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Compliance Programs

Under the Affordable Care Act (ACA), §6102, nursing facility (NF) providers are required to design and implement a compliance and ethics program (e.g., a written and operational program specifying an organization’s policies, procedures and actions to help prevent and detect violations of federal and state laws and regulations including detecting and preventing any allegations of fraud and abuse), by March 23, 2013. 

On October 4, 2016, CMS finalized a compliance and ethics program as part of the Requirements of Participation regulations (42 C.F.R. § 483.85), and will begin enforcement November 28, 2019. At that time, nursing centers must have a Compliance and Ethics Program that meet the standards outlined in the rule. Creating an effective program requires advanced planning to have in place the appropriate staff, training, and policies and procedures. AHCA members can access this toolkit to review a summary of the requirements with helpful, practical tips for implementation.

Under the CMS regulation, 42 CFR 483.85, NFs must develop, implement and maintain a compliance and ethics program that has the following 8 elements:

  1. Establish written standards, policies and procedures “likely to be effective” to reduce the prospect of criminal, civil and administrative violations and promote quality of care.
  2. Assign “high level” individual[s] (e.g., Chief Executive Officer (CEO), Board Member, Division Director, etc.) to oversee the program standards, policies and procedures.
  3. Allocate sufficient resources and authority to individual(s) overseeing the program to “reasonably assure compliance” with standards, policies and procedures.
  4. Exercise “due diligence” to ensure individual(s) overseeing the program do not have the “propensity” to engage in illegal behavior.
  5. Act to “effectively” communicate the program standards, policies and procedures to staff, contractors and volunteers.
  6. Take “reasonable steps” to achieve compliance with the program’s standards, policies and procedures.
  7. Apply consistent enforcement of the program standards, policies and procedures through appropriate disciplinary mechanisms including as appropriate, discipline for individual(s) failure to detect and report a violation to the program contact.
  8. Ensure all “reasonable steps” are taken to “respond appropriately” to a violation and to “prevent further similar violations” including any necessary modification to the program.

Organizations with 5+ NFs must implement 3 additional requirements:

  1. Conduct annual and mandatory program training as explained in 42 CFR 483.95(f).
  2. Designate a compliance officer whose “major responsibility” is to oversee the program, and who reports to the “governing body.” Note: The compliance officer cannot be “subordinate to the general counsel, chief financial officer [CFO] or chief operating officer [COO].”
  3. Designate a compliance liaison at each of the organization’s centers.

For additional background information, see HHS, Office of Inspector General (OIG) Compliance Guidance for NFs (released in 2000) and OIG’s Supplemental Compliance Program Guidance for NFs (released in 2008).