Compliance & Ethics Program Message from Chief Executive Officer 1

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TABLE OF CONTENTS

Page

Compliance & Ethics Program – Message from Chief Executive Officer 1

Introduction 2

Overview of the Compliance and Ethics Program 3

The Compliance & Ethics Program 3

Organizational Structure 3

The Corporate Compliance Committee 4

The Corporate Compliance Officer 5

Board of Directors 6

Compliance Liaison 6

GEC Code of Conduct 6

Statement of Receipt and Acknowledgment 7

Code of Conduct 8

Introduction 8

I. Resident Care 8

A. Quality of Care 8

B. Resident Rights 9

C. Privacy and Confidentiality of Resident Information 10

II. Billing and Business Practices 10

A. Billing and Coding Policy 10

B. Cost Reporting 11

C. Accurate Books and Recordkeeping 11

D. Record Retention Policy 11

E. Fraud, Waste and Abuse 12

F. Prohibition on Kickbacks 13

G. Patient Referrals 13

H. Regulatory Inquiries, Investigations, and Litigation Policy 13

I. Voluntary Reporting 13

J. Contract Review Policy 13

K. Marketing and Advertising 14

L. Market Competition 14

M. Confidentiality of Business Information 14

N. Accounting and Financial Reporting Policy 14

O. Adhering to Laws and Regulations 15

P. Environmental and Safety Considerations 15

Q. Protecting GEC Assets 15

III. Personnel 16

A. Workplace Conduct & Employment Practices 16

B. Gifts from Residents and Patients 16

C. Business Courtesies 17

D. Use of GEC Property 17

E. Use of Computers and the Internet 17

F. Personnel Screening 17

G. Conflict of Interest Policy 18

IV. Compliance Training and Monitoring 19

A. Compliance Training and Education 19

B. Compliance as an Element of Performance 19

C. Prohibition on Retaliation 19

D. Reporting and Investigation of Noncompliance 19

E. Discipline for Noncompliance 20

F. Auditing and Monitoring Policy 20

G. Annual Identification of Risk Areas 20

V. Corporate Compliance Policies 20

Triple Check Policy…. 21

Compliance Policy Regarding Fraud, Waste and Abuse 24

Compliance Hotline Policy 34

Answers to Commonly Asked Questions 36

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COMPLIANCE & ETHICS PROGRAM

January 1, 2015

Message from Chief Executive Officer

Our success and reputation are not only dependent on the quality of services provided to our clients, but also on the way in which we do business. Our ambition is to become a leader in the industry. For us, becoming an industry leader means we provide loving care and professional services, and set the standard through exemplary business practices and ethical behavior.

We have a long history of adhering to and promoting strong professional ethics. It is, and must continue to be, a key part of our culture. Integrity enters into everything we do and is a central part of our philosophy to “do the right thing.” We have developed our Compliance and Ethics Program and it’s supporting Code of Conduct to establish a shared vision of standards and practices for the organization, grouping them together in a single document. Its principles must guide each one of us in the performance of our daily functions. Our long-term success depends on the attention paid by each one of us to uphold the highest ethical standards and business practices. It is our business that requires this and our reputation that is at stake.

Our leadership team and owners have pledged their support along with me to uphold the Code of Conduct and support the Compliance and Ethics Program. Your commitment is essential to the shared values that unite us as an organization, guide our decisions and actions, and promote the highest quality of care. We expect each one of you to ensure compliance with the rules defined in the Compliance and Ethics Program and Code of Conduct. In this way we will be able to achieve our ambition of leadership, which goes hand in hand with the ethical and professional manner in which we must conduct our business on a daily basis.

Eddy Inzana, President & CEO

INTRODUCTION

The United States Sentencing Commission defines a compliance program as a “program that has been reasonably designed, implemented, and enforced so that it generally will be effective in preventing and detecting criminal conduct. Failure to prevent or detect the instant offense, by itself, does not mean that the program is not effective. The hallmark of an effective program to prevent and detect violations of law is that the organization exercises due diligence in seeking to prevent and detect criminal conduct by its employees or other agents.”

Guardian Elder Care a skilled nursing facilities and ancillary providers in Pennsylvania, Ohio, and West Virginia (referred to as “facility,” collectively as “facilities,” “GEC” or “we”). We recognize the need to conduct business with honesty and integrity and in compliance with applicable federal and state laws. This recognition is supported by an organizational commitment to promote ethical and compliant business operations through the implementation of a systematic plan. We are committed to conducting our business according to the highest standards of honesty and fairness. This commitment to observing the highest ethical standards is designed not only to ensure compliance with the applicable laws and regulations in the various jurisdictions where we operate, but also to earning and keeping the continued trust of our clients, shareholders, personnel, and business partners.

