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The Patient Protection and Affordable Care Act included a mandate that skilled nursing facilities and nursing homes adopt and implement an effective compliance and ethics program as a condition of participation in the Medicare and Medicaid programs. The governing regulation was issued by the Centers for Medicare & Medicaid Services (CMS) on October 4, 2016 and gives facilities until November 28, 2019 to meet the compliance program requirements. At that time, state survey agencies will begin assessing facility compliance with implementation of an effective compliance and ethics program as a condition for nursing facility participation in the Medicare and Medicaid programs. They will follow the CMS State Operation Manual “Guidance to Surveyors for Long Term Care Facilities.” Survey protocols and guides for state survey agencies have also been posted by CMS and can be reviewed by nursing homes in preparation for the reviews.

Tom Herrmann, JD, served over 20 years in the Department of Health and Human Services (HHS) Office of Inspector General (OIG) Office of Counsel and for the past 10 years has been a compliance consultant, specializing in nursing home compliance programs. He explains that the new mandate parallels the HHS OIG Compliance Program Guidance for Nursing Facilities with its identified seven elements of an effective compliance program. Those nursing homes that followed the OIG guidance will have little problem in meeting the new mandate, but for those who did not, they have only months to come into compliance. When building or improving the compliance program, organizations should note the CMS requirement for a nursing home’s annual review of its compliance and ethics program to ensure that modifications are made to reflect changes in laws, regulations, and to reduce violations. Also, the CMS regulations require facilities to assess the resources needed for an effective compliance program, including the delivery of mandatory training for all covered persons. For larger operating organizations (five or more), CMS requires the designation of a compliance officer along with a compliance liaison at each facility. CMS also calls for nursing homes to assess each individual element of a compliance program in order to determine the program’s “effectiveness” as a whole.

From his experience, Mr. Herrmann believes that many facilities have a lot to do to come into compliance before state agencies begin their assessments. This sector is far behind hospitals, largely driven by the fact that the operating margins are far leaner for nursing homes. As such, many have delayed or restricted resources for compliance program development. For those organizations with weak programs, he suggests that the most cost effective method to begin catching up is to have a compliance expert perform a gap analysis to identify elements needed for the compliance program and how to be able to evidence program effectiveness. A gap analysis should provide a “road map” and a step-by-step plan for bringing a facility into compliance with the mandates. Those that have already implemented their compliance program should consider having an effectiveness evaluation conducted by experts to verify it will meet mandated standards.

For more information about meeting the standards of these new mandates, join Strategic Management Services for our free webinar on Thursday, November 1st at 2:00 PM EST. You can also contact Tom Herrmann directly at thermmann@strategicm.com or at (703) 535-1410.

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