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Medicare Conditions of Participation – Contractual Arrangements

Jul 1, 2014

Compliance officers have to worry about the Medicare conditions of participation, which have standards for the use of outside providers and other types of vendors, while minding the anti-kickback and Stark regulations. Some common contractual arrangements include physician relationships, management/administrative services, radiology, pharmacy, holter monitoring, billing and collections, enteral nutrition and wound care.

Compliance officers have more to think about if they are contracting with entities that are regulated. If the organization is regulated, the burden is on the hospitals, hospices and skilled nursing facilities to ensure their contractors are in compliance with laws and regulations. That includes having licensed and credentialed staff that aren’t excluded from Medicare and other federal health programs.

If operational managers resist compliance reviews of relationships with other outside resources, develop a checklist for them. Explain that if the department enters into a relationship with an external provider, the manager has to review the contract against the checklist and sign off on it. If there are no issues identified, the compliance officer can skip a direct review.

One of the “threshold issues” for hospitals, hospices and skilled nursing facilities is whether they are complying with provisions in the Medicare conditions of participation that address contractual relationships. For hospitals, the conditions of participation for contracted services state that “The governing body must be responsible for services furnished in the hospital whether or not they are furnished under contracts. The governing body must ensure that a contractor of services (including one for shared services and joint ventures) furnishes services that permit the hospital to comply with all applicable conditions of participation and standards for the contracted services. (1) The governing body must ensure that the services performed under a contract are provided in a safe and effective manner. (2) The hospital must maintain a list of all contracted services, including the scope and nature of the services provided” (42 CFR § 482.12(e)).

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