The OIG’s Anti-Kickback Concerns on Contracts Between Senior Communities and Placement Agencies

By on June 30, 2014

The Office of Inspector General (OIG) of the Department of Health & Human Services (HHS) has issued an advisory opinion about whether senior communities that paid a placement agency for referring new residents violated the federal anti-kickback statute. OIG Advisory Opinion No. 14-01. Although the OIG did not impose sanctions, the opinion highlights the risks inherent in these types of arrangements.

A nonprofit organization that owns subsidiaries involved in senior housing and geriatric care, including senior residential communities and skilled nursing facilities, requested an advisory opinion about the relationship between two residential communities and a placement agency.  The placement agency contracted with the two communities to promote their available housing and place new residents with them.  Under the agreement the placement agency receives a fee for every new resident it places at one of the communities.  The fee is based on a percentage of a new resident’s initial charges and does not include any charges billed to federal health care programs.  In addition, the contracts prohibited the placement agency from referring new residents who rely on state or federal health care money and do not allow the communities to accept any referrals of residents who receive state or federal health care money.

The communities did not provide services reimbursed by Medicare, no residents who were referred received services provided under a Medicaid waiver program, and none of the residents received therapy from skilled nursing facility staff.  Although none of the residents who were referred by the placement agency received federally payable services at the time of the referral, it was possible that the residents could receive federally payable services by an affiliated entity in the future.

Although the OIG found that there was remuneration that implicated the anti-kickback statute, it concluded that the facts and circumstances of the arrangement adequately reduced the risk that the payment provided under the contract could be an improper payment for referrals or the generation of federal health care program business.  The placement fee does not include any charges to the federal health care programs.  In addition, the contract prohibits the placement agency from referring and the communities from accepting any residents who rely on state or federal health care programs.  The placement agency does not refer residents for services and housing that are paid by federal health care programs, nor does it limit a resident’s choice of provider.  Finally, the parent company certified that its affiliated entities do not track referrals or common residents or providers.

The OIG’s opinion highlights the risks of referral-based payment arrangements.  By paying the placement fee, the communities paid remuneration that implicates the anti-kickback statute because the residents may later receive care reimbursed by federal health care programs.  Percentage compensation arrangements are problematic under the anti-kickback statute because they relate to the volume and value of the business between the parties.  However, due to the unique circumstances of this matter — including that the entities certified they did not track referrals to determine which residents eventually received Medicare and Medicaid services — the OIG found that the remuneration was not likely to be an improper payment to generate federal health care program business.

Of note, the OIG’s advisory opinion did not extend to a community that at one time had residents who had access to federally payable on-site therapy services provided by staff from a skilled nursing facility.  Health care providers that enter volume- and value-based contracts should proceed with caution: The OIG’s advisory opinion is tied to a specific and narrow set of facts

Filed under Medicaid, Medicare, Nursing Homes, OIG Advisory Opinion, Placement Agencies

OIG Issues Priority Recommendations Highlighting Focus Areas

By on June 24, 2014

The U.S. Department of Health and Human Services’ Office of Inspector General (OIG) recently released the OIG Compendium of Priority Recommendations.  The OIG derives its 25 priority recommendations from more specific recommendations that the OIG has made in audit and evaluation reports but has not yet implemented.  The recommendations cover 25 broad areas and provide insight into the OIG’s focus areas.  According to the OIG, the “recommendations represent opportunities to achieve cost-savings, improve program management, and ensure quality of care and safety of beneficiaries. …”  Health care providers should review the OIG recommendations to assist in focusing compliance efforts.

The OIG’s recommendations fall into seven broad categories:HC BLOG_hospice

1.         Medicare Policies and Payments;

2.         Medicare Quality of Care and Safety Issues;

3.         Medicaid Program Policies and Payments;

4.         Medicaid Quality of Care and Safety Issues;

5.         Oversight of Food Safety;

6.         HHS Grants and Contracts; and

7.         HHS Financial Stewardship.

Below is a summary of selected recommendations that affect senior providers, hospice, and home health.

Hospice care in nursing homes – The OIG expresses concern that Medicare’s hospice payment methodology may lead some hospices to inappropriately seek out beneficiaries in nursing homes.  As the OIG notes, Medicare pays hospices an all-inclusive daily rate regardless of the number of services furnished.  The OIG identified hundreds of hospices that had more than two-thirds of their beneficiaries residing in nursing facilities in 2009.

The OIG recommends monitoring hospices that depend heavily on nursing facility residents.  In addition, the OIG recommends modification of the payment system for hospice care in nursing facilities, including statutory authority if necessary.

Home health services: billing practices – The OIG expressed concern about home health agencies’ billing practices, noting that one review found one in four home health agencies exceeded a threshold that indicated unusually high billing for at least one of six measures of questionable billing.

As a result of this finding, the OIG’s recommendations include increasing monitoring of billing of home health services and taking action regarding inappropriate payments and questionable billing.

Skilled nursing facilities: billing practices – According to the OIG, skilled nursing facilities have a number of billing problems.  The OIG states that these problems include submitting inaccurate, medically unnecessary, and fraudulent claims, concluding that in 2009 skilled nursing facilities billed one-quarter of their claims in error.

