HHS Issues Guidance Notice for Skilled Nursing Facilities and Nursing Homes

ATTENTION NURSING FACILITIES:

On November 20, 2024, the U.S. Department of Health and Human Services (HHS) issued its Industry Segment-Specific Compliance Program Guidance (“ICPG”) for Skilled Nursing Facilities and Nursing Facilities. This information provides voluntary, nonbinding guidance to help nursing facilities identify and mitigate compliance risks, improve quality of care, and ensure resident safety.

The guidance applies to skilled nursing facilities (“SNFs”), nursing facilities (“NFs”), and dually certified facilities, including nursing home single facilities, chains, managing companies, and entities owning nursing facilities. The guidance issued by HHS has three main focus areas: quality of care and quality of life; Medicare and Medicaid billing requirements; and the federal Anti-Kickback statute.

Quality of Care and Quality of Life

HHS emphasizes the need for adequate staffing levels within nursing facilities and skilled nursing facilities, encouraging facilities to implement a “multifaceted, strategic approach that addresses nursing leadership, recruitment, retention, and overall staffing management” in order to best serve their residents. Specific suggestions to combat understaffing include the following:

facilities hiring a Director of Nursing to “set the tone” for staff who contribute to clinical, quality and safety improvement initiatives within the facility;

offering a competitive salary, bonus and benefits package to improve recruiting efforts;

recognition of staff members’ outstanding performance and investing in ongoing education and training programs to encourage retention of staff; and

implementing relationship-based care for staff.

Developing appropriate resident care plans and activities has also been shown to contribute substantially to “high-quality, individualized, and person-centered care.”

Facilities should dedicate the necessary resources for an activities program that consistently appeals to the specific and unique abilities, interests and preferences of the residents living in a facility.

Additionally, facilities should regularly encourage high rates of attendance across activities, provide a facility’s activities director with the discretion to develop and implement a rotating schedule of stimulating programs for residents, and continually solicit ideas for enlivening and meaningful experiences that residents may enjoy.

HHS encourages facilities to facilitate medication safety, thereby improving quality of care, by offering consistent and comprehensive training by the facility’s consultant pharmacist to familiarize all staff involved in resident care with proper medication management practices and documentation requirements, and developing and implementing a review process to identify the incidence and frequency of medication errors, determine root causes of those errors, and develop or modify policies and training initiatives to prevent recurrences.

A facility must also ensure that a resident is provided with the appropriate medications for their care, noting that the high rate of psychotropic drug use within nursing facilities raises concerns about whether they are being utilized as a means of chemical restraint. Nursing facilities should consider encouraging collaboration among attending physicians, consultant pharmacists, and other resident care providers to mitigate the risk of inappropriate use of medications.

HHS also encourages facilities to be proactive and initiative-taking in their monitoring of resident abuse and neglect. An initiative-taking approach to mitigating resident safety risks through continual monitoring of adverse events and quality of care issues should be the driving force behind nursing facilities’ resident safety programs.

Proactive monitoring may prevent harm before it occurs. Recommendations for a safety program include creating robust communication systems clearly promoting safety initiatives, promoting resident safety education among staff, and developing systems and processes to proactively monitor adverse events and quality of care issues.

Medicare and Medicaid Billing Requirements

Nursing facilities should take proactive measures to ensure compliance with federal health care program rules, including conducting regular compliance reviews to ensure billing and coding practices are current and accurate, as well as performing regular internal billing and coding audits.

Focusing on the SNF prospective payment system (“PPS”), HHS notes that common and longstanding risks exist, including, but not limited to, duplicate billing, insufficient documentation, and false or fraudulent cost reports. The newest PPS case-mix classification system, PDPM, changes the way that residents are calculated into payment groups compared to the prior system. It is important for SNFs to know that PDPM does not change any of the coverage criteria or documentation requirements for services to be covered under the SNF PPS. More importantly, PDPM does not change the care needs of a nursing facility resident.

Ensuring policies and procedures are in place to maintain compliance under PDPM, that clinical and billing staff are fully trained in PDPM requirements, and that reviews and audits take place are integral to prevent misbilling by facilities. Facilities are further encouraged to ensure that an individual in a covered Part A stay is not billed under MA-PD plans or PDPs for prescriptions to prevent coverage by Medicare Part D under a Part A stay.

The Federal Anti-Kickback Statute

All facilities must comply with the Federal Anti-Kickback statute and HHS states that “it is incumbent on nursing facilities to identify arrangements with referral sources and referral recipients that present a potential for fraud and abuse under the Federal anti-kickback statute.” HHS encourages facilities to, whenever possible, structure arrangements to meet all conditions set forth in a statutory exception or regulatory safe harbor to the Federal anti-kickback statute.

Facilities should particularly scrutinize the following to avoid liability under the Anti-Kickback Statute:

free, or below fair market value, goods and services;

discounts;

arrangements for services and supplies;

long-term care pharmacy and consultant pharmacist agreements;

hospital arrangements;

hospice arrangements;

care coordination and value-based care arrangements; and

joint ventures.

HHS notes that the list of risk areas included is not exhaustive, and that “the propriety of any arrangement can only be determined after a detailed examination of the relevant facts and circumstances. Arrangements similar to those discussed in the risk areas below are not necessarily illegal and could possibly be structured to fit in a safe harbor.”

Facilities are encouraged by HHS to document the factors that mitigate the risk of fraud and abuse in any arrangement before payment to the provider of supplies or services and to monitor any arrangement to ensure it continues to be consistent with any features intended to mitigate fraud and abuse.

The complete version of the ICPG for Skilled Nursing Facilities and Nursing Facilities can be found here. For more information, or legal representation, please contact David R. Ross, Esq., Shareholder, at dross@olaw.com or at (518) 312-0167. Mr. Ross has many years of extensive experience with skilled nursing facilities and compliance issues. Olivia Vecchio, Law Clerk, contributed to this article.