REVISED: November 2014

TABLE OF CONTENTSPage

Compliance & Ethics Program – Message from Chief Executive Officer..................................1

Introduction..................................................................................................................................2

Overview of the Compliance and Ethics Program.......................................................................3The Compliance & Ethics Program.................................................................................3Organizational Structure .................................................................................................3The Corporate Compliance Committee...........................................................................4The Corporate Compliance Officer.................................................................................5Board of Directors............................................................................................................6Compliance Liaison.........................................................................................................6GEC Code of Conduct.....................................................................................................6Statement of Receipt and Acknowledgment....................................................................7

Code of Conduct..........................................................................................................................8Introduction......................................................................................................................8I. Resident Care.......................................................................................................8

A. Quality of Care.........................................................................................8B. Resident Rights........................................................................................9C. Privacy and Confidentiality of Resident Information..............................10

II. Billing and Business Practices.............................................................................10A. Billing and Coding Policy........................................................................10B. Cost Reporting.........................................................................................11C. Accurate Books and Recordkeeping........................................................11D. Record Retention Policy..........................................................................11E. Fraud, Waste and Abuse..........................................................................12F. Prohibition on Kickbacks.........................................................................13G. Patient Referrals.......................................................................................13H. Regulatory Inquiries, Investigations, and Litigation Policy....................13I. Voluntary Reporting................................................................................13J. Contract Review Policy...........................................................................13K. Marketing and Advertising......................................................................14L. Market Competition.................................................................................14M. Confidentiality of Business Information..................................................14N. Accounting and Financial Reporting Policy............................................14O. Adhering to Laws and Regulations..........................................................15P. Environmental and Safety Considerations...............................................15Q. Protecting GEC Assets.............................................................................15

III. Personnel..............................................................................................................16A. Workplace Conduct & Employment Practices........................................16B. Gifts from Residents and Patients............................................................16C. Business Courtesies.................................................................................17D. Use of GEC Property...............................................................................17

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E. Use of Computers and the Internet..........................................................17F. Personnel Screening.................................................................................17G. Conflict of Interest Policy........................................................................18

IV. Compliance Training and Monitoring.................................................................19A. Compliance Training and Education.......................................................19B. Compliance as an Element of Performance.............................................19C. Prohibition on Retaliation........................................................................19D. Reporting and Investigation of Noncompliance......................................19E. Discipline for Noncompliance.................................................................20F. Auditing and Monitoring Policy..............................................................20G. Annual Identification of Risk Areas........................................................20

V. Corporate Compliance Policies............................................................................20Triple Check Policy….........................................................................................21Compliance Policy Regarding Fraud, Waste and Abuse.....................................24Compliance Hotline Policy..................................................................................34

Answers to Commonly Asked Questions....................................................................................36

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COMPLIANCE & ETHICS PROGRAM

January 1, 2015

Message from Chief Executive Officer

Our success and reputation are not only dependent on the quality of services provided to our clients, but also on the way in which we do business. Our ambition is to become a leader in the industry. For us, becoming an industry leader means we provide loving care and professional services, and set the standard through exemplary business practices and ethical behavior.

We have a long history of adhering to and promoting strong professional ethics. It is, and must continue to be, a key part of our culture. Integrity enters into everything we do and is a central part of our philosophy to “do the right thing.” We have developed our Compliance and Ethics Program and it’s supporting Code of Conduct to establish a shared vision of standards and practices for the organization, grouping them together in a single document. Its principles must guide each one of us in the performance of our daily functions. Our long-term success depends on the attention paid by each one of us to uphold the highest ethical standards and business practices. It is our business that requires this and our reputation that is at stake.

Our leadership team and owners have pledged their support along with me to uphold the Code of Conduct and support the Compliance and Ethics Program. Your commitment is essential to the shared values that unite us as an organization, guide our decisions and actions, and promote the highest quality of care. We expect each one of you to ensure compliance with the rules defined in the Compliance and Ethics Program and Code of Conduct. In this way we will be able to achieve our ambition of leadership, which goes hand in hand with the ethical and professional manner in which we must conduct our business on a daily basis.

Eddy Inzana, President & CEO

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INTRODUCTION

The United States Sentencing Commission defines a compliance program as a “program that has been reasonably designed, implemented, and enforced so that it generally will be effective in preventing and detecting criminal conduct. Failure to prevent or detect the instant offense, by itself, does not mean that the program is not effective. The hallmark of an effective program to prevent and detect violations of law is that the organization exercises due diligence in seeking to prevent and detect criminal conduct by its employees or other agents.”

Guardian Elder Care a skilled nursing facilities and ancillary providers in Pennsylvania, Ohio, and West Virginia (referred to as “facility,” collectively as “facilities,” “GEC” or “we”). We recognize the need to conduct business with honesty and integrity and in compliance with applicable federal and state laws. This recognition is supported by an organizational commitment to promote ethical and compliant business operations through the implementation of a systematic plan. We are committed to conducting our business according to the highest standards of honesty and fairness. This commitment to observing the highest ethical standards is designed not only to ensure compliance with the applicable laws and regulations in the various jurisdictions where we operate, but also to earning and keeping the continued trust of our clients, shareholders, personnel, and business partners.

By resolution of our Board of Directors, we have created this Compliance and Ethics Program and it’s supporting Code of Conduct to establish a framework to be used in our current operations and business development to ensure compliance.

The Compliance and Ethics Program is not intended to be an exhaustive guide to all the detailed rules and regulations governing the services provided by us. Rather, it is intended to establish certain guiding principles and corporate wide policies designed to ensure that each facility and its personnel have a common vision of our ethical standards and operate in accordance with those standards.

The Compliance and Ethics Program and the Code of Conduct are directed at providing business conduct and operational guidance to board members, management, employees, independent contractors, and consultants who may be engaged in activities that pose specific areas of risk or vulnerability for us.

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Overview of the Compliance & Ethics Program

THE COMPLIANCE & ETHICS PROGRAM

We are committed to the highest standards of ethics, honesty, and integrity in pursuit of our mission. Our values include

Conducting ourselves with absolute integrity in business matters.

Treating all people with respect and courtesy.

Searching constantly for new opportunities to use our skills, resources, and knowledge and to better serve our patients and our community. We will look "over the horizon" for tomorrow’s opportunities.

Focusing on creating the best experience and outcome for the user of our health care system, be it patient, member, provider, or staff.

Developing and implementing new ideas and approaches that will serve our patients and our community better.

Created at the direction and under the oversight of our Board of Directors, the Compliance and Ethics Program (“Program”) demonstrates our commitment to ethical conduct, compliance and our values by setting forth guidelines for conduct designed to prevent and detect violations of law, and by encouraging compliance by providing support, training, and educational resources to assist us in fulfilling our responsibilities. The Program is designed to assist and facilitate us in fulfilling our compliance responsibilities by creating a process to monitor compliance efforts and documenting the expectations for members of our community in the performance of their responsibilities. The Program applies to all skilled nursing facilities and other ancillary providers managed by Guardian Elder Care. Board members, the president, members of senior management, employees, volunteers, vendors, independent contractors, and others representing us are expected to adhere to these standards of conduct in the discharge of their duties.

Organizational Structure

We have a Corporate Compliance Committee (“CC”), chaired by the Corporate Compliance Officer (“CCO”), and comprised of members of management necessary to support the CCO in fulfilling his/her responsibilities under the Compliance & Ethics Program. The CCO reports on compliance activities to the Board of Directors and to the Chief Executive Officer. The Administrator of each Facility or the Director of each ancillary service (hereinafter referred to as the Compliance Liaison) is responsible for implementing and monitoring compliance with the

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Program within the facility and for providing regular reports to the Corporate Compliance Committee regarding the facility’s compliance with the Program.

The Corporate Compliance Committee

The CC is comprised of members of our management. Other individuals will be invited to attend when appropriate. The CC has oversight responsibilities for our compliance activities and assists in fulfilling its legal compliance obligations and provides support for functions related to our operations and activities. This Committee provides a forum for discussion of compliance-related issues and the status of action plans developed to resolve those issues. The CC advises the CCO and assists in the development and implementation of the Compliance and Ethics Program. The duties and responsibilities of the CC include:

Assisting in the development of a risk-based compliance plan that addresses regulatory compliance with all governing bodies and regulatory agencies, including but not limited to: Centers for Medicare & Medicaid Services (CMS), all applicable State Departments of Health (PA DOH, OH DHHS & WV DHHS), and State Departments of Public Welfare (DPW), and the Office of Inspector General (OIG).

