National Association of State Veterans Homes Hot Legal Topics in Long Term Care

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National Association of State Veterans Homes

Hot Legal Topics in Long Term Care

Ken Burgess, Esq.Ken Burgess, Esq.

Kim Licata, Esq.Kim Licata, Esq.

Poyner Spruill, LLPPoyner Spruill, LLP

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Designing An Auditing And Monitoring Process For SNF

Operations And BusinessKen BurgessKen Burgess

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Compliance Programs

We discussed last year.We discussed last year. Health care reform: To make these Health care reform: To make these

mandatory if passed.mandatory if passed. Reference: Reference: www.ahcancal.org

Membership required.Membership required. The project we discussed last year.The project we discussed last year.

Now completed.Now completed.

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Recall OIG’s 7 Elements of Effective Compliance Program

Compliance officer/committee (architect/general Compliance officer/committee (architect/general contractor).contractor).

Effective lines of communication.Effective lines of communication. Creation & retention of records.Creation & retention of records. Effective training & education.Effective training & education. Compliance as part of employee performance.Compliance as part of employee performance. Internal auditing & monitoring.Internal auditing & monitoring. Responding to violations & corrective actions.Responding to violations & corrective actions. Assessing effectiveness of your program.Assessing effectiveness of your program. Policies, procedures and code of conduct.Policies, procedures and code of conduct.

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The Project: One Stop Shopping

For setting up your compliance For setting up your compliance program.program.

Revising it.Revising it. Tweaking it.Tweaking it. Teaching it to your compliance Teaching it to your compliance

committee and officer and staff.committee and officer and staff.

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Auditing and Monitoring as Element of Effective Compliance Program

Auditing and Monitoring Systems;Auditing and Monitoring Systems;OIG: Integral to an “effective” OIG: Integral to an “effective”

compliance program.compliance program.Monitoring operations (business Monitoring operations (business

processes, quality, resident safety).processes, quality, resident safety).And your compliance program’s And your compliance program’s

effectiveness.effectiveness.

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Auditing & Monitoring Is Just:

Reliable, periodic audit/checks on the Reliable, periodic audit/checks on the effectiveness of business/operational effectiveness of business/operational processes;processes;Risk-based.Risk-based.Systematic/comprehensive .Systematic/comprehensive .Not overly-complex.Not overly-complex.But comprehensive & reliable.But comprehensive & reliable.Identifies responsibility/accountability.Identifies responsibility/accountability.

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RISK

… “… “exposure to the chance of injury or exposure to the chance of injury or loss”;loss”;

1.1. Business Risk.Business Risk.

2.2. Healthcare Company Risk.Healthcare Company Risk.

3.3. Quality Risk.Quality Risk.

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LONG TERM CARE RISKS

HEALTHCARECOMPANY

QUALITY

BUSINESS

LTC

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Business Risks

Financial Viability

Sarbanes-Oxley

(Public Company and/or Financing Covenants)

Enforcement

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Healthcare Company Risks

Regulatory

OIG/DOJ

Whistleblower

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Quality Risks

Reimbursement

Fraud/Abuse

Litigation

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Components of

Risk Management “Silos”

QualityRisksCMS-Quality Improvement

- survey- quality measures- staffing

BusinessRisksExternal -Internal AuditDashboard

Healthcare Company RisksOIG – ComplianceProgram

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Another Risk Management Approach

(aka “an Integrated Approach” Quality Risk

Healthcare CompanyRisk

OIG – Compliance

Program

Business RiskExternal -Internal

AuditDashboard

CMS-Quality Improvement

- survey- quality measures- staffing

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“DASHBOARD”for

Integrating Risk Data

Data Metrics;Data Metrics;Quality.Quality.Business.Business.Healthcare Company Compliance.Healthcare Company Compliance.

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Dashboard Formats

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Dashboard Development Get constituent buy-in and allocate funds.Get constituent buy-in and allocate funds. Select project team;Select project team;

In-house.In-house. Consultant /vendor.Consultant /vendor. Combination. Combination.

Determine data to be “rolled-up”;Determine data to be “rolled-up”; Don’t create new data.Don’t create new data.

Select dashboard format based on ease of data Select dashboard format based on ease of data import (manually or through IT).import (manually or through IT).

Wide-distribution to constituents;Wide-distribution to constituents; Act on indicators.Act on indicators.

