicians.48 care plans to determine if they consultation on all aspects of the
incorporate an assessment of the provision of pharmacy services in the
3. Appropriate Use of Psychotropic resident’s ‘‘medical, nursing, and facility.’’ 58 The drug regimen of each
Medications mental and psychosocial needs,’’ 54 resident must be reviewed at least once
Based on our enforcement and including the need for psychotropic a month by a licensed pharmacist, who
compliance monitoring activities, OIG medications for a specific medical must report any irregularities
has identified inappropriate use of condition.55 The care providers should discovered in a resident’s drug regimen
psychotropic medications for residents analyze the outcomes of the provision of to the attending physician and the
as a risk area in at least two ways—the care with the results of the drug regimen director of nursing.59 Consultant
prohibition against inappropriate use of reviews, progress notes, and monitoring pharmacists are also required to: (1)
chemical restraints and the requirement of the resident’s behaviors. ‘‘[e]stablish a system of records of
to avoid unnecessary drug usage. receipt and disposition of all controlled
Facilities have affirmative obligations 4. Medication Management
drugs * * *;’’ and (2) ‘‘[d]etermine that
to ensure appropriate use of The Act requires nursing facilities to drug records are in order and that an
psychotropic medications. Specifically, provide ‘‘pharmaceutical services account of all controlled drugs is
nursing facilities must ensure that (including procedures that assure maintained and periodically
psychopharmacological practices accurate acquiring, receiving, reconciled.’’ 60
comport with Federal regulations and dispensing, and administering of all In many cases, the consultant
generally accepted professional drugs and biologicals) to meet the needs pharmacists working in nursing
standards.49 The facility is responsible of each resident.’’ 56 Nursing facilities facilities are provided by long-term care
pharmacies in arrangements to furnish
provide nursing facilities with an ideal opportunity provide necessary care and services, including the
to ensure that these obligations are met. resident’s right to be free of unnecessary drugs); 42
drugs and supplies to the nursing
43 Where possible, residents and their family CFR 483.75(b) (requiring facilities to provide facility, often on an exclusive basis.
members or legal guardians should be included in services in compliance ‘‘with all applicable Federal, Long-term care pharmacies have
the development of care and treatment plans. State, and local laws, regulations, and codes, and purchasing agreements with
Unless the resident has been declared incompetent with accepted professional standards and principles
* * *’’).
pharmaceutical manufacturers and
or otherwise found to be incapacitated under State
law, the resident has a right to participate in his or 50 42 CFR 483.13(a). contracts with health plans. As a result
her care planning and treatment, as well as in the 51 42 CFR 483.25(l)(1). An unnecessary drug of these agreements and contracts, long-
changes in care or treatment. 42 CFR 483.10(d)(3). includes any medication, including psychotropic term care pharmacies may prefer that
44 See, e.g., 42 CFR 483.40(b), (c), (e). medications, that is excessive in dose, used nursing facility customers use some
45 42 CFR 483.40(a). excessively in duration, used without adequate
monitoring, used without adequate indications for
drugs over others. A consultant
46 42 CFR 483.20(k)(2)(ii).
47 42 CFR 483.40 (detailing physician services); its use, used in the presence of adverse pharmacist provided by a long-term care
42 CFR 483.20 (detailing facility’s role in resident consequences, or any combination thereof. Id.
52 42 CFR 483.25(l)(2). facilities must meet this obligation even if a
assessments and care plan coordination). Although
physicians may delegate some tasks to physician 53 42 CFR 483.60(c). pharmacy charges a Medicare Part D copayment to
assistants, nurse practitioners, or clinical nurse 54 42 CFR 483.20(k). a dual eligible beneficiary who cannot afford to pay
specialists, as permitted by regulations, facilities 55 42 CFR 483.25(l)(2). the copayment. See CMS, Question & Answer ID
must still ensure that physicians supervise the care 56 Sections 1819(b)(4)(A)(iii) and 7042, available on CMS’s Web site at http://
of residents. 42 CFR 483.40. questions.cms.hhs.gov.

1919(b)(4)(A)(iii) of the Act (42 U.S.C. 1395i– 57 For further discussion of the anti-kickback
48 See 42 CFR 483.60(c).
3(b)(4)(A)(iii) and 1396r(b)(4)(A)(iii)). In addition,
49 See, e.g., 42 CFR 483.20(k)(3) (requiring under 42 CFR 483.60, SNFs and NFs must ‘‘provide statute, see section III.C. below.
58 42 CFR 483.60(b)(1).
services that are ‘‘provided or arranged by the routine and emergency drugs and biologicals to
59 42 CFR 483.60(c).
facility’’ to comport with professional standards of [their] residents, or obtain them under an agreement
quality); 42 CFR 483.25 (requiring facilities to described in [section] 483.75(h) * * *.’’ Nursing 60 42 CFR 483.60(b)(2), (3).
pharmacy may be in a position to is harm caused by staff and fellow hotline where staff, contractors,
influence prescriptions in a manner that residents.64 residents, family members, visitors, and
benefits the long-term care pharmacy. others with concerns can report
(a) Promoting Resident Safety
The consultant pharmacist may face a suspicions. Regardless of the reporting
potential conflict of interest if a drug Federal regulations mandate that vehicle, ideally coverage for reporting
prescribed for a resident is not one nursing facilities develop and and addressing resident safety issues
preferred by the long-term care implement policies and procedures to would be on a constant basis (i.e., 24
pharmacy. prohibit mistreatment, neglect, and hours per day/7 days per week).
abuse of residents.65 Facilities must also Moreover, nursing facilities should
To minimize these risks and improve thoroughly investigate and report
compliance with CMS regulations, make clear to caregivers, facility staff,
incidents to law enforcement, as and residents that the facility is
nursing facilities should commit to required by State laws.66 Although
robust training and monitoring on a committed to protecting those who
experts continue to debate the most make reports from retaliation.
regular basis of all staff involved in effective systems for enhancing the
prescribing, administering, and Facilities may also want to consider a
reporting, investigation, and program to engage everyone who comes
managing pharmaceuticals, including prosecution of nursing facility resident
all consultant pharmacists. The training in contact with nursing facility
abuse, an effective compliance program residents—whether health care
should familiarize staff with proper recognizes the value of a demonstrated
medication management techniques. It professionals, administrative, and
internal commitment to eliminating custodial staff, family and friends,
should also educate staff on the legal resident abuse.67 An effective
prohibition against accepting anything visiting therapists, or community
compliance program will include members—in the mission of protecting
of value from a pharmacy or policies, procedures, and practices to
pharmaceutical manufacturer to residents. Such a program could include
prevent, investigate, and respond to specialized training for everyone who
influence the choice of a drug for a instances of potential resident abuse,
resident or to switch a resident from one interacts on a regular basis with
neglect, or mistreatment, including residents on recognizing warning signs
drug to another. Nursing facilities injuries resulting from staff-on-resident
should implement policies and of neglect or abuse and on effective
abuse and neglect, resident-on-resident methods to communicate with
procedures for maintaining accurate abuse, and abuse from unknown causes.
drug records and tracking medications. potentially fearful residents in a way
Confidential reporting is a key likely to induce candid self-reporting of
In addition, nursing facilities should component of an effective resident neglect or abuse.68
consider monitoring drug records for safety program. Such a mechanism
patterns that may indicate inappropriate enables staff, contractors, residents, (b) Resident Interactions
drug switching or steering. family members, visitors, and others to The nursing facility industry, resident
Nursing facilities should also review report threats, abuse, mistreatment, and advocacy groups, and law enforcement
the total compensation paid to other safety concerns confidentially to are becoming increasingly concerned
consultant pharmacists (whether under senior staff empowered to take about resident abuse committed by
contract with a long-term care pharmacy immediate action. Posters, brochures, fellow residents. Abuse can occur as a
or employed directly by the nursing and online resources that encourage result of the failure to properly screen
facility) to ensure that the compensation readers to report suspected safety and assess, or the failure of staff to
is not structured in any manner that problems to senior facility staff are monitor, residents at risk for aggressive
reflects the volume or value of commonly used. Another commonly behavior. Such failures can jeopardize
particular drugs prescribed for, or used compliance component for both the resident with aggressive
administered to, patients. Nursing reporting violations is a dedicated behaviors and the resident who may be
facilities should establish policies that victimized.
64 For an overview of research relating to resident
make clear that all prescribing must be Heightened awareness and monitoring
abuse and neglect, see Catherine Hawes, Ph.D.,
based principally on clinical efficacy ‘‘Elder Abuse in Residential Long-Term Care for abuse are crucial to eradicating
and appropriateness 61 and that drug Settings: What is Known and What Information is resident-on-resident abuse. Nursing
switches should not be made by a Needed?,’’ in Elder Mistreatment: Abuse, Neglect,
facilities can advance their mission to
pharmacist without authorization from and Exploitation in an Aging America (National
Research Council, 2003); U.S. Government provide a safe environment for residents
the attending physician, medical Accountability Office (GAO), GAO Report GAO– through targeted education relating to
director, or other licensed prescriber 02–312, ‘‘Nursing Homes: More Can Be Done to resident-on-resident abuse (particularly
(except for generic substitutions where Protect Residents from Abuse,’’ March 2002,
for staff with responsibilities for
permitted by State law). available on GAO’s Web site at http://www.gao.gov/
new.items/d02312.pdf; Administration on Aging, admission evaluations). Thorough
5. Resident Safety Elder Abuse Web site, available at http:// resident assessments, comprehensive
www.aoa.gov/eldfam/Elder_Rights/Elder_Abuse/ care plans, periodic resident
Elder_Abuse.asp.
