In the following sample, we take the steps described above and apply them to one nursing facility “risk area” identified by the OIG in its 2008 Supplemental Guidance to Nursing Facilities – the responsibilities of nursing facilities to residents under the Medicare Part D Program. In later sections of this Compliance Guidance, we will look at other key risk areas identified by the OIG but here we want to demonstrate how to take the general “auditing and monitoring” process described above and apply it to a real world example. CAUTION: this is only an example which may or may not work for your facility. There is no “one way” to perform auditing and monitoring functions and those processes should be designed to meet the unique needs of each provider. But, this sample demonstrates one way to approach auditing and monitoring in the context of a specific risk area.
The AMCE Nursing Home Medicare Part D Monitoring Program
To understand how and why we’ve developed this sample auditing/monitoring process as we have, you need to understand a few basics about the role and responsibilities of nursing facilities in the Medicare Part D program from the OIG’s perspective. So, before we reach the sample below, here are a few basics you need to understand. We’ve pulled this “primer” on Medicare Part D and nursing facilities directly from the OIG’s 2008 Supplemental Compliance Guidance for Nursing Facilities (73 Federal Register 56832 at pages 56846-56847). As discussed previously, this document and the OIG’s advisory opinions, fraud alerts and similar publications published at www.oig.hhs.gov/fraud are a great source for identifying the risk areas the OIG is especially concerned about with nursing facilities (along with each company’s specific risk areas as identified by internal auditing and monitoring systems).
With respect to Medicare Part D in nursing facilities, the OIG has pointed out that:
- Medicare Part D extends voluntary prescription drug coverage to all Medicare beneficiaries, including nursing facility residents.
- Nursing facility residents who elect Medicare Part D have the right to select their own Part D Plans.
- Different Part D Plans offer a variety of drug formularies and have arrangements with a variety of pharmacies to dispense drugs on the Plan’s specific formulary. Nursing facilities also contract with pharmacies to dispense medications to their residents. These arrangements are often exclusive or semi-exclusive arrangements between the nursing facility and one or more pharmacies, designed to ease the administrative burden on facilities and help coordinate the accurate dispensing of medications to residents.
- In some cases, the Part D Plan that best meets a resident’s needs may not have a contract with the nursing facility’s pharmacy(ies)
- CMS has said that it expects nursing facilities to work with their current pharmacies to assure that they recognize the Part D Plans chosen by its Medicare residents or to add additional pharmacies to ensure residents’ rights to select the Part D Plan that’s best for them. In the alternative, according to CMS, the facility could enter an exclusive contract with another single pharmacy (other than its current pharmacy(ies)) that contracts more broadly with an array of Part D Plans and thus offers more choice.
- CMS has also said that nursing facilities “may, and are encouraged to, provide information and education on all available Part D Plans to their residents.” If facilities choose to do this, they should ensure the information they provide is “complete and objective.” This could include walking residents through the important details of all available Part D Plans available to its residents, including premium and cost-sharing obligations, and discussing which Plans do and do not cover a resident’s medications.
- The OIG warns that in carrying out these educational efforts, or at other times, nursing facilities must not act in ways that frustrate a resident’s right to choose a Part D Plan, must not require, request, coach or steer any resident to select or change a plan for any reason, and must not “knowingly and/or willingly allow the pharmacy servicing the nursing home” to do the same.
- In addition, nursing facilities, their employees and contractors should not accept any payments (or other items of value) from any Plan or pharmacy to influence a resident to select a particular Part D Plan or pharmacy (a potential kickback and violation of a resident’s right to choose a Part D Plan).
Our Sample Auditing/Monitoring Plan for Part D
- Specifically target and identify what you are monitoring.
a. Task: audit and monitor the following aspects of Medicare Part D compliance:
Design the specific steps that will make up the monitoring process for the particular issue you are auditing.
- Do we explain residents’ Part D options in a manner that is complete and accurate?
- Are our available pharmacy agreements sufficient to ensure residents’ right of choice for a Part D Plan they elect?
- If not, do we have a mechanism to contract with additional pharmacies to ensure the Plans residents elect are available to them?
- Or, in the alternative, have we considered (or implemented) contracts with other pharmacies that offer an array of Part D Plans sufficient to accommodate our residents’ choices?
