2014 Code of Ethical Conduct/Compliance Program Training Module

1. 2014 Code of Ethical Conduct/Compliance Program Training Module

2. Our Mission Statement • Our Mission • Elmcroft Senior Living is dedicated to enriching the lives of the individuals who live and work with us by responding to their unique needs and universal desire for dignity and respect. • Our Values • The values that form the foundation of our mission are our commitment to: • enriching the lives of each resident, patient, and employee through teamwork; • respecting each individual; • promoting creative thinking and learning; • leading and serving with humility; • accepting and expecting accountability; • providing compassion and kindness to our residents, patients, and fellow employees; • building trust by acting with integrity; and • the passionate pursuit of excellent care and service

3. A message from our Chief Compliance Officer… Elmcroft’s mission statement and values state that we will enrich the lives of the individuals who live and work with us, accept accountability, and build trust by acting with integrity. Our Code of Ethical Conduct has been developed to ensure that state and federal reimbursement, regulatory, and clinical guidelines are an integral part of our day to day process for both associates and business associates. It is within this framework of integrity and ethical behavior that our Code of Ethical Conduct and Compliance Program were developed. As the leader of the Compliance Team at Elmcroft, it is my goal to continually find ways to enhance Elmcroft’s compliance program so that every Elmcroft associate is consistently living up to our mission and values statement. Tony Miranda, CHC, FHFMA SVP, Chief Compliance Officer

4. Session Goals • Discuss and understand Elmcroft’s Code of Ethical Conduct. • Clarify the role of associates for ensuring ethical and legal business practices. • Clarify options for reporting suspected violations. • Review the seven elements of an effective Compliance Plan.

5. Session Goals Understand the Compliance Program Plan (CPP) and its relationship to Elmcroft’s Core Values. Review ethical and legal issues using case examples. Explore how our personal values reflect organizational values.

6. Why we need a Compliance Program? • Elmcroft must meet high ethical and legal standards in all our activities. • Mandated by The Affordable Care Act 2010. • It’s just good business.

7. Elmcroft Senior Living Source: Hospitals and Health Networks Magazine, April 2001

8. Code of Ethical Conduct • Is a living document that guides each Elmcroft Associate in how to live the Elmcroft Mission Statement and values. • Guides us through the complex spider web of laws regulating the Senior Housing Industry. • Is an essential part of the relationship between Elmcroft and its associates. • We are all bound to adhere to the code as a condition of our employment. • Violations of The Code are subject to disciplinary action up to and including termination. • Being aware of potential violations and NOT reporting them is subject to disciplinary action up to and including termination

9. Code of Ethical Conduct If you see, or think you see, anything that may violate the law, The Code or the requirements of quality resident care, you have the responsibility to speak up. Elmcroft will not tolerate retaliation, in any form, against those who report, in good faith, potential violations.

10. Code of Ethical Conduct Things are not always black and white. When things are gray, consider the following: • Evaluate your facts for accuracy; • Think about the impact of your decision; • Handle your decision as if it were going to be in the news; • Identify the potential consequences of your decision before you take action; • Consider if your decision is setting a precedent; • Stop and reflect if you are in doubt.

11. Our Commitment to Ethical and Compliant Conduct Elmcroft associates and vendors must make a commitment to adhere to the principles set forth in the Code of Ethical Conduct: • Respect one another • Foster a positive work environment • Treat our residents, families and vendors with respect • Protect our resident’s confidentiality • Ensure records are accurate and reflect the care given to our residents • Be good stewards of Elmcroft’s assets • Protect Elmcroft’s proprietary information • Report suspected violations in good faith

12. Our Commitment to Ethical and Compliant Conduct • We do not employ or contract with individuals or entities that are excluded from participation in any federal or state health care program. • We do not offer, give, accept, or receive improper or illegal gifts, or inducements for referrals. • We NEVER accept gifts from residents or their families! • We safeguard resident Protected Health Information (PHI).

13. Our Commitment to Ethical and Compliant Conduct We ensure bills, claims, and requests for reimbursement are true, correct, complete, and accurate and are supported by appropriate documentation for medically necessary and provided services.