Nursing facility residents have a legal 65 42 CFR 483.13(c); see also 42 CFR 483.13(a).
assessments, and proper staffing
right to be free from abuse and neglect.62 66 Id. assignments, would also assist nursing
Facilities should take steps to ensure 67 Under State mandatory reporting statutes,
that they are protecting their residents persons such as health care professionals, human 68 Facilities could explore partnering with the
from these risks.63 Of particular concern service professionals, clergy, law enforcement, and ombudsmen and other consumer advocates in
financial professionals may have a legal obligation sponsoring or participating in special training
to make a formal report to law enforcement officials programs designed to prevent abuse. See ‘‘Elder
61 The determination of clinical efficacy and
or a central reporting agency if they suspect that a Justice: Protecting Seniors from Abuse and Neglect:
appropriateness of the particular drugs should nursing facility resident is being abused or Hearing Before the Senate Committee on Finance,’’
precede, and be paramount to, the consideration of neglected. To ensure compliance with these 107th Congress (2002) (testimony of Catherine
costs. statutes, nursing facilities should consider training Hawes, Ph.D., titled ‘‘Elder Abuse in Residential
62 Sections 1819 and 1919 of the Act (42 U.S.C.
relating to compliance with their relevant States’ Long-Term Care Facilities: What is Known About
1351i-3 and 1396r); 42 CFR 483.10; see also 42 CFR laws. Nursing facilities can also assist by providing the Prevalence, Causes, and Prevention’’), available
483.15 and 483.25. ready access to law enforcement contact at http://finance.senate.gov/hearings/testimony/
63 See id. information. 061802chtest.pdf.
facilities in their mission to provide a mechanisms in place to identify which evaluation of resident case-mix data as
safe environment for residents. State registries they must examine. a significant risk area for SNFs.75
Because of the critical role resident
(c) Staff Screening B. Submission of Accurate Claims
case-mix data plays in resident care
Nursing facilities cannot employ Nursing facilities must submit planning and reimbursement, training
individuals ‘‘[f]ound guilty of abusing, accurate claims to Federal health care on the collection and use of case-mix
neglecting, or mistreating residents,’’ or programs. Examples of false or data is important. An effective
individuals with ‘‘a finding entered into fraudulent claims include claims for compliance program will include
[a] State nurse aide registry concerning items not provided or not provided as training of responsible staff to ensure
abuse, neglect, mistreatment of residents claimed, claims for services that are not that persons collecting the data and
or misappropriation of their medically necessary, and claims when those charged with analyzing and
property.’’ 69 Effective recruitment, there has been a failure of care. responding to the data are
screening, and training of care providers Submitting false claims, or causing false knowledgeable about the purpose and
are essential to ensure a viable claims to be submitted, to Medicare or utility of the data. Facilities must also
workforce. Although no pre- Medicaid may subject the individual, ensure that data reported to the Federal
employment background screening can the entity, or both to criminal Government is accurate. Both internal
provide nursing facilities with absolute prosecution, civil penalties including and external periodic validation of data
assurances that a job applicant will not treble damages, and exclusion from may prove useful. Moreover, as
commit a crime in the future, nursing participation in Federal health care authorities continue to scrutinize
facilities must make reasonable efforts programs. quality-reporting data,76 nursing
to ensure that they have a workforce Common and longstanding risks facilities are well-advised to review
that will maintain the safety of their associated with claims preparation and such data regularly to ensure its
residents. submission include duplicate billing, accuracy and to identify and address
Commonly, nursing facilities screen insufficient documentation, and false or potential quality of care issues.77
potential employees against criminal fraudulent cost reports. While nursing
record databases. OIG is aware that facilities should continue to be vigilant 2. Therapy Services
there is a ‘‘great diversity in the way with respect to these important risk The provision of physical,
States systematically identify, report, areas, we believe these risk areas are occupational, and speech therapy
and investigate suspected abuse.’’ 70 relatively well-understood in the services continues to be a risk area for
Nonetheless, a comprehensive industry, and therefore they are not nursing facilities. Potential problems
examination of a prospective specifically addressed in this section. include: (i) Improper utilization of
employee’s criminal record in all States As reimbursement systems have therapy services to inflate the severity of
in which the person has worked or evolved, OIG has uncovered other types RUG classifications and obtain
resided may provide a greater degree of of fraudulent transactions related to the additional reimbursement; (ii)
protection for residents.71 provision of health care services to
Verification of education, licensing, overutilization of therapy services billed
residents of nursing facilities on a fee-for-service basis to Part B under
certifications, and training for care reimbursed by Medicare and Medicaid.
providers can also assist nursing consolidated billing; and (iii) stinting on
In this section, we will discuss some of therapy services provided to patients
facilities in their efforts to ensure these risk areas. This list is not
patients are provided with qualified and covered by the Part A PPS payment.78
exhaustive. It is intended to assist These practices may result in the
skilled caregivers. Many States have facilities in evaluating their own risk
requirements that nursing facilities submission of false claims.79
areas. In addition, section III.A. above In addition, unnecessary therapy
conduct these checks for all professional outlines other regulatory requirements
care providers, such as therapists, services may place frail but otherwise
that, if not met, may subject nursing functioning residents at risk for physical
medical directors, and nurses. Federal facilities to potential liability for
regulations require a nursing facility to injury, such as muscle fatigue and
submission of false or fraudulent claims. broken bones, and may obscure a
check its State nurse aide registry to
ensure that potential hires for nurse aide 1. Proper Reporting of Resident Case- resident’s true condition, leading to
positions have met competency Mix by SNFs inadequate plans of care and inaccurate
evaluation requirements or are RUG classifications.80 Too few therapy
We are aware of instances in which
otherwise excepted from registration SNFs have improperly upcoded resident 75 To the extent a State Medicaid program relies
requirements.72 In addition, the facility RUG assignments.74 The method of upon RUG classification, or a variation of this
must also check every State nurse aide classifying a resident into the correct system, to calculate its reimbursement rate, nursing
registry it ‘‘believes will include RUG, through resident assessments, facilities, as defined in section 1919 of the Act (42
information’’ on the individual.73 To U.S.C. 1396r), should be aware of this risk area as
requires accurate and comprehensive well.
ensure compliance with this reporting about a resident’s conditions 76 See, e.g., CMS, ‘‘2007 Action Plan for (Further
requirement, facilities should have and needs. Inaccurate reporting of data Improvement of) Nursing Home Quality,’’
could result in the misrepresentation of September 2006, available on CMS’s Web site at
69 42 CFR 483.13(c)(1)(ii). http://www.cms.hhs.gov/
the resident’s status, the submission of
70 OIG, Audit Report A–12–12–97–0003, SurveyCertificationGenInfo/downloads/
‘‘Safeguarding Long-Term Care Residents,’’
false claims, and potential enforcement 2007ActionPlan.pdf.
September 1998, available on our Web site at actions. Therefore, we have identified 77 In addition to assisting facilities with ensuring
http://oig.hhs.gov/oas/reports/aoa/d9700003.pdf. the assessment, reporting, and that claims data is accurate, monitoring MDS data
71 Because there is no one central repository for may assist facilities in recognizing common
criminal records, there is a significant limitation to 74 A 2006 OIG report found that 22 percent of warning signs of a systemic care problem (e.g.,
searching the criminal record databases only for the claims were upcoded, representing $542 million in increase in or excessive pressure ulcers or falls).
State in which the facility is located. A better potential overpayments for FY 2002. OIG, OEI
78 There may be additional risk areas for outside
practice may be to search databases for all States in Report OEI–02–02–00830, ‘‘A Review of Nursing therapy suppliers.
which the applicant resided or was employed. Facility Resource Utilization Groups,’’ February 79 Additional risks related to the anti-kickback
72 42 CFR 483.75(e)(5). statute are discussed below in section III.C.
2006, available on our Web site at http://
73 42 CFR 483.75(e)(6). oig.hhs.gov/oei/reports/oei-02–02–00830.pdf. 80 See 42 CFR 483.20(b) and (k).
services may expose residents to risk of prior to engaging their services against to attain and maintain their highest
physical injury or decline in condition, OIG’s List of Excluded Individuals/ practicable level of functioning.90 These
resulting in potential failure of care Entities (LEIE) on OIG’s Web site,86 as services include, among others, care to
problems. well as the U.S. General Services avoid pressure ulcers, active and
OIG strongly advises nursing facilities Administration’s Excluded Parties List passive range of motion, ambulation,
to develop policies, procedures, and System.87 In addition, facilities should fall prevention, incontinence
measures to ensure that residents are consider implementing a process that management, bathing, dressing, and
receiving medically appropriate therapy requires job applicants to disclose, grooming activities.91
services.81 Some practices that may be during the pre-employment process (or OIG is aware of facilities that have
beneficial include: requirements that vendors during the request for proposal received payment from Federal health
therapy contractors provide complete process), whether they are excluded. care programs for restorative and
and contemporaneous documentation of Facilities should strongly consider personal care services despite the fact
each resident’s services; regular and periodically screening their current that the services were not provided or
periodic reconciliation of the owners, officers, directors, employees, were so wholly deficient that they
physician’s orders and the services contractors, and agents to ensure that amounted to no care at all. Federal
actually provided; interviews with the they have not been excluded since the health care programs do not reimburse
residents and family members to be sure initial screening. for restorative and personal care
services are delivered; and assessments Providers should also take steps to services under these circumstances.
of the continued medical necessity for ensure that they have policies and Nursing facilities that fail to provide
services during resident care meetings at procedures that require removal of any necessary restorative and personal care
which the attending physician attends. owner, officer, director, employee, services risk billing for services not
contractor, or agent from responsibility rendered as claimed, and therefore may
3. Screening for Excluded Individuals for, or involvement with, a provider’s be subject to liability under fraud and
and Entities business operations related to the abuse statutes and regulations.
