Deeper Than the Headlines: Long Term Care Final Rule

It’s finally here. The long awaited Final Rule from CMS for Long-Term Care (LTC) facilities was recently published in the Federal Register on Tuesday, Oct. 4, 2016 (Fed. Reg. Vol. 81, No. 192 pages 68688-68872).

The Final Rule is a major overhaul of the requirements for SNFs to participate in Medicare and Medicaid. The requirement to maintain a “Compliance and Ethics Program,” is among the many provisions. I have previously written on the compliance and ethics program requirements that were proposed for SNFs. This Final Rule finalizes these proposals. All SNFs that wish to participate in Medicare or Medicaid will be required to have such a compliance program and surveyors will be including this in their assessments.

Final Rule Key Takeaways

A huge takeaway from the final rule is that compliance programs can no longer be an afterthought. One of the requirements is that the organization “must provide sufficient resources to reasonably assure compliance with the program’s standards, policies, and procedures.”

Additionally, all organizations “must also take steps to effectively communicate the standards, policies, and procedures of its program to its entire staff, individuals providing services under contractual arrangements, and volunteers.”

Larger organizations (i.e., those which operate five or more facilities) will have additional, formalized requirements, including:

• Mandatory annual training programs on the operating organization's compliance and ethics programs
• A designated compliance officer for whom their operating organization’s compliance and ethics program is a major responsibility
• Designated compliance liaisons located at each of the operating organization’s facilities

The designated compliance officer cannot be subordinate to the general counsel (GC), chief financial officer (CFO), or chief operating officer (COO). The compliance officer must also be able to report directly to the governing body.

Compliance Documents for SNFs

CMS will continue to publish additional guidance, but compliance programs take time to establish and the Final Rule already references resources that facilities should be considering and implementing now. Most prominent among these are the OIG’s compliance guidance documents. For SNFs, there are two documents:

• Compliance Program Guidance for Nursing Facilities (65 Fed. Reg. 14289; March 16, 2000)
• Supplemental Compliance Program Guidance for Nursing Facilities (73 Fed. Reg. 56832; September 30, 2008) 

Like the other compliance guidance documents the OIG has previously published, these documents, as well as the Final Rule, focus on the seven elements of an effective compliance program with special emphasis placed on areas prone to noncompliance in SNFs.

1. The general seven elements include:
2. Implementing written policies, procedures and standards of conduct
3. Designating a compliance officer and compliance committee
4. Conducting effective training and education
5. Developing effective lines of communication
6. Enforcing standards through well publicized disciplinary guidelines
7. Conducting internal monitoring and auditing
8. Responding promptly to detected offenses and developing corrective action

Where SNFs Should Focus Their Compliance Programs

Some of the areas SNFs should consider focusing their compliance programs, as outlined by the OIG and the CMS Proposed and Final Rules include:

• Resource Utilization Group (RUG) classification system
• Minimum Data Set (MDS)
• Resident Assessment Instrument (RAI)
• Therapy services
• Arrangements with physicians (i.e., Anti-Kickback Statute)
• Medication Management
• Comprehensive Resident Care Plans
• Sufficient Staffing
• Screening for excluded individuals and entities
• Services contracts
• Physician services
• Price Reductions
• Swapping
• Physician self-referrals (i.e., Stark law)
• HIPAA Privacy and Security Rules
• Regular Review of Compliance Program Effectiveness

Altogether, the Proposed Rule, Final Rule, and OIG Compliance Guidance documents contain hundreds of pages of details outlining the importance and requirements that SNFs maintain a Compliance and Ethics Program in order for them to qualify to participate in Medicare and Medicaid. Though CMS will continually publish additional guidance there is plenty of guidance currently existing to make sure your LTC organization is well on its way towards meeting this requirement.