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Making Auditing and Monitoring Practical

A Step-By-Step Approach to Taking A Step-By-Step Approach to Taking the Pulse of Your Operations and the Pulse of Your Operations and

Compliance ProgramCompliance Program

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We Suggest 3 Simple Questions for Each of 18 Risk

Areas From OIG 1. What are we looking 1. What are we looking forfor??

What are we testing or examining?What are we testing or examining? 2. What are we looking 2. What are we looking atat??

What information sources to get at What information sources to get at question 1 (and who does it and question 1 (and who does it and how often)?how often)?

3. What do we do with our findings 3. What do we do with our findings from 1 and 2?from 1 and 2?

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1. Specifically target and identify what you are auditing

Possible audit “targets” come from:Possible audit “targets” come from: OIG “Risk Areas”;OIG “Risk Areas”;

OIG Compliance Program Guidance for Nursing Facilities.65 Federal Register 14289 (03/16/2000)

OIG Supplemental Compliance Program Guidance for Nursing Facilities.

73 Federal Register 56832 (09/30/2008) Experience-based performance indicators;Experience-based performance indicators;

Financial/operational “outliers” or variances. Financial/operational “outliers” or variances. Internal/external audit results.Internal/external audit results. ““Other”;Other”;

Survey results, denials, probes, QI scores, QA Survey results, denials, probes, QI scores, QA meetings, complaints, hotline calls, satisfaction meetings, complaints, hotline calls, satisfaction surveys.surveys.

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Poor “Targeting” = Poor Results

“Targeting” should be based on analysis of indicators, outcomes, and applicable risk areas.

With multiple targets, failure to clearly define, and give team clear direction = disorganization, missed issues & ineffective auditing.

Am I targeting med error rates, contract compliance with illegal kickbacks, improper MDS coding and resulting improper payment claims?

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2. Design the Specific Auditing Steps You’ll Employ

Prepare audit plan around identified Prepare audit plan around identified “targets”;“targets”;Assessment of Applicable OIG Risk Assessment of Applicable OIG Risk

Areas.Areas.Financial/Operational Indicators.Financial/Operational Indicators.Survey/Reimbursement Claims Survey/Reimbursement Claims

Outcomes.Outcomes.Federal/State Announced Initiatives.Federal/State Announced Initiatives.Civil Litigation Risks.Civil Litigation Risks.

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2. Design the Specific Auditing Steps You’ll Employ (cont.)

Identify data/reports/other documentation Identify data/reports/other documentation associated with targeted areas;associated with targeted areas; Quality/Outcomes Reports.Quality/Outcomes Reports. Survey Documents.Survey Documents. Financial Results.Financial Results. Risk Management Reports.Risk Management Reports. Customer/Family Satisfaction Surveys.Customer/Family Satisfaction Surveys. Hotline Reports/Compliance Investigations.Hotline Reports/Compliance Investigations. Employee Interviews/Feedback.Employee Interviews/Feedback.

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Determine process-owners of targeted Determine process-owners of targeted functions to assign responsibility and to functions to assign responsibility and to enlist assistance to gather data.enlist assistance to gather data.

Team Leader;Team Leader;Assures plan on target.Assures plan on target.Verifies identified sources.Verifies identified sources.Maintains schedule.Maintains schedule.Coordinates all audit aspects. Coordinates all audit aspects.

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Develop audit-scoring parameters with input from process owners:Develop audit-scoring parameters with input from process owners:

Audit Report GradingAudit Report Grading ExcellentExcellent:: Compliance with control process is excellent; no Compliance with control process is excellent; no

reportable issues.reportable issues. GoodGood:: Compliance with control process is good; no reportable Compliance with control process is good; no reportable

issues. No high-risk reportable findings.issues. No high-risk reportable findings. SatisfactorySatisfactory:: Good controls exist, but opportunities to strengthen Good controls exist, but opportunities to strengthen

controls evident. No high-risk and <5 moderate-risk findings exist. controls evident. No high-risk and <5 moderate-risk findings exist. Low-risk findings may exist.Low-risk findings may exist.

Needs improvementNeeds improvement:: Gaps in the control process exist, which Gaps in the control process exist, which weaken the system. Need to introduce additional controls and weaken the system. Need to introduce additional controls and improve compliance with existing controls. One high-risk finding, improve compliance with existing controls. One high-risk finding, and/or 6 or < moderate-risk findings. Many low-risk findings may and/or 6 or < moderate-risk findings. Many low-risk findings may be present.be present.