- Do we carefully avoid steering, coaching, requiring or requesting that residents select a particular Part D plan (because, for example, that Plan is offered by one or more pharmacies with which we have a contract)?
- Do any of our employees or contractors accept payments or other items of value from any pharmacy or Part D Plan in exchange for influencing residents to select a particular Plan or pharmacy?
a. Review any applicable policies, procedures, training materials and “scripts” used to prescribe how the facility explains available Part D Plans to residents.
b. Observe (insert frequency or by random number of observations on a defined schedule) facility staff or contractors explaining available Part D plans to residents, how we explain the various aspects of each plan, and how we respond to resident requests for Part D Plans that are not available through our current pharmacy contracts. Supplement observations with interviews of residents, family members and facility employees and/or contractors regarding these same issues. Identify failures to describe plans accurately or completely, failures to respond to residents’ request for Part D Plans not available currently through our existing pharmacy contracts.
c. Observe (insert frequency or by random number of observations on a defined schedule) employee or contractor interactions with residents regarding Part D Plans and identify any instances of employees and/or contractors coaching, steering, requesting or requiring residents to select a particular Part D Plan or pharmacy. Supplement observations with interviews of residents, family members and facility employees and/or contractors regarding these same issues. Immediately counsel any employee or contractor against such practices and, where applicable, recommend discipline consistent with the facility’s published disciplinary guidelines.
d. Observe (insert frequency or by random number of observations on a defined schedule) interactions between representatives of our current pharmacy(ies) and residents to ensure they do not engage in activities identified in section c, above. Supplement observations with interviews of residents, family members and facility employees and/or contractors regarding these same issues. Report any violations to the compliance officer (or other individual as directed by facility policy and/or facility compliance program). (insert frequency or by random number of observations on a defined schedule).
e. Examine how our pharmacy contracts are negotiated, selected and executed (in concert with compliance officer, administrator and/or legal counsel per company policy). Review contact negotiation and execution process to ensure contracts are not selected, priced or executed in exchange for any item of value or payment which prohibited by applicable state or federal law.
f. Identify any and all items of value provided to the facility, any employee or contractor, or any resident or family by 1) facility staff, 2) any pharmacy representative, or 3) any Medicare Part D Plan representative to the compliance officer for review (in concert with external advisors if needed). Determine if such items are permissible under applicable law (with legal review as directed by the compliance officer, as needed).
g. The audits and reviews described in this section will be performed by (identify who in the facility or company is responsible for this, such as compliance officer, designated staff or external consultants) on the following periodic basis (indicate how frequently these audits should be performed).
Decide how your company or facility will use the information obtained as a result of auditing and monitoring.
a. The results of ACME’s Medicare Part D auditing and monitoring program will be shared as soon as practicable after each periodic audit is complete, or upon discovery of potential noncompliance with applicable law, with AMCE’s corporate compliance officer and the facility administrator at the direction of the compliance officer.
b. At the direction of the compliance officer, audit results will be shared with the facility’s Quality Assurance Committee.
c. As appropriate, the Compliance Officer will discuss the results of such audits with senior management and/or the Board of Directors (or owners) and determine whether any additional, external reporting is required or recommended, whether additional compliance safeguards should be instituted at the facility (including more frequent auditing of Part D procedures), whether training of employees and/or contractors is recommended and such other corrective and monitoring activities are appropriate.
The goal of this sample is just to show you one way to approach the auditing and monitoring of risk areas identified by applicable government authorities, like the OIG, and your own facility or corporate operations (both quality and finance/business operations). Each provider should determine what system of auditing and monitoring works best for them. But, an “effective” compliance program, as defined by the OIG, just include the auditing/monitoring element.
We’ve approached our sample through a series of questions and answers a provider can ask internally, and a series of steps. This sequence might change, even in our sample, for different risk areas (which we’ll examine in later parts of this Compliance Guidance). Also, a system you design on the front end might not work as well as intended and may need tweaking or revising as you spot issues the system failed to catch.
One way to figure out what works for you is to take a proposed system, like our sample system of questions and answers, try applying it to a risk area you’ve identified in your company’s operations, and see how it works. You’ll quickly determine if it works as is, needs some tailoring or is simply not the approach that’s best for you. The simple process of walking through that exercise will help you overcome the dread many providers feel when they hear or read about “audits.”