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Phase III: Do SNFs need a Compliance Officer?

Posted by Margaret Scavotto, JD, CHC on 2/25/20 8:15 AM

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In July 2019, CMS published a proposed rule that would modify the Compliance and Ethics program aspects of the Phase III Long-Term Care Facilities Requirements for Participation (the “Proposed Rule”).

Some of these proposed modifications removed requirements to assign compliance roles to nursing home personnel. For example, CMS proposes eliminating the following requirements:

  • All nursing homes must designate “an appropriate compliance and ethics program contact to which individuals may report suspected violations.”
  • Chains of five or more nursing homes must designate a compliance officer for whom the compliance program “is a major responsibility.”
  • Chains of five or more nursing homes must designate compliance liaisons at each facility.


If made final, the changes will go into effect one year after the rule goes into effect.

CMS’ proposed removal of the compliance officer, compliance liaison, and compliance reports contact requirements might have some nursing homes jumping for joy. After all, fewer regulatory requirements likely means fewer F-tags on your state survey. While we can likely all agree that fewer F-tags are a good thing, nursing homes would be wise to designate someone as compliance officer.

Keep in mind that the Proposed Rule has not yet been made final, and, as of November 28, 2019, SNFs are expected to comply with the original Phase 3 compliance requirements at 42 CFR 483.85. But, what if the Proposed Rule becomes final?

Why you still need a compliance officer

If the Proposed Rule is made final, CMS will not require nursing homes to have a compliance officer, and you cannot be penalized in state survey for not having one.

But the OIG still expects all nursing homes to have a compliance officer:

  • The OIG Compliance Program Guidance for Nursing Facilities lists “The designation of a compliance officer and other appropriate bodies (e.g. a corporate compliance committee)…” as one of the seven elements of an effective compliance program.
  • This guidance also states: “Every nursing home provider should designate a compliance officer to serve as the focal point for compliance activities… Designating a compliance officer with the appropriate authority is critical to the success of the program… (emphasis added)

Nursing homes who decide not to designate a compliance officer would be acting contrary to long-standing OIG guidance and expectations.

The good news is, the OIG does not expect nursing homes to hire a full-time compliance officer if that is beyond their means:

  • “This responsibility may be the individual’s sole duty or added to other management responsibilities, depending upon the size and resources of the nursing facility and the complexity of the task.”
  • “A small nursing facility may not have the resources to hire or appoint a full time compliance officer… In any event, each facility should have a person in its organization (this person may have other functional responsibilities) who can oversee the nursing facility’s compliance with applicable statutes, rules, regulations, and policies. The structure and comprehensiveness of the facility’s compliance program will help determine the responsibilities of each individual compliance officer.”

In other words, nursing homes may designate an existing employee, who has other duties, to perform the role of compliance officer. Effective training, software tools, and use of consultants can help support this person and help them succeed.

What about compliance liaisons?

CMS’ Proposed Rule removes the compliance liaison requirement and replaces it with a requirement that chains of five or more nursing homes “have a more formal program that includes established written policies defining the standards and procedures to be followed by its employees” and “develop a compliance and ethics program that is appropriate for the complexity of the operating organization and its facilities.”

It probably does not surprise you that the OIG guidance for nursing homes recommended “compliance liaisons” in 2000:

  • "For multi-facility organizations, the OIG encourages coordination with each facility owned by the corporation through the use of a headquarters compliance officer, communicating with parallel positions or compliance liaison in each facility or regional office, as appropriate."
  • "Multi-facility providers also may consider appointing one compliance officer at the corporate level and designating compliance liaisons at each facility. In any event, each facility should have a person in its organization (this person may have other functional responsibilities) who can oversee the nursing facility’s compliance with applicable statutes, rules, regulations, and policies."

Just like compliance officers, the compliance liaisons can also have other job duties.

The OIG views compliance officers (and liaisons) as necessary for effective compliance programs. Appointing a compliance officer is also, simply, a good idea. A compliance program without a compliance officer is like a drive-through restaurant with nobody at the window to take your order. Can you do that? Sure. Will it work? No. Do you technically have a drive through window? Yes! How is it going to go? What is the point of investing in a compliance program – and not setting it up to succeed?

I hope the OIG never shows up at your organization to investigate false claims, kickbacks, overpayments, or a whistleblower complaint. But if they do, they are likely to ask the first employee they see: “Who is your compliance officer?” And this single response could mean a lot for your future.

Need help supporting your compliance officer? MPA's compliance tools, training programs, and compliance officer support programs can help. Email me today to learn more.

MCS Signature November 2018


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Topics: compliance, compliance officer, Phase 3

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