As operators mull problems on staying up to date with new or upcoming rules, legal and compliance executives believe that the federal government’s staffing proposal and focus on healthcare fraud prosecution are among the top challenges facing the sector.
Speaking at Skilled Nursing News’ Risk Summit, leaders from Cascadia Healthcare and American Senior Communities, discussed the critical role of staffing in delivering quality care, particularly in addressing the challenges exacerbated by the Covid-19 pandemic and an industry-wide shortage of direct caregivers and frontline workers.
Executives also touched upon the challenges in meeting the proposed staffing requirements and the impact of Medicaid reimbursement rates on operating environments, especially in rural areas, the legal implications of the Talevski Supreme Court Case, and the changing role of compliance officers, noting the Department of Justice’s (DOJ) increased focus on healthcare fraud prosecution and the evolving expectations for compliance programs.
Steve LaForte, chief legal officer and EVP of Corporate Affairs at Cascadia, emphasized the pivotal role of staffing in delivering quality care. Cascadia Healthcare, with 46 locations across six states, has been at the forefront of addressing staffing challenges.
“Even before Covid, staffing had been an incredible challenge. Covid turned it on its head [and] we’re still an industry down almost 200,000 people, for direct caregiver, frontline workers in the industry,” he said. “We’ve made it our goal to make sure that we’re staffed adequately, but that we do it in a way that’s culturally appropriate and meets our mission.”
LaForte stressed the importance of building internal teams, minimizing agency staffing, and fostering a culture conducive to delivering quality care.
LaForte shared Cascadia’s success in reducing agency labor costs by focusing on building culture and teams. He cited a significant example where a building, initially heavily reliant on agency staffing, transitioned to primarily internal teams, resulting in a drastic reduction in agency labor costs from $1.4 million to $30,000 within six months.
“One of our challenges has been maintaining cultural competency, and at the same time having a robust compliance program, that if the OIG were to look at it, they would say, ‘You’re doing everything you need to be doing.’”
Challenges in meeting staffing proposals
Acknowledging the staffing proposal’s potential paralyzing impact, LaForte discussed the industry’s struggle to meet proposed staffing requirements. Currently, none of Cascadia Healthcare’s buildings align with the proposed standards, he said.
Despite this, several of Cascadia’s buildings, including award-winning ones, consistently deliver top-tier quality care, challenging the correlation between staffing levels and quality as suggested by CMS’s study, he said.
“All of that put together (will cause a)staffing crisis with the lack of RNs out there, with not including LPN in the staffing proposal,” LaForte said. “From a risk management standpoint, we are sitting around tables, talking about it, but scratching our heads as to how we’re going to be able to meet it. The only glimmer of hope I can say is that in talking to people over the last few weeks, it seems like the number of comments that were submitted are going to slow the process.”
Medicaid reimbursement disparities
LaForte said Medicaid reimbursement rates in states like Montana and Idaho are creating especially challenging operating environments. Low reimbursement rates in rural areas hinder attracting and retaining staff, limiting investments in clinical programs and innovation.
He highlighted the impact of legislative intervention in Montana, where reimbursement increases resulted in a healthier environment and potential for more innovative care.
Another helpful intervention was pooling together resources across buildings.
LaForte pointed out the changing landscape of caregiver wages, making it challenging for rural states to attract and retain staff. With significant differences in reimbursement rates between states, the risk assessment for providers becomes complex, especially when considering sustainability in the face of declining Medicare margins. However, Cascadia has been able to work around the problem to an extent, he said.
“One of the things that has been successful for us is developing resource cohorts where we have multiple buildings in an area,” LaForte said. “That’s always been very successful, but it’s hard to do that when you don’t have the reimbursement and the revenue to be able to do it.”
Legal and regulatory challenges
Mindy Shapiro, chief compliance officer at American Senior Communities, discussed the legal implications of the Talevski Supreme Court Case, which established a potential right to bring civil actions for violations of the Nursing Home Reform Act in federal court.
American Senior Communities, served as the management entity involved in litigation with Health and Hospital Corporation, the county hospital partner in Indiana in the Talevski case.
Shapiro discussed the argument presented in federal court against nursing homes, suggesting that the discharge process leading to a patient’s move to another facility was mishandled, and the individual was improperly medicated with psychoactive drugs.
“I was a defense attorney for almost 30 years defending nursing homes before I went into the chief compliance officer role I’m in now, and I made the argument dozens if not hundreds of times, that this regulatory scheme that federal and state schemes don’t give rise to individual actions,” she said. “We were always successful with that argument. Then the Talevskis challenged that.”
She said that the surprising outcome of the Talevski case suggests a potential shift in the legal scrutiny on nursing homes, allowing individuals to bring civil actions for violations of the Nursing Home Reform Act in federal court.
Reflecting on the industry’s uncertainty following this precedent, Shapiro expressed a desire for clear answers and discussed the ongoing discussions among attorneys involved in nursing home defense work. She emphasized the potential for prolonged litigation on details such as administrative prerequisites and attorney fees, speculating that legislative clarity might be necessary.
She also noted a unique aspect of the case—the Talevskis bypassed the administrative prerequisite and missed the statute of limitations, proceeding directly to federal court.
“It’s a Supreme Court case,” she said. “So it sets some precedent for sure. But what that precedent is, is unknown.”
Shapiro also shared insights into the DOJ’s expanded focus on healthcare fraud prosecution. A September 15, 2022, memo outlines the expectations for corporate compliance programs, emphasizing individual accountability and voluntary self-disclosure. The DOJ’s increased scrutiny, particularly over an eight to ten-year history, poses challenges for companies aiming to navigate the intricate regulatory landscape.
“I think it gives us a heads up as to what the DOJ is going to be focusing on and what their partners in the federal government are going to be focused on as well, and also gives us some tools to kind of figure out how to best address those subjects,” she said.
Changing roles of compliance officers
Shapiro emphasized the shared responsibility inherent in ensuring the fulfillment of diverse compliance needs. Beyond internal collaborations, she underscored the involvement of external auditing and legal advice in maintaining a robust compliance department.
“We have to share responsibility to ensure that all the different needs of compliance are met,” she said.
Moreover, Shapiro delved into a significant development in 2022, wherein the DOJbegan requiring chief compliance officers and CEOs to certify and attest to the adequacy of the design and function of compliance programs as part of case resolutions.
This shift, she noted, had notable implications for compliance officers and further emphasized the evolving role they play within organizations.
Shapiro said that compliance officers, even in smaller companies, were gradually gaining a more influential voice, challenging the traditional expectations placed upon them and signaling a necessary and ongoing transformation in the industry.
“I think compliance officers have increasingly been given a seat at the table,” she said. “But what I hear about from others in the industry, in smaller companies, particularly in compliance, there are these big expectations on what they do and what they accomplish, but they don’t necessarily have a voice. So I think that’s changing, and I think it has to continue to change.”
Companies featured in this article:
Cascadia Healthcare, Centers for Medicare & Medicaid Services
