What's on the OIG's Mind, Part 2 -- Compliance Planning.

Recently we reviewed the Office of Inspector General's (OIG) Work Plan for 2000 to identify issues the OIG will be focusing on regarding skilled nursing providers during 2000 and beyond ("What's on the OIG's Mind: Part 1," Nursing Homes/Long Term Care Management, April 2000, p. 44). This month we review what to do about it--a look at the OIG's Compliance Program Guidance for Nursing Facilities ("Compliance Plan") published in March. [*]

In February 1998, the GIG issued its first Compliance Program Guidance, which was for hospitals. According to the GIG, the "program guidance [was] intended to assist hospitals and their agents and subproviders to develop effective internal controls that promote adherence to applicable federal and state law, and the program requirements of federal, state, and private health plans." Since that time the OIG has issued six Compliance Plans for a variety of other providers, including home health, clinical laboratories, durable medical equipment suppliers and, most recently, for individual and small group physician practices. As with the OIG's previous Compliance Plans, the Compliance Plan for nursing homes outlines problem areas of which providers should be aware, as well as a rough outline for establishing their own compliance plans.

What makes this Compliance Plan different from previous ones is its focus on OBRA survey compliance and care issues as potential indicators of fraud and as a basis for fraud prosecutions. This new focus on care issues creates additional, previously unknown liability for providers. Completing the proper billing forms and avoiding improper relationships is no longer enough to avoid prosecution. Not surprisingly, the OIG's comments regarding quality of care dovetail with the Clinton administration's comments regarding increased enforcement on quality-of-care issues. In a future issue, we will review how the Department of Justice and the OIG are using the False Claims Act to ensure quality of care.

Suffice it to say for now, this new direction means that compliance plans aren't just for crooks anymore. Having an effective compliance plan might be the only way for providers to address all areas of liability properly, but before we can discuss creating an effective compliance plan, we should identify what the OIG is concerned about. Specifically, the OIG has identified the following risk areas:

1. quality of care and residents' rights;

2. employee screening;

3. vendor relationships;

4. billing and cost reporting; and

5. record keeping and documentation.

These risk areas will be the focus of future investigations, audits and prosecutions. Following are some practical steps providers can take to begin addressing them.

Quality of Care and Residents' Rights

This should be one of the primary focuses of any provider's compliance review and subsequent compliance plan. The OIG's concern about quality of care is illustrated by its comments regarding how a facility should prioritize its resources when evaluating risk areas: Nursing facilities should "focus first on those risks areas most likely to arise in their business operations. At a minimum, resources should be directed to analyze the results of annual surveys and to verify that the facility has effectively addressed any deficiencies cited by the surveyors....Current and past surveys are a good place to begin to identify specific risk areas and regulatory vulnerabilities at the individual facility." The GIG also stated, "Any deficiencies discovered by annual state agency survey, federal violation survey or complaint survey reflect noncompliance with program requirements for nursing homes and can be the basis for enforcement actions." The OIG suggests that quality-of-care issues are best addressed through the fac ility's quality assessment and assurance committee, which should include facility staff, the director of nursing and the medical director.

Underlying the seriousness of this is the growing number of cases in which the Department of Justice has alleged that nursing homes submitted Medicare claims that were "false" by reason of their poor compliance. The theory in these cases is that the providers have failed to meet the minimum requirements for participation in the Medicare program, as evidenced by their poor survey results. Because the facilities "knew" that they did not meet participation requirements, their claims were "false." While none of these cases has gone to trial, they all resulted in significant settlement payments (ranging from $50,000 to $675,000) and the imposition of strict Corporate Integrity Agreements (CIAs) on the nursing homes.

Does this mean that a survey with deficiencies automatically subjects a facility to a False Claims Act lawsuit? No, not in every case or even in most cases--but a bad survey could trigger prosecution. In essence, all of these suits have focused on four care issues (and they're all featured prominently in the OIG Compliance Plan): skin care, hydration, nutrition and abuse. These four areas must be the foundation of any facility's compliance effort in the area of quality of care.

Specific examples: A failure to prevent the development of decubitus ulcers on a regular basis will certainly raise a red flag. Likewise, facilities that are cited for failing to document fluid intake and output or follow fluid/diet restrictions also are at risk. Citations for failing to identify or address significant weight loss can also lead to liability.

So, what can you do? First, review the facility's past three years worth of surveys. Do skin care and/or nutrition issues repeatedly show up? Are there citations in these areas at a "G" level or higher? If so, you should concentrate on how you will address these issues. Remember a crucial factor: Even though the facility might have responded to the citation with a Plan of Correction that was accepted, this does not mean the facility has no quality-of-care issues. If there are repeated citations related to a particular care area, this raises concern about a larger, more systematic problem in the facility. Identification of such repeat citations should trigger additional corrective measures independent of any Plan of Correction.

For example, in-service staff on skin care, covering such topics as repositioning, skin care treatments, incontinence care, nutrition and hydration. Second, in-service staff on proper documentation. A quality-oriented compliance plan doesn't necessarily mean more documentation, but it does mean better documentation.

Even though providers understand that some residents will suffer unavoidable declines because of their fragile medical conditions, they should not expect the government to have the same understanding. The chart of any resident that is experiencing an unavoidable decline should make abundantly clear that the decline was unavoidable, as well as indicating steps taken to attempt to address the decline. Documenting communication with physicians is critical, as is fully documenting new approaches that were tried and their success or failure. Staff must understand that the extra two minutes spent charting these issues could be the most important two minutes in their day.