Delegating primary responsibility for compliance with standards and regulations of the Department of Labor (DOL), Internal Revenue Service (IRS), Drug Enforcement Administration (DEA), and Quality Improvement Organizations (QIO).

Coordinating efforts, communication, and reporting between the CCO, legal counsel, external auditors and compliance management in operating departments to ensure effective monitoring and reporting. The Compliance Liaison will have day-to-day oversight and responsibility to ensure that internal controls over compliance are in place and working effectively.

Maintaining a system to solicit, evaluate, and respond to complaints and problems.

Ensuring that there is no retaliation against those who report alleged noncompliance in good faith.

Periodically reviewing the results of monitoring and auditing activities performed by the CCO or designee.

Periodically reviewing the Code of Conduct policies and procedures as well as other compliance-related policies as requested. Approving appropriate additions, deletions and/or revisions. Ensuring all officers, directors, and employees are

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familiar with the Code of Conduct through training and education and fulfilling their duties for completing the annual disclosure statement.

Monitoring compliance education activities and scope and providing input to the overall content of annual training. Where necessary, the CC will also consult with facilities and monitor the implementation of specialized compliance training sessions based on the facility’s specific needs.

Implementing a compliance performance assessment to identify business risks and evaluate internal compliance controls necessary for an effective compliance program.

The CC consists of the following members:

Chief Financial OfficerSenior Vice President of OperationsSenior Vice President of Clinical OperationsCorporate Director of Financial OperationsCorporate Director of Clinical ReimbursementCorporate Director of Information TechnologyCorporate Director of Risk ManagementCorporate Director of Human ResourcesClinical Service Point Click Care CoordinatorRegional Director of Clinical Therapy ServicesFacility AdministratorFacility Business Office Manager

Our governing body may also approve adjustments to Corporate Compliance Committee membership, from time to time.

The Corporate Compliance Officer

The Corporate Compliance Officer (“CCO”) is a senior member of management who has been authorized by the Board of Directors to oversee and implement the Compliance and Ethics Program and the Code of Conduct. The CCO has the authority and independence to provide candid advice and information to the Chief Executive Officer and makes regular reports directly to the Board of Directors.

Our Board of Directors has appointed Robert Barnes as the CCO. The CCO works with the Corporate Compliance Committee and various personnel in our community to ensure the proper development and implementation of the Compliance and Ethics Program. In furtherance of this responsibility, the CCO oversees the following areas of compliance activity:

Informing, training, and educating our community about our Compliance and Ethics Program and Code of Conduct (“Code”) and ethical obligations under that Code.

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Monitoring and implementing compliance activities, including policies, procedures, training and education programs.

Serving as a resource to us on matters of compliance and legal and regulatory changes, and assessing and identifying areas of risk.

Maintaining the anonymous hotline for confidential reporting of compliance matters.

Ensuring that open lines of communication between our personnel and management exist to ensure the proper reporting of compliance issues.

Ensuring that there is no retaliation against those who report alleged noncompliance in good faith.

Assisting operational units in developing corrective action plans.

Recommending and reviewing disciplinary action for violations of the Code.

Coordinating investigations to ensure proper review and resolution of potential compliance issues.

Reporting to the Board of Directors on a regular basis regarding corporate compliance.

We may engage outside legal counsel and/or expert consultants to assist the Corporate Compliance Committee or Corporate Compliance Officer, as appropriate.

Board of Directors

The Board receives training and briefings at least quarterly from the CCO on areas of significant compliance risk.

Compliance Liaison

The Compliance Liaison is responsible for implementing and monitoring compliance with the Program on a day-to-day basis at the facility. The Compliance Liaison provides quarterly compliance reports to the CC.

Our Code of Conduct

Our Code of Conduct provides the guiding standards of conduct for all members of our community, and sets forth our commitment to good practices and compliance with applicable

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laws and regulations. Management is responsible for ensuring that the Code of Conduct is observed by all members of our community under their direct and indirect supervision.

The following areas are covered in our Code of Conduct:

Reporting possible violations of the Code of Conduct.

Protecting those who report possible violations of the Code of Conduct from retaliation.

Following all federal healthcare program rules and regulations.

Complying with the law.

Provide Patient care to meet the needs of each individual

Preparing and submitting accurate claims.

Protecting confidential information.

Adhering to anti-referral and health care fraud and abuse legislation.

Not accepting inappropriate gifts or gratuities.

Prohibiting inappropriate gifts to patients, physicians, and vendors.

Avoiding conflicts of interest.

Following antitrust regulations.

Keeping accurate and complete records.

Protecting the environment.

Providing a safe workplace.

Prohibiting harassment and discrimination.

Using assets appropriately.

Protecting access to information systems.

Adhering to intellectual property laws.

Monitoring privacy and security of confidential patient, employee, and business information collected and maintained by us.

Statement of Receipt and Acknowledgment

Our employees and contracted individuals shall acknowledge receipt of our Code of Conduct and acknowledge individual responsibility for knowing and adhering to the Compliance and Ethics Program and Code of Conduct annually. The Code of Conduct shall be signed by all employees as part of the new employee orientation and on an annual basis.

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Code of ConductINTRODUCTION

Our Code of Conduct describes the compliance issues, laws and regulations that are relevant to our community and our provision of a wide range of healthcare services. The Code of Conduct provides guidance to our board members, officers, managers, employees, vendors, and contractors as well as to the managers, employees, vendors and contractors of our managed facilities (“our personnel”) regarding state and federal laws and regulations, including but not limited to Medicare and Medicaid regulatory issues and guidelines from various federal agencies including the Office of Inspector General, the Internal Revenue Services, the Office of Civil Rights of the Department of Health and Human Services and the Occupational Safety and Health Administration.

While this Code of Conduct is comprehensive, it is not exhaustive. Rather, the Code of Conduct’s purpose is to provide guiding principles and corporate wide policies that can ensure that all of our personnel have a common vision of our ethical standards. All of our personnel are required to comply with the requirements of the Code of Conduct and the Compliance and Ethics Program. Our personnel are also required to report any known or suspected violations of the Code of Conduct or Compliance and Ethics Program. Failure to report known or suspected noncompliance may result in disciplinary action, up to and including termination. Retaliation against those who report suspected noncompliance in good faith is strictly prohibited. If you have any questions about the Code of Conduct or compliance issues, you are encouraged to contact your supervisor, the Compliance Liaison, the Human Resources Department, the Corporate Compliance Officer or call the Compliance Hotline at 1-888-739-9576.

I. RESIDENT CARE

A. Patient Specific Care

We provide medically necessary care based on individual resident needs, and cost-effective care to patients. We will respect each patient’s dignity and their right to privacy of their medical information in accordance with operative rules and regulations, including the Health Insurance Portability and Accountability Act (HIPAA) privacy and security regulations. We will listen to our patients, their families, and visitors, in an effort to understand any concerns or complaints and will involve patients in the decision-making process regarding their care, and quickly and efficiently respond to their questions, concerns, and needs.

We strive to complete and maintain accurate medical records and accurately communicate information to patients, families, and payers, including insurance companies and health plans as requested and appropriate. We comply with all applicable federal and state laws and regulations regarding the completion and maintenance of medical records.

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Clinical assessments will be completed as required by federal and state laws and regulations. Only those clinical staff appropriately licensed and credentialed will provide patient evaluations and clinical assessments, and they will supervise all care provided by assistants and aides. All licensed and professional staff will maintain their credentials in good standing and will keep current in practice techniques.

B. Resident Rights

We comply with federal and state laws and regulations regarding the protection of resident rights at its facilities. In accordance with these rights, we do not discriminate against any resident on the basis of race, gender, age, religion, national origin, disability, color, marital status, veteran status, medical condition, sexual orientation or other protected status in the admission, transfer or discharge of a resident or in the care provided to the resident.

