The healthcare industry has long faced significant challenges in maintaining regulatory compliance. An ever-shifting set of regulations, coupled with myriad state and federal agencies overseeing operations, make the regulatory landscape confusing and contradictory, even under the best of circumstances. Regulatory compliance in nursing homes, including skilled nursing facilities, is a critical component of risk management. Facility managers must understand the regulatory and compliance challenges, then take steps to overcome them. Failing to maintain compliance in this heavily-regulated healthcare sector can be a recipe for financial disaster.
The Nursing Home Reform Act of 1987
In 1986, federal legislators tasked the National Academy of Medicine (formerly known as the Institute of Medicine) to analyze the care quality of America’s nursing homes. The findings were troubling; in many cases, nursing homes were providing substandard care to seniors. Some of the worst nursing homes had high levels of neglect and abuse claims.
The study spurred the creation and passage of the Nursing Home Reform Act (NHRA) of 1987 as part of the Omnibus Budget Reconciliation Act. The Act set federal minimum standards for nursing homes and defines many of the rights nursing home residents are entitled to. Regulatory compliance challenges are common in nursing homes, and compliance under the Act is critical; those facilities violating provisions in the Act may be subject to monetary penalties, denial of funds provided by Medicare and Medicaid, and increased oversight from state and federal agencies. Violators may also lose any licensure, forcing the business operation to close.
Regulatory Hurdles on the State Level
The federal NHRA is not the only set of regulations skilled nursing and long-term care facilities must adhere to. There are additional federal agencies, such as the U.S. Department of Labor, with their own regulations. Each state also has oversight of long-term care facilities located within state boundaries, and each state has set its own minimum standards of care. Many municipalities have adopted their own regulations governing nursing homes. The end result is a patchwork of federal, state, and local laws, leading to confusion on the part of facility managers and owners.
An Ever-Changing Regulatory Landscape
As if the regulatory challenges nursing homes face were not complicated enough, regulations change constantly. Several of these changes, including the Patient Driven Payment Model that governs participation in Medicare, are so massive that legislators had to pass a series of rule explanations and amendments prior to its implementation. The Affordable Care Act (ACA) is another; when it was introduced, its regulations exceeded 2700 pages published in the Federal Register.
Every time a federal or state agency changes its regulations, affected facilities often scramble to make sense of the contradictory or overlapping rules. Some facilities may take a backseat approach, waiting for interpretations or revisions before implementing new rules. Others race to adopt new regulatory compliance in nursing homes standards, only to find out that the rules have been modified or streamlined after initial passage. These regulatory changes create unforeseen overhead expenses, driving up costs in training and implementation. They can also open the door to new or unexpected liability risks, forcing nursing homes to obtain ever-more-expensive liability insurance coverages.
Managing Regulatory Compliance in Nursing Homes
To help prevent costly regulatory errors and expenses, many forward-thinking nursing homes are utilizing innovative strategies to remain compliant. Designated compliance officers are an integral part of the healthcare landscape; these individuals are tasked with three major roles:
- Preventing accidental and intentional violations;
- Detecting and reporting violations when they occur; and
- Correcting non-compliance of regulations.
Compliance officers carefully scrutinize federal, state, and local regulations, then develop implementation strategies. Even with the help of a designated compliance officer, regulatory compliance in nursing homes is far from clear-cut. Training of staff and facility managers must occur at regular intervals, especially when new regulations impact patient care or operations within the facility. New rules governing the types of care for nursing home residents and the handling or disposal of hazardous drugs, require frequent and ongoing training for all stakeholders.
Finally, nursing homes must ensure that their liability insurance policies are up to date and adequate to meet existing and emerging risks. With compliance, training, and insurance, nursing homes are better able to manage the ever-shifting regulatory landscape while providing their residents with compassionate healthcare.
About Caitlin Morgan
Caitlin Morgan specializes in insuring assisted living facilities and nursing homes and can assist you in providing insurance and risk management services for this niche market. Give us a call to learn more about our programs at 877.226.1027.