II. Compliance Program Elements

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A. The Seven Basic Compliance Elements

The OIG believes that every effective compliance program must begin with a formal commitment 10 by the nursing facility’s governing body to address all of the applicable elements listed below, which are based on the seven steps of the Federal Sentencing Guidelines.11

The OIG recognizes that full implementation of all elements may not be immediately feasible for all nursing facilities. However, as a first step, a good faith and meaningful commitment on the part of nursing facility management will substantially contribute to the program’s successful implementation. As the compliance program is effectuated, that commitment should cascade down through management to every employee and contractor of the nursing facility.

At a minimum, a comprehensive compliance program should include the following seven elements:

(1) The development and distribution of written standards of conduct, as well as written policies, procedures and protocols that promote the nursing facility’s commitment to compliance (e.g., including adherence to the compliance program as an element in evaluating managers and employees) and address specific areas of potential fraud and abuse, such as claims development and submission processes, quality of care issues, and financial arrangements with physicians and outside contractors;

(2) The designation of a compliance officer and other appropriate bodies (e.g., a corporate compliance committee) charged with the responsibility for developing, operating and monitoring the compliance program, and who reports directly to the owner(s), governing body and/or CEO; 12

(3) The development and implementation of regular, effective education and training programs for all affected employees; 13

(4) The creation and maintenance of an effective line of communication between the compliance officer and all employees, including a process, such as a hotline or other reporting system, to receive complaints, and the adoption of procedures to protect the anonymity of complainants and to protect whistle blowers from retaliation;

(5) The use of audits and/or other risk evaluation techniques to monitor compliance, identify problem areas, and assist in the reduction of identified problems; 14

(6) The development of policies and procedures addressing the non-employment or retention of excluded individuals or entities and the enforcement of appropriate disciplinary action against employees or contractors who have violated corporate or compliance policies and procedures, applicable statutes, regulations, or Federal, State, or private payor health care program requirements; and

(7) The development of policies and procedures with respect to the investigation of identified systemic problems, which include direction regarding the prompt and proper response to detected offenses, such as the initiation of appropriate corrective action, repayments, and preventive measures.


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