Compliance Program Alert

Written by Martin A. Donlan, Jr., Esquire

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Nursing homes now face audits by Medicare and Medicaid recovery audit contractors (“RACs”) (overpayment auditors), Medicare and Medicaid integrity contractors (fraud auditors), as well as standard Medicare and Medicaid cost report and utilization review auditors such as PHBV Partners, LLP (formerly, Clifton Gunderson, LLP) who are ever more aggressive than in the past.  These auditors rely upon their successful retraction of payments for their continued contracting, not to mention that some receive direct incentive payments.  Accordingly, the scrutiny of your medical and billing records will now be more intense.  

Having an effective and active compliance program is, therefore, in every nursing home’s self-interest, as it may avoid adverse audit findings and provide protection against claims under the False Claims Act (“FCA”).  The federal government has made it even more important as the Patient Protection and Affordable Care Act of 2010 (“PPACA”) mandates that nursing homes implement compliance and ethics programs, which must be followed by all employees and agents of the nursing home and be effective in the prevention and detection of criminal, civil and administrative violations of Medicare and Medicaid program requirements.  The deadline for doing this is March 2013, and noncompliance with this mandate creates its own audit risk and may even be a basis for FCA liability.  

While federal regulations regarding this compliance program mandate are in process, it is essential that you review your current compliance program to be certain that it meets current OIG compliance program guidance and is an active and effective compliance program.  The American Health Care Association has developed a number of resources for members addressing compliance issues (member login required).  This is a good place to learn more about your compliance obligations.   

Identifying a compliance problem today has its own set of risks.  Under the PPACA, a provider only has 60 days from the date a Medicare or Medicaid overpayment is “identified” to make repayment to the program.  When an overpayment is “identified,” it raises questions of law and fact that can be very complex and 60 days is a very short period of time, so being diligent in resolving compliance issues is critical.  Remember, failure to make repayment of an identified overpayment is itself a violation of the FCA with criminal liability risks for both individuals and the company.

Forewarned is forearmed. Now is the time to review your compliance programs to assure their effectiveness and to provide you with the legal protections that they can afford you and this includes self-audits of your coding and billing practices.  Failure to do so now heightens your audit risk exposure.  

About the Author                    

Mr. Donlan is a Shareholder at the law firm of Williams Mullen and can be reached at 804.420.6934 or