Residents have the right to participate in the decisions that affect their care. This includes the choice of health care providers. Residents and patients have the right to know what they need to know to make intelligent decisions. That includes receiving information about us and our applicable policies, procedures and charges, and who will provide services on our behalf.

We will endeavor to assure that each resident and patient is protected from verbal, mental or physical abuse and neglect, corporal punishment, involuntary seclusion, and against inappropriate use of chemical and physical restraints. Any restrictions on a resident’s visitors, mail, telephone, or other communication must be evaluated for their therapeutic effectiveness and fully explained to and agreed upon by the resident or their respective representative. Residents and patients have the right to refuse to perform tasks in or for the facility. Any incident of alleged mistreatment, neglect or abuse will be reported to the facility administrator and other officials as required by law.

We will safeguard each resident’s financial affairs. Resident accounts will be maintained in accordance with state and federal law.

Residents are informed of their right to make advance health care directives. Advance health care directives will be honored within the limits of the law and our mission, philosophy, and capabilities.

We provide a description of these and additional residents rights to each resident upon admission and post these rights in conspicuous locations throughout its facilities. Staff will receive annual training about resident and patient rights in order to clearly understand their role in supporting them.

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C. Privacy and Confidentiality of Resident Information

We maintain the privacy and confidentiality of information entrusted to us in accordance with legal standards. We will respect the privacy of our patients and customers and safeguard patient and customer information from physical damage and protect the privacy of our patient’s health records according to state, federal and licensure requirements. We will maintain medical and businesses documents and follow our record retention policy in accordance with the law, the Health Insurance Portability and Accountability Act (HIPAA) and other applicable guidelines.

We have adopted and implemented HIPAA Compliance Policies and Procedures which provide guidance for our personnel regarding the protection and security of protected health information. All of our personnel will comply with the requirements of the HIPAA Compliance Policies and Procedures to ensure the privacy and confidentiality of resident’s protected health information.

II. BILLING AND BUSINESS PRACTICES

A. Billing and Coding Policy

We are committed to accurate billing in accordance with applicable federal and state laws and regulations, payer rules and procedures, and our policies and procedures. We understand that claims for services submitted to any private insurance program or payer, Medicare, Medicaid, or other federally funded healthcare programs have to be accurate and correctly identify and document the services ordered and performed. We will bill only for services actually provided and documented. We will not engage in and/or permit known upcoding or unbundling of services rendered and/or other improper billing practices intended to increase reimbursement.

We will require payment of insurance copayments and deductibles and will only waive required fees following a determination of patient financial need or after reasonable collection efforts have failed and in accordance with our applicable policies and procedures. GEC will use systematic methods for analyzing the payments received and will reconcile any overpayments in accordance with contractual or legal requirements. In the case of overpayments received from a federal health care program, we will report an overpayment in compliance with state and federal requirements.

We will assign diagnostic, procedural, and other billing codes that accurately reflect the services that were provided. We will periodically review coding practices and policies, including software edits, to facilitate compliance with all applicable federal, state, and private payer healthcare program requirements and will investigate inaccurate billings and payments to determine the necessary changes to current protocol or other remedial steps.

We will periodically audit our manual and automated billing systems to ensure proper operation of all steps required to generate claims for healthcare services. We conduct a triple check of all Medicare, Medicare Managed Care claims prior to submitting the claims to the government. The triple check procedure is outlined in our Triple Check Policy.

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We also conduct comprehensive audits no less than annually to ensure timely detection and corrective action of system failures or errors. If a billing systems audit reveals system failures or errors, the department manager responsible for the audit should immediately consult with the Corporate Compliance Officer to determine the appropriate corrective action.

B. Cost Reporting

We file a cost report with the Medicare and Medicaid program each fiscal year, which includes fiscal, statistical, and operational information about the facility. We will take steps to ensure the completeness and accuracy of the information which is submitted in these filings.

C. Accurate Books and Recordkeeping

We will maintain accurate books and records in support of all claims filed for reimbursement from any federal, state, or private healthcare program. Our employees and contractors are prohibited from making false statements in any of our books or records, including but not limited to, business records, patient medical records, and medical billing records, or on any of our documents prepared for or filed with any government or private entity or person.

D. Record Retention Policy

We shall retain all recorded information, regardless of medium, that is generated and/or received in connection with our transactions and legal obligations, for the applicable required retention period(s) as set forth under federal and state law, or for a period of seven (7) years, whichever is longer.

Our records will be destroyed after all applicable retention periods have expired, except in the following circumstances:

a. In the event of the reasonable anticipation of a lawsuit, government investigation, or other legal process, records pertaining to such matters should not be destroyed until the lawsuit or investigation has been finally concluded. Once the lawsuit or investigation has been closed, the records pertaining to such matter may be destroyed in accordance with this policy and only after consulting with the Corporate Compliance Officer.

b. Upon receipt of information that leads the Corporate Compliance Officer and/or any other department to believe that legal action may arise, such party shall immediately issue a “data hold” order to the Information Technology (IT) Department, the Compliance Liaison, the Corporate Compliance Officer, and any departments that may be in possession of records that may be relevant to the action.

Records shall be kept in their original form or in an acceptable alternative form for storage. All records shall be maintained in an accessible condition and in an appropriate environment to

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secure the integrity of the information. Confidentiality of all records pertaining to patient care or billing will be maintained in accordance with applicable federal and state laws and regulations.

E. Fraud, Waste and Abuse

Our personnel are required to comply, with all applicable laws and regulations associated with its operations. Several of these laws and regulations are designed to prevent and detect fraud, waste, and abuse in federal health care programs such as Medicare and Medicaid. These laws include the federal False Claims Act, the federal Program Fraud Civil Remedies Act, the Civil Monetary Penalties Laws, the Ant kickback Statute, the Physician Self-Referral Law (Stark) and state specific laws including but not limited to the Pennsylvania Medicaid Fraud and Abuse Control Act, the Pennsylvania Insurance Fraud Law, the Pennsylvania Whistleblower Law, the Ohio Medicaid Fraud Law, the Ohio False Claims Law, the Ohio Perjury Law and the Ohio Whistleblower Protection Law. A more detailed explanation of the laws and regulations designed to prevent and detect fraud waste and abuse can be found in our Deficit Reduction Act Policy. We have also adopted policies and procedures for detecting and preventing fraud, waste, and abuse.

Our personnel must ensure that all information they submit to the government is accurate. Our personnel must know or believe the information contained in a claim or statement he or she submits on behalf of us is correct. Our personnel cannot, either deliberately or carelessly, ignore questionable information in a claim that we submit. Whether information is true and accurate includes making reasonably sure that essential facts are accurate, and that no essential fact is omitted. All of our personnel have a responsibility to comply with the law and to report his or her good faith belief of any violation thereof. Any of our personnel who have a good faith belief, based on objective information that a false claim will or has been made must report it to his or her supervisor, the CCO, or to the Compliance Hotline. Failure to report a good faith belief that a false claim will or has been made may result in disciplinary action up to and including termination.

We maintain a non-retaliation and non-intimidation policy. Our personnel may not be retaliated against or intimidated because they made a good faith report through the Hotline or to a supervisor, manager or the CCO. All of our personnel who lawfully report false claims are protected from retaliation and intimidation by our policy and federal and state laws.

We promptly investigate all Hotline reports and any compliance concerns brought to our attention through other means.

We endeavor to ensure that claims that are filed in an accurate manner. We routinely monitor and audit our operations to assure compliance with the requirements of government programs.

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F. Prohibition on Kickbacks

Our personnel may not offer, pay, solicit, or accept any compensation including any kickback, bribe, or rebate, directly or indirectly, overtly or covertly, in cash or in kind in exchange for a referral for admission or to induce purchasing, leasing, ordering, arranging for, or recommending the purchase, lease, or order of any good, facility, service, or item covered under a federal healthcare program.

We will not engage in transactions that violate relevant and applicable federal or state anti-kickback statutes.

G. Patient Referrals

We accept patient referrals based on the clinical needs of the patient and our ability to provide the care and services required by the patient. We do not solicit, accept offers, or give anything of value in exchange for patient referrals.

H. Regulatory Inquiries, Investigations, and Litigation Policy

Governmental agencies, regulatory organizations, and their authorized agents may, from time to time, conduct surveys or make inquiries that request information about us, our patients, or others that generally would be considered confidential or proprietary. We are committed to cooperating with government investigations. Our personnel will not mislead or obstruct government agents.

Regulatory inquiries may be received by mail, e-mail, telephone, or by personal visit. In the case of a personal visit, demand may be made for the immediate production or inspection of documents. Our personnel receiving such inquiries should refer such matters immediately to their supervisors.

I. Voluntary Reporting

If we become aware of any reportable event, such as reimbursement overpayment, or criminal activity, it shall be reported as required under federal or state law.

J. Contract Review Policy

We will have all contracts where the other party is a referral source or potential referral source and reviewed by legal counsel prior to our entering into such agreements. The term “contract” is defined as any written agreement, including but not limited to Memorandum of Understanding, Letter of Intent, Letter Agreement, Countersigned Letter of Understanding, Proposal, to which we are a party to, assumes obligations under, or incurs liability for. (A “material contract” is a contract with an annual expenditure greater than $5,000 or with a term longer than one year and for which we have no ability to terminate without reason or cause prior to expiration of that term.)

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Legal counsel is responsible for performing compliance and legal reviews. Directors, or other authorized representatives, may not enter into, or sign, any contract with a referral source or potential referral source or any material contract prior to the completion of a contract review and approval by legal counsel.

K. Marketing and Advertising

We may use marketing and advertising activities to educate the public, provide information to the community, increase awareness of our services, and to recruit staff. We will present only truthful, informative and non-deceptive information in these materials and announcements.

L. Market Competition

We are committed to complying with state and federal antitrust (monopolies) laws and regulations. Our policy and business practices prohibit setting charges in collusion with competitors, certain exclusive arrangements with vendors, and the sharing of confidential information with competitors. Additionally, our personnel are prohibited from sharing confidential information with competing providers, such as salaries or charges for services rendered.

M. Confidentiality of Business Information

We will exercise care to ensure that confidential and proprietary information is carefully maintained and managed to protect its value including salary, benefits, payroll, personnel files and information on disciplinary matters as confidential information while maintaining computer passwords and access codes in a confidential and responsible manner.

N. Accounting and Financial Reporting Policy

All of our accounting entries, as well as all internal and external financial reports, must be prepared accurately and on a timely basis in accordance with generally accepted accounting principles (GAAP) and applicable government regulations.

We shall maintain a high level of accuracy and completeness in the documentation and reporting of financial records. These records serve as a financial basis for our business and are important in meeting our obligations to our patients, employees, suppliers, and others. They are also necessary for compliance with tax and financial reporting requirements. We maintain a system of internal controls to provide reasonable assurances that all financial transactions are executed in accordance with management authorization and are recorded in a proper manner so as to protect and maintain accountability of company assets.

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O. Adhering To Laws and Regulations

We follow applicable laws and regulations and conduct our business and clinical activity with high standards of ethics, integrity, honesty and responsibility. Our failure to adhere to relevant laws and regulations could result in civil or criminal penalties against us.

We will follow the laws regarding intellectual properties including patents, trademarks, marketing, copyrights, and software and do not copy computer software, documents or any other materials that may be copyrighted or otherwise protected unless it is specifically allowed in the license agreement.

We will provide health care services, plan and data management support consistent with federal, state, local laws and regulations that apply to our business and provide our staff and agents with knowledge of the governing rules and regulations.

P. Environmental and Safety Considerations

We are committed to providing a safe and secure environment for patients, members, employees, visitors and customers. We comply with relevant state and federal laws and regulations with regard to the environmental aspects of the use of facility equipment, buildings, property, laboratory processes and medical products.

We comply with permit requirements that allow for the safe discharge of pollutants into the air, sewage systems, water, or land and comply with all laws and regulations governing the handling, storage, use, and disposal of hazardous materials, other pollutants and infectious wastes.

Our personnel are required to understand how their job duties may impact the environment, adhere to all requirements for proper handling of hazardous materials, and immediately alert supervisors to any situation regarding the discharge of a hazardous substance, improper disposal of medical waste or any situation which may be potentially damaging to the environment.

Q. Protecting GEC Assets

We protect our assets and the assets of others entrusted to us, including physical and intellectual property, and protect information against loss, theft, or misuse. We establish policies, practices, and educational mechanisms within our areas of responsibility to ensure the safeguarding of our assets, the accuracy of financial statements and all other records and reports. Our personnel must use company property appropriately, with approval and take measures to prevent any unexpected loss of equipment, supplies, materials, or services and adhere to established policies regarding approval for disposing of company properties.

Our personnel must report time and attendance accurately.

Expenses are consistent with and justified by our job responsibilities and the organization’s policies, procedures, and required needs.

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III. PERSONNEL

A. Workplace Conduct & Employment Practices

We recognize that the greatest strength of our organization lies in the efforts and talents of our employees, who create our success and our reputation. We treat each other with respect, dignity and courtesy.

We provide equal employment opportunities to prospective and current employees, based solely on merit, qualifications, and abilities. We show respect and do not discriminate in employment opportunities or practices on the basis of race, color, religion, sex, national origin, ancestry, age, physical or mental disability, sexual orientation, veteran status or any other status protected by law. The Human Resources Department (HR) has responsibility for monitoring affirmative action and assisting with application and interpretation of laws that impose those obligations on us. Any of our personnel who experiences harassment or discrimination on the basis of sex, race, color, religion, national origin, age, disability, or sexual orientation should immediately seek assistance from HR or make a report to the Compliance Hotline. HR either receives, or is informed of, all complaints of unlawful discrimination raised within our facilities and assists in the resolution of those complaints. We prohibit retaliation against any of our personnel who, in good faith, make complaints of harassing or discriminatory conduct.

We support and observe a workplace free of alcohol and drugs. We prohibit the unlawful possession, use, manufacture or distribution of illegal drugs and alcohol. We prohibit the unlawful possession, use, manufacture or distribution of illegal drugs and alcohol on our property or as part of any of our sponsored activities. Additionally, members of the Medical Staff, including those who maintain Drug Enforcement Agency (DEA) registration, shall comply with all federal and state laws regulating controlled substances.

We do not tolerate violence, abuse or aggressive behavior. Such behavior by any of our personnel must be reported immediately.

All of our employees will receive appropriate training and orientation to perform their duties and to meet the needs of our customers.

B. Gifts from Residents and Patients

Our personnel may not accept gifts or gratuities from residents and patients for whom we provide care or services. Our personnel may not accept gifts or gratuities from family members or friends of residents and patients. However, personnel may accept gifts from “gift funds” so long as the gifts provided to our personnel are of equal value and the contributions by residents to the “gift fund” are voluntary and anonymous such that there is no way for our personnel who benefits from the fund to determine whether a resident contributed to the fund. Also, perishable or consumable gifts given to a department or group during the holidays are not subject to any specific limitation.

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C. Business Courtesies

We prohibit our personnel from offering, extending, soliciting or accepting business or professional courtesies, including but not limited to gifts and entertainment, except in limited circumstances where the business courtesy is approved in advance by the Compliance Committee. Our personnel may never offer, extend, solicit or accept a business or professional courtesy that could be interpreted as an attempt to influence decision-making.

Federal, state and local governments have strict rules and laws regarding gifts, meals and other business courtesies for their employees and agents. Our policy is to not provide any gifts, entertainment, meals, or anything else of value to any employee or agent of the Federal, state or local government, except for minor refreshments in connection with business discussions.

D. Use of Our Property

It is the responsibility of each individual to preserve our assets including time, materials, supplies, equipment, and information. Our assets are to be maintained for business related purposes. As a general rule, the personal use of any asset without prior supervisory approval is prohibited. The occasional use of items, such as copying facilities or telephones, where the cost to us is insignificant, is permissible. Any community or charitable use of our resources must be approved in advance by the employee’s or agent’s supervisor. Any use of our resources for personal financial gain unrelated to our business is prohibited.