No Federal health care program Federal health care programs if the To avoid this risk, nursing facilities
payment may be made for items or provider has actual notice that such a are strongly encouraged to have
services furnished by an excluded person is excluded. Providers may also comprehensive procedures in place to
individual or entity.82 This payment wish to consider appropriate training for ensure that services are of an
ban applies to all methods of Federal human resources personnel on the appropriate quality and level and that
health care program reimbursement. effects of exclusion. Exclusion services are in fact delivered to nursing
Civil monetary penalties (CMPs) may be continues to apply to an individual even facility residents. To accomplish this,
imposed against any person who if he or she changes from one health facilities may wish to engage in resident
arranges or contracts (by employment or care profession to another while and staff interviews, medical record
otherwise) with an individual or entity excluded. That exclusion remains in reviews,92 and personal observations of
for the provision of items or services for effect until OIG has reinstated the care delivery. Moreover, complete and
which payment may be made under a individual, which is not automatic.88 A contemporaneous documentation of
Federal health care program,83 if the useful tool for the training is OIG’s services is critical to ensuring that
person knows or should know that the Special Advisory Bulletin, titled ‘‘The services are rendered.
employee or contractor is excluded from Effect of Exclusion from Participation in
Federal Health Care Programs.’’ 89 C. The Federal Anti-Kickback Statute
participation in a Federal health care
program.84 4. Restorative and Personal Care The Federal anti-kickback statute,
To prevent hiring or contracting with Services section 1128B(b) of the Act, 93 places
an excluded person, OIG strongly constraints on business arrangements
Facilities must ensure that residents related directly or indirectly to items or
advises nursing facilities to screen all receive appropriate restorative and
prospective owners, officers, directors, services reimbursable by Federal health
personal care services to allow residents
employees, contractors,85 and agents care programs, including, but not
limited to, Medicare and Medicaid. The
would not avoid liability for violating Medicare’s
81 See OIG, OEI Report OEI–09–99–00563,
prohibition on payment for services rendered by the anti-kickback statute prohibits the
‘‘Physical, Occupational, and Speech Therapy for excluded staff person merely by including such a health care industry from engaging in
Medicare Nursing Home Patients: Medical provision, requiring the vendors to screen staff may
Necessity and Quality of Care Based on Treatment
some practices that are common in other
help a nursing facility avoid engaging the services
Diagnosis,’’ August 2001, available on our Web site of excluded persons, and could be taken into
business sectors, such as offering or
at http://oig.hhs.gov/oei/reports/oei-09–99– account in the event of a Government enforcement receiving gifts to reward past or
00563.pdf. action. potential new referrals.
82 42 CFR 1001.1901. Exclusions imposed prior to 86 Available on our Web site at http://oig.hhs.gov/
The anti-kickback statute is a criminal
August 5, 1997, cover Medicare and all State health fraud/exclusions/listofexcluded.html.
care programs (including Medicaid), but not other 87 Available at http://www.epls.gov/.
prohibition against remuneration (in
Federal health care programs. See The Balanced 88 Reinstatement of excluded entities and
any form, whether direct or indirect)
Budget Act of 1997 (Pub. L. 105–33) (amending individuals is not automatic. Those wishing to made purposefully to induce or reward
section 1128 of the Act (42 U.S.C. 1320a–7) to again participate in the Medicare, Medicaid and all the referral or generation of Federal
expand the scope of exclusions imposed by OIG).
83 Such items or services could include
Federal health care programs must apply for health care program business. The anti-
reinstatement and receive authorized notice from
administrative, clerical, and other activities that do OIG that reinstatement has been granted. Obtaining 90 42 CFR 483.25 (requiring facilities to provide
not directly involve patient care. See section a provider number from a Medicare contractor, a
1128A(a)(6) of the Act (42 U.S.C. 1320a–7a(a)(6)). State agency or a Federal health care program does care and services necessary to ensure a resident’s
84 Id.
not reinstate eligibility to participate in those ability to participate in activities of daily living do
85 A nursing facility that relies upon third-party programs. There are no provisions for retroactive not diminish unless a clinical condition makes the
agencies to provide temporary or contract staffing reinstatement. See 42 CFR 1001.1901. decline unavoidable).
91 Id.
should consider including provisions in its 89 OIG, ‘‘The Effect of Exclusion From
92 Indicators to watch for include, but are not
contracts that require the vendors to screen staff Participation in Federal Health Care Programs,’’
against OIG’s List of Excluded Individuals/Entities September 1999, available on our Web site at http:// limited to, bedsores, falls, unexplained weight loss,
before determining that they are eligible to work at oig.hhs.gov/fraud/docs/alertsandbulletins/ and dehydration.
the nursing facility. Although a nursing facility effected.htm. 93 42 U.S.C. 1320a–7b.
kickback statute prohibits offering or present a significant potential for abuse. corresponding regulations establish a
paying anything of value for patient For purposes of identifying potential number of ‘‘safe harbors’’ for common
referrals. It also prohibits offering or kickback risks under the anti-kickback business arrangements. The safe harbors
paying of anything of value in return for statute, the following inquiries are protect arrangements from liability
purchasing, leasing, ordering, or useful: under the statute. The following safe
arranging for or recommending the • Does the nursing facility (or its harbors are of most relevance to nursing
purchase, lease, or order of any item or affiliates or representatives) provide facilities:
service reimbursable in whole or in part anything of value to persons or entities • Investment interests safe harbor (42
by a Federal health care program. The in a position to influence or generate CFR 1001.952(a));
statute also covers the solicitation or Federal health care program business for • Space rental safe harbor (42 CFR
acceptance of remuneration for referrals the nursing facility (or its affiliates) 1001.952(b));
for, or the generation of, business directly or indirectly? • Equipment rental safe harbor (42
payable by a Federal health care • Does the nursing facility (or its CFR 1001.952(c));
program. Liability under the anti- affiliates or representatives) receive • Personal services and management
kickback statute is determined anything of value from persons or contracts safe harbor (42 CFR
separately for each party involved. In entities for which the nursing facility 1001.952(d));
addition to criminal penalties, violators generates Federal health care program • Discount safe harbor (42 CFR
may be subject to CMPs and exclusion business, directly or indirectly? 1001.952(h));
from the Federal health care programs. • Could one purpose of an • Employee safe harbor (42 CFR
Nursing facilities should also be aware arrangement be to induce or reward the 1001.952(i));
that compliance with the anti-kickback generation of business payable in whole • Electronic health records items and
statute is a condition of payment under or in part by a Federal health care services (42 CFR 1001.952(y)); and
Medicare and other Federal health care program? Importantly, under the anti- • Managed care and risk sharing
programs.94 As such, liability may arise kickback statute, neither a legitimate arrangements (42 CFR 1001.952(m), (t),
under the False Claims Act if the anti- business purpose for an arrangement and (u)).
kickback statute violation results in the nor a fair-market value payment will An arrangement must fit squarely in
submission of a claim for payment legitimize a payment if there is also an a safe harbor to be protected. Safe
under a Federal health care program. illegal purpose (i.e., inducing Federal harbor protection requires strict
Nursing facilities make and receive health care program business). compliance with all applicable
referrals of Federal health care program Any arrangement for which the conditions set out in the relevant
business. Nursing facilities need to answer to any of these inquiries is regulation.95 Compliance with a safe
ensure that these referrals comply with affirmative implicates the anti-kickback harbor is voluntary. Failure to comply
the anti-kickback statute. Nursing statute and requires careful scrutiny. with a safe harbor does not mean an
facilities may obtain referrals of Federal Several potentially aggravating arrangement is illegal per se.
health care program beneficiaries from a considerations are useful in identifying Nevertheless, we recommend that
variety of health care sources, including, arrangements at greatest risk of nursing facilities structure arrangements
for example, physicians and other prosecution. In particular, in assessing to fit in a safe harbor whenever possible.
health care professionals, hospitals and risk, nursing facilities should ask the Nursing facilities should evaluate
hospital discharge planners, hospices, following questions, among others, potentially problematic arrangements
home health agencies, and other nursing about any potentially problematic with referral sources and referral
facilities. Physicians, pharmacists, and arrangements or practices they identify: recipients that do not fit into a safe
other health care professionals may • Does the arrangement or practice harbor by reviewing the totality of the
generate referrals for items and services have a potential to interfere with, or facts and circumstances, including the
reimbursed to the nursing facilities by skew, clinical decision-making? intent of the parties. Depending on the
Federal health care programs. In • Does the arrangement or practice circumstances, some relevant factors
addition, when furnishing services to have a potential to increase costs to include:
residents, nursing facilities often direct Federal health care programs or • Nature of the relationship between
or influence referrals to others for items beneficiaries? the parties. What degree of influence do
and services reimbursable by Federal • Does the arrangement or practice the parties have, directly or indirectly,
health care programs. For example, have a potential to increase the risk of on the generation of business for each
nursing facilities may refer patients to, overutilization or inappropriate other?
