The federal watchdog for health programs has issued new guidance for nursing homes that, while technically voluntary, is quickly becoming the template for how facilities run their compliance programs in 2025.
What the guidance covers
The Office of Inspector General (OIG) at the Department of Health and Human Services published sector-specific compliance program guidance for skilled nursing and nursing facilities on November 20, 2024. The document builds on OIG’s 2023 General Compliance Program Guidance, but is tailored to long-term care providers.
The nursing facility guidance highlights four high-risk areas: billing and coding integrity, quality of care and patient safety, relationships with referral sources, and data reporting accuracy. It calls for annual, facility-specific risk assessments; ongoing staff training; proactive auditing of Medicare and Medicaid claims; and clearer oversight of referral arrangements that could implicate the Anti-Kickback Statute.
OIG also encourages appointment of a designated compliance officer with sufficient authority, anonymous reporting hotlines, and tighter controls around person-centered care planning. These recommendations align with existing Conditions of Participation and ethics program requirements under 42 CFR Part 483.
“This guidance is a proactive resource to help nursing facilities build robust compliance programs that prevent fraud, ensure high-quality care, and protect vulnerable residents,” Gregory E. Demske, OIG’s chief counsel, said in a statement when the document was released. “While voluntary, it aligns with CMS expectations and can shield providers from costly enforcement actions.”
From voluntary to de facto required
Providers and consultants say the guidance is increasingly reflected in survey activity and enforcement. Surveyors are asking how facilities’ compliance plans match OIG’s elements, according to industry sources. Facilities that fall short risk civil monetary penalties that can exceed $20,000 per instance, along with intensified oversight if deficiencies persist.
The shift comes amid continued scrutiny of nursing home quality and spending. OIG audits have flagged improper payments in recent years, and federal officials have prioritized fraud prevention while pushing improvements tied to resident safety. Operators note the guidance’s emphasis on referral practices—such as avoiding inducements to hospitals or physicians—signals heightened attention to anti-kickback risks.
Costs and capacity concerns
Adoption is accelerating, but not without strain. In a September 2025 survey by the American Health Care Association, 70% of operators said they plan to implement the OIG framework by early 2026 to reduce audit risk. At the same time, 62% reported no dedicated compliance budget. Legal advisories estimate startup costs of $50,000 to $150,000 per facility for training, software, and auditing tools, with ongoing annual expenses around $20,000.
“The OIG’s ICPG is a double-edged sword—valuable for risk mitigation but overwhelming without resources,” AHCA/NCAL President and CEO Mark Parkinson wrote in a letter to Congress urging $2 billion in federal grants to help providers implement the recommendations.
Nonprofit operators have echoed those concerns, especially in rural communities where staffing shortages complicate compliance work. “OIG’s voluntary tag belies its impact—our members are racing to comply before 2026 surveys. It’s essential but needs rural exemptions,” said Katy Scott, a policy leader at LeadingAge, in a public post last fall.
Ties to broader federal reforms
The compliance push dovetails with broader federal efforts, including the nursing home staffing rule that took effect in May 2025 and ongoing reforms to the Special Focus Facility program. Together, these policies point operators toward stronger internal monitoring, better documentation, and sustained performance improvements.
Industry analysts say early adopters report fewer citations and reduced penalties, though the outlay can be steep for smaller facilities. Technology may help: some providers are turning to automated claims reviews and documentation tools to meet audit expectations without adding administrative layers.
What comes next
Providers expect surveyors to keep leaning on the OIG framework through 2026. Operators that can demonstrate risk-based audits, active compliance committees, and careful management of referral relationships will likely be better positioned when inspections intensify.
For now, the message from regulators is clear: treating the guidance as optional could be costly. As Demske noted, “voluntary adoption now” may prevent enforcement later—an argument that appears to be driving compliance decisions across much of the sector.