The OIG has several recommendations to remedy skilled nursing facilities’ billing problems, such as increasing and expanding review of claims, monitoring compliance with new therapy assessments, and strengthening monitoring of skilled nursing facilities that disproportionately bill for higher paying resource utilization groups.

Nursing homes: patient harm, questionable resident hospitalizations, and inappropriate drug use – The OIG found a number of problems with nursing homes.  According to the OIG’s findings, about 33 percent of Medicare beneficiaries experienced adverse or temporary harm events during their stay.  Fifty-nine percent of these events were clearly or likely preventable, and the OIG found that these events resulted from substandard treatment, inadequate resident monitoring, and failure or delay of necessary care.  The OIG also found that nursing homes had questionable hospitalizations and safeguards against unnecessary antipsychotic drug use.

The OIG made several specific recommendations to combat the nursing home problems that it identified.  The recommendations include instructing nursing home surveyors to review facility practices for identifying and reducing adverse events, instructing surveyors to review nursing home hospitalization rates, and having the Centers for Medicare and Medicaid Services assess whether survey and certification processes offer adequate safeguards against unnecessary antipsychotic drug use in nursing homes.

Other recommendations – Health care providers should review the OIG’s entire list of priority recommendations to determine which recommendations apply to them.  The recommendations provide a useful starting point for targeted compliance activities.

Filed under Health Care Providers, Medicaid, Medicare, Nursing Homes

The Top 10 Assisted Living Deficiencies

By on June 19, 2014

Last year, the Assisted Living Federation of America (ALFA) conducted a state-by-state assessment of the most common regulatory citations in assisted living communities.  The results of the 2013 Top 10 Deficiencies Report can help assisted living facilities in their regulatory compliance efforts.

3926259585_5f265f6683_zALFA contacted each state’s regulatory agency to compile a list of the 10 most common assisted living citations.  The deficiencies were placed in one of 17 categories, making it possible to compare deficiencies across states.

ALFA found several deficiencies that were common across states.  Medication administration was the most commonly cited deficiency, reported in 76 percent of states.  This deficiency citation includes not providing medication as directed, having an outdated physician order, and incorrect medication administration documentation.  Other common deficiencies across states include admission requirements (66 percent of states), ongoing resident assessment (62 percent of states), and resident care (62 percent of states).

ALFA found that the 10 most commonly cited deficiencies in Colorado are the following:

  1. compliance with physician orders (medication administration);
  2. medication storage;
  3. policies and procedures (medication storage);
  4. interior and exterior environment (maintenance and building code);
  5. food service sanitation;
  6. written orders (medication administration);
  7. background checks — other staff and volunteers;
  8. administration of medication and treatment;
  9. current first-aid certification; and
  10. administration of medication

Based on ALFA’s assessment, six out of the 10 most common deficiencies relate to medication administration.

Assisted living facilities should focus compliance efforts, including training, audits, and policy development, on the commonly cited deficiencies, particularly medication administration

Image courtesy of Flickr by Charles Williams

Filed under Assisted Living Regulatory Citations

Key Points to Consider When It Comes to Bed Rail Safety

By on June 12, 2014

In recent years, the use of bed rails has received increased scrutiny from the health care community and regulators.  There have been many reports of death and injury, such as entrapment, falls, and asphyxiation, due to bed rail use.  Between Jan. 1, 1985, and Jan. 1, 2013, the Food and Drug Administration (FDA) received 901 incident reports of patients caught, trapped, entangled, or strangled in hospital beds, including 531 deaths.

In January, the FDA, working in conjunction with the Consumer Product Safety Commission (CPSC), developed a new webpage that provides guidance about bed rail use.  The guidance addresses bed rail safety, safety concerns about bed rails, and recommendations for health care providers, consumers, and caregivers about bed rails. Among the information available is clinical guidance to assess an individual patient’s needs when using a bed rail and a bed safety entrapment kit containing information and tools that can be used to assess entrapment risk.

The Colorado Department of Public Health and Environment (CDPHE) also has information on its website to assist nursing homes with bed safety.  The CDPHE has pointed out the risks of using restraints such as bed rails.  The risk of bed rails include falls caused by climbing over the rails, becoming trapped between the bed rail and mattress, which can result in asphyxiation, and fracture from rolling into the transfer rails.

The FDA cautions that health care providers should avoid the routine use of bed rails and that bed rails should not be used as a substitute for proper monitoring, especially for people at high risk of entrapment.  Likewise, the CDPHE encourages the use of alternatives before using bed rails, such as lowered beds, futons, or waterbeds.

Nursing homes often run into conflict with family members who request bed rails.  However, nursing homes cannot use family requests to justify using bed rails.  Surveyor guidance emphasizes that the legal surrogate or representative cannot give permission to use restraints for the sake of discipline or staff convenience when the restraint is not necessary to treat the resident’s medical condition.  In other words, the facility cannot use restraints in violation of 42 C.F.R. § 483.13(a) solely based on a family member’s request or approval.

Filed under Bed Rail Safety, Colorado Department of Public Health and Environment, Consumer Product Safety Commission (CPSC), Food and Drug Administration (FDA), Nursing Home Regulations