or order items or services from, utilization? • Manner in which participants
hospices, DME companies, laboratories, • Does the arrangement or practice selected. Were parties selected to
diagnostic testing facilities, long-term raise patient safety or quality of care participate in an arrangement in whole
care pharmacies, hospitals, physicians, concerns? or in part because of their past or
other nursing facilities, and physical, Nursing facilities should be mindful anticipated referrals?
occupational and speech therapists. All of these concerns when structuring and • Manner in which the remuneration
of these circumstances call for vigilance reviewing arrangements. An affirmative is determined. Does the remuneration
under the anti-kickback statute. answer to one or more of these take into account, directly or indirectly,
Although liability under the anti- questions is a red flag signaling an
kickback statute ultimately turns on a arrangement or practice that may be 95 Parties to an arrangement cannot obtain safe
party’s intent, it is possible to identify particularly susceptible to fraud and harbor protection by entering into a sham contract
that complies with the written agreement
arrangements or practices that may abuse. requirement of a safe harbor and appears, on paper,
Nursing facilities that have identified to meet all of the other safe harbor requirements,
94 See, e.g., CMS, Form 855A, ‘‘Medicare Federal potentially problematic arrangements or but does not reflect the actual arrangement between
Health Care Provider/Supplier Application,’’ practices can take a number of steps to the parties. In other words, in assessing compliance
Certification Statement at section 15, paragraph A.3, with a safe harbor, the question is not whether the
available on CMS’s Web site at http://
reduce or eliminate the risk of an anti- terms in a written contract satisfy all of the safe
www.cms.hhs.gov/CMSForms/downloads/ kickback violation. Most importantly, harbor requirements, but whether the actual
CMS855a.pdf. the anti-kickback statute and the arrangement satisfies the requirements.
the volume or value of business specific parties about their particular free to use for a variety of purposes in
generated? Is the remuneration business arrangements.96 A nursing addition to receiving test results. In that
conditioned in whole or in part on facility concerned about an existing or situation the computer has a definite value to
the physician, and, depending on the
referrals or other business generated proposed arrangement may request a circumstances, may well constitute an illegal
between the parties? Is the arrangement binding OIG advisory opinion regarding inducement.97
itself conditioned, directly or indirectly, whether the arrangement violates the
on the volume or value of Federal health Federal anti-kickback statute or other Similarly, with respect to free
care program business? Is there any OIG fraud and abuse authorities. services, OIG observed in a Special
service provided other than referrals? Procedures for requesting an advisory Fraud Alert that:
• Value of the remuneration. Is the opinion are set out at 42 CFR part 1008. While the mere placement of a laboratory
remuneration fair-market value in an The safe harbor regulations (and employee in the physician’s office would not
arm’s-length transaction for legitimate, accompanying Federal Register necessarily serve as an inducement
reasonable, and necessary services that preambles), fraud alerts and bulletins, prohibited by the anti-kickback statute, the
are actually rendered? Is the nursing statute is implicated when the phlebotomist
advisory opinions (and instructions for performs additional tasks that are normally
facility paying an inflated rate to a obtaining them, including a list of the responsibility of the physician’s office
potential referral source? Is the nursing frequently asked questions), and other staff. These tasks can include taking vital
facility receiving free or below-market- guidance are available on our Web site signs or other nursing functions, testing for
rate items or services from a provider or at http://oig.hhs.gov. the physician’s office laboratory, or
supplier? Is compensation tied, directly The following discussion highlights performing clerical services. Where the
or indirectly, to Federal health care several known areas of potential risk phlebotomist performs clerical or medical
program reimbursement? Is the under the anti-kickback statute. The functions not directly related to the
collection or processing of laboratory
determination of fair-market value based propriety of any particular arrangement specimens, a strong inference arises that he
upon a reasonable methodology that is can only be determined after a detailed or she is providing a benefit in return for the
uniformly applied and properly examination of the attendant facts and physician’s referrals to the laboratory. In
documented? circumstances. The identification of a such a case, the physician, the phlebotomist,
• Nature of items or services given practice or activity as ‘‘suspect’’ or and the laboratory may have exposure under
provided. Are items and services as an area of risk does not mean it is the anti-kickback statute. This analysis
actually needed and rendered, necessarily illegal or unlawful, or that it applies equally to the placement of
commercially reasonable, and necessary phlebotomists in other health care settings,
cannot be properly structured to fit in a including nursing homes, clinics and
to achieve a legitimate business safe harbor. It also does not mean that hospitals.98
purpose? the practice or activity is not beneficial
• Potential Federal program impact. from a clinical, cost, or other The principles illustrated by each of
Does the remuneration have the perspective. Instead, the areas identified the above examples also apply in the
potential to affect costs to any of the below are practices that have a potential nursing facility context. The provision
Federal health care programs or their for abuse and that should receive close of goods or services that have
beneficiaries? Could the remuneration scrutiny from nursing facilities. independent value to the recipient or
lead to overutilization or inappropriate that the recipient would otherwise have
utilization? 1. Free Goods and Services to provide at its own expense confers a
• Potential conflicts of interest. OIG has a longstanding concern about benefit on the recipient. This benefit
Would acceptance of the remuneration the provision of free goods or services may constitute prohibited remuneration
diminish, or appear to diminish, the to an existing or potential referral under the anti-kickback statute, if one
objectivity of professional judgment? source. There is a substantial risk that purpose of the remuneration is to
Are there patient safety or quality-of- free goods or services may be used as a generate referrals of Federal health care
care concerns? If the remuneration vehicle to disguise or confer an program business.
relates to the dissemination of unlawful payment for referrals of Examples of suspect free goods and
information, is the information Federal health care program business. services arrangements that warrant
complete, accurate, and not misleading? For example, OIG gave the following careful scrutiny include:
• Manner in which the arrangement • Pharmaceutical consultant services,
warning about free computers in the
is documented. Is the arrangement medication management, or supplies
preamble to the 1991 safe harbor
properly and fully documented in offered by a pharmacy;
regulations: • Infection control, chart review, or
writing? Are the nursing facilities and
A related issue is the practice of giving other services offered by laboratories or
outside providers and suppliers away free computers. In some cases the
documenting the items and services other suppliers;
computer can only be used as part of a • Equipment, computers, or software
they provide? Is the nursing facility particular service that is being provided, for
monitoring items and services provided applications 99 that have independent
example, printing out the results of
by outside providers and suppliers? Are laboratory tests. In this situation, it appears value to the nursing facility;
arrangements actually conducted that the computer has no independent value
97 56 FR 35952 and 35978 (July 29, 1991),
according to the terms of the written apart from the service being provided and
that the purpose of the free computer is not ‘‘Medicare and State Health Care Programs: Fraud
agreements? It is the substance, not the and Abuse; OIG Anti-Kickback Provisions,’’
to induce an act that is prohibited by the
written form, of an arrangement that is statute * * * In contrast, sometimes the
available on our Web site at http://oig.hhs.gov/
determinative. fraud/docs/safeharborregulations/072991.htm.
computer that is given away is a regular 98 59 FR 65372, 65377 (December 19, 1994),
These inquiries—and appropriate personal computer, which the physician is ‘‘Publication of OIG Special Fraud Alerts,’’
follow-up inquiries—can help nursing available on our Web site at http://oig.hhs.gov/
facilities identify, address, and avoid 96 While informative for guidance purposes, an fraud/docs/alertsandbulletins/121994.html.
problematic arrangements. OIG advisory opinion is binding only with respect 99 There is a safe harbor for electronic health
Available OIG guidance on the anti- to the particular party or parties that requested the records software arrangements at 42 CFR
opinion. The analyses and conclusions set forth in 1001.952(y), which can be used by nursing
kickback statute includes OIG Special OIG advisory opinions are fact-specific. facilities. The safe harbor is available if all of its
Fraud Alerts and advisory bulletins. Accordingly, different facts may lead to different conditions are satisfied. The safe harbor does not
OIG also issues advisory opinions to results. protect free hardware or equipment.
• DME or supplies offered by DME (b) Physician Services exception covers only reductions in the
suppliers for patients covered by the product’s or service’s price.
SNF Part A benefit; Nursing facilities also arrange for
physicians to provide medical director, In conducting business, nursing
• A laboratory phlebotomist facilities routinely purchase items and
providing administrative services; quality assurance, and other services.
Such physician oversight and services reimbursable by Federal health
• A hospice nurse providing nursing
services for non-hospice patients; and involvement at the nursing facility care programs. Therefore, they should
• A registered nurse provided by a contributes to the quality of care familiarize themselves with the
hospital. furnished to the residents. These discount safe harbor at 42 CFR
Nursing facilities should be mindful physicians, however, may also be in a 1001.952(h). In particular, nursing
that, depending on the circumstances, position to generate Federal health care facilities should insure that all
these and similar arrangements may program business for the nursing discounts—including any rebates—are
subject the parties to liability under the facility. For instance, these physicians properly disclosed and accurately
anti-kickback statute, if the requisite may refer patients for admission. They reflected on their cost reports (and in
intent is present. may order items and services that result any claims as appropriate) filed with a
in an increased RUG or that are billable Federal program. In addition, some
2. Services Contracts nursing facilities purchase products
separately by the nursing facility.
