CMS Changes SNF Compliance Program Requirements

Ladies and gentlemen, long-anticipated compliance program requirements are changing, one more time. Let’s take a look at what has changed – and what hasn’t.

The proposed rule

On July 16, 2019, CMS published a proposed rule that would modify multiple aspects of Phase III of the Long-Term Care Facilities Requirements for Participation (the “Proposed Rule”). The goal of the Proposed Rule is to reduce regulatory burdens and costs, allowing nursing homes to focus resources on providing quality resident care. Some of the most discussed proposed amendments are those to the Compliance and Ethics Program requirements (42 CFR 483.85), which, if finalized, will become effective one year later. With comments from the public due September 16, 2019, our best guess is that enforcement will begin October or November 2020.

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Good news: fewer compliance-related F-tags ahead

Nursing homes: LeadingAge (and other associations) successfully lobbied on your behalf.

The prior rule required nursing homes to designate specific personnel as 1) compliance officers, 2) individuals to receive compliance reports, and 3) for chains of five or more nursing homes, compliance liaisons. The message conveyed to CMS was that these requirements were too burdensome, and took staff time away from resident care. The Proposed Rule seems to incorporate this message loud and clear.

The Proposed Rule removed more than the designated personnel requirements. Annual review, annual training, discipline for volunteers and contractors, and more requirements are gone. For a complete summary of the proposed changes, see the tables in the attached memo. What is left is a more general compliance program framework from CMS.

Because the Proposed Rule reduces the number of compliance survey requirements, there are fewer potential F-tags on your survey. These largely new and untested requirements would also have been subjected to variation in surveyor interpretations come November 28, 2019. The bottom line is that the Proposed Rule potentially brings good news for nursing homes: reduced compliance requirements and reduced potential F –Tags.

But don’t forget about the OIG

But, be careful. Everything CMS removed from the Proposed Rule is still recommended by the OIG in its Compliance Program Guidance documents for nursing facilities. For three decades, providers, including nursing homes, have followed this OIG guidance when developing compliance programs – and it’s still the gold standard. CMS’ comments in the Proposed Rule acknowledge this when they recommend that nursing homes refer to the OIG guidance. Nursing homes still need to develop and maintain compliance programs that adhere to the OIG guidance.

What is the difference between survey enforcement and OIG enforcement?

When the Proposed Rule becomes final, the Phase III Compliance and Ethics Program requirements will be enforced through the survey process. The OIG, on the other hand, enforces compliance related laws, such as the False Claims Act, the Anti-Kickback Law, the Stark Law, and the Civil Monetary Penalties Law. OIG enforcement is far more serious: civil monetary penalties, costly settlements, potential jail time, legal expenses, and loss of government reimbursement.

The OIG recognizes that compliance programs prevent and detect the types of misconduct that violate these laws. More than one Assistant US Attorney has told MPA that all providers should have an effective compliance program in place. If the OIG knocks on your door to conduct an investigation, they will look for a working compliance program. If one is not in place, the provider will likely face larger exposure to federal fines and penalties. And, if a provider has a compliance program, that provider is more likely to prevent the type of violations that can lead to an OIG investigation in the first place.

Proceed with caution

While it is OK to celebrate the reduction in regulatory requirements, please be careful.

Everything CMS took out is still recommended by the OIG.

What does this mean?

CMS will not require you to designate a compliance officer, but the OIG does.
CMS will not require you to review your compliance program every year, but the OIG does.
CMS will not require chains of five or more nursing homes to provide compliance training, but the OIG expects all nursing homes to provide annual compliance training.
CMS will not require chains of five or more nursing homes to designate compliance liaisons, but the OIG expects all nursing home chains to do this.

The bottom line

Under the proposed rule, CMS compliance requirements do not meet OIG expectations for compliance programs.

Enjoy the survey break!

But don’t jeopardize your compliance effort over the Proposed Rule. The OIG should be, and still is, the last word on compliance. Your compliance program should be created to meet OIG expectations. If the OIG shows up at your nursing home, will you be ready?