14. Our Commitment to Ethical and Compliant Conduct We maintain complete, accurate and proper documentation in the medical and business records and we understand coding must accurately describe the services we provided. • We are prohibited from making false or fraudulent statements in any documentation or record.

15. Our Commitment to Ethical and Compliant Conduct Anyone with knowledge of fraudulent or questionable practices has a responsibility to report it.

16. Our Commitment to Each Other • We maintain a professional and safe work environment. • We foster work environments in which concerns can be raised and openly discussed without fear of retaliation • We do not tolerate conduct that disrupts our work environment, including behavior that is disrespectful, hostile, violent, intimidating, threatening or harassing.

17. What actions would you take and why? Mary, a single mother and your co-worker, confided in you over lunch that she is quite upset. She had recently found out that she makes less money than another nursing assistant who was hired at the same time, and she feels she is being discriminated against. When you asked her how she knew this, she replied that one of her friends who works in payroll and has access to payroll records agreed to give her the information. She told you she had promised her friend she would not tell anyone, but felt she could trust you. Although she did not tell you her friend’s name, you know it could only have been one of three people. What would you do?

18. Violations Care is at the heart of what we do. You work hard every day to provide quality and compassionate care to our patients and residents. Elmcroft is committed to partnering with those who share our mission and values. Failure to follow The Code, the Compliance Plan, the Associate Handbook, or Elmcroft policies and procedures and applicable laws and regulations will not be tolerated. All violations will be taken seriously and may result in disciplinary action. Associates who commit unethical or illegal acts may face immediate termination and possible legal action.

19. Your Duty to Report Our commitment to ethical conduct and compliance depends on you. If you find yourself in an ethical dilemma or suspect an inappropriate or illegal situation, follow the processes outlined in The Code. • If you have a question or concern, • Talk to your supervisor. He or she will be able to provide access to the Compliance Program documents, if necessary. • If you are not comfortable talking to your supervisor, you may discuss concerns or report matters to the Local Compliance Officer, the Ethics Line or the Chief Compliance Officer.

20. Your Duty to Report All associates, contractors, and vendors have an obligation to report, in good faith, concerns about possible instances of questionable conduct or practices, wrongdoing, and/or non-compliance. • This means you may be disciplined if you had an obligation to report and did not do so. The Ethics Line is available to provide associates and others with a confidential method for raising compliance and ethics concerns and is available 24 hours a day, seven days a week. • Elmcroft will make every attempt to protect the callers’ anonymity within the limits of the law and Elmcroft’s duty to investigate the wrongdoing or alleged inappropriate conduct.

21. Your Duty to Report Individuals who intentionally fabricate and maliciously report conduct or practices, wrongdoing, and/or non-compliance in bad faith may be subject to disciplinary action up to and including termination.

22. Non-Retaliation Elmcroft prohibits retaliatory action against an associate for making a good faith report. • Associates and/or Supervisors will not attempt to prevent an associate from reporting suspected violations. • If an associate, supervisor or manager attempts such action, he/she is subject to disciplinary action up to and including termination. • Any suspected retaliation should be reported to the Chief Compliance Officer or Ethics Line immediately.

23. Our Compliance Program (CP)? Our Compliance Program is a system designed to: • Establish a culture of “doing the right thing” all the time • Pro-actively detect and prevent violations of law • Ensure ethical and legal business practices • Ensure adherence to Federal guidelines governing our operations • Provide for disclosure and monitoring of conflicts of interest • Ensure resolution of instances of impropriety.

24. Seven Elements of an Effective Compliance Program Written Compliance Policies Designated Chief Compliance Officer Training and Education Effective lines of communication Consistent Enforcement Confidential Reporting and Response Methods Monitoring and Auditing Systems

25. Element #1 – Written Compliance Policies Our Compliance Program is comprised of written expectations, standards, and procedures, which are contained in the following documents: • Compliance Program Plan • Elmcroft’s Code of Ethical Conduct (The Code) • Elmcroft’s Associate Handbook • Elmcroft’s Policies and Procedures

26. Element #2 – Chief Compliance Officer and Compliance Department Elmcroft’s Compliance Program is headed by Tony Miranda, the Chief Compliance Officer and administered by the Compliance Committee and the Compliance Department.

