F. Auditing and Monitoring

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The OIG believes that an effective program should incorporate thorough monitoring of its implementation and an ongoing evaluation process. The compliance officer should document this ongoing monitoring, including reports of suspected noncompliance, and share these assessments with the nursing facility’s senior management and the compliance committee. The extent and frequency of the compliance audits may vary depending on variables such as the nursing facility’s available resources, prior history of noncompliance, and the risk factors particular to the facility.101

Although many assessment techniques are available, one effective tool is the performance of regular, periodic compliance audits by internal or external evaluators who have expertise in Federal and State health care statutes, regulations, and program requirements, as well as private payor rules. These assessments should focus both on the nursing facility’s day-to-day operations, as well as its adherence to the rules governing claims development, billing and cost reports, and relationships with third parties. The reviews also should address the nursing facility’s compliance with Medicare requirements and the specific rules and policies that have been the focus of particular attention by the Medicare fiscal intermediaries or carriers, survey agencies, and law enforcement.102

Monitoring techniques may include sampling protocols that permit the compliance officer to identify and review variations from an established performance baseline.103 This performance baseline should include measurable patient outcomes, such as resident weight maintenance and pressure ulcers, established by the facility’s Quality Assessment and Assurance Committee. Significant variations from the baseline should trigger an inquiry to determine the cause of the deviation. If the inquiry determines that the deviation occurred for legitimate reasons, the compliance officer and nursing facility management may want to take no action. If it is determined that the deviation was caused by a departure from or misunderstanding of the facility’s policies, the nursing facility should take prompt steps to correct the problem. Any overpayments discovered as a result of such deviations should be returned promptly to the affected payor,104 with appropriate documentation and a sufficiently detailed explanation of the reason for the refund.105

In addition to evaluating the facility’s conformance with program rules, an effective compliance program also should incorporate periodic (at least annual) reviews of whether the program’s compliance elements have been satisfied, e.g., whether there has been appropriate dissemination of the program’s standards, ongoing educational programs, and internal investigations of alleged non-compliance. This process will assess actual conformance by all departments with the compliance program and may identify areas for improvements in the program, as well as the nursing facility’s general operations.

The OIG requires a provider operating under a CIA to conduct an annual assessment of its compliance with the elements of the CIA. A compliance officer may want to review several CIAs in designing the facility’s self-audit protocol.106

As part of the review process, the compliance officer or reviewers should consider techniques such as:

  • on-site visits to all facilities owned and/or operated by the nursing home owner;
  • testing the billing and claims reimbursement staff on its knowledge of applicable program requirements and claims and billing criteria;
  • unannounced mock surveys and audits;
  • examination of the organization’s complaint logs and investigative files;
  • legal assessment of all contractual relationships with contractors, consultants and potential referral sources;
  • reevaluation of deficiencies cited in past surveys for State requirements and Medicare participation requirements;
  • checking personnel records to determine whether individuals who previously have been reprimanded for compliance issues are now conforming to facility policies;
  • questionnaires developed to solicit impressions of a broad cross-section of the nursing facility’s employees and staff concerning adherence to the code of conduct and policies and procedures, as well as their work loads and ability to address the residents’ activities of daily living;
  • validation of qualifications of nursing facility physicians and other staff, including verification of applicable State license renewals;
  • trend analysis, or longitudinal studies, that uncover deviations in specific areas over a given period; and
  • analyzing past survey reports for patterns of deficiencies to determine if the proposed corrective plan of action identified and corrected the underlying problem.

The reviewers should:

  • have the qualifications and experience necessary to adequately identify potential issues with the subject matter that is reviewed;
  • be objective and independent of line management to the extent reasonably possible; 107
  • have access to existing audit and health care resources, relevant personnel, and all relevant areas of operation;
  • present written evaluative reports on compliance activities to the CEO, governing body, and members of the compliance committee on a regular basis, but no less often than annually; and
  • specifically identify areas where corrective actions are needed.

The extent and scope of a nursing facility’s compliance self-audits will depend on the facility’s identified risk areas, past history of deficiencies and enforcement actions, and resources. If the facility comes under Government scrutiny in the future, the Government will assess whether the facility developed a reasonable audit plan based upon identified risk areas and resources. If the Government determines that the nursing facility failed to develop an adequate audit program, the Government will be less likely to afford the nursing facility favorable treatment under the Federal Sentencing Guidelines.

Summary
Background

I. Introduction
II. Compliance Program Elements
A. The Seven Basic Compliance Elements
B. Written Policies and Procedures
C. Designation of a Compliance Officer and a Compliance Committee
D. Conducting Effective Training and Education
E. Developing Effective Lines of Communication
F. Auditing and Monitoring
G. Enforcing Standards Through Well-Publicized Disciplinary Guidelines
H. Responding to Detected Offenses and Developing Corrective Action Initiatives
III. Assessing the Effectiveness of a Compliance Program
IV. Conclusion
Appendix