(a) Non-Physician Services Physician arrangements need to be through group purchasing organizations
Often kickbacks are disguised as closely monitored to ensure that they (GPOs) to which they belong. Any
otherwise legitimate payments or are are not vehicles to pay physicians for discounts received from vendors who
hidden in business arrangements that referrals. As with other services sell their products under a GPO contract
appear, on their face, to be appropriate. contracts, nursing facilities should should be properly disclosed and
In addition to the provision of free periodically review these arrangements accurately reported on the nursing
goods and services, the provision or to ensure that: (i) There is a legitimate facility’s cost reports. Although there is
receipt of goods or services at non-fair- need for the services; (ii) the services are a safe harbor for administrative fees
market value rates presents a heightened provided; (iii) the compensation is at paid by a vendor to a GPO,102 that safe
risk of fraud and abuse. Nursing fair-market value in an arm’s-length harbor does not protect discounts
facilities often arrange for certain transaction; and (iv) the arrangement is provided by a vendor to purchasers of
services and supplies to be provided to not related in any manner to the volume products.
residents by outside suppliers and or value of Federal health care program
business. In addition, prudent nursing (b) Swapping
providers, such as pharmacies, clinical
laboratories, DME suppliers, ambulance facilities will maintain Nursing facilities often obtain
providers, parenteral and enteral contemporaneous documentation of the discounts from suppliers and providers
nutrition (PEN) suppliers, diagnostic arrangement, including, for example, on items and services that the nursing
testing facilities, rehabilitation the compensation terms, time logs or facilities purchase for their own
companies, and physical, occupational, other accounts of services rendered, and account. In negotiating arrangements
and speech therapists. These the basis for determining compensation. with suppliers and providers, a nursing
relationships need to be closely Prudent facilities will also take steps to facility should be careful that there is no
scrutinized under the anti-kickback ensure that they have not engaged more link or connection, explicit or implicit,
statute to ensure that they are not medical directors or other physicians between discounts offered or solicited
vehicles to disguise kickbacks from the than necessary for legitimate business for business that the nursing facility
suppliers and providers to the nursing purposes. They will also ensure that pays for and the nursing facility’s
facility to influence the nursing facility compensation is commensurate with the referral of business billable by the
to refer Federal health care program skill level and experience reasonably supplier or provider directly to
business to the suppliers and providers. necessary to perform the contracted
To minimize their risk, nursing Medicare or another Federal health care
services. To eliminate their risk, nursing program. For example, nursing facilities
facilities should periodically review facilities should structure services
contractor and staff arrangements to should not engage in ‘‘swapping’’
arrangements to comply with the arrangements by accepting a low price
ensure that: (i) There is a legitimate personal services and management
need for the services or supplies; (ii) the from a supplier or provider on an item
contracts safe harbor 101 whenever
services or supplies are actually or service covered by the nursing
possible.
provided and adequately documented; facility’s Part A per diem payment in
(iii) the compensation is at fair-market 3. Discounts exchange for the nursing facility
value in an arm’s-length transaction; (a) Price Reductions referring to the supplier or provider
and (iv) the arrangement is not related other Federal health care program
in any manner to the volume or value Public policy favors open and business, such as Part B business
of Federal health care program business. legitimate price competition in health excluded from consolidated billing, that
Nursing facilities are well-advised to care. Thus, the anti-kickback statute the supplier or provider can bill directly
have all of the preceding facts contains an exception for discounts to a Federal health care program. Such
documented contemporaneously and offered to customers that submit claims ‘‘swapping’’ arrangements implicate the
prior to payment to the provider of the to the Federal health care programs, if anti-kickback statute and are not
supplies or services. To eliminate their the discounts are properly disclosed and protected by the discount safe harbor.
risk, nursing facilities should structure accurately reported. However, to qualify Nursing facility arrangements with
services arrangements to comply with for the exception, the discount must be clinical laboratories, DME suppliers,
the personal services and management in the form of a reduction in the price and ambulance providers are some
contracts safe harbor 100 whenever of the good or service based on an arm’s- examples of arrangements that may be
possible. length transaction. In other words, the prone to ‘‘swapping’’ problems.
100 42 CFR 1001.952(b) 101 42 CFR 1001.952(d). 102 42 CFR 1001.952(d).
As we have previously explained in providing hospice services to the • A hospice providing staff at its
other guidance,103 the size of a discount hospice’s patients.105 Nursing facilities expense to the nursing facility.
is not determinative of an anti-kickback should be mindful that requesting or For additional guidance on
statute violation. Rather, the appropriate accepting remuneration from a hospice arrangements with hospices, nursing
question to ask is whether the discount may subject the nursing facility and the facilities should review OIG’s Special
is tied or linked, directly or indirectly, hospice to liability under the anti-
Fraud Alert on Nursing Home
to referrals of other Federal health care kickback statute if the remuneration
program business. When evaluating Arrangements with Hospices.107
might influence the nursing facility’s
whether an improper connection exists decision to do business with the Whenever possible, nursing facilities
between a discount offered to a nursing hospice.106 should structure their relationships with
facility and referrals of Federal health Some of the practices that are suspect hospices to fit in a safe harbor, such as
care program business billed by a under the anti-kickback statute include: the personal services and management
supplier or provider, suspect • A hospice offering free goods or contracts safe harbor.108
arrangements include below-cost goods at below fair-market value to 5. Reserved Bed Arrangements
arrangements or arrangements at prices induce a nursing facility to refer
lower than the prices offered by the patients to the hospice; Sometimes hospitals arrange with
supplier or provider to other customers • A hospice paying room and board nursing facilities to accept discharged
with similar volumes of business, but payments to the nursing facility in Medicare patients. Under some reserved
without Federal health care program amounts in excess of what the nursing bed arrangements, hospitals provide
referrals. Other suspect practices facility would have received directly remuneration to nursing facilities to
include, but are not limited to, from Medicaid had the patient not been keep certain beds available and open for
discounts that are coupled with enrolled in hospice. Any additional the hospital’s own patients.109 Payments
exclusive provider agreements and payment must represent the fair-market from hospitals to nursing facilities to
discounts or other pricing schemes value of additional services actually
made in conjunction with explicit or reserve a bed may pose risk under the
provided to that patient that are not anti-kickback statute if one purpose of
implicit agreements to refer other included in the Medicaid daily rate;
facility business. In sum, if any direct or the arrangement is to induce referrals to
• A hospice paying amounts to the the hospital.
indirect link exists between a price nursing facility for additional services
offered by a supplier or provider to a that Medicaid considers to be included These arrangements should be
nursing facility for items or services that in its room and board payment to the reviewed to ensure that the payment is
the nursing facility pays for out-of- hospice; not a disguised payment for referrals
pocket and referrals of Federal business • A hospice paying above fair-market from the nursing facility to the hospital.
for which the supplier or provider can value for additional services that Examples of some potentially
bill a Federal health care program, the Medicaid does not consider to be problematic arrangements include: (1)
anti-kickback statute is implicated. included in its room and board payment Payments that are more than the actual
4. Hospices to the nursing facility; cost to the nursing facility of holding an
Hospice services for terminally ill • A hospice referring its patients to a empty bed; (2) payments for ‘‘lost
patients are typically provided in the nursing facility to induce the nursing opportunity’’ or similar costs that are
patients’ homes. In some cases, facility to refer its patients to the calculated based on a nursing facility’s
however, a nursing facility is the hospice; revenues for an occupied bed; and (3)
patient’s home. In such cases, nursing • A hospice providing free (or below payments for more beds than the
facilities often arrange for the provision fair-market value) care to nursing hospital legitimately needs. Payments
of hospice services in the nursing facility patients, for whom the nursing should be for the limited purpose of
facility if the resident meets the hospice facility is receiving Medicare payment securing needed beds, not future
eligibility criteria and elects the hospice under the SNF benefit, with the referrals.
benefit. These arrangements pose expectation that after the patient
several fraud and abuse risks. For exhausts the SNF benefit, the patient 107 OIG Special Fraud Alert on Fraud and Abuse
example, to induce referrals, a hospice will receive hospice services from that in Nursing Home Arrangements with Hospices,
may offer a nursing facility hospice; and March 1998, available on our Web site at http://
remuneration in the form of free nursing oig.hhs.gov/fraud/docs/alertsandbulletins/
at http://www.cms.hhs.gov/Manuals/. For Medicaid hospice.pdf.
services for non-hospice patients; 108 42 CFR 1001.952(d).
patients, the State will pay the hospice at least 95
additional room and board percent of the State’s Medicaid daily nursing 109 The Provider Reimbursement Manual provides
payments; 104 or inflated payments for facility rate, and the hospice is then responsible for as follows:
paying the nursing facility for the beneficiary’s Providers are permitted to enter into reserved bed
103 See, e.g., OIG’s September 22, 1999 letter room and board. Section 1902(a)(13)(B) of the Act agreements, as long as the terms of that agreement
regarding ‘‘Discount Arrangements Between (42 U.S.C. 1396a(a)(13)(B)). do not violate the provisions of the statute and
Clinical Laboratories and SNFs’’ (referencing OIG 105 Under the regulations at 42 CFR 418.80,
regulations which govern provider agreements
Advisory Opinion No. 99–2 issued February 26, hospices must generally furnish substantially all of which (1) Prohibit a provider from charging the
1999), available on our Web site at http:// the core hospice service themselves. Hospices are
beneficiary or other party for covered services; (2)
oig.hhs.gov/fraud/docs/safeharborregulations/ permitted to furnish non-core services under
prohibit a provider from discriminating against
rs.htm; 56 FR 35952 at the preamble (July 29, 1991), arrangements with other providers or suppliers,
Medicare beneficiaries, as a class, in admission
‘‘Medicare and State Health Care Programs: Fraud including nursing facilities. 42 CFR 418.56; CMS,
and Abuse; OIG Anti-Kickback Provisions,’’ State Operations Manual, chapter 2, section 2082C, policies; or (3) prohibit certain types of payments
available on our Web site at http://oig.hhs.gov/ available on CMS’s Web site at http:// in connection with referring patients for covered
fraud/docs/safeharborregulations/072991.htm. www.cms.hhs.gov/Manuals/IOM/list.asp. services. A provider may jeopardize its provider
104 The Medicare reimbursement rate for routine 106 Under certain circumstances, a nursing facility agreement or incur other penalties if it enters into
hospice services provided in a nursing facility does that knowingly refers to a hospice patients who do a reserved bed agreement that violates these
not include room and board expenses, so payment not qualify for the hospice benefit may be liable for requirements.
for room and board may be the responsibility of the the submission of false claims. The Medicare CMS, Provider Reimbursement Manual, section
patient. CMS, Medicare Benefit Policy Manual, hospice eligibility criteria are found at 42 CFR 2105.3(D), available on CMS’s Web site at http://
chapter 9, section 20.3, available on CMS’s Web site 418.20. www.cms.hhs.gov/Manuals/PBM.
