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Long Term Care Compliance Risk Factors

Nursing Home Compliance Plan Risk Areas Identified in OIG Guidance from 2000

The OIG Guidance to Nursing Homes relative to their compliance plans was issued in 2000.  That document contained the elements that the OIG felt that Nursing Homes should consider in their compliance plans.  Now that the date has passed and nursing facilities and skilled nursing facilities are required to have adopted effective compliance programs, I thought it might be useful to list some of the risk factors that the OIG felt were important in 2000.  Obviously, these factors are not all inclusive and additional risk areas have been identified since that time.  Yet, the items identified in the 2000 OIG Guidance remains a viable starting point to assist facilities in identifiying risk areas that need to be addressed in their compliance programs.


Important Statement from the OIG – This factor should be specifically mentioned in all nursing home compliance plans:

The OIG believes that a nursing facility’s compliance policies should start with a statement that affirms the facility’s commitment to providing the care and services necessary to attain or maintain the resident’s ‘‘highest practicable physical, mental and psychosocial well-being.’’

Additional Factors Relative to Quality

  • accurate assessment of each resident’s functional capacity and a comprehensive care plan that includes measurable objectives and timetables to meet the resident’s medical, nursing, and mental and psychosocial needs;
  • inappropriate or insufficient treatment and services to address residents’ clinical conditions, including pressure ulcers, dehydration, malnutrition, incontinence of the bladder, and mental or psychosocial problems;
  • failure to accommodate individual resident needs and preferences;
  • failure to properly prescribe, administer and monitor prescription drug usage;
  • inadequate staffing levels or insufficiently trained or supervised staff to provide medical, nursing, and related services;
  • failure to provide appropriate therapy services;
  • failure to provide appropriate services to assist residents with activities of daily living (e.g., feeding, dressing, bathing, etc.);
  • failure to provide an ongoing activities program to meet the individual needs of all residents; and
  • failure to report incidents of mistreatment, neglect, or abuse to the administrator of the facility and other officials as required by law.


Residents Rights.  To protect the rights of each resident, the OIG recommends that a provider address the following risk areas as part of its compliance policies:


  •   discriminatory admission or improper denial of access to care;
  • verbal, mental or physical abuse, corporal punishment and involuntary seclusion;
  • inappropriate use of physical or chemical restraints;
  • failure to ensure that residents have personal privacy and access to their personal records upon request and that the privacy and confidentiality of those records are protected;
  • denial of a resident’s right to participate in care and treatment decisions;
  • failure to safeguard residents’ financial affairs.

Billing Issues.

billing for items or services not rendered or provided as claimed;

  • submitting claims for equipment, medical supplies and services that are medically unnecessary;
  • submitting claims to Medicare Part A for residents who are not eligible for Part A coverage;
  • duplicate billing;
  • failing to identify and refund credit balances;
  • submitting claims for items or services not ordered;
  • knowingly billing for inadequate or substandard care;
  • providing misleading information about a resident’s medical condition on the MDS or otherwise providing inaccurate information used to determine the RUG assigned to the resident;
  • upcoding the level of service provided;
  • billing for individual items or services when they either are included in the facility’s per diem rate or are of the type of item or service that must be billed as a unit and may not be unbundled;
  • billing residents for items or services that are included in the per diem rate or otherwise covered by the third-party payor;
  • altering documentation or forging a physician signature on documents used to verify that services were ordered and/ or provided;
  • failing to maintain sufficient documentation to support the diagnosis, justify treatment, document the course of treatment and results, and promote continuity of care;
  • false cost reports;
  • routinely waiving coinsurance or deductible amounts without a good faith determination that the resident is in financial need, or absent reasonable efforts to collect the cost-sharing amount;
  • agreements between the facility and a hospital, home health agency, or hospice that involve the referral or transfer of any resident to or by the nursing home;
  • soliciting, accepting or offering any gift or gratuity of more than nominal value to or from residents, potential referral sources, and other individuals and entities with which the nursing facility has a business relationship;
  • conditioning admission or continued stay at a facility on a third-party guarantee of payment, or soliciting payment for services covered by Medicaid, in addition to any amount required to be paid under the State Medicaid plan;
  • arrangements between a nursing facility and a hospital under which the facility will only accept a Medicare beneficiary on the condition that the hospital pays the facility an amount over and above what the facility would receive through PPS;
  • financial arrangements with physicians, including the facility’s medical director;
  • arrangements with vendors that result in the nursing facility receiving non-covered items (such as disposable adult diapers) at below market prices or no charge, provided the facility orders Medicare-reimbursed products;
  • soliciting or receiving items of value in exchange for providing the supplier access to residents’ medical records and other information needed to bill Medicare;
  •  joint ventures with entities supplying goods or services;
  •  swapping.

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John H. Fisher

Health Care Counsel
Ruder Ware, L.L.S.C.
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P.O. Box 8050
Wausau, WI 54402-8050

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