When I first got into the world of healthcare reimbursement in 1981, keeping up with regulations was pretty simple. Every September, the final regulations would be published in the Federal Register; usually this included about 100 pages of text. I now read several thousand pages a year. Thank God for the government.

On March 23, 2010, the president signed the Patient Protection and Affordable Care Act into law. The act contains 974 pages (or 909 pages, depending on how you count it). Few people read the entire bill, and many ignored it.

How could you ignore the law? First, it faced a bitter court battle. Many thought that the conservative U.S. Supreme Court would declare the entire law unconstitutional.

Second, there was an election looming, and one of the candidates (can you guess which one?) vowed to repeal the law on his first day in office. In addition, with the economy in a weak recovery (or mired in a recession, depending on who you believe), the president appeared vulnerable. 

Most of you know the rest of the story. U.S. Supreme Court Justice John Roberts, in a surprise vote, found the most contentious part of the law to be constitutional, and it was upheld (for the most part) on a 5-4 vote. The final blow to the opponents of the law came when the president won reelection in November 2012.

For many skilled nursing homes, there was a particular surprise in all of this. While compliance plans were always a good idea up until now, people in the nursing-home industry were not required to have them. Section 6102 of the act required nursing homes not only to have a compliance plan, but it amended Part A of Title XI of the Social Security Act, adding eight specific objectives to the plan. The deadline for having such a plan was March 23, 2013, or three years after the law was signed (if you are late getting this done, you are not alone). The eight aforementioned mandated objectives included:

  • Written standards and procedures
  • High levels of oversight
  • Non-delegation of authority to those likely to commit fraud and/or abuse
  • Effective communication of the plan to staff and vendors
  • Reasonable monitoring systems and auditing practices
  • Enforcement for noncompliance
  • Appropriate responses to violations
  • Periodic review and assessment of the plan 

I have one more wrinkle to throw into the mix. Medicare Zone Program Integrity Contractors (ZPICs) started focusing on skilled nursing providers in 2012. ZPICs are the hardcore fraud-and-abuse folks. They had a new tool with which to focus their efforts: “big data.” They used computer programs to compare all the billed and paid claims in the United States, looking for unusual patterns. 

They found such a pattern in skilled nursing homes’ reporting of therapy visits and charges. Medicare pays skilled nursing homes on an adjusted per-diem basis. The biggest factor increasing payments was the payment for rehabilitation services. Patients requiring the most rehabilitation services were paid the highest rate (they commonly are called “ultra-high” patients.) 

It turned out that some areas of the country and some nursing homes were billing for much higher percentages of these “ultra-high” patients than others. ZPICs smelled both fraud and collusion.   

The ZPIC audits have been and will continue to be brutal. Unlike most audits, in addition to looking at claims, the ZPICs want financial records, and, again, they are investigating suspected collusion. It goes without saying that the ZPICs wanted to see your compliance plan if you had one before, but now they can demand it. 

Even worse for those without a plan in place, such providers are not in compliance with Medicare’s requirements for participation. The bottom line is that a ZPIC could recommend that your Medicare provider number be suspended or revoked if it audits and determines that you do not have a plan.

What can you do to protect yourself? First of course, is this: start to build a compliant plan. This is not a job you typically can do by yourself, so find a specialist. Remember that one of the requirements is that the compliance plan be reviewed regularly. Even if you have the staff, hire an outside auditor who can provide an independent look at your plan and test to see if it meets the new requirements.

In addition to having a plan, remember that you can become a target based on the claims you submit. Here are some basic steps to avoid becoming a target, and to make sure you can respond if you are hit:

  • Build a database of billed and paid claims, and look for trends. 
  • Make sure that you are documenting your coding practices. 
  • Enlist an outside vendor to test your coding practice, on at least an annual basis 

Last but not least, take a breath. Working with folks like the people at RACmonitor, you can protect yourself and your facility.

About the Author

Timothy Powell, CPA, is a member of the Moore, Stephens long-term care group. He has more than 30 years of reimbursement experience working with the “Big 4.” He has worked in the managed care area for most of his career.

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