Implementation Date: Phase 3 – November 28, 2019
This is a new section developed in response to a mandate under the Affordable Care Act that requires the operating organizations of skilled nursing facilities to have a compliance and ethics program that is effective in preventing and detecting criminal, civil, and administrative violations and in promoting quality of care consistent with current regulations.
In §483.85(a), the new rule defines “compliance and ethics program” as a program of the operating organization that has been reasonably designed, implemented, and enforced so that it is effective in preventing and detecting criminal, civil, and administrative violations and in promoting quality of care. The term “managing employee” that is contained in the current requirements has been replaced with the term “high-level personnel”, which is used in the Affordable Care Act. The term “high-level personnel” is defined as individuals who have substantial control over the operating organization or who have a substantial role in the making of policy within the operating organization. Individuals considered “high-level personnel” will differ according to each operating organization’s structure. However, some examples include, but are not limited to, the following: (1) a director; (2) an executive officer; (3) an individual in charge of a major business or functional unit; and (4) an individual with a substantial ownership interest in the operating organization.
The new rule defines “operating organization” to mean the individual(s) or entity that operates a facility. The rule takes into consideration that many long-term care facilities are part of corporate chains, but there are still some facilities that are owned by an individual or a small group of individuals. Therefore, the term “individual(s)” was added to the definition to make it clear that all long-term care facilities, regardless of their legal structure, are required to comply with these requirements.
In §483.85(b), the operating organization for each facility is required to have a compliance and ethics program that meets the requirements of this section beginning on the date that is one year after the rule’s effective date.
In §483.85(c), the operating organization for each facility is required to develop, implement, and maintain an effective compliance and ethics program that contains several components. First, at §485.85(c)(1) the operating organization must establish written compliance and ethics standards, policies, and procedures to follow that are reasonably capable of reducing the prospect of criminal, civil, and administrative violations and which include, but are not limited to, the designation of an appropriate compliance and ethics program contact to which individuals may report suspected violations, as well as an alternate method of reporting suspected violations anonymously without fear of retribution; and disciplinary standards that set out the consequences for committing violations. Second at §483.85(c)(2), the operating organization must assign specific individuals within the high-level personnel of the operating organization with the overall responsibility to oversee compliance with the operating organization’s compliance and ethics program’s standards, policies, and procedures. The program must include provisions ensuring that the specific individuals designated with oversight responsibility have sufficient resources and authority to assure compliance with these standards, policies, and procedures.
In §483.85(c)(4), the operating organization is required to use due care not to delegate discretionary authority to individuals whom the operating organization knew, or should have known through the exercise of due diligence, had a propensity to engage in criminal, civil, or administrative violations. At §483.85(c)(5), the operating organization is required to effectively communicate the standards, policies, and procedures in the operating organization’s compliance and ethics program. Requirements include mandatory participation in training or orientation programs, and/or dissemination of information.
In §483.85(c)(6), the compliance program must ensure that reasonable steps were being taken to achieve compliance with the program’s standards, policies, and procedures, such as utilizing monitoring and auditing systems reasonably designed to detect criminal, civil, and administrative violations and publicizing a reporting system whereby individuals can report violations by others anonymously within the operating organization without fear of retaliation. The operating organization is also required to enforce the operating organization’s standards, policies, and procedures through appropriate disciplinary mechanisms, including, as appropriate, discipline of individuals responsible for the failure to detect and report a violation to the appropriate party identified in the operating organization’s compliance and ethics program. After an operating organization has detected a violation, it must ensure that all reasonable steps identified in its program were taken to respond appropriately to the violation and, to prevent further similar violations, including any necessary modification to the operating organization’s program.
In §483.85(d), the new rule requires operating organizations that operate five or more facilities to designate a compliance officer, and require that such individuals be designated as high-level personnel of the operating organizations with the overall responsibility to oversee the compliance and ethics program. In addition, the designated compliance officer must report directly to the governing body for the operating organization. In addition, the operating organizations that operate five or more facilities must also include, at a minimum, the following components in their compliance and ethics program:
Lastly, at §483.85(e), the operating organization for each facility must review its compliance and ethics program annually, and revise its program, as needed to reflect changes in all applicable laws or regulations and within its organization and facilities to improve its performance in deterring, reducing, and detecting criminal, civil, and administrative violations and in promoting quality of care.