1 National Association of State Veterans Homes Hot Legal Topics in Long Term Care Ken Burgess, Esq. Kim Licata, Esq. Poyner Spruill, LLP

2 Designing An Auditing And Monitoring Process For SNF Operations And Business Ken Burgess

3 Compliance Programs We discussed last year. We discussed last year. Health care reform: To make these mandatory if passed. Health care reform: To make these mandatory if passed. Reference: Reference:  Membership required. The project we discussed last year. The project we discussed last year.  Now completed.

4 Recall OIG’s 7 Elements of Effective Compliance Program Compliance officer/committee (architect/general contractor). Compliance officer/committee (architect/general 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.

5 The Project: One Stop Shopping For setting up your compliance program. For setting up your compliance program. Revising it. Revising it. Tweaking it. Tweaking it. Teaching it to your compliance committee and officer and staff. Teaching it to your compliance committee and officer and staff.

6 Auditing and Monitoring as Element of Effective Compliance Program Auditing and Monitoring Systems; Auditing and Monitoring Systems;  OIG: Integral to an “effective” compliance program.  Monitoring operations (business processes, quality, resident safety).  And your compliance program’s effectiveness.

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

8 RISK … “exposure to the chance of injury or loss”; 1. Business Risk. 2. Healthcare Company Risk. 3. Quality Risk.

9 LONG TERM CARE RISKS LTC BUSINESSQUALITY HEALTHCARE COMPANY

10 Business Risks Financial Viability Sarbanes- Oxley (Public Company and/or Financing Covenants) Enforcement

11 Healthcare Company Risks Regulatory OIG/DOJ Whistleblower

12 Quality Risks Reimbursement Fraud/Abuse Litigation

13 Components of Risk Management “Silos” Quality Risks CMS- Quality Improvement - survey - quality measures - staffing Business Risks External - Internal Audit Dashboard Healthcare Company Risks OIG – Compliance Program

14 Another Risk Management Approach (aka “an Integrated Approach” Quality Risk Healthcare Company Risk OIG – Compliance Program Business Risk External - Internal Audit Dashboard CMS- Quality Improvement - survey - quality measures - staffing

15 “DASHBOARD” for Integrating Risk Data Data Metrics; Data Metrics;  Quality.  Business.  Healthcare Company Compliance.

16 Dashboard Formats

17 Dashboard Development Get constituent buy-in and allocate funds. Get constituent buy-in and allocate funds. Select project team; Select project team;  In-house.  Consultant /vendor.  Combination. Determine data to be “rolled-up”; Determine data to be “rolled-up”;  Don’t create new data. Select dashboard format based on ease of data import (manually or through IT). Select dashboard format based on ease of data import (manually or through IT). Wide-distribution to constituents; Wide-distribution to constituents;  Act on indicators.

18 Making Auditing and Monitoring Practical A Step-By-Step Approach to Taking the Pulse of Your Operations and Compliance Program

19 We Suggest 3 Simple Questions for Each of 18 Risk Areas From OIG 1. What are we looking for? 1. What are we looking for?  What are we testing or examining? 2. What are we looking at? 2. What are we looking at?  What information sources to get at question 1 (and who does it and how often)? 3. What do we do with our findings from 1 and 2? 3. What do we do with our findings from 1 and 2?

20 1. Specifically target and identify what you are auditing Possible audit “targets” come from: Possible audit “targets” come from:  OIG “Risk Areas”;   OIG Compliance Program Guidance for Nursing Facilities.   65 Federal Register (03/16/2000)   OIG Supplemental Compliance Program Guidance for Nursing Facilities.   73 Federal Register (09/30/2008)  Experience-based performance indicators;  Financial/operational “outliers” or variances.  Internal/external audit results.  “Other”;  Survey results, denials, probes, QI scores, QA meetings, complaints, hotline calls, satisfaction surveys.

21 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?

22 2. Design the Specific Auditing Steps You’ll Employ Prepare audit plan around identified “targets”; Prepare audit plan around identified “targets”;  Assessment of Applicable OIG Risk Areas.  Financial/Operational Indicators.  Survey/Reimbursement Claims Outcomes.  Federal/State Announced Initiatives.  Civil Litigation Risks.

