Health Reform WK-EDGE Faced with developing mandatory compliance plans, LTCFs should consider all operations
Friday, October 6, 2017

Faced with developing mandatory compliance plans, LTCFs should consider all operations

By Kayla R. Bryant, J.D.

When CMS creates new regulations in an area it has not overhauled in over 20 years, the rules can get complicated and compliance may not be straightforward or simple. CMS published a Final rule (81 FR 68688) amending the long term care facility (LTCF) conditions of participation (CoP) regulations on October 4, 2016. CMS estimated that facilities would spend $62,900 to come into compliance for the first phase of the three-phase program, and $55,000 in subsequent years. CMS has yet to provide guidance on compliance with the new regulations governing LTCF compliance and ethics program requirements, but this Strategic Perspective will offer some tips from an expert for facilities looking ahead to the implementation date of November 28, 2018.

The Final Rule—Extensive and, Maybe, Overdue?

The Final rule completely overhauled LTCF CoPs with a focus on improving quality of care, strengthening safety measures, and reducing hospital readmissions and hospital acquired infections (see Arbitration out, quality in under LTCF rule, October 4, 2016). The Final rule divided implementation of the regulations into three phases.

In Phase One, which ended November 28, 2016, the rule required facilities to assess what resources were necessary for operations and emergency situations and ensure that all employees receive abuse, neglect, and exploitation training. Also effective November 28, 2016, the Final rule:

  • prohibits facilities from forcing incoming residents to sign "pre-dispute" agreements compelling arbitrations for any disputes arising during the stay;
  • requires facilities to develop and implement baseline care plans for each resident within 48 hours of admission; and
  • requires facilities to implement an overall discharge planning process for (1) effective transitions, (2) post-discharge care, and (3) the prevention of readmissions.

Phase Two, which has an implementation date of November 28, 2017, involves regulatory changes for areas such as reporting crimes, transfer/discharge documentation, baseline care plans, and behavioral health services. These changes focus on ensuring that there is sufficient staff to meet residents’ behavioral health needs, closer oversight of psychotropic drugs, a plan of care that is quickly implemented to allow for person-centered care, continuity of care, and reduction of readmissions.

Phase Three, the final phase with an implementation date of November 28, 2018, mostly consists of requirements for compliance and ethics programs and training. The compliance and ethics program regulations are mandated by section 6102 of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), which requires operating organizations for skilled nursing facilities (SNFs) and nursing facilities (NFs) to have compliance and ethics programs that are effective in detecting violations under the Social Security Act and promote quality of care.

LTCF Regulations Codify the Seven Elements of OIG Compliance Program Guidance

Through 2008, the HHS Office of Inspector General (OIG) issued voluntary compliance program guidances (CPGs) for a range of health care providers and suppliers as well as other health care entities. The first guidance for NFs was released in 2000 (65 FR 14289), with a supplemental guidance released in 2008 (73 FR 56832). At the time OIG issued the CPGs, compliance programs were voluntary, the ACA established the first mandatory compliance programs. All of the OIG guidances describe the same seven basic compliance program elements as they apply to specific provider types. The seven elements are:

  1. implementing written policies and procedures;
  2. designating a compliance officer and committee;
  3. conducting effective training;
  4. developing effective lines of communication;
  5. conducting internal monitoring;
  6. developing and enforcing clear disciplinary guidelines; and
  7. responding promptly to identified offenses.

LTCFs’ mandated compliance program. In the Final rule, CMS codified much of the language found in the OIG’s guidance at 42 C.F.R. Sec. 483.85. The adopted regulation makes compliance programs mandatory for LTCFs, beginning November 28, 2019. Under 42 C.F.R. Sec. 483.85(c), each facility must develop, implement, and maintain an effective compliance and ethics program. Section 483.85(a), defines a "compliance and ethics program" as a program of the operating organization that "has been reasonably designed, implemented, and enforced so that it is likely to be effective in preventing and detecting criminal, civil, and administrative violations under the act and in promoting quality of care," and includes at least eight required components. Section 483.85(c)(1)-(8) codifies the seven basic elements, referred to as components, found in the OIG’s guidance. The compliance program is subject to an annual review and revision as needed (see Sec. 483.85(e)).

The components of the mandated compliance program. The first component combines aspects of several guidance elements and requires establishment of written standards, policies, and procedures designed to meet the above definition of a compliance and ethics program. These policies must include designating a compliance and ethics program contact for reporting suspected violations, a method for anonymous reporting without fear of retribution, and appropriate disciplinary standards for committing violations that apply to the entire staff, individuals that provide services under contractual arrangements, and volunteers. Other components require:

  • assigning specific high-level personnel, such as the chief executive officer (CEO), members of the board of directors, or directors of major divisions, to oversee compliance with program standards, policies and procedures;
  • members of the oversight committee to be granted sufficient resources and authority to ensure compliance with standards, policies and procedures;
  • reasonable steps to achieve compliance with the program’s standards, policies, and procedures, which include using monitoring and auditing systems to detect criminal, civil, and administrative violations by staff, contracted individuals, and volunteers, and a process for reporting violations anonymously without fear of retribution;
  • effective communication of all program standards and policies to staff, contractors, and volunteers, including through mandatory training or orientation programs, or providing information about the programs in a practical manner;
  • "due care" not to allow individuals who have a propensity to engage in criminal, civil, and administrative violations to have substantial discretionary authority;
  • consistent enforcement of standards, policies and procedures, and the use appropriate and consistent disciplinary measures, including disciplining those responsible for detecting and reporting violations but failing to do so; and
  • appropriate steps to respond to a violation and ensure that violations do not occur again, which includes appropriate modifications to the compliance program to prevent and detect criminal, civil, and administrative violations.