D. Other Risk Areas financial relationship, there is no consistent, and objective determinations
physician self-referral issue. If there is a of fair-market value and for ensuring
1. Physician Self-Referrals
financial relationship, the next inquiry that needed items and services are
Nursing facilities should familiarize is: furnished or rendered. Nursing facilities
themselves with the physician self- • Does the financial relationship fit in should also implement systems to track
referral law (section 1877 of the Act),110 an exception? If not, the statute is non-monetary compensation provided
commonly known as the ‘‘Stark’’ law. violated. annually to referring physicians (such as
The physician self-referral law prohibits Detailed regulations regarding the free parking or gifts) and ensure that
entities that furnish ‘‘designated health italicized terms are set forth in such compensation does not exceed
services’’ (DHS) from submitting—and regulations at 42 CFR 411.351 through limits set forth in the physician self-
Medicare from paying—claims for DHS 411.361 (substantial additional referral regulations.
if the referral for the DHS comes from explanatory material appears in
a physician with whom the entity has a preambles to the final regulations: 66 FR Further information about the
prohibited financial relationship. This is 856 (January 4, 2001), 69 FR 16054 physician self-referral law and
true even if the prohibited financial (March 26, 2004), and 72 FR 51012 applicable regulations can be found on
relationship is the result of inadvertence (September 5, 2007)).113 CMS’s Web site at http://
or error. Violations can result in Nursing facilities should pay www.cms.hhs.gov/Physician
refunding of the prohibited payment particular attention to their SelfReferral/. Information regarding
and, in cases of knowing violations, relationships with attending physicians CMS’s physician self-referral advisory
CMPs, and exclusion from the Federal who treat residents and with physicians opinion process can be found at http://
health care programs. Knowing who are nursing facility owners, www.cms.hhs.gov/Physician
violations of the physician self-referral investors, medical directors, or SelfReferral/07_
law can also form the basis for liability consultants. The statutory and advisory_opinions.asp#TopOfPage.
under the False Claims Act. regulatory exceptions are key to
2. Anti-Supplementation
Nursing facility services, including compliance with the physician self-
SNF services covered by the Part A PPS referral law. Exceptions exist for many As a condition of its Medicare
payment, are not DHS for purposes of common types of arrangements.114 To fit provider agreement and under
the physician self-referral law. However, in an exception, an arrangement must applicable Medicaid regulations and a
laboratory services, physical therapy squarely meet all of the conditions set criminal provision precluding
services, and occupational services are forth in the exception. Importantly, it is supplementation of Medicaid payment
among the DHS covered by the the actual relationship between the rates, a nursing facility must accept the
statute.111 Nursing facilities that bill parties, and not merely the paperwork, applicable Medicare or Medicaid
Part B for laboratory services, physical that must fit in an exception. Unlike the payment (including any beneficiary
therapy services, occupational therapy anti-kickback safe harbors, which are coinsurance or copayments authorized
services, or other DHS pursuant to the voluntary, fitting in an exception is under those programs), respectively, for
consolidated billing rules are mandatory under the physician self- covered items and services as the
considered entities that furnish DHS.112 referral law. Compliance with a complete payment.115 For covered items
Accordingly, nursing facilities should physician self-referral law exception
and services, a nursing facility may not
review all financial relationships with does not immunize an arrangement
charge a Medicare or Medicaid
physicians who refer or order such under the anti-kickback statute.
beneficiary, or another person in lieu of
services to ensure compliance with the Therefore, arrangements that implicate
the beneficiary, any amount in addition
physician self-referral law. the physician self-referral law should
to what is otherwise required to be paid
When analyzing potential physician also be analyzed under the anti-
kickback statute. under Medicare or Medicaid (i.e., a cost-
self-referral situations, the following
In addition to reviewing particular sharing amount). For example, an SNF
three part inquiry is useful:
may not condition acceptance of a
• Is there a referral (including, but arrangements, nursing facilities can
implement several systemic measures to beneficiary from a hospital upon
not limited to, ordering a service for a
guard against violations. First, many of receiving payment from the hospital or
resident) from a physician for a
designated health service? If not, there the potentially applicable exceptions the beneficiary’s family in an amount
is no physician self-referral issue. If yes, require written, signed agreements greater than what the SNF would
then the next inquiry is: between the parties. Nursing facilities receive under the PPS. For Medicare
• Does the physician (or an should enter into appropriate written and Medicaid beneficiaries, a nursing
immediate family member) have a direct agreements with physicians. In facility may not accept supplemental
or indirect financial relationship with addition, nursing facilities should payments, including, but not limited to,
the nursing facility? A financial review their contracting processes to cash and free or discounted items and
relationship can be created by ensure that they obtain and maintain services, from a hospital or other source
ownership, investment, or signed agreements covering all time merely because the nursing facility
compensation; it need not relate to the periods for which an arrangement is in considers the Medicare or Medicaid
furnishing of DHS. If there is no place. Second, many exceptions require payment to be inadequate (although a
fair-market value compensation for nursing facility may accept donations
110 42 U.S.C. 1395nn. items and services actually needed and unrelated to the care of specific
111 The complete list of DHS is found at section rendered. Thus, nursing facilities patients). The supplemental payment
1877(h)(6) of the Act (42 U.S.C. 1395nn(h)(6)) and should have appropriate processes for would be a prohibited charge imposed
42 CFR 411.351.
making and documenting reasonable, by the nursing facility on another party
112 See 66 FR 856, 923 (January 4, 2001),
‘‘Medicare and Medicaid Programs; Physicians’

113 Available on CMS’s Web site at http://
Referrals to Health Care Entities With Which They 115 Section 1866(a) of the Act (42 U.S.C.
Have Financial Relationships,’’ available on CMS’s www.cms.hhs.gov/PhysicianSelfReferral. 1395cc(a)); 42 CFR 489.20; section 1128B(d) of the
Web site at http://www.cms.hhs.gov/PhysicianSelf 114 Section 1877(b)–(e) of the Act (42 U.S.C. Act (42 U.S.C. 1320a–7b(d)); 42 CFR 447.15; 42 CFR
Referral/Downloads/66FR856.pdf. 1395nn(b)–(e)). See also 42 CFR 411.351–411.357. 483.12(d)(3).
for services that are already covered by Plan is ensured by section 1860D–1 of on its own unique circumstances.
Medicare or Medicaid.116 the Act.122 Nursing facilities may not Covered entities may consider their
limit this choice in the Part D program. organization and capabilities, as well as
3. Medicare Part D
costs, in designing their security plans
Medicare Part D extends voluntary E. HIPAA Privacy and Security Rules
and procedures. Questions about the
prescription drug coverage to all As of April 14, 2003, all nursing HIPAA Security Rule should be
Medicare beneficiaries, 117 including facilities that conduct electronic submitted to CMS.127
individuals who reside in nursing transactions governed by HIPAA are
facilities. Like all Medicare required to comply with the Privacy IV. Other Compliance Considerations
beneficiaries, nursing facility residents Rule adopted under HIPAA.123 A. An Ethical Culture
who decide to enroll in Part D have the Generally, the HIPAA Privacy Rule
Every effective compliance program
right to choose their Part D plans.118 addresses the use and disclosure of
begins with a formal commitment to
Part D plans offer a variety of drug individuals’ personally identifiable
compliance by the nursing facility’s
formularies and have arrangements with health information (called ‘‘protected
governing body and senior management.
a variety of pharmacies to administer health information’’ or PHI) by covered
Evidence of that commitment includes
drugs to the plan’s enrollees. Nursing nursing facilities and other covered
active involvement of the organizational
facilities also enter into arrangements entities. The Privacy Rule also covers
leadership; allocation of adequate
with pharmacies to administer drugs. individuals’ privacy rights to
resources; a reasonable timetable for
Typically, these are exclusive or semi- understand and control how their health
implementation of the compliance
exclusive arrangements designed to ease information is used. The Privacy Rule
measures; and the identification of a
administrative burdens and coordinate also requires nursing facilities to
compliance officer and compliance
accurate administration of drugs to disclose PHI to the individual who is
committee vested with sufficient
residents. When a resident is selecting the subject of the PHI or to the Secretary
autonomy, authority, and accountability
a particular Part D plan, it may be that of the Department of Health and Human
to implement and enforce appropriate
the Part D plan that best satisfies a Services under certain circumstances.
