Jeannine LeCompte, Publishing and Research Coordinator
Medicare- and Medicaid-approved long-term care facilities (LTCs) must ensure that all their outside vendors adhere to the same strict compliance and ethics guidelines required by the Centers for Medicare & Medicaid Services (CMS).
All vendor contracts must be in writing and specify in detail all items or services to be provided. In addition, the contracts must specify the exact payments that will be made to the vendor. These payments must be in line with those established by federal or state agencies or other third-party payers or based on fair market value. These goods and services may not involve free or discounted goods or services, or even those below fair market value, as this can be interpreted as a breach under anti-kickback regulations.
The contract must also contain a certification that the vendor is eligible for participation in Medicare and/or Medicaid, and that on a quarterly basis, a check will be made on the vendor’s status on the Office of the Inspector General’s “List of Exclusions and Reinstatements,” and the General Services Administration “List of Contractors Barred from Dealing with the Federal Government.”
Furthermore, the contract must also contain a clause compelling the vendor to cooperate with any relevant party which conducts an audit or otherwise requests documentation regarding services or supplies provided by the vendor or its subcontractors.
Regarding subcontractors, the contract must also oblige the vendor to ensure that all its subcontractors are bound by the same commitment to compliance and ethics as the vendor.
It is also important to note that no contract may be made between an LTC and any other entity in which the LTC’s medical director has an ownership, investment, or other financial interest, without first obtaining approval from the compliance and ethics committee, or, at least, the compliance and ethics attorney.
Further, the contract process must contain a pre-engagement statement by the vendor which states if they have ever been convicted of a criminal offense related to healthcare fraud.
Vendors in this category include all suppliers of products used by the LTC, and all building and equipment lessors. In addition, any billing services which are outsourced fall under this category.
