The New Year calls for new beginnings and fresh starts! With increasingly sophisticated data analytics, regulatory enforcement of required Compliance and Ethics Programs (CEP) effective October 2022, and President Biden’s nursing home reform, providers must focus audit priorities on critical areas of industry and facility risk. In this week’s blog, we explore hot button risk areas to consider including in your audit work plan for 2023.

Gearing up for 2023 audit work plans, providers should consider the full spectrum of potential compliance risks across the organization, including but not limited to reimbursement, clinical, regulatory, and potential liability. While the provider must consider the full spectrum of potential compliance risks and audit priorities across the organization, we’ve compiled a list of top risk areas that should be on your 2023 audit plan:

  1. Sufficient Staffing

In the FY 2023 SNF PPS final rule, CMS adopted a measure looking at total nurse staffing hours per resident day that will begin impacting payments in the FY 2026 SNF VBP program year. This was in addition to President Biden’s remarks and accompanying fact sheet during his State of the Union address in 2022, that indicated plans to establish a new minimum staffing ratio, and 5-Star Staffing rating methodology changes with the July 2022 update including analysis of nurse staffing on weekends and  turnover data.

  1. Comprehensive care plans

The OIG updated its 2023 work plan to include a review of potentially preventable hospitalizations of Medicare-eligible SNF residents. Inpatient hospitalizations of SNF residents will be reviewed with any of the 6 conditions (Pneumonia, CHF, UTIs, Dehydration, COPD/asthma, and Sepsis) to determine whether the SNF provided services to residents in accordance with their care plans and professional standards of practice (42 CFR § 483.21 and 42 CFR § 483.25).  Focused Care plan audits should include a review of the individualized resident centered care plan to validate that the care plans for at risk residents include evidence based interventions to mitigate the risks and improve care practices to manage treatable conditions and avoid preventable readmissions.  The focus of the care plan should be to enhance quality of care through improved communication between the resident and the care team.

  1. SNF Waiver (1812(f)) Use

As expected, recent medical review activity has included a close look at waiver use. Notably, Supplemental Medical Review Contractor (SMRC) Noridian reports in their current project that data analysis done by CMS and the SMRC identified a potential area of vulnerability related to the appropriate use of 3-day stay waivers, and the SMRC is tasked to perform post-payment medical review on SNF claims (3/1/2020 – 12/31/2021) that had zero hospital days prior to admission.

  1. Section GG (Functional Abilities) Documentation & Coding

Section GG remains among the top areas for PDPM coding errors. This is significant since Section GG impacts 3 of the 5 case mix groups affecting reimbursement, and also since GG is the primary mechanism for measuring functional performance outcomes from admission to discharge. While many providers continue to struggle to effectively code and provide sufficient supportive documentation for Section GG, CMS released a draft MDS Nursing Home Comprehensive (NC) Item Set, v1.18.11, announcing it would be eliminating Section G and other elements of the MDS, effective next October, 2023. As a result, states will likely be forced to abandon their metrics for scoring Section G and transition to data collection for Section GG to complete OBRA assessments. Now is the time to audit PDPM metrics including Section GG. Check out Proactive’s Section GG Function Scoring Competency Toolkit, which includes training material, competency assessment with video case studies coding observations, and a comprehensive audit tool.

  1. PDPM Coding Accuracy

Determine whether Medicare payments under PDPM meet all Medicare requirements. Identify PDPM components at greatest risk (See the blogs PDPM Coding & Documentation Top Risks for additional guidance: Part 1 and Part 2).

  1. Infection prevention

Of the 7703  surveys completed  during calendar year 2022, >93% were cited for deficiencies related to F-Tag 880 Infection Control. Good planning, monitoring, re-assessment, and staff involvement in the program will assist your facility in meeting CMS requirements for F880 and provide your facility with a well-educated and capable workforce. Consider additional training for the Infection Preventionist on conducting appropriate surveillance activities and survey preparedness. We also have a 12-part webinar package available in our shop.

  1. Medication Management

According to recent OIG studies between 2011- 2018 approximately 80% of nursing home residents were prescribed psychotropic medications. It was also noted the as CMS focused efforts on reducing antipsychotics, the use of other psychotropic medications increased. During the PHE, CMS has noted an increase in the use of antipsychotic medication among SNF residents based on the QMs. Evaluation of the facility’s use of these medications to verify their appropriateness will be a focus area for CMS. Strong behavior management programs that include individualized care planning with non-pharmacological interventions and consideration for gradual dose reduction documented as appropriate.

  1. Emergency Preparedness

Survey the challenges for managing patient care during emergencies and the procedures for effective collaboration with community partners. Use data collected for new Key Performance Indicators to track both the prevalence and severity of challenges over time, and use this information to drive program updates.

  1. Billing & Cost Reporting

Determine whether your SNF is reporting related-party costs in accordance with Federal regulations. Determine whether the allocation of Medicare funds could impact beneficiary care, such as whether overhead costs might have increased while allocations for patient care decreased, potentially reducing care quality.

  1. 10-CM Coding Accuracy

Providers that are still struggling to accurately capture diagnoses that drive federal reimbursement will be doubly left behind as more states start to use Patient Driven Payment Model-like systems to determine long-stay Medicaid pay rates.  Emphasize coding accuracy in your auditing and monitoring programs and develop strong training systems –especially with turnover of key personnel involved in the coding process. Contact Proactive to schedule SNF/LTC focused ICD.10-CM coding training with an AHIMA approved trainer.

No two organizations are alike and as a result, no two audit plans will be the same; at the end of the day your audit plan needs to be specific to your organization to ensure you are not leaving any stone unturned. Providers should develop compliance auditing & monitoring systems and a formal audit plan that addresses priority risk areas. Include a process for reviewing audit results, implementing responsive actions and updating the audit plan as necessary as part of the Compliance and Ethics Program and/or QAPI process. Keep in mind, audit assignments should be completed by those with subject matter expertise and performed by a 3rd party or members of the interdisciplinary team with no vested interest in the outcome. Taking the time to drive performance improvement and compliance through structured auditing will make all the difference in 2023 outcomes.

Need help developing a Compliance and Ethics Program, or assistance with audits? Contact Proactive for budget-friendly solutions.



Cowritten by Stacy Baker, OTR/L, CHC, RAC-CT and Christine Twombly, RN-BC, RAC-MT, RAC-MTA, HCRM, CHC


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