compliance measures. A nursing
beneficiary’s needs does not have an The Privacy Rule and helpful
facility’s leadership should foster an
arrangement with the nursing facility’s information about how it applies can be
organizational culture that values, and
pharmacy. CMS has stated that it found on the Web site of the
even rewards, the prevention, detection,
expects nursing facilities ‘‘to work with Department’s Office for Civil Rights
and resolution of problems. Moreover, a
their current pharmacies to assure that (OCR).124 Questions about the Privacy
nursing facility’s leadership and
they recognize the Part D plans chosen Rule should be submitted to OCR.125
The Privacy Rule gives covered management should ensure that policies
by that facility’s Medicare beneficiaries,
nursing facilities and other covered and procedures, such as compensation
or, in the alternative, to add additional
entities some flexibility to create their structures, do not create undue pressure
pharmacies to achieve that
own privacy procedures. Each nursing to pursue profit over compliance. The
objective.’’ 119 CMS also suggests that a
facility should make sure that it is effectiveness of these policies and
nursing facility ‘‘could contract
compliant with all applicable provisions procedures should be periodically re-
exclusively with another pharmacy that
of the Privacy Rule, including standards evaluated. In short, the nursing facility
contracts more broadly with Part D
for the use and disclosure of PHI with should endeavor to develop a culture
plans.’’ 120
Nursing facilities must be particularly and without patient authorization and that values compliance from the top
careful not to act in ways that would the provisions pertaining to permitted down and fosters compliance from the
frustrate a beneficiary’s freedom of and required disclosures. bottom up. Such an organizational
choice in choosing a Part D plan. CMS The HIPAA Security Rule specifies a culture is the foundation of an effective
has stated that ‘‘[u]nder no series of administrative, technical, and compliance program.
physical security safeguards for covered Although a clear statement of detailed
circumstances should a nursing home
entities to ensure the confidentiality of and substantive policies and
require, request, coach or steer any
electronic PHI.126 Nursing facilities that procedures—and the periodic
resident to select or change a plan for evaluation of their effectiveness—are at
any reason,’’ nor should it ‘‘knowingly are covered entities were required to be
the core of a compliance program, OIG
and/or willingly allow the pharmacy compliant with the Security Rule by
recommends that nursing facilities also
servicing the nursing home’’ to do the April 20, 2005. The Security Rule
develop a general organizational
same.121 Nursing facilities and their requirements are flexible and scalable,
statement of ethical and compliance
employees and contractors should not which allows each covered entity to
principles to guide their operations. One
accept any payments from any plan or tailor its approach to compliance based
common expression of this statement of
pharmacy to influence a beneficiary to principles is a code of conduct. The
122 42 U.S.C. 1395w–101.
select a particular plan. Beneficiary code should function as the nursing
123 45 CFR parts 160 and 164, subparts A and E;
freedom of choice in choosing a Part D facility’s constitution. It should be a
available at http://www.hhs.gov/ocr/hipaa/
116 See id.; see also CMS, Skilled Nursing Facility
finalreg.html. In addition to the HIPAA Privacy and document that details the fundamental
Security Rules, facilities should also take steps to principles, values, and framework for
Manual, chapter 3, sections 317 and 318, available adhere to the privacy and confidentiality
on CMS’s Web site at http://www.cms.hhs.gov/ requirements for residents’ personal and clinical
action within the organization. The code
Manuals/PBM/list.asp. records, 42 CFR 483.10(e), and any applicable State of conduct for a nursing facility should
117 Section 1860D–1 of the Act (42 U.S.C.
privacy laws. articulate a commitment to compliance
1395w 101). 124 OCR, ‘‘Office of Civil Rights—HIPAA,’’
by management, employees, and
118 Id.
available at http://www.hhs.gov/ocr/hipaa/. contractors. It should summarize the
119 See CMS Survey and Certification Group’s 125 Nursing facilities can contact OCR by
broad ethical and legal principles under
May 11, 2006 letter to State Survey Agency following the instructions on its Web site, available
Directors, available on CMS’s Web site at http:// at http://www.hhs.gov/ocr/contact.html, or by which the nursing facility must operate.
www.cms.hhs.gov/SurveyCertificationGenInfo/ calling the HIPAA toll-free number, (866) 627–7748.
downloads/SCLetter06-16.pdf. 126 45 CFR parts 160 and 164, subparts A and C, 127 Nursing facilities can contact CMS by
120 Id.
available on CMS’s Web site at http://www.cms.gov/ following the instructions on its Web site, http://
121 Id. SecurityStandard/02_Regulations.asp. www.cms.hhs.gov/HIPAAGenInfo/.
The code of conduct should also OIG’s 2000 Nursing Facility CPG, which oversight and management
include a requirement that professionals explains in detail the fundamental responsibilities.
follow the ethical standards dictated by elements of a compliance program.128
V. Self-Reporting
their respective professional Nursing facilities may also wish to
organizations. consult quality of care corporate If the compliance officer, compliance
The code of conduct should be brief, integrity agreements (CIAs) entered into committee, or a member of senior
easily readable, and cover general between OIG and parties settling management discovers credible
principles applicable to all members of specific matters.129 evidence of misconduct from any source
the organization. OIG strongly and, after a reasonable inquiry, believes
encourages broad participation in C. Communication to Decisionmakers that the misconduct may violate
creating and implementing an Good compliance practices may criminal, civil, or administrative law,
organization’s code of conduct and include the development of a the nursing facility should promptly
compliance program. This may include, mechanism, such as a ‘‘dashboard,’’ 130 report the existence of the misconduct
as appropriate, the participation and designed to communicate effectively to the appropriate Federal and State
involvement of the nursing facility’s appropriate compliance and authorities.132 The reporting should
board of directors, officers (including performance-related information to a occur within a reasonable period, but
the chief executive officer), members of nursing facility’s board of directors and not longer than 60 days,133 after
senior management, quality assurance senior officers. The dashboard or other determining that there is credible
staff, compliance staff, representatives communication tool should include evidence of a violation.134 Prompt
from the medical and clinical staffs, and quality of care information. Further voluntary reporting will demonstrate
other nursing facility personnel in the information and resources about quality the nursing facility’s good faith and
development of all aspects of the of care dashboards are available on our willingness to work with governmental
compliance program, especially the Web site.131 authorities to correct and remedy the
code of conduct. Management and When communication tools such as problem. In addition, prompt reporting
employee involvement in this process dashboards are properly implemented of misconduct will be considered a
communicates a strong and explicit and include quality of care information, mitigating factor by OIG in determining
commitment by management to foster the directors and senior officers can, administrative sanctions (e.g., penalties,
compliance with applicable Federal among other things: (1) Demonstrate a assessments, and exclusion) if the
health care program requirements. It commitment to quality of care and foster reporting nursing facility becomes the
also communicates the need for all an organization-wide culture that values subject of an OIG investigation.135
directors, officers, managers, employees, quality of care; (2) improve the facility’s
contractors, and medical and clinical quality of care through increased
132 Appropriate Federal and State authorities
staff members to comply with the include OIG, CMS, the Criminal and Civil Divisions
awareness of and involvement in the of the Department of Justice, the U.S. Attorney in
organization’s code of conduct and oversight of quality of care issues; and relevant districts, the Food and Drug
policies and procedures. (3) track and trend quality of care data Administration, the Department’s Office for Civil
(e.g., State agency survey results, Rights, the Federal Trade Commission, the Drug
B. Regular Review of Compliance Enforcement Administration, the Federal Bureau of
Program Effectiveness outcome care and delivery data, and Investigation, and the other investigative arms for
staff retention and turnover data) to the agencies administering the affected Federal or
Effective compliance requires identify potential quality of care State health care programs, such as the State
effective systems and structures. The problems, identify areas in which the Medicaid Fraud Control Unit, the Defense Criminal
following elements are common to organization is providing high quality of
Investigative Service, the Department of Veterans
building effective compliance programs: Affairs, the Health Resources and Services
care, and measure progress on quality of Administration, and the Office of Personnel
• Designation of a compliance officer
care initiatives. Each dashboard should Management (which administers the Federal
and compliance committee; Employee Health Benefits Program).
• Development of compliance be tailored to meet the specific needs 133 To qualify for the ’’not less than double
policies and procedures, including and sophistication of the implementing damages’’ provision of the False Claims Act, the
standards of conduct; nursing facility, its board members, and provider must provide the report to the government
• Developing open lines of senior officers. OIG views the use of within 30 days after the date when the provider first
dashboards, and similar tools, as a obtained the information. 31 U.S.C. 3729(a).
communication; 134 Some violations may be so serious that they
• Appropriate training and teaching; helpful compliance practice that can
warrant immediate notification to governmental
• Internal monitoring and auditing; lead to improved quality of care and authorities prior to, or simultaneous with,
• Response to detected deficiencies; assist the board members and senior commencing an internal investigation. By way of
and officers in fulfilling, respectively, their example, OIG believes a provider should
immediately report misconduct that: (i) is a clear
• Enforcement of disciplinary violation of administrative, civil, or criminal laws;
standards. 128 2000 Nursing Facility CPG, supra note 2, at
(ii) poses an imminent danger to a patient’s safety;
Nursing facilities should regularly 14289. (iii) has a significant adverse effect on the quality
129 OIG, ‘‘Corporate Integrity Agreements,’’
review the implementation and of care provided to Federal health care program
available on our Web site at http://oig.hhs.gov/ beneficiaries; or (iv) indicates evidence of a
execution of their compliance program fraud/cias.html. systemic failure to comply with applicable laws or
systems and structures. This review 130 Much like the dashboard of a car, a an existing corporate integrity agreement, regardless
should be conducted annually. It should ‘‘dashboard’’ is an instrument that provides the of the financial impact on Federal health care
include an assessment of each of the recipient with a user-friendly (i.e., presented in an programs.
basic elements individually, as well as appropriate context) snapshot of the key pieces of 135 OIG has published criteria setting forth those
information needed by the recipient to oversee and factors that OIG takes into consideration in
the overall success of the program. This manage effectively the operation of an organization determining whether it is appropriate to exclude an
review should help nursing facilities and forestall potential problems, while avoiding individual or entity from program participation
identify any weaknesses in their information overload. pursuant to section 1128(b)(7) of the Act (42 U.S.C.