23 2. Design the Specific Auditing Steps You’ll Employ (cont.) Identify data/reports/other documentation associated with targeted areas; Identify data/reports/other documentation associated with targeted areas;  Quality/Outcomes Reports.  Survey Documents.  Financial Results.  Risk Management Reports.  Customer/Family Satisfaction Surveys.  Hotline Reports/Compliance Investigations.  Employee Interviews/Feedback.

24 2. Design the Specific Auditing Steps You’ll Employ (cont.) Determine process-owners of targeted functions to assign responsibility and to enlist assistance to gather data. Determine process-owners of targeted functions to assign responsibility and to enlist assistance to gather data. Team Leader; Team Leader;  Assures plan on target.  Verifies identified sources.  Maintains schedule.  Coordinates all audit aspects.

25 2. Design the Specific Auditing Steps You’ll Employ (cont.) Develop audit-scoring parameters with input from process owners: Develop audit-scoring parameters with input from process owners:  Audit Report Grading  Excellent: Compliance with control process is excellent; no reportable issues.  Good: Compliance with control process is good; no reportable issues. No high-risk reportable findings.  Satisfactory: Good controls exist, but opportunities to strengthen controls evident. No high-risk and <5 moderate-risk findings exist. Low-risk findings may exist.  Needs improvement: Gaps in the control process exist, which weaken the system. Need to introduce additional controls and improve compliance with existing controls. One high-risk finding, and/or 6 or < moderate-risk findings. Many low-risk findings may be present.  Unsatisfactory: Controls are insufficient, with the absence of at least one critical control, with many errors and omissions. Failure to improve controls could lead to a decline in financial integrity and lead to an increased risk of major loss and embarrassment.

26 2. Design the Specific Auditing Steps You’ll Employ (cont.) Scale frequency to risk assessment in each area - the findings dictate frequency; Scale frequency to risk assessment in each area - the findings dictate frequency;  Annual audit.  Quarterly review.  Snapshot review for outliers.  Followed by periodic check on the “fixes”.

27 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.  Care plan audit to DON, administrator, consultant, Quality Assurance Committee. Purpose: spot an issue, analyze it, repair it, communicate repair, consider legal reporting requirements. Purpose: spot an issue, analyze it, repair it, communicate repair, consider legal reporting requirements.

28 Decide How We’ll Use the Audit Results Obtained (cont.) Almost always, goes to; Almost always, goes to;  Senior management.  Compliance officer/committee.  QA Committee.  Board of Directors via Compliance officer.  Along with “fixes” for identified problems found via the results.

29 If You Want to Write a Specific Audit Flowchart These questions will direct how to do that; These questions will direct how to do that;  Really, for any issue you can think of: quality, finance, business ops. And, if you’re looking for an “audit & monitoring” policy for your compliance program, these questions will take you there. And, if you’re looking for an “audit & monitoring” policy for your compliance program, these questions will take you there.

30 An Example Compliance with Facility Obligations Under Medicare Part D [From OIG 2008 Supplemental Guidance for Nursing Facilities]

31 1. Target / Identify What We’re Monitoring Audit/monitor following aspects of Medicare Part D compliance: Audit/monitor following aspects of Medicare Part D compliance: Explaining Part D Plans to residents accurately/completely? Explaining Part D Plans to residents accurately/completely? Are our pharmacy contracts sufficient to ensure resident choice in Part D Plans? Are our pharmacy contracts sufficient to ensure resident choice in Part D Plans?

32 1. Target / Identify What We’re Monitoring (cont.) Have mechanism to contract with additional pharmacies or with one (exclusive) with broader Plans? Have mechanism to contract with additional pharmacies or with one (exclusive) with broader Plans? Avoid coaching, steering, requiring a resident to select a specific Part D Plan or specific pharmacy? Avoid coaching, steering, requiring a resident to select a specific Part D Plan or specific pharmacy? Do employees/contractors accept items of value from Part D Plan or pharmacy to refer patients? Do employees/contractors accept items of value from Part D Plan or pharmacy to refer patients?