UnsatisfactoryUnsatisfactory:: Controls are insufficient, with the absence of at Controls are insufficient, with the absence of at least one critical control, with many errors and omissions. Failure least one critical control, with many errors and omissions. Failure to improve controls could lead to a decline in financial integrity to improve controls could lead to a decline in financial integrity and lead to an increased risk of major loss and embarrassment.and lead to an increased risk of major loss and embarrassment.

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Scale frequency to risk assessment Scale frequency to risk assessment in each area - the findings dictate in each area - the findings dictate frequency;frequency;Annual audit. Annual audit. Quarterly review. Quarterly review. Snapshot review for outliers.Snapshot review for outliers.

Followed by periodic check on Followed by periodic check on the “fixes”.the “fixes”.

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3. Decide How We’ll Use the Audit Results Obtained

Depends on the issue and company;Depends on the issue and company;External CPA audit goes to CFO.External CPA audit goes to CFO.Care plan audit to DON, administrator, Care plan audit to DON, administrator,

consultant, Quality Assurance consultant, Quality Assurance Committee.Committee.

Purpose: spot an issue, analyze it, repair Purpose: spot an issue, analyze it, repair it, communicate repair, consider legal it, communicate repair, consider legal reporting requirements.reporting requirements.

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Decide How We’ll Use the Audit Results Obtained (cont.)

Almost always, goes to;Almost always, goes to;Senior management.Senior management.Compliance officer/committee.Compliance officer/committee.QA Committee.QA Committee.Board of Directors via Compliance Board of Directors via Compliance

officer.officer. Along with “fixes” for identified Along with “fixes” for identified

problems found via the results.problems found via the results.

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If You Want to Write a Specific Audit Flowchart

These questions will direct how to do These questions will direct how to do that;that;Really, for any issue you can think Really, for any issue you can think

of: quality, finance, business ops.of: quality, finance, business ops. And, if you’re looking for an “audit & And, if you’re looking for an “audit &

monitoring” policy for your monitoring” policy for your compliance program, these compliance program, these questions will take you there.questions will take you there.

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An Example

Compliance with Facility Obligations Compliance with Facility Obligations Under Medicare Part DUnder Medicare Part D

[From OIG 2008 Supplemental [From OIG 2008 Supplemental Guidance for Nursing Facilities]Guidance for Nursing Facilities]

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1. Target / Identify What We’re Monitoring

Audit/monitor following aspects of Audit/monitor following aspects of Medicare Part D compliance:Medicare Part D compliance:

Explaining Part D Plans to Explaining Part D Plans to residents accurately/completely?residents accurately/completely?

Are our pharmacy contracts Are our pharmacy contracts sufficient to ensure resident sufficient to ensure resident choice in Part D Plans?choice in Part D Plans?

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1. Target / Identify What We’re Monitoring (cont.)

Have mechanism to contract with Have mechanism to contract with additional pharmacies or with one additional pharmacies or with one (exclusive) with broader Plans?(exclusive) with broader Plans?

Avoid coaching, steering, requiring a Avoid coaching, steering, requiring a resident to select a specific Part D Plan or resident to select a specific Part D Plan or specific pharmacy?specific pharmacy?

Do employees/contractors accept items of Do employees/contractors accept items of value from Part D Plan or pharmacy to value from Part D Plan or pharmacy to refer patients?refer patients?

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2. Designate Specific Audit Steps

Review any policy/procedure and Review any policy/procedure and “scripts” used to explain Part D “scripts” used to explain Part D Plans to residents. Plans to residents.

Observe 15 instances of staff Observe 15 instances of staff explaining Plans to residents.explaining Plans to residents.

Supplement with 15 interviews of Supplement with 15 interviews of staff, residents and families re how staff, residents and families re how we explained Plans.we explained Plans.

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2. Designate Specific Audit Steps (cont.)

Identify failures to describe Plan fully or Identify failures to describe Plan fully or accurately or respond to resident requests for accurately or respond to resident requests for Plans we don’t offer.Plans we don’t offer.

Observe 15 instances of pharmacy rep or Observe 15 instances of pharmacy rep or contractor discussing Plans with residentscontractor discussing Plans with residents

Any instances of coaching, steering, requiring a Any instances of coaching, steering, requiring a specific Plan or pharmacy?specific Plan or pharmacy?

Supplement with resident/family/staff interviews Supplement with resident/family/staff interviews re those interactions.re those interactions.

Counsel employees / consider discipline for Counsel employees / consider discipline for violations & any corrective action required?violations & any corrective action required?

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Observe 15 interactions between resident Observe 15 interactions between resident and contract pharmacy(ies) to ensure no and contract pharmacy(ies) to ensure no steering, coaching, etc.steering, coaching, etc.