By resolution of our Board of Directors, we have created this Compliance and Ethics Program and it’s supporting Code of Conduct to establish a framework to be used in our current operations and business development to ensure compliance.

The Compliance and Ethics Program is not intended to be an exhaustive guide to all the detailed rules and regulations governing the services provided by us. Rather, it is intended to establish certain guiding principles and corporate wide policies designed to ensure that each facility and its personnel have a common vision of our ethical standards and operate in accordance with those standards.

The Compliance and Ethics Program and the Code of Conduct are directed at providing business conduct and operational guidance to board members, management, employees, independent contractors, and consultants who may be engaged in activities that pose specific areas of risk or vulnerability for us.

Overview of the Compliance & Ethics Program

THE COMPLIANCE & ETHICS PROGRAM

We are committed to the highest standards of ethics, honesty, and integrity in pursuit of our mission. Our values include

· Conducting ourselves with absolute integrity in business matters.

· Treating all people with respect and courtesy.

· Searching constantly for new opportunities to use our skills, resources, and knowledge and to better serve our patients and our community. We will look "over the horizon" for tomorrow’s opportunities.

· Focusing on creating the best experience and outcome for the user of our health care system, be it patient, member, provider, or staff.

· Developing and implementing new ideas and approaches that will serve our patients and our community better.

Created at the direction and under the oversight of our Board of Directors, the Compliance and Ethics Program (“Program”) demonstrates our commitment to ethical conduct, compliance and our values by setting forth guidelines for conduct designed to prevent and detect violations of law, and by encouraging compliance by providing support, training, and educational resources to assist us in fulfilling our responsibilities. The Program is designed to assist and facilitate us in fulfilling our compliance responsibilities by creating a process to monitor compliance efforts and documenting the expectations for members of our community in the performance of their responsibilities. The Program applies to all skilled nursing facilities and other ancillary providers managed by Guardian Elder Care. Board members, the president, members of senior management, employees, volunteers, vendors, independent contractors, and others representing us are expected to adhere to these standards of conduct in the discharge of their duties.

Organizational Structure

We have a Corporate Compliance Committee (“CC”), chaired by the Corporate Compliance Officer (“CCO”), and comprised of members of management necessary to support the CCO in fulfilling his/her responsibilities under the Compliance & Ethics Program. The CCO reports on compliance activities to the Board of Directors and to the Chief Executive Officer. The Administrator of each Facility or the Director of each ancillary service (hereinafter referred to as the Compliance Liaison) is responsible for implementing and monitoring compliance with the Program within the facility and for providing regular reports to the Corporate Compliance Committee regarding the facility’s compliance with the Program.

The Corporate Compliance Committee

The CC is comprised of members of our management. Other individuals will be invited to attend when appropriate.

The CC has oversight responsibilities for our compliance activities and assists in fulfilling its legal compliance obligations and provides support for functions related to our operations and activities. This Committee provides a forum for discussion of compliance-related issues and the status of action plans developed to resolve those issues. The CC advises the CCO and assists in the development and implementation of the Compliance and Ethics Program. The duties and responsibilities of the CC include:

· Assisting in the development of a risk-based compliance plan that addresses regulatory compliance with all governing bodies and regulatory agencies, including but not limited to: Centers for Medicare & Medicaid Services (CMS), all applicable State Departments of Health (PA DOH, OH DHHS & WV DHHS), and State Departments of Public Welfare (DPW), and the Office of Inspector General (OIG).

· Delegating primary responsibility for compliance with standards and regulations of the Department of Labor (DOL), Internal Revenue Service (IRS), Drug Enforcement Administration (DEA), and Quality Improvement Organizations (QIO).

· Coordinating efforts, communication, and reporting between the CCO, legal counsel, external auditors and compliance management in operating departments to ensure effective monitoring and reporting. The Compliance Liaison will have day-to-day oversight and responsibility to ensure that internal controls over compliance are in place and working effectively.

· Maintaining a system to solicit, evaluate, and respond to complaints and problems.

· Ensuring that there is no retaliation against those who report alleged noncompliance in good faith.

· Periodically reviewing the results of monitoring and auditing activities performed by the CCO or designee.

· Periodically reviewing the Code of Conduct policies and procedures as well as other compliance-related policies as requested. Approving appropriate additions, deletions and/or revisions. Ensuring all officers, directors, and employees are familiar with the Code of Conduct through