33 2. Designate Specific Audit Steps Review any policy/procedure and “scripts” used to explain Part D Plans to residents. Review any policy/procedure and “scripts” used to explain Part D Plans to residents. Observe 15 instances of staff explaining Plans to residents. Observe 15 instances of staff explaining Plans to residents. Supplement with 15 interviews of staff, residents and families re how we explained Plans. Supplement with 15 interviews of staff, residents and families re how we explained Plans.

34 2. Designate Specific Audit Steps (cont.) Identify failures to describe Plan fully or accurately or respond to resident requests for Plans we don’t offer. Identify failures to describe Plan fully or accurately or respond to resident requests for Plans we don’t offer. Observe 15 instances of pharmacy rep or contractor discussing Plans with residents Observe 15 instances of pharmacy rep or contractor discussing Plans with residents Any instances of coaching, steering, requiring a specific Plan or pharmacy? Any instances of coaching, steering, requiring a specific Plan or pharmacy? Supplement with resident/family/staff interviews re those interactions. Supplement with resident/family/staff interviews re those interactions. Counsel employees / consider discipline for violations & any corrective action required? Counsel employees / consider discipline for violations & any corrective action required?

35 2. Designate Specific Audit Steps (cont.) Observe 15 interactions between resident and contract pharmacy(ies) to ensure no steering, coaching, etc. Observe 15 interactions between resident and contract pharmacy(ies) to ensure no steering, coaching, etc. Report violations to compliance officer/committee. Report violations to compliance officer/committee.  Corrective action required? Examine how pharmacy contracts are negotiated / executed to ensure no items of value to induce contracts or referrals. Examine how pharmacy contracts are negotiated / executed to ensure no items of value to induce contracts or referrals.

36 2. Designate Specific Audit Steps (cont.) Identify any items of value provided to facility staff, resident or family by facility staff, Part D Plan rep, or pharmacy rep. Identify any items of value provided to facility staff, resident or family by facility staff, Part D Plan rep, or pharmacy rep.  Via interviews with staff, resident, family, contractors (I.D. #).  Determine if permissible under applicable law (counsel / compliance officer).  Identify who will perform these steps by title and frequency (if not above).

37 3. Designate How We Will Use the Audit Results Share audit results and any noncompliance instances with compliance officer or designee as soon as practicable after audit. Share audit results and any noncompliance instances with compliance officer or designee as soon as practicable after audit. And with QA Committee as directed by compliance officer. And with QA Committee as directed by compliance officer. Compliance officer will share results with Board and decide if additional steps required (corrections, external reporting). Compliance officer will share results with Board and decide if additional steps required (corrections, external reporting).

38 Example: Reserved Bed Arrangements Summary of law; Summary of law;  Permitted if price or exchange value not based on value/volume of referrals.  Potential for disguised kickback.  Double dipping by SNF-bed already occupied-can’t pay for days bed occupied.

39 Reserved Bed Arrangements (cont.) Summary of law (cont.); Summary of law (cont.);  Don’t reserve more beds than hospital really needs.  Payments to SNF not more than SNF loses from empty bed or would make on occupied bed based on occupancy and acuity mix.

40 Reserved Bed Arrangements (cont.) Summary of law (cont.); Summary of law (cont.);  In kind exchanges ok if offered to all residents of SNF; not just those in reserved bed or while reserved bed occupied.  Hospital gives RN to SNF.  Free lab/pharmacy/therapy.  Free in-service education.  Properly reported as discounts on cost reports.

41 Sample Audit Too: 1) What Are We Auditing/Looking For? Evaluate/monitor following aspects of any reserved bed arrangements; Evaluate/monitor following aspects of any reserved bed arrangements;  Do we use these arrangements?  If so, committed to writing?  Do they meet the specific elements identified above (spell out in policy)?  Any policy/procedure in place re parameters we will accept consistent with OIG warnings?

42 Reserved Bed Arrangements: What Are We Looking For? Do we ensure these agreements are reviewed by legal counsel (kickbacks)? Do we ensure these agreements are reviewed by legal counsel (kickbacks)? Do we periodically review actual implementation of these against the written contracts for consistency? Do we periodically review actual implementation of these against the written contracts for consistency? Do we modify contract or practice when violations/variances identified? Do we modify contract or practice when violations/variances identified?