Organizations with five or more facilities are required to implement additional components. At minimum, they must conduct a mandatory annual training program on the compliance and ethics program. A designated compliance officer must be appointed and report directly to the organization’s governing body. This officer must not be subordinate to the general counsel, chief financial officer, or chief operating officer. A designated compliance liaison must be appointed at each facility (see 42 C.F.R. Sec. 483.85(d)).

Facilities Awaiting Guidance from CMS, Compliance Organizations

As the clock ticks down toward the final implementation date, LTCFs are waiting on guidance related to unanswered questions as to what needs to be in their compliance programs that must be in effect on November 28, 2018, as part of Phase Three. Such questions include: What would be considered "sufficient" resources and authority for the compliance committee? What types of auditing and monitoring programs are appropriate for ensuring compliance, and are there limits on the amount of intrusion such oversight can entail? What amount of training is sufficient? Although the OIG guidance acknowledged that the specifics of compliance programs will vary among facilities due to type, size, and financial considerations, the regulations give no indication about such particulars.

An expert weighs in on ethics. With a little over a year to go before the implementation date, facilities have some time to get their official policies and procedures in place. Yet time flies, and without proper implementation, facilities could find themselves in significant trouble with HHS. Gina Riddell, research and compliance analyst at McBrayer, McGinnis, Leslie and Kirkland, PLLC, offered Wolters Kluwer some insight on how compliance departments should approach conforming to these new regulations. Riddell believes that effectively building or adjusting an ethics plan starts with reviewing the compliance plan, ensuring that specific policies and procedures are up to date and are appropriate for the particular facility. Some areas that compliance departments should focus on that are not specifically mentioned in the regulations extends to patient rights and responsibilities, privacy and confidentiality, relationships with other provider agencies, professional ethics, fiscal responsibilities, marketing and public relations, and personnel code of conduct. Attention to these areas helps ensure that program is "likely to be effective" in preventing and detecting violations.

After reviewing the compliance plan, a compliance officer should study ethical guidelines and new or updated statutes and regulations governing ethical behavior and reporting and build the facility’s program accordingly. Riddell encourages compliance officers to use real life examples when training staff on ethical behavior to make the material more accessible. When training staff, a facility’s leadership should emphasize its commitment to ethical corporate conduct, and serve as an example to everyone involved when carrying out compliance oversight duties. A compliance department should develop and regularly perform assessments on employee and contractor behavior, and develop a streamlined approach to dealing with ethical violations. Riddell emphasized the necessity of sticking to an established procedure for every investigation into potential ethical violations.

Sticking points. An LTCF will be challenged, in Riddell’s opinion, by the heavy burden of obligations that comes with providing services to beneficiaries and complying with strict regulations. LTCFs perform a high volume of services, and policies and procedures must be strictly followed for each patient encounter. Not only does this mean that every employee must understand the nuances and importance of compliance requirements, but the facility has to invest resources in ensuring that the compliance plan is followed at all times. Riddell also noted that the regulations are vague on training and thinks that regulators should have codified training program requirements and, at a minimum, offer some program guidance. She has seen some facilities offer generic webinars as the extent of their training, while others bring in outside counsel. Regulations and guidance would standardize levels of understanding and compliance.

Behavioral health. Although a compliance program is tasked with improving the quality of care provided to beneficiaries, LTCFs are faced with a high level of behavioral health services needs and overworked staff. LTCFs are required, under the Preadmission Screening and Resident Review program, to determine if residents require mental health care. Riddell noted that the percentage of new residents with mental illness now exceeds the percentage of residents presenting with dementia only, many residents suffer from drug addiction. The need for behavioral health care is expected to rise. To be prepared for the rise in behavioral health care, LTCF compliance programs should ensure that residents’ needs in this area are met, and consider using telemedicine and certified nonphysician practitioners to meet the demand.


By the fall of 2017, LTCF compliance departments must have a plan that meets all regulatory requirements. This shift provides an opportunity for facilities to completely overhaul their programs if needed, and ensure that their ethics plans are seamlessly woven within the compliance plan. While waiting for CMS to create guidance, facilities should consider areas that might need increased oversight and incorporation into their compliance plans.

Attorneys: (McBrayer, McGinnis, Leslie and Kirkland, PLLC).

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