Mid-Atlantic Health Law TOPICS

In the last days of the Biden administration, the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) issued updated compliance program guidance for nursing facilities for the first time in 16 years. The Nursing Facility Industry Segment-Specific Compliance Program Guidance (Program Guidance), while non-binding, provides critical insight into how the OIG views common compliance issues.

The Program Guidance is a nursing facility focused supplement that builds on the OIG’s General Compliance Program Guidance, most recently updated in 2023, covering all types of participants in federal health care programs. These documents are complementary to the Compliance Program Requirements of Participation (ROPS) which are mandatory for nursing facilities.  

Quality

The most recent update to the Program Guide envisions quality and compliance functions within nursing facilities as being interdependent, requiring input from compliance professionals and those with clinical 
experience. This includes consideration of clinically appropriate staffing levels, care plans, resident safety measures, medication management and more.   

Referral Relationships

A lengthy section of the Program Guidance emphasizes the importance of scrutinizing all referral relationships for compliance with the Anti-Kickback Statute (AKS). The AKS prohibits the knowing exchange of anything of value in return for referrals or the offer of a referral. 

The Program Guide acknowledges that nursing facility dynamics are filled with the opportunity for potentially problematic referral relationships, requiring vigilant review of every contract and arrangement. The consequences of a misstep are high: AKS violations may result in criminal charges or removal from federally funded health care programs, as well as financial penalties.   

The AKS has several statutory exceptions, and applicable regulations have created several additional safe harbors, that set specific criteria for permissible arrangements. The Program Guidance cautions operators to adhere precisely to the criteria for these exemptions to avoid legal issues. 

The Program Guidance also highlights with illustrative examples some of the areas most prone to abuse, including free/below market value goods and services, discounts and swapping arrangements, long term care pharmacy and consultant pharmacist arrangements, hospital arrangements, hospice arrangements, care coordination arrangements, and joint ventures.

Other Concerns

Beyond the AKS, the Program Guide contains reminders about other compliance concerns ranging from payment practices to privacy. 

The publication of the Program Guide serves as a reminder for nursing facility operators to review existing policies and practices regularly and to review each new arrangement prior to implementation, in relation to the standards and examples suggested by the OIG.

Alexandria K. Montanio
410-576-4278 • amontanio@gfrlaw.com