43 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 contracts/arrangements. Review actual implementation of these contracts/arrangements. Re in-kind arrangements, are these offered to all residents at all times (not just while beds occupied)? Re in-kind arrangements, are these offered to all residents at all times (not just while beds occupied)? Interview hospital staff/SNF staff to ensure practice is consistent with Ps & Ps and contracts. Interview hospital staff/SNF staff to ensure practice is consistent with Ps & Ps and contracts. Designate person (by title) and frequency of same. Designate person (by title) and frequency of same.

44 3. What Will We Do With The Results? Provided on regular basis (define) to facility administration (by title) and QA Committee for evaluation, remedial steps, training of staff. Provided on regular basis (define) to facility administration (by title) and QA Committee for evaluation, remedial steps, training of staff. Revise applicable Ps & Ps to address variances in contracts and law, and contracts and practices of facility. Revise applicable Ps & Ps to address variances in contracts and law, and contracts and practices of facility. Compliance officer to report to Board re problems found, corrections, monitoring of corrective actions (defined period). Compliance officer to report to Board re problems found, corrections, monitoring of corrective actions (defined period).

45 OIG Risk Area: Psychotropic Medications OIG Focus: OIG Focus:  Use of PP meds is consistent with Federal regs / standard of care.  SNF responsible for quality of PPs use.  No use as restraint / for convenience.  PPs necessary per medical symptoms.  No unnecessary PPs / other drugs.  Gradual dose reductions with behavior modifications unless medically contraindicated.

46 Auditing/Monitoring for PP Meds What are we looking for specifically? What are we looking for specifically?  The above items / issues. What information sources will we use to look at those issues? What information sources will we use to look at those issues?  And who is looking on what schedule? What will we do with the results of our findings? What will we do with the results of our findings?

47 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 basis for PPs. Documentation of symptom based basis for PPs. Is documentation by proper inter- disciplinary team – all aspects of resident’s condition/care involved? Is documentation by proper inter- disciplinary team – all aspects of resident’s condition/care involved? Is documentation consistent with care plan/medical records and updated regularly? Is documentation consistent with care plan/medical records and updated regularly?

48 What Are We Looking For? (cont.) Documentation of ongoing efforts to “dose down” with behavior modifications, unless contraindicated. Documentation of ongoing efforts to “dose down” with behavior modifications, unless contraindicated. Is all of above regularly reviewed by consulting pharmacist? Is all of above regularly reviewed by consulting pharmacist? Have system for regular updates to care plan, med records, MD orders, MARs, lab tests/lab results/follow- ups. Have system for regular updates to care plan, med records, MD orders, MARs, lab tests/lab results/follow- ups.

49 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 symptom based reasons for use of PPs. Nursing/social work/psychosocial notes re symptom based reasons for use of PPs. System for recording/follow up of MD oral PP orders / tracking lab orders & results / reports of same to attending MD. System for recording/follow up of MD oral PP orders / tracking lab orders & results / reports of same to attending MD.

50 What Information Sources Do We Examine to Test Those Issues? (cont.) Facility incident reports, survey results and QA Committee minutes to detect failings in these systems. Facility incident reports, survey results and QA Committee minutes to detect failings in these systems. Reports of consulting pharmacist re same issues. Reports of consulting pharmacist re same issues. AND who (by title) is handling each task and on what defined, periodic schedule. AND who (by title) is handling each task and on what defined, periodic schedule.

51 What Do We Do With The Results of Our Audit? Report same to facility administration & QA Committee & Compliance Officer / Committee. Report same to facility administration & QA Committee & Compliance Officer / Committee. Revise applicable policies & procedures to respond to detected problems / Train re same (repeated). Revise applicable policies & procedures to respond to detected problems / Train re same (repeated). Compliance Officer report to Bd of Directors, including corrective measures and how they are working. Compliance Officer report to Bd of Directors, including corrective measures and how they are working.

52 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?  Does it work (finding problems)?  Is it thorough?  Are we actually using it and the results?  Are we auditing the audit system to ensure it’s working also?