The U.S. Department of Health and Human Services Office of Inspector General (OIG) recently issued draft Supplemental Compliance Program Guidance (Guidance) for nursing facilities, supplementing and updating its 2000 Compliance Program Guidance, and inviting comment from interested parties. The Guidance takes into closer account Medicare and Medicaid nursing facility payment systems, evolving industry practices and current government enforcement priorities, notably the government’s heightened focus on quality of care. The Guidance should be the subject of review not only by nursing facilities, but a broad reach of health care providers and suppliers that deal with nursing facilities, including hospitals, hospices, and physician and non-physician health professionals. The draft Guidance is available for review here.
Fraud and Abuse Risk Areas
The Guidance provides an overview of Medicare and Medicaid reimbursement to nursing facilities as a backdrop for its updated recommendations and discussion of expanded risk areas. Noting that by 2030, the number of older Americans is estimated to rise to 71 million, making the aging of the U.S. population one of the major health challenges in the 21st century, the OIG observes that a national focus on the quality of health care is emerging. The Centers for Medicare and Medicare Services’ (CMS’s) focus on hospital pay for performance, or P4P, seems to confirm this. Since Federal False Claims Act enforcement can be based upon failure of care, the OIG states that compliance with applicable quality of care standards and regulations is essential for the lawful behavior and success of nursing facilities. Areas highlighted as common risk areas associated with the delivery of quality health care to nursing facility residents that frequently arise in enforcement cases are: 1) sufficient facility staffing, 2) comprehensive care plans, 3) appropriate use of psychotropic medications, 4) medication management/pharmaceutical care and 5) resident safety, including provisions for investigation and reporting of instances of mistreatment, neglect and abuse, as well as mandated staff screening. Among many recommendations that the OIG makes to address quality of care, the OIG envisions training and education as key.
Submission of Accurate Claims
The OIG observes that as reimbursement systems have evolved, the OIG has uncovered types of health care fraud other than claims—for example, for services not provided, or not provided as claimed, claims for services that are not medically necessary, duplicate billing and claims when there has been a failure of care. The OIG highlighted areas include: 1) risk associated with proper reporting of resident case-mix by Skilled Nursing Facilities (SNFs), noting instances in which SNFs have allegedly improperly upcoded resident Resource Utilization Group (RUG) assignments; 2) risk associated with provision of physical, occupational and speech therapy in nursing facilities, such as potential improper utilization of therapy services to inflate the severity of RUG classification or unnecessary therapy services that may place frail residents at risk; 3) mandated screening for excluded individuals and entities to prevent hiring or contracting with an excluded person (the OIG “strongly” advises nursing facilities to screen all prospective owners, officers, directors, employees, contractors and agents prior to engaging their services); and 4) the need to have comprehensive procedures in place ensuring that residents receive appropriate restorative and personal care services to avoid the risk of billing for services not rendered as claimed and therefore potentially subject to liability under fraud and abuse laws.
Because nursing facilities make and receive referrals of federal health care business, and health care professionals may generate referrals, the OIG points out that the federal anti-kickback statute may be implicated. For example, nursing facilities may refer patients to, or order items or services from, hospices; DME companies; laboratories; diagnostic testing facilities; long-term care pharmacies; hospitals; physicians; other nursing facilities; and physical, occupational and speech therapists. Among areas that the OIG highlights for anti-kickback review under a compliance program are free goods and services to referral sources, discounts (including price reductions and “swapping”) and a variety of potential nursing facility arrangements with a hospice that would be suspect under the anti-kickback statute. The OIG flags some potentially problematic “reserve bed” arrangements, whereby the hospital pays the nursing facility to reserve a bed to accept discharged Medicare patients, which can be permissible subject to strict CMS requirements, but that could be a disguised payment for referral from the nursing facility to the hospital.
The extension of voluntary prescription drug coverage to all Medicare beneficiaries under Medicare Part D, including residents of nursing facilities, warranted OIG comment. The OIG cautions that nursing facilities must be particularly careful not to act in ways that would frustrate a beneficiary’s freedom of choice in choosing a Part D plan. Moreover, nursing facilities and their employees and contractors should not accept any payments from any plan or pharmacy to influence a beneficiary to select a particular plan. Nursing facility compliance with HIPAA Privacy and Security Rules is another area that the OIG highlights in its Guidance for review by nursing facilities as part of ongoing compliance efforts.
The Guidance reminds nursing facilities that if the compliance officer, committee or member of senior management discovers credible evidence of misconduct and, after a reasonable inquiry, believes that the misconduct may violate the law, the nursing facility should promptly report the existence of the misconduct to the appropriate federal and state authorities. The OIG states that reporting should occur within a reasonable period, but not longer than 60 days after determining that there is credible evidence of a violation.
Comments must be received by the OIG at the address stated in the Guidance by 5 pm on June 2, 2008.