Work with speech therapists and dietitians to better coordinate communication and follow up on their recommendations. Implementing a tickler system will help ensure that recommendations are properly conveyed to a resident's physician.

I would reiterate the importance of documenting communication with physicians. I've been shocked at how often facilities have told me that they tried contacting and paging physicians and got no response, and yet they didn't document this.

Document when a resident comes back from the hospital in worse shape than when he/she was transferred. Often the resident's development of pressure sores and weight loss is blamed on the nursing home, when the cause might have been his or her state and recovery while in the hospital.

Resident abuse is another care area getting the federal government's attention. Providers must have a comprehensive policy in place to deal with allegations of and suspected abuse. Review both the federal and state law to ensure that you are properly reporting such allegations, as well as correctly handling employees accused of it. As with the previously discussed areas, documentation is crucial for addressing abuse issues. Investigations should be fully documented and promptly completed. Staff should be in-serviced regarding the facility's policy on abuse, and residents and families should be regularly reminded of the procedure for reporting abuse and encouraged to do so.

In addition to these steps, providers also need to closely scrutinize their employees--which leads to the OIG's next risk area, employee screening.

Employee Screening

Virtually every facility screens its employees through a variety of mechanisms--licensing agencies, nurse's aide registries and, now much more commonly, criminal background checks. In addition to these checks, the OIG is recommending that providers also determine whether a potential employee--and this includes nurses, administrators and CNAs--is excluded from participating in Medicaid and/or Medicare. This check can be done on the OIG's Web site (http://www.dhhs.gov/progorg/oig/cumsan/index.htm). Check for all excluded individuals in a state or even nationwide.

All of these checks should be well documented and included in the employee's file. You should also check your physicians and third-party vendors to ensure that they have not been excluded. Employing any individual who has been excluded means that any services provided or ordered by that individual are not reimbursable and could subject the employer to civil money penalties. At the time of this writing, 18,848 individuals or entities had been excluded from Medicare/Medicaid participation, 2,117 of which were related to skilled nursing providers.

Vendor Relationships

Vendor relationships can become problematic when the party referring the business (usually the nursing home) receives something of value from the party receiving the referral (commonly called a kickback). While it might be common practice for a copier salesman to throw a few free boxes of toner in to close a sale, free pharmaceuticals or durable medical equipment can result in criminal liability. Under the Medicaid and Medicare Anti-kickback Statute, it is illegal for a person or entity to offer, give, solicit or receive remuneration (anything of value) in return for a referral for services or goods reimbursed under a federal health program.

Prohibited remuneration can include agreements to cross-refer; provision of free noncovered goods, such as incontinence supplies; free services; deep discounts for one payer class to guarantee access to other payers (e.g., deep discounts offered by vendors on PPS services in return for being an exclusive provider for Part B services); and cash payments. Penalties for violating this statute are fines of up to $25,000 and five years' imprisonment. Because of this risk, providers should have all of their vendor contracts reviewed by an attorney with expertise in health law, to ensure that the agreements do not violate the anti-kickback statute. Remember, if a deal seems too good to be true, it often is.

Billing and Cost Reporting

Billing and cost reporting are, of course, traditional areas of concern for fraud and abuse prosecution, and providers can expect continued emphasis on these areas. Due to PPS and the pending implementation of consolidated Part B billing, providers need to be particularly watchful of how third-party vendors service their residents. When a provider is submitting requests for payment, the provider has the ultimate responsibility to ensure that all third-party vendors are providing and billing for services appropriately. Providers should make sure that their vendor contracts clearly spell out the vendor's responsibility in meeting all reimbursement criteria and for documenting that services are provided. Providers should conduct regular reviews of vendors' charting to ensure that this is so.

One additional area of potential liability involves cost reports. The federal government is closely scrutinizing provider cost reports to determine if costs are being inappropriately passed through or if the provider is failing to identify transactions with related parties. Providers should pay close attention when reviewing their costs reports to ensure that there are no factual inaccuracies.

Record Keeping and Documentation

The provider's documentation might be the only thing preventing a prosecution. As with certification surveys, the government takes the position that "if it isn't documented, it didn't happen."

Staff need to be regularly reminded that they have to fully document care. They sometimes fall short simply because they've become familiar with the resident's condition and think writing things down is only a formality. This tendency can become particularly dangerous in the world of fraud and abuse prosecution, since many cases are not filed until several years after the events took place. A provider could find itself trying to justify treatment decisions made and billing done three to five years before. Without proper documentation, a provider might go into the case already crippled. Hence the need for regular in-services on documentation.

During the in-services, specific examples of good and bad notes should be offered. Staff should be reminded about the need to promptly and accurately complete flow sheets and intake records. Their documentation should be randomly reviewed to ensure that it is accurate and complete. The facility should also maintain a documentation policy or guidelines governing how and how long records are to be kept. This policy should be coordinated with the provider's attorney to ensure that it meets state record retention requirements.

In conclusion, while the idea of a compliance plan might seem daunting at first, it really is nothing more than an extension of your quality assurance mechanism. By focusing on the risk areas identified by the OIG, you should be able to significantly reduce your facility's potential liability. While some providers might scoff at the idea of implementing a compliance plan, I would suggest that they talk to hospital executives about their experiences. Because of extensive investigations into that industry by the OIG, virtually every hospital now has a compliance plan. The recent release of the OIG's Compliance Plan for nursing homes indicates that they're next for such scrutiny.

Matthew J. Murer Is an attorney with the firm of Duane, Morris & Heckscher, Chicago.

(*.) Review the OIG's draft Compliance Plan at http://www.dhhs.gov/progorg/ oig/readrm/index.htm/.