Report violations to compliance Report violations to compliance officer/committee.officer/committee.Corrective action required?Corrective action required?

Examine how pharmacy contracts are Examine how pharmacy contracts are negotiated / executed to ensure no items negotiated / executed to ensure no items of value to induce contracts or referrals.of value to induce contracts or referrals.

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Identify any items of value provided to Identify any items of value provided to facility staff, resident or family by facility facility staff, resident or family by facility staff, Part D Plan rep, or pharmacy rep.staff, Part D Plan rep, or pharmacy rep.Via interviews with staff, resident, Via interviews with staff, resident,

family, contractors (I.D. #).family, contractors (I.D. #).Determine if permissible under Determine if permissible under

applicable law (counsel / compliance applicable law (counsel / compliance officer).officer).

Identify who will perform these steps by Identify who will perform these steps by title and frequency (if not above).title and frequency (if not above).

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3. Designate How We Will Use the Audit Results

Share audit results and any Share audit results and any noncompliance instances with compliance noncompliance instances with compliance officer or designee as soon as practicable officer or designee as soon as practicable after audit.after audit.

And with QA Committee as directed by And with QA Committee as directed by compliance officer.compliance officer.

Compliance officer will share results with Compliance officer will share results with Board and decide if additional steps Board and decide if additional steps required (corrections, external reporting).required (corrections, external reporting).

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Example: Reserved Bed Arrangements

Summary of law;Summary of law;Permitted if price or exchange Permitted if price or exchange

value not based on value/volume value not based on value/volume of referrals.of referrals.

Potential for disguised kickback.Potential for disguised kickback.Double dipping by SNF-bed Double dipping by SNF-bed

already occupied-can’t pay for already occupied-can’t pay for days bed occupied.days bed occupied.

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Reserved Bed Arrangements (cont.)

Summary of law (cont.);Summary of law (cont.);Don’t reserve more beds than Don’t reserve more beds than

hospital really needs.hospital really needs.Payments to SNF not more than Payments to SNF not more than

SNF loses from empty bed or SNF loses from empty bed or would make on occupied bed would make on occupied bed based on occupancy and acuity based on occupancy and acuity mix.mix.

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Reserved Bed Arrangements(cont.)

Summary of law (cont.);Summary of law (cont.);In kind exchanges ok if offered to all In kind exchanges ok if offered to all

residents of SNF; not just those in residents of SNF; not just those in reserved bed or while reserved bed reserved bed or while reserved bed occupied.occupied. Hospital gives RN to SNF.Hospital gives RN to SNF. Free lab/pharmacy/therapy.Free lab/pharmacy/therapy. Free in-service education.Free in-service education. Properly reported as discounts on Properly reported as discounts on

cost reports.cost reports.

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Sample Audit Too: 1) What Are We Auditing/Looking For?

Evaluate/monitor following aspects of any Evaluate/monitor following aspects of any reserved bed arrangements;reserved bed arrangements;Do we use these arrangements?Do we use these arrangements?If so, committed to writing?If so, committed to writing?Do they meet the specific elements Do they meet the specific elements

identified above (spell out in policy)?identified above (spell out in policy)?Any policy/procedure in place re Any policy/procedure in place re

parameters we will accept consistent parameters we will accept consistent with OIG warnings?with OIG warnings?

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Reserved Bed Arrangements: What Are We Looking For?

Do we ensure these agreements are Do we ensure these agreements are reviewed by legal counsel reviewed by legal counsel (kickbacks)?(kickbacks)?

Do we periodically review actual Do we periodically review actual implementation of these against the implementation of these against the written contracts for consistency?written contracts for consistency?

Do we modify contract or practice Do we modify contract or practice when violations/variances identified?when violations/variances identified?

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2. Design the Specific Steps in Monitoring Process

Review applicable Ps & Ps on bed arrangements.Review applicable Ps & Ps on bed arrangements. Review existing contracts. Review existing contracts. Review actual implementation of these Review actual implementation of these

contracts/arrangements.contracts/arrangements. Re in-kind arrangements, are these offered to all Re in-kind arrangements, are these offered to all

residents at all times (not just while beds residents at all times (not just while beds occupied)?occupied)?

Interview hospital staff/SNF staff to ensure Interview hospital staff/SNF staff to ensure practice is consistent with Ps & Ps and contracts.practice is consistent with Ps & Ps and contracts.