131 See, e.g., OIG, ‘‘Driving for Quality in Long- 1320a–7(b)(7)) for violations of various fraud and
compliance programs and implement
Term Care: A Board of Director’s Dashboard— abuse laws. See 62 FR 67392 (December 24, 1997),
appropriate changes. Nursing facilities Government-Industry Roundtable,’’ available on our ‘‘Criteria for Implementing Permissive Exclusion
seeking guidance on setting up effective Web site at http://oig.hhs.gov/fraud/docs/ Authority Under Section 1128(b)(7) of the Social
compliance operations should review complianceguidance/Roundtable013007.pdf Security Act.’’
To encourage providers to make a.m. to June 5, 2008, 5 p.m., Latham Contact Person: Reed A. Graves, PhD,
voluntary disclosures, OIG published Hotel, 3000 M Street, NW., Washington, Scientific Review Officer, Center for
the Provider Self-Disclosure Protocol.136 DC, 20007 which was published in the Scientific Review, National Institutes of
Health, 6701 Rockledge Drive, Room 6166,
When reporting to the Government, a Federal Register on April 4, 2008, 73 FR
MSC 7892, Bethesda, MD 20892, (301) 402–
nursing facility should provide all 18539–18542. 6297, gravesr@csr.nih.gov.
relevant information regarding the The meeting will be held one day
Name of Committee: Immunology
alleged violation of applicable Federal only June 4, 2008. The meeting time and Integrated Review Group; Cellular and
or State law(s) and the potential location remain the same. The meeting Molecular Immunology—B Study Section.
financial or other impact of the alleged is closed to the public. Date: May 29–30, 2008.
violation. The compliance officer, under Dated: April 9, 2008. Time: 8:30 a.m. to 2 p.m.
advice of counsel and with guidance Jennifer Spaeth,
Agenda: To review and evaluate grant
from governmental authorities, may be applications.
Director, Office of Federal Advisory Place: Residence Inn Bethesda, 7335
requested to continue to investigate the Committee Policy.
reported violation. Once the Wisconsin Avenue, Bethesda, MD 20814.
[FR Doc. E8–8044 Filed 4–15–08; 8:45 am] Contact Person: Betty Hayden, PhD,
investigation is completed, and
BILLING CODE 4140–01–M Scientific Review Officer, Center for
especially if the investigation ultimately Scientific Review, National Institutes of
reveals that criminal, civil, or Health, 6701 Rockledge Drive, Room 4206,
administrative violations have occurred, MSC 7812, Bethesda, MD 20892, 301–435–
DEPARTMENT OF HEALTH AND
the compliance officer should notify the 1223, haydenb@csr.nih.gov.
HUMAN SERVICES
appropriate governmental authority of Name of Committee: Center for Scientific
the outcome of the investigation. This National Institutes of Health Review Special Emphasis Panel; Pilot-scale
notification should include a Libraries for High-throughput Screening.
description of the impact of the alleged Center for Scientific Review; Notice of Date: May 29, 2008.
violation on the applicable Federal Closed Meetings Time: 8:30 a.m. to 6 p.m.
health care programs or their Agenda: To review and evaluate grant
Pursuant to section 10(d) of the applications.
beneficiaries.
Federal Advisory Committee Act, as Place: St. Gregory Hotel, 2033 M Street,
VI. Conclusion amended (5 U.S.C. Appendix 2), notice NW., Washington, DC 20036.
Contact Person: Mike Radtke, PhD,
In today’s environment of increased is hereby given of the following Scientific Review Officer, Center for
scrutiny of corporate conduct and meetings. Scientific Review, National Institutes of
increasingly large expenditures for The meetings will be closed to the Health, 6701 Rockledge Drive, Room 4176,
health care, it is imperative for nursing public in accordance with the MSC 7806, Bethesda, MD 20892, 301–435–
facilities to establish and maintain provisions set forth in sections 1728, radtkem@csr.nih.gov.
effective compliance programs. These 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., Name of Committee: Infectious Diseases
programs should foster a culture of as amended. The grant applications and and Microbiology Integrated Review Group;
compliance and a commitment to the discussions could disclose Drug Discovery and Mechanisms of
delivery of quality health care that confidential trade secrets or commercial Antimicrobial Resistance Study Section.
begins at the highest levels and extends property such as patentable material, Date: May 29–30, 2008.
throughout the organization. This and personal information concerning Time: 8 p.m. to 5 p.m.
individuals associated with the grant Agenda: To review and evaluate grant
supplemental CPG is intended as a
applications.
resource for nursing facilities to help applications, the disclosure of which Place: Doubletree Hotel Bethesda, 8120
them operate effective compliance would constitute a clearly unwarranted Wisconsin Avenue, Bethesda, MD 20814.
programs that decrease errors, fraud, invasion of personal privacy. Contact Person: Tera Bounds, DVM, PhD,
and abuse and increase compliance with Name of Committee: Center for Scientific Scientific Review Officer, Center for
Federal health care program Review Special Emphasis Panel; Member Scientific Review, National Institutes of
requirements for the benefit of the Conflicts: Psychopharmacology. Health, 6701 Rockledge Drive, Room 3198,
nursing facilities and their residents. Date: May 21–22, 2008. MSC 7808, Bethesda, MD 20892, (301) 435–
Time: 8 a.m. to 8 p.m. 2306, boundst@csr.nih.gov.
Dated: April 10, 2008.
Agenda: To review and evaluate grant Name of Committee: Endocrinology,
Daniel R. Levinson, applications. Metabolism, Nutrition and Reproductive
Inspector General. Place: National Institutes of Health, 6701 Sciences Integrated Review Group; Clinical
[FR Doc. E8–7993 Filed 4–15–08; 8:45 am] Rockledge Drive, Bethesda, MD 20892 and Integrative Diabetes and Obesity Study
BILLING CODE 4152–01–P (Virtual Meeting). Section.
Contact Person: Christine L. Melchior, Date: June 5–6, 2008.
PhD, Scientific Review Officer, Center for Time: 8 a.m. to 3 p.m.
DEPARTMENT OF HEALTH AND Scientific Review, National Institutes of Agenda: To review and evaluate grant
HUMAN SERVICES Health, 6701 Rockledge Drive, Room 5176, applications.
MSC 7844, Bethesda, MD 20892, (301) 435– Place: San Francisco Airport Marriott, 1800
National Institutes of Health 1713, melchioc@csr.nih.gov. Old Bayshore Highway, Burlingame, CA
Name of Committee: Endocrinology, 94010.
Center For Scientific Review; Amended Metabolism, Nutrition and Reproductive Contact Person: Nancy Sheard, SCD,
Sciences Integrated Review Group; Scientific Review Officer, Center for
Notice of Meeting
Integrative Physiology of Obesity and Scientific Review, National Institutes of
Notice is hereby given of a change in Diabetes Study Section. Health, 6701 Rockledge Drive, Room 6046–E,
the meeting of the Cell Structure and Date: May 29–30, 2008. MSC 7892, Bethesda, MD 20892, (301) 435–
1154, sheardn@csr.nih.gov.
Function Study Section, June 4, 2008, 8 Time: 8 a.m. to 3 p.m.

Agenda: To review and evaluate grant Name of Committee: Oncological Sciences
136 See 63 FR 58399 (October 30, 1998), applications. Integrated Review Group; Cancer Etiology
‘‘Publication of the OIG’s Provider Self-Disclosure Place: Hyatt Regency Bethesda, One Study Section.
Protocol,’’ available on our Web site at http:// Bethesda Metro Center, 7400 Wisconsin Date: June 9–10, 2008.
oig.hhs.gov/authorities/docs/selfdisclosure.pdf. Avenue, Bethesda, MD 20814. Time: 8 a.m. to 4 p.m.

Notice: Draft OIG Supplemental Compliance Program Guidance For Nursing Facilities

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20680 Federal Register / Vol. 73, No.

74 / Wednesday, April 16, 2008 / Notices

evaluation of ‘‘Economic Incentives for

resources, the needs of its resident needs.

of residents. 42 CFR 483.40. questions.cms.hhs.gov.

100 42 CFR 1001.952(b) 101 42 CFR 1001.952(d). 102 42 CFR 1001.952(d).

112 See 66 FR 856, 923 (January 4, 2001),

‘‘Medicare and Medicaid Programs; Physicians’

Function Study Section, June 4, 2008, 8 Time: 8 a.m. to 3 p.m.

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