27. Element #3 – Effective Training and Education The goal of education and training is to provide our associates, contractors and vendors with the information and education they need to fully understand and comply with applicable laws and regulations, as well as Elmcroft’s Compliance Program.

28. Element #4 – Effective Lines of Communication Ethics Line: (866) 605-3804 Mailing Address: Elmcroft Senior Living 9510 Ormsby Station Rd, Suite 101 Louisville, Kentucky 40223 Attention: Compliance Department Email Addresses: compliance@elmcroft.com hipaa@elmcroft.com Chief Compliance Officer: (502) 753-6034

29. Element #5 – Enforcement The requirements of the Compliance Program must be taken seriously: • Any associate, who engages in a deliberate or reckless violation of standards, will be subject to disciplinary action, up to and including termination.

30. Element #6 – Responding to offenses When a report of a suspected violation or questionable conduct is received by the Compliance Department, they will: • Determine whether the report raises compliance issues; • If not a compliance issue, the concern will be forwarded to the appropriate department for review; • Investigate the facts; • Take corrective action and/or disciplinary action based on the results of the investigation;

31. Element #7 – Auditing and Monitoring A compliance risk assessment will be completed annually by the Chief Compliance Officer and the Compliance Department as part of the annual compliance work plan development. The Compliance Department will conduct internal audit reviews on a routine basis to ensure that applicable laws and regulations are being followed, and that accurate information is being conveyed or submitted. • Monitoring: systems and evaluations we do everyday in our daily work, within our facilities such as: • QA • Triple Check • Auditing: External or outside/independent activities such as what the Compliance Auditors do when they come into your facility

32. Acceptance of Gifts including Meals and Entertainment • We do not solicit gifts or entertainment. • We may not accept or solicit gifts from residents in any form. • Perishable gifts; food, cakes, snacks; as long as shared with all staff are acceptable. • We may not accept cash or its equivalent (gift certificates, stock, etc.). • If a gift is accepted that exceeds our guidelines, it should be returned with an explanation. If returning the gift would create an awkward situation, check with your supervisor or call the Ethics Line at (866) 605-3804 for guidance

33. Elmcroft’s Policy on Conflicts of Interest • Associates have a duty to avoid interests, both real and perceived, that may conflict with their employment or service to Elmcroft. • Associates should discuss outside employment options with their supervisor before accepting any outside employment to ensure a conflict is not caused or perceived to be caused by such employment.

34. Fraud and Abuse Laws False Claims Act Anti-Kickback Statue Physician Self-Referral Statute (Stark) Exclusion Statute Civil Monetary Penalties Law

35. What is the Deficit Reduction Act of 2005? Requirement for Medicaid in addition to Federal Fraud, Waste and Abuse requirements. The Deficit Reduction Act of 2005(DRA) is a law passed by Congress to reconcile the 2006 federal budget. The DRAincludes specific provisions aimed at reducing Medicaid fraud and abuse. While the DRA applies to all health care providers receiving at least $5 million in annual Medicaid payments (By state), all healthcare providers who accept Federal healthcare dollars must adhere to the FCA and all other Fraud, Waste and Abuse requirements.

36. What does the DRA require Elmcroft to do? • The DRA provisions aimed at reducing Medicaid fraud and abuse require health care providers to do a number of things, including • Establish written policies for all employees, contractors and agents that provide detailed information about: • The federal False Claims Act (31 U.S.C. 3729-3733) • Applicable state false claims laws • Administrative remedies for false claims • Any comparable state laws pertaining to penalties for false claims and statements • Whistleblower protections

37. What are False Claims Acts? • Federal and State versions • Protects government programs, including Medicare, Medicaid and TRICARE from fraud and abuse. • Knowingly presenting a false or fraudulent claim for payment; • Knowingly making or using a false record or statement material to a fraudulent claim; • “Reverse False Claims” – false statements or records used to avoid paying monies owed to the government. • Government defines a “claim” as a line item on a bill. • Penalty: monetary fines of $5,500 to $11,000 plus triple the amount of the claim.