E. Use of Computers and the Internet

Our personnel are prohibited from using our computers or the internet for improper or unlawful activity or from downloading software to our computers without prior authorization from a supervisor. We reserve the right to track how our personnel use their time on the internet. Our personnel should have no expectation of privacy when using our computers, email or internet connections.

F. Personnel Screening

We will conduct routine and customary criminal background checks and investigations for state licensure including sanctions and/or exclusions from any federal healthcare program, for all of our employment applicants, independent contractors and current personnel.

We will not employ or contract with individuals or entities when a background check or investigation demonstrates that the individual or entity has been convicted of any felony criminal offense within the past five years or sanctioned and/or excluded from any federal healthcare program (e.g., Medicare fraud, money laundering, mail fraud, Stark Law violation, and anti-kickback statute violation). In addition, we will immediately suspend and/or terminate any current employee, or independent contractor, if we learn of any conviction or sanction and/or exclusion.

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All employment applicants are required to disclose at the time of application any criminal convictions, sanctions, and/or exclusions from any federal healthcare program. Any and all employment offers extended on behalf of us to persons subject to this policy are contingent upon successful passage of a criminal background investigation. All personnel have an ongoing obligation to disclose any criminal convictions, sanctions and/or exclusions from any federal healthcare program during their employment.

We also require background checks from any temporary agency providing contracted persons to perform services for us. We require written proof that said temporary personnel have not been subject to any criminal conviction or sanction and/or exclusion from any federal healthcare program prior to starting work with us.

Individuals subject to this policy are also subject to periodic background investigations during the term of their employment or independent contract relationship with us as follows:

Criminal background check.

Office of Inspector General (OIG) list of excluded providers.

System for Award Management (SAM) Database.

Any state specific database, which may include but is not limited to the Pennsylvania Department of Public Welfare Medicheck Database, the Ohio Department of Developmental Disabilities Abuser Registry, the Ohio Attorney General’s Sex-Offender Search, the Ohio Department of Rehabilitation and Correction’s Database of Inmates and the Ohio Department of Health’s Nurse-Aide Registry.

G. Conflict of Interest Policy

We expect board members, officers, stockholders, employees, vendors, and volunteers to avoid any activities that may involve a conflict of interest. A “conflict of interest” exists when a person’s private interest interferes or even appears to interfere in any way with our business interests. Our personnel should avoid conflicts as well as the appearance of conflicts between their private interests and our business interests.

A conflict of interest may occur if outside activities or personal interests influence or appear to influence the ability of a person to make objective decisions in the course of their job responsibilities. Any questions about whether an outside activity might be or appear to be a conflict of interest should be directed to the Compliance Liaison.

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IV. COMPLIANCE TRAINING AND MONITORING

A. Compliance Training and Education

We recognize and understand that ongoing investment in and commitment to effective training at all levels is essential to attain the desired standards of excellence in service and to adhere to our Compliance and Ethics Program.

All of our personnel undergo orientation training and annual training that contains—as necessary and appropriate to their job title and function—any new, updated, or revised information, policies, or procedures regarding patient care, billing, documentation, confidentiality, privacy, security, and other pertinent company policies and procedures. Additional training for appropriate department directors is also utilized, including in response to audit and monitoring findings.

B. Compliance as an Element of Performance

We will consider compliance with this Code of Conduct and the Compliance and Ethics Program as a factor in the performance evaluation of all of our personnel. Adherence to the Code of Conduct and participation in required compliance training will also be considered in promotion and compensation decisions.

C. Prohibition on Retaliation

We strictly prohibit any type of retaliation against any individual who, in good faith, reports any alleged compliance policy violation or illegal activity occurring at our facilities. This policy is applicable to any report or violation made to a supervisor, a member of the Executive Management Team, the Corporate Compliance Officer, or to any government official or entity.

Any person violating this policy will be subject to disciplinary action, which may include termination.

D. Reporting and Investigation of Noncompliance

All of our personnel are required to report any known or suspected violations of federal health care program requirements or of the Compliance and Ethics Program or this Code of Conduct. Failure to report a suspected or known violation of the Compliance and Ethics Program or this Code of Conduct may result in discipline, up to and including termination.

Our personnel may report known or suspected noncompliance to their immediate supervisors, the Compliance Liaison, the Corporate Compliance Officer, or to the Compliance Hotline at 1-888-739-9576.

The Compliance Liaison, in coordination with the Corporate Compliance Officer where appropriate, is responsible for coordinating investigations of alleged noncompliance to ensure the prompt review and resolution of the alleged noncompliance. The Compliance Liaison is

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responsible for ensuring that personnel are appropriately disciplined for instances of noncompliance and that root causes of noncompliance are addressed and corrected.

The Corporate Compliance Officer is also responsible for maintaining the operation and integrity of the Compliance Hotline. The Compliance Hotline Policy outlines our policy and procedure regarding the investigation and resolution of Hotline calls.

E. Discipline for Noncompliance

We will discipline, as appropriate, any personnel who engage in activities that violate our Compliance and Ethics Program policies or procedures and/or applicable federal and state laws. Disciplinary action will be dispensed without regard to seniority, position, and/or title of the violator.

F. Auditing and Monitoring Policy

We recognize the need for ongoing internal auditing and monitoring to ensure a successful business and Compliance and Ethics Program. As such, ongoing internal compliance auditing and monitoring is performed through the coordination of activities administered by appropriate personnel under the direction of the Compliance Liaison. Areas of concern or vulnerability are addressed, when applicable, by way of a corrective action plan with appropriate follow-up.

We perform formal and informal routine audit activities. We also recognize the need for ongoing external auditing and monitoring to ensure our clients, investors, and employees that our commitment to compliance is supported objectively. Compliance monitoring and auditing will be conducted externally through payer audits, external accreditation agency review, if applicable, and through independent examination of annual financial reports and compliance activity.

G. Annual Identification of Risk Areas

We will annually review key areas of potential risk and set forth a system to identify potential risk elements in each key area. The annual risk assessment will take into consideration the annual work plans published by the OIG of the Department of Health and Human Services. Potential risk elements may be subject to monitoring and auditing activities.

V. CORPORATE COMPLIANCE POLICIES

The following policies have been established to support our Code of Conduct. Our personnel are expected to understand and to be knowledgeable about the policies contained herein.

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Compliance Policy Regarding Fraud, Waste and Abuse

Policy: It is GEC’s policy to consistently and fully comply with all laws and regulations pertaining to the preparation of, delivery of and billing for services which apply to GEC on account of its participation in Medicare, Medicaid and other state and federal government programs. In furtherance of this policy, GEC has implemented a compliance program that is designed to detect and prevent fraud, waste, and abuse as well as inadvertent billing and other issues. Each GEC personnel receives training on this plan at orientation and annually, and has been provided with a copy of GEC’s Compliance and Ethics Program. The components of that Program that are designed to detect and prevent fraud, waste, and abuse are as follows:

1. Our Code of Conduct contains standards that require both GEC and its GEC personnel and contractors to comply with applicable laws and standards of care, including those applicable to documentation and the submission of claims to governmental programs. Any questions regarding the Code of Conduct should be directed to a supervisor or GEC’s Corporate Compliance Officer.

2. We are committed to ensuring that all information we submit to the government is accurate. Each GEC personnel and contractor must know or believe the information contained in a claim or statement he or she submits on behalf of GEC is correct. Personnel cannot, either deliberately or negligently, ignore questionable information in a claim that GEC submits. Whether information is true and accurate includes making reasonably sure those essential facts are accurate and that no essential fact is omitted.

3. Under GEC’s compliance and ethics standards, all GEC personnel and contractors have a responsibility to comply with the law and to report his or her good faith belief of any violation thereof. Any GEC personnel or contractor who has a good faith belief that a false claim will or has been made must report it to his or her supervisor, the Corporate Compliance Officer, or to the hotline. Failure to report a good faith belief that a false claim will or has been made may result in disciplinary action up to and including termination. GEC prohibits retaliation against or intimidation of any person who reports a good faith belief of a violation of the law or of GEC’s Code of Conduct.

4. We encourage GEC personnel and contractors to report possible incidents of fraud and abuse, violations of the Code of Conduct, or possible violations of the law to a supervisor or a member of the management team or the Corporate Compliance Officer. GEC personnel and contractors may also report compliance concerns by calling our compliance hotline. GEC personnel and contractors may make a report anonymously if they desire. Numbers for the compliance hotline are posted throughout the organization.

GEC maintains a non-retaliation standard. GEC personnel and contractors may not be retaliated against because they made a good faith report through the hotline or to a supervisor, manager or the Corporate Compliance Officer. GEC personnel who report concerns in good faith are protected from retaliation by our policy and federal and state laws. If a GEC personnel or contractor believes they are or

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have been the subject of such retaliation, the Corporate Compliance Officer should be contacted immediately.

5. GEC provides training and education to its GEC personnel about its compliance program and applicable laws, regulations and requirements of government health care programs.

6. We promptly investigate all hotline reports and any compliance concerns brought to our attention through other means. We will work with all parties involved to correct any non-compliance. We will take appropriate corrective actions as necessary.

7. We investigate all compliance and ethics reports, and if it is determined that a government program (e.g., Medicare or Medicaid) or other Payor was improperly billed, we refund any excess amounts to the appropriate program. If the investigation reveals a billing issue, we will address the issue and notify the government or other Payor of the issue and the manner in which it was addressed. We will return known overpayments within 60 days of the date the overpayment has been identified.

8. GEC is committed to ensuring that claims that are filed are accurate. GEC routinely monitors and audits its operations to assure compliance with the requirements of government programs.

9. We routinely monitor and audit claims submitted to government programs to ensure compliance with the requirements of these programs. As noted above, if we discover any billing issues, we refund overpayments to the appropriate government agency or Payor.

10. If personnel violate GEC’s Code of Conduct, that GEC personnel will be subject to disciplinary action, up to and including, in appropriate cases, termination.

Relevant Legislation and Regulations:

1. The Federal False Claims Act

In an effort to eliminate fraud with respect to government funds, the government has several laws at its disposal. One such law is the False Claims Act. Among other things, the Act makes it illegal for any person to knowingly present or cause to be presented to an officer or GEC personnel of the Federal government a false or fraudulent claim for payment or approval or make, use, or cause to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the government. The Act defines knowingly to mean that a person (a) has actual knowledge of the information; (b) acts in deliberate ignorance of the truth or falsity of the information; or (c) recklessly disregards the truth or falsity of the information.

In 2009, the False Claims Act was amended by the Fraud Enforcement and Recovery Act of 2009 (FERA). FERA redefines “claim” to include claims submitted “to a contractor, grantee, or other recipient, if the money or property is to be spent or used on the Government’s behalf, or to advance a Government program or interest. FERA also redefines “obligation” to include “an established duty, whether or not fixed,” arising from a variety of relationships, and specifically includes obligations “arising from statute or regulation, or from the retention of any

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overpayment.” This change allows the government and whistleblowers to pursue violations of regulatory statutes with penalty provisions such as False Claims Act cases and to pursue false documents which are “material to an obligation to pay or to transmit money . . . to the Government” regardless of whether a false claim has been submitted. We are also required to repay all known overpayments within 60 days of the identification of the overpayment.

An action for violation of the Act may be brought by the government or a private citizen on behalf of the government. Penalties for violation of the Act include damages of up to three times the amount of the false claims submitted, plus a civil penalty of between $5,500 and $11,000 for each false claim. Criminal penalties may also be imposed upon individuals who submit false claims.

The Federal False Claims Act contains a provision that protects GEC personnel who act in furtherance of an action under the False Claims Act. It allows any GEC personnel who is discharged, demoted, suspended, threatened, harassed, or discriminated against in the terms or conditions of employment as a result of lawful acts done by the GEC personnel in furtherance of an action under the False Claims Act, including actions with respect to an investigation, initiation of, testimony for, or assistance with any False Claims Act action, to be made whole. If the claim is successful, relief includes reinstatement with the same seniority as the GEC personnel would have had had their status with the employer not been changed, two times the amount of back pay, interest on the back pay, and counsel fees and costs.

2. The Federal Program Fraud Civil Remedies Act

In addition to the False Claims Act, the government may utilize the Program Fraud Civil Remedies Act, a law that allows the Department of Health and Human Services and other Federal agencies to impose an administrative penalty upon individuals and entities who submit a false claim or series of claims with a value of less than $150,000.

That law makes it unlawful for a person to submit such claims that the person knows or has reason to know (a) are false, fictitious, or fraudulent, (b) include or are supported by any written statement that is materially false, fictitious, or fraudulent, (c) include or are supported by any written statement that omits a material fact, is false fictitious, or fraudulent as a result of such omission, and is a statement that the person submitting the statement has a duty to include, or (d) is for payment for the provision of property or services that the person has not provided as claimed. Similarly, the submission of false, fictitious, or fraudulent statements to a government agency will violate the Act if the statement is accompanied by an express certification of its truthfulness. Penalties for violation of the Act are up to $5,500 per false claim or statement.

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3. Pennsylvania False Claims and False Statements Laws

Pennsylvania law also prohibits the submission of false claims and statements, but it is limited to claims for Medical Assistance. In accordance with Pennsylvania law, no GEC personnel may:

(a) Knowingly or intentionally present for allowance or payment any false or fraudulent claim or cost report for furnishing services or merchandise under medical assistance, or knowingly present for allowance or payment any claim or cost report for medically unnecessary services or merchandise under medical assistance, or knowingly submit false information, for the purpose of obtaining greater compensation than that to which GEC is legally entitled for furnishing services or merchandise under medical assistance, or knowingly submit false information for the purpose of obtaining authorization for furnishing services or merchandise under medical assistance.

(b) Submit a duplicate claim for services, supplies or equipment for which the provider has already received or claimed reimbursement from any source.

(c) Submit a claim for services, supplies or equipment which was not rendered to a recipient.

(d) Submit a claim for services, supplies or equipment which includes costs or charges not related to such services, supplies or equipment rendered to the recipient.

(e) Submit a claim or refer a recipient to another provider by referral, order or prescription, for services, supplies or equipment which are not documented in the record in the prescribed manner and are of little or no benefit to the recipient, are below the accepted medical treatment standards, or are unneeded by the recipient.

(f) Submit a claim which misrepresents the description of services, supplies or equipment dispensed or provided; the dates of services; the identity of the recipient; the identity of the attending, prescribing or referring practitioner; or the identity of the actual provider.

(g) Submit a claim for reimbursement for a service, charge or item at a fee or charge which is higher than the provider's usual and customary charge to the general public for the same service or item.

(h) Submit a claim for a service or item which was not rendered by the provider.

Pennsylvania’s law has both criminal and civil penalties. If convicted, there are criminal penalties for each violation of up to seven (7) years in prison and a fine of up to $15,000. However, if the violator has previously been convicted of a violation of any state or Federal law based upon conduct that would have violated any of Pennsylvania’s provisions as described above, each subsequent violation of Pennsylvania’s law will carry a penalty of up to 10 years in prison and a fine of up to $25,000. In addition, if convicted, a provider must repay any amounts

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received on account of false claims plus interest at the legal maximum rate and pay an additional amount equal to three times the amount received on account of false claims. A conviction will also result in exclusion from the Medical Assistance program for five (5) years. Notice of such a conviction will be forwarded to the Medicaid Fraud Control Unit of the Department of Justice.

In addition to the criminal penalties described above, Pennsylvania allows the Department of Public Welfare (“DPW”) to immediately terminate a provider’s agreement with the DPW and institute a civil action claiming two (2) times the amount received on account of false claims if it determines that a provider has violated any of the provisions described above.

If a provider’s Medical Assistance participation is terminated as described above, whether through a criminal proceeding or action of DPW, that provider is prohibited from owning, arranging for, rendering or ordering any service for medical assistance recipients. Moreover, the provider may not receive any Medical Assistance funds, whether directly or in the form of salary, shared fees, contracts, or otherwise from or through a participating provider.

4. Pennsylvania Insurance Fraud

The Pennsylvania Insurance Fraud law makes it a criminal offense to knowingly submit any false, incomplete or misleading information concerning any material fact to an insurer or self-insured. If a claim is made by computer billing or other electronic means, there is a presumption that the “knowingly” requirement has been proven. Additionally, the law provides that a provider’s knowledge of a potential violation without further action may trigger another provision of the law that makes it an offense to be an owner, administrator, or GEC personnel of a health care facility and knowingly allow the use of the facility by a person who is engaged in violating the law.

5. Pennsylvania Whistleblower Law

Pennsylvania law also makes it illegal to discharge, threaten or otherwise discriminate or retaliate against a GEC personnel regarding the GEC personnel's compensation, terms, conditions, location or privileges of employment because the GEC personnel or a person acting on behalf of the GEC personnel makes a good faith report or is about to report, verbally or in writing, to the employer or appropriate government agency an instance of wrongdoing or waste or because the GEC personnel is requested by an appropriate authority to participate in an investigation, hearing or inquiry held by an appropriate government agency or in a court action. A good faith report is a report of wrongdoing or waste which is made without malice or consideration of personal benefit and which the person making the report has reasonable cause to believe is true.

A person who alleges a violation of the Whistleblower Law may bring a civil action against his or her employer to prohibit an employment action as described, for damages, or both, within 180 days after the occurrence of the alleged violation. An employer may take an employment action for separate and legitimate reasons, which are not merely pretextual.

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6. Ohio Medicaid Fraud Law

Ohio law makes it illegal for any person to knowingly make or cause to be a made a false or misleading statement or representation in order to obtain reimbursement from the Medicaid program.

Ohio law also makes it illegal for any person to knowingly alter, falsify, destroy, conceal or remove any records necessary to disclose the nature of goods or services for which a claim was submitted to the Medicaid program within six years of submitting a claim for reimbursement. It is also illegal to knowingly alter, falsify destroy conceal or remove any records necessary to disclose all income and expenditures upon which rates of reimbursements were based within six years of submitting a claim for reimbursement.

Ohio law also makes it illegal for any person to charge, solicit, accept or receive any property, money or other consideration in exchange for goods or services provided under the Medicaid program with the purpose of committing fraud or knowing that the person is facilitating a fraud.

Violation of the Medicaid Fraud Law is a first degree misdemeanor. However, if Medicaid services are provided as a result of the violation, a violation may become a felony, the level of which depends on the amount of money paid as a result of the violation. For violations resulting in services between $1,000 and $7,500 in value, the violation is considered a fifth degree felony. If the value of the services is between $7,500 and $150,000, the violation is considered a fourth degree felony. If the value of the services is $150,000 or greater, the violation is a third degree felony.

The government agency can also request that a person found guilty of Medicaid Fraud pay the cost of investigating and prosecuting the case.

7. Ohio False Claims Law

Ohio law prohibits a provider from using deception to obtain or attempt to obtain payments under the Medicaid program to which the provider is not entitled. The law also prohibits providers from willfully receiving payments to which the provider is not entitled, willfully receiving payment greater than that to which the provider is entitled, or falsifying any reports or documents required by state or federal law or the provider agreement relating to Medicaid payments.

Deception is defined under the statute as acting with actual knowledge of the representation or information involved, acting in deliberate ignorance of the truth or falsity of the representation or information involved, or acting in reckless disregard of the truth or falsity of the representation or information involved such that another is deceived by the information or is prevented from acquiring information. Deception includes any conduct, act or omission that creates, confirms or perpetuates a false impression of another.

Violation of the Ohio Law can result in required reimbursement of up to three times the amount of excess payments plus interest, payment of between $5,000 and $10,000 per deceptive

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claim or falsification, and all reasonable expenses incurred by the state in enforcement of the law. The Medicaid Director will also terminate the provider’s provider agreement and stop payment to the provider for Medicaid services rendered from the date of conviction, although a nursing facility may continue to receive Medicaid payments for up to thirty days after the date of termination if the provider makes reasonable efforts to transfer its Medicaid patients to another facility. The provider will also be excluded from participation in the Medicaid program.

A provider will not be terminated if the provider can demonstrate that it did not directly or indirectly sanction the action of its authorized agent, associate, manager or employee that resulted in the conviction.

8. Ohio Perjury Law

Ohio law prohibits a person from knowingly making a false statement or knowingly swearing or affirming the truth of a false statement previously made for the purpose of securing a provider agreement. Ohio law also prohibits a person from knowingly making a false statement or knowingly swearing or affirming the truth of a false statement previously made if the statement is in writing on or in connection with a report, return, account, form or other writing that is required by law.

A violation of this law is a misdemeanor in the first degree. If the violation leads to the violator inappropriately receiving property, the violation may rise to a felony, the level of which depends on the value of the property obtained. If the value of the property which is received is between $1,000 and $7,500, the offense is a fifth degree felony. If the value of the services is between $7,500 and $150,000, the offense is a fourth degree felony. If the value of the services is $150,000 or more, the offense is a third degree felony.

The violator is also liable in a civil action to those harmed for the violation and for reasonable attorney’s fees, court costs and other expenses incurred as the result of prosecuting such a civil action.

9. Ohio Whistleblower Protection Law

Ohio law provides protection against retaliation for employees who report alleged wrongdoing by employers. However, employees must reasonably believe the violation is a criminal offense, must make a reasonable and good faith effort to determine the accuracy of his/her information, and must first orally notify the employee’s supervisor or a responsible officer of the employer of the violation and file a written report of the alleged violation with the same supervisor. If the employer does not correct the violation or make a reasonable good faith effort to correct the violation within twenty-four hours of the oral notification or receipt of the report, the employee may file a written report with the proper authorities. If the employee has followed this process, he/she is protected from disciplinary or retaliatory action by the employer.

10. Contractors and Agents

This standard applies to and will be made available to any of GEC’s contractors or agents who, on behalf of GEC, furnish, or otherwise authorize the furnishing of Medicaid health care

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items or services, perform billing or coding functions, or are involved in monitoring of health care provided by GEC.

Prohibited Conduct: Any GEC personnel who engage in the following conduct may be subject to disciplinary action. This disciplinary action may include termination. Any disciplinary action taken will be documented in the GEC personnel’s personnel file.

1. Deliberately or negligently ignore questionable information in a claim GEC submits.

2. Failure to be reasonably sure that the essential facts in a claim are true and accurate.

3. Failure to report a good faith belief that a false claim will or has been made.

4. Failure to report violations of GEC’s Code of Conduct that are witnessed by GEC personnel.

5. Retaliation against any GEC personnel that reports a suspected violation.

6. Knowingly or intentionally present for allowance or payment any false or fraudulent claim or cost report for furnishing services or merchandise under medical assistance, or knowingly present for allowance or payment any claim or cost report for medically unnecessary services or merchandise under medical assistance, or knowingly submit false information, for the purpose of obtaining greater compensation than that to which GEC is legally entitled for furnishing services or merchandise under medical assistance, or knowingly submit false information for the purpose of obtaining authorization for furnishing services or merchandise under medical assistance.

7. Submit a duplicate claim for services, supplies or equipment for which GEC has already received or claimed reimbursement from any source.

8. Submit a claim for services, supplies or equipment which was not rendered.

9. Submit a claim for services, supplies or equipment which includes costs or charges not related to such services, supplies or equipment rendered to the resident or patient.

10. Submit a claim or refer a resident or patient to another provider by referral, order or prescription, for services, supplies or equipment which are not documented in the record in the prescribed manner and are of little or no benefit to the resident or patient, are below the accepted medical treatment standards, or are unneeded.

11. Submit a claim which misrepresents the description of services, supplies or equipment dispensed or provided; the dates of services; the identity of the resident or patient; the identity of the attending, prescribing or referring practitioner; or the identity of the actual provider.

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12. Submit a claim for reimbursement for a service, charge or item at a fee or charge which is higher than GEC’s usual and customary charge to the general public for the same service or item.

13. Submit a claim for a service or item which was not rendered by GEC.

14. Failure to adhere to GEC’s policies and procedures and the standards of professional conduct.

Compliance Investigation: GEC promptly investigates all possible violations of law, regulation or policy, including Hotline reports and any compliance concerns brought to our attention through other means. The Corporate Compliance Officer or designee is responsible for directing and overseeing the investigations of any allegation of noncompliance with the above-referenced laws.