Designate person (by title) and frequency of Designate person (by title) and frequency of same.same.

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3. What Will We Do With The Results?

Provided on regular basis (define) to Provided on regular basis (define) to facility administration (by title) and QA facility administration (by title) and QA Committee for evaluation, remedial steps, Committee for evaluation, remedial steps, training of staff.training of staff.

Revise applicable Ps & Ps to address Revise applicable Ps & Ps to address variances in contracts and law, and variances in contracts and law, and contracts and practices of facility.contracts and practices of facility.

Compliance officer to report to Board re Compliance officer to report to Board re problems found, corrections, monitoring problems found, corrections, monitoring of corrective actions (defined period).of corrective actions (defined period).

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OIG Risk Area: Psychotropic Medications

OIG Focus:OIG Focus:Use of PP meds is consistent with Federal Use of PP meds is consistent with Federal

regs / standard of care.regs / standard of care.SNF responsible for quality of PPs use.SNF responsible for quality of PPs use.No use as restraint / for convenience.No use as restraint / for convenience.PPs necessary per medical symptoms.PPs necessary per medical symptoms.No unnecessary PPs / other drugs.No unnecessary PPs / other drugs.Gradual dose reductions with behavior Gradual dose reductions with behavior

modifications unless medically modifications unless medically contraindicated.contraindicated.

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Auditing/Monitoring for PP Meds

What are we looking for specifically? What are we looking for specifically? The above items / issues.The above items / issues.

What information sources will we use What information sources will we use to look at those issues?to look at those issues?And who is looking on what And who is looking on what

schedule?schedule? What will we do with the results of our What will we do with the results of our

findings?findings?

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What Are We Looking For?

System to know who is on PP meds?System to know who is on PP meds? Documentation of symptom based Documentation of symptom based

basis for PPs.basis for PPs. Is documentation by proper inter-Is documentation by proper inter-

disciplinary team – all aspects of disciplinary team – all aspects of resident’s condition/care involved?resident’s condition/care involved?

Is documentation consistent with care Is documentation consistent with care plan/medical records and updated plan/medical records and updated regularly?regularly?

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What Are We Looking For? (cont.)

Documentation of ongoing efforts to Documentation of ongoing efforts to “dose down” with behavior “dose down” with behavior modifications, unless contraindicated.modifications, unless contraindicated.

Is all of above regularly reviewed by Is all of above regularly reviewed by consulting pharmacist?consulting pharmacist?

Have system for regular updates to Have system for regular updates to care plan, med records, MD orders, care plan, med records, MD orders, MARs, lab tests/lab results/follow-ups.MARs, lab tests/lab results/follow-ups.

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What Information Sources Do We Examine to Test Those

Issues? Resident medical orders for PPs.Resident medical orders for PPs. Care plans.Care plans. MARs.MARs. Nursing/social work/psychosocial notes re Nursing/social work/psychosocial notes re

symptom based reasons for use of PPs.symptom based reasons for use of PPs. System for recording/follow up of MD oral System for recording/follow up of MD oral

PP orders / tracking lab orders & results / PP orders / tracking lab orders & results / reports of same to attending MD.reports of same to attending MD.

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What Information Sources Do We Examine to Test Those

Issues? (cont.) Facility incident reports, survey Facility incident reports, survey

results and QA Committee minutes results and QA Committee minutes to detect failings in these systems.to detect failings in these systems.

Reports of consulting pharmacist re Reports of consulting pharmacist re same issues.same issues.

AND who (by title) is handling each AND who (by title) is handling each task and on what defined, periodic task and on what defined, periodic schedule.schedule.

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What Do We Do With The Results of Our Audit?

Report same to facility Report same to facility administration & QA Committee & administration & QA Committee & Compliance Officer / Committee.Compliance Officer / Committee.

Revise applicable policies & Revise applicable policies & procedures to respond to detected procedures to respond to detected problems / Train re same (repeated).problems / Train re same (repeated).

Compliance Officer report to Bd of Compliance Officer report to Bd of Directors, including corrective Directors, including corrective measures and how they are working.measures and how they are working.

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Summary Our Q and A approach is one format.Our Q and A approach is one format. Many ways to design audit system.Many ways to design audit system. Keys are:Keys are:

Is it manageable?Is it manageable?Does it work (finding problems)?Does it work (finding problems)?Is it thorough?Is it thorough?Are we actually using it and the results?Are we actually using it and the results?Are we auditing the audit system to Are we auditing the audit system to

ensure it’s working also?ensure it’s working also?