38. Fraud, Waste and Abuse In order to prevent fraud and abuse, it essential to understand the difference between fraud and abuse related to Medicare, Medicaid and other government health programs. Fraud: making false statements or representations of fact to obtain payment for which you are not entitled. This is an intentional act. Waste: the careless, inefficient, or unnecessary use of public resources. This is usually an error. Abuse: Practices that result in unnecessary costs to the Medicare or Medicaid programs such as billing for more expensive services than were actually provided, inflating charges, billing for services that are not medically necessary. Usually occurs related to an error.

39. Fraud and Abuse Risk Areas CMS is looking at • Billing and Cost Reporting • Accurate claims • Credit balances • MDS accuracy • Billing for substandard care • Quality of Care • Documentation • Interventions • Accommodations • Staffing • Therapy and ADLs • Resident Rights • Restraints • Abuse • Privacy • Right to make decisions • Financial protections

40. Additional Risk Areas • Additions and specificities: • Comprehensive resident care plans • Medication management • Use of psychotropic medications • Resident safety • Restorative and personal care services • Free goods and services • Conflicts of interest • Hospice relationships • HIPAA compliance • Employee screening • Background • Exclusions • Licensure • Kickbacks, inducements, and self-referrals • Financial waivers • Physician payments • Gifts • Referral arrangements • Joint ventures

41. Whistleblower (Qui Tam/Relator) The FCA establishes the right of individuals, commonly referred to as whistleblowers, with first- hand knowledge of fraudulent activities to bring legal action against people and companies engaged in the illegal behavior. • A whistleblower is a person who exposes misconduct or alleged dishonest or illegal activity occurring in an organization. Whistleblowers are protected by law. • Individuals who bring a successful qui tam/whistleblower action are entitled to receive a percentage of the monies recovered. • Elmcroft strictly prohibits retaliation, in any form, against a whistleblower.

42. What actions would you take and why? Clarice is the cook for a large skilled facility with a high volume of skilled residents. One day Clarice is sitting in the break room when she hears Pam, the MDS Coordinator telling Adam, the Bookkeeper that “Mr. Hill did not make his therapy minutes and is going to drop several RUG levels.” Adam replies “That is going to cost us thousands of dollars, the big wigs won’t be happy.” Pam states “Bill at the higher RUG, I will fix the therapy minutes.” Although Clarice has no idea what a RUG level is, she doesn’t think it sounds right that Pam is “going to fix the therapy minutes.” What should Clarice do?

43. Anti-Kickback Law • Federal and State versions • Prohibits providers from paying for referrals of individuals or buying services for which payment may be made by a federal or state health care program. • Penalty: Criminal statute punishable by $25,000 fine per violation, up to 5 years in federal prison and potential exclusion from Medicare/Medicaid.

44. Elder Justice Act This law requires a skilled care provider to report any reasonable suspicion of a crime committed against any individual who is a resident of, or receiving care from, the facility. • Report must be made within 2 hours of forming a reasonable suspicion of a crime with serious bodily injury. • Report must be made within 24 hours if there is no serious bodily injury. • Penalty: monetary fines up to $300,000 and potential exclusion from Medicare/Medicaid.

45. Expectations of Associates Read and understand Elmcroft’s Code of Ethical Conduct and commit to living The Code. Act responsibly. Document according to legal and ethical standards. Participate in associate education sessions for your job. Assist in compliance auditing and monitoring activities that relate to your job. Report suspected violations to your Supervisor, Administrator, Chief Compliance Officer or call the Ethics Line (866-605-3804).

46. Your Compliance and Ethics Resources… • Supervisor • Administrator (Local Compliance Officer) • Chief Compliance Officer • Ethics Line 1-866-605-3804 • Code of Ethical Conduct • Compliance Program Plan • Compliance Policies and Procedures • Elmcroft Associate Handbook

47. Questions about Compliance and Ethics?

48. Contact Information Tony Miranda, CHC, FHFMA Senior Vice President Chief Compliance Officer Elmcroft Senior Living. 9510 Ormsby Station Rd, Suite 101 Louisville, KY 40223-4082 Tel. (502) 753-6034 Fax. (502) 753-6134 e-mail: tmiranda@elmcroft.com Ethics Line: 866-605-3804 compliance@elmcroft.com