If, in consultation with legal counsel, the Corporate Compliance Officer or designee determines that a violation of a law or regulation above has occurred, GEC will:

1. Stop submitting claims related to the alleged violation until the violating practices are corrected.

2. Remove the person who violated the law or regulation from the claims submission process and take other disciplinary action against that person as appropriate.

3. In consultation with legal counsel, notify the appropriate government agencies as required by laws or regulations and make any financial restitution or repayments in a timely manner as required by law or regulation. This includes providing any required voluntary disclosures within the time frames identified under the Patient Protection and Affordable Care Act.

4. Conduct a root-cause analysis to determine appropriate corrective measures to avoid future noncompliance with the laws and regulations discussed above.

5. Implement the appropriate corrective measures.

6. Document the investigation and corrective measures implemented.

Mandatory Reporting: Any GEC personnel who finds or suspects prohibited conduct as set forth herein must immediately report the conduct to the Compliance Liaison or the Corporate Compliance Officer.

Confidential Reporting: Any GEC personnel may in good faith report conduct that may be in violation of this policy through GEC’s confidential Compliance Hotline without fear of retaliation or retribution.

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References: Deficit Reduction Act of 2005 (S.1932), 42 U.S.C. §1396a(a)(68)

Federal Criminal Penalties for Acts Involving Federal Health Care Programs, 42 U.S.C. §1320a-76(a)

Federal False Claims Act, 31 U.S.C. §§ 3729—3733

Fraud Enforcement and Recovery Act of 2009, Pub.L. 111-21, S.386

Administrative remedies for false claims and false statements established under the Program Fraud Civil Remedies Act, 31 U.S.C. §§3801, et seq.

Pennsylvania Medicaid Fraud and Abuse Control Act, 62 P.S. §1407

Pennsylvania Medicaid Regulations, 55 Pa. Code §§ 1101.51 and 1101.75

Pennsylvania Insurance Fraud, 18 Pa.C.S.A § 4117

Pennsylvania Whistleblower Law, 43 P.S. §§ 1421 et seq.

Ohio Medicaid Fraud Law, Ohio Rev. Code. Ann. § 2913.40.

Ohio False Claims Law, Ohio Rev. Code Ann. § 5164.35.

Ohio Perjury Law, Ohio Rev. Code Ann. § 2921.13.

Ohio Whistleblower Protection Law, Ohio Rev. Code Ann. § 4113.52.

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Compliance Hotline Policy

Policy: GEC will maintain a toll free Hotline 1-888-739-9576 to enable an individual to report any suspected violations of the law, Federal healthcare regulations, policies or procedures or GEC’s Code of Conduct. The Hotline is pre-recorded messages that will allow the caller communicate their concerns. The Hotline will be available 24 hours a day. All voice mail calls will be returned within two business days. GEC will publicize the existence of the Compliance Hotline and display information regarding the Hotline in an employee area and in an area in the facility where residents and others regularly congregate.

1. Operation: The Corporate Compliance Officer must maintain the operation and integrity of the Compliance Hotline. Primary responsibilities include:

a) Ensure the proper functioning of the Hotline;b) Conduct appropriate investigations of all credible allegations; andc) Follow-up appropriately in response to all Hotline calls to:d) Provide feedback to callers as necessary;e) Report Compliance Hotline activity to GEC’s governing board on a

consistent/regular basis; andf) Maintain a secure area for all documentation.

2. Confidentiality: The Corporate Compliance Officer will keep all reported information confidential by:

a) Refraining from requiring the caller to disclose his/her identity;b) Maintaining anonymity when requested by the caller to the fullest extent

practical or permitted by law;c) Maintaining the identity of the caller in confidence to the fullest extent

practical or permitted by law;d) Refraining from identifying the number/location of the call to the fullest

extent practical or permitted by law;e) Keeping the Compliance Hotline Log as the only record of Compliance

Hotline calls; and f) Maintaining the Compliance Hotline Log and Report in a secure area.

3. Retaliation: No retaliatory actions will be taken against any individual who reports compliance violations in good faith through the Compliance Hotline.

4. Communication: GEC will communicate to all employees the existence of the Compliance Hotline by:

a) Developing a Hotline Poster that states the Hotline number and hours of operation;

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b) Displaying the Poster in a prominent location within the facility frequented by employees and residents; and

c) Providing Compliance Hotline information/instructions to all employees during orientation and annual compliance training.

5. Tracking: The Corporate Compliance Officer will track all Compliance Hotline calls by using Hotline Log according to date;

Compliance Monitoring: All calls will be reviewed quarterly at the Corporate Compliance Committee Meetings.

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ANSWERS TO COMMONLY ASKED QUESTIONS

1. Who does this Code of Conduct apply to?

Unless specifically stated otherwise, the policies set forth in this Code of Conduct apply to all of our companies and to all of our personnel, including directors, officers, employees, independent contractors doing business with or on behalf of us and our wholly owned subsidiaries.

2. What are my responsibilities as GEC personnel?

As our personnel, you are expected to conduct yourself in a manner appropriate for your work environment, and to be sensitive to and respectful of the concerns, values, and preferences of others, including other employees, patients, and clients. All of our personnel are required to familiarize themselves with the policies in this Code of Conduct and to abide by them in the daily performance of their job responsibilities. You are encouraged to promptly report any practices or actions that you believe to be inappropriate or inconsistent with the policies and procedures set forth in this Code of Conduct or that you believe may compromise our ethical standards or integrity.

3. How do I report misconduct or other matters that I believe should be reported under the policies and procedures set forth in this Code of Conduct?

We have adopted a policy statement on handling employee complaints in addition to a Compliance Hotline policy as noted in the Compliance & Ethics Program. Taking proactive steps to prevent problems is part of our culture and speaking to the right people is one of your first steps to understanding and resolving what often can be difficult questions. All of our personnel are encouraged to promptly report any practices or actions that they believe are inappropriate or inconsistent with company policy, including but not limited to those policies and procedures set forth in this Code of Conduct. Anyone reporting misconduct in good faith will be protected against retaliation.

Employees are encouraged to report to their immediate supervisor or alternatively may choose to report to the Compliance Liaison or the Corporate Compliance Officer. Anonymous reporting is also permitted by calling the Compliance Hotline at 1-888-739-9576.

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4. What is a “Hotline”?

A hotline provides a risk-free way for you to anonymously report suspected violations of our compliance policies or procedures or the Code of Conduct as outlined in the Compliance & Ethics Program.

5. What should I report to the “Hotline”?

You may use the Hotline to report any and all concerns that you may have about GEC, your fellow teammates, clients, and patients. However, the “Hotline” should be used primarily to report violations related to our personnel conduct, violations of our Code of Conduct, policies, and any suspected violations of federal, state, or local law, which may include but are not limited to the following:

Medicare/Medicaid rules and regulations. Self-referral laws (also known as Stark Violations). Anti-kickback statute, theft, or bribe violations. Fraudulent billings or collections. Environmental hazards. Conflicts of interest. Any and all potential criminal violations.

6. Who do I contact if I have a question?

The Code of Conduct can only serve as a general standard of conduct. It cannot substitute for personal integrity and good judgment and cannot spell out the appropriate response to every type of situation that may arise. If you have questions about the interpretation or application of the policies or procedures of this Code of Conduct to a particular situation or if you believe that there is a conflict between the policies of this Code of Conduct and our other policies, please consult your immediate supervisor, the Compliance Liaison, or the Corporate Compliance Officer.

CORPORATE COMPLIANCE AND ETHICS PROGRAM

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CODE OF CONDUCT

ACKNOWLEDGEMENT FORM

I, the undersigned employee or agents of Guardian Elder Care facility do hereby acknowledge that I have read and reviewed the Compliance and Ethics Program. I understand the content of this as it applies to me and are fully aware that I must comply with the standards set forth in the program or face disciplinary measures.

I will cooperate fully with the Compliance Committee and Compliance Officer to the extent necessary or helpful to implementation of the program.

Name:

Signature

Print

Facility or Ancillary Division Name:

Department:

Position:

Date:

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