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CMS Proposes Revisions to Compliance & Ethics Programs

August 12, 2019
Compliance By Rodney Farley, Director

On July 18, 2019, The Centers for Medicare & Medicaid Services (CMS) issued a proposed rule that would reform Medicare and Medicaid long-term care requirements that CMS has identified as unnecessary, obsolete or excessively burdensome. This rule would increase the ability of health care professionals to apportion resources to improving resident care by eliminating or reducing requirements that impede quality care or that divert resources away from providing high quality care.


Compliance and ethics blog

For the compliance and ethics program (§483.85), CMS proposes to remove many of the requirements not expressly required by statute. The proposed revisions include removing the requirements for a compliance officer and compliance liaisons,  in addition to revising the requirement for reviewing the program from annually to biennially. Note:  while the requirement for a “compliance officer” has been removed, the requirement for designated, high-level oversight of the compliance program remains in effect.

According to revised §483.85, a compliance and ethics program is, with respect to a facility, a program of the operating organization that: 

  1. Has been reasonably designed, implemented and enforced so that it is likely to be effective in preventing and detecting criminal, civil and administrative violations under the Act and in promoting quality of care; and 
  2. Includes, at a minimum, the required components specified in paragraph (c) of this section

Revised §483.85 applies the following definitions, in addition to the above:

  • High-level personnel is defined as individual(s) who have substantial control over the operating organization or who have a substantial role in the making of policy within the operating organization.
  • Operating organization is defined as the individual(s) or entity that operates a facility.

Required Components of a Compliance and Ethics Program

CMS’ proposed revisions do not alter the requirement that beginning on November 28, 2019, the operating organization for each facility must have in operation a compliance and ethics program—as defined in paragraph (a) of this section—that meets the requirements of this section.

In addition, the operating organization for each facility must develop, implement, and maintain an effective compliance and ethics program that contains, at a minimum, the following components:

  1. Established written compliance and ethics standards, policies and procedures to follow that are reasonably capable of reducing the prospect of criminal, civil and administrative violations under the Act. 
  2. Assignment of 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.
  3. Sufficient resources and authority to the specific individuals designated above to reasonably assure compliance with such standards, policies and procedures.
  4. Due care not to delegate substantial discretionary authority to individuals who the operating organization knew or should have known through the exercise of due diligence, had a propensity to engage in criminal, civil and administrative violations under the Social Security Act.
  5. Steps taken to effectively communicate the standards, policies, and procedures in the compliance and ethics program to:
    • The entire staff,
    • Individuals providing services under contractual arrangement; and
    • Volunteers, consistent with the volunteers expected roles.
      • Requirements include, but are not limited to:
        • Mandatory participation in training as set forth at §483.95(f) or orientation programs, or
        • Disseminating information that explains, in a practical manner, what is required under the program.
  6. The facility takes reasonable steps to achieve compliance with the program's standards, policies and procedures. Such steps include, but are not limited to: utilizing monitoring and auditing systems reasonably designed to detect criminal, civil and administrative violations under the Act by any of the operating organization's staff, individuals providing services under a contractual arrangement or volunteers, having in place and publicizing a reporting system whereby any of these individuals could report violations by others anonymously within the operating organization without fear of retribution, and
  7. Consistent enforcement of the 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 compliance and ethics program contact identified in the compliance and ethics program.
  8. After a violation is detected, the operating organization must ensure that all reasonable steps identified in its program are taken to respond appropriately to the violation and to prevent further similar violations, including any necessary modification to the operating organization's program to prevent and detect criminal, civil and administrative violations under the Act.
  9. The facility has an alternate method of reporting suspected violations.

Additional Required Components for Operating Organizations with Five or More Facilities 

In addition to all of the other requirements, operating organizations that operate five or more facilities and facilities with corporate level management of multi-unit nursing home chains must comply with these additional requirements: 

  1. Have a more formal program that includes established written policies defining the standards and procedures to be followed by its employees.
  2. Develop a compliance and ethics program that is appropriate for the complexity of the operating organization and its facilities.
  3. The operating organization for each facility must periodically review and revise its compliance program to identify necessary changes within the organization and its facilities.


 For more information, contact Rodney Farley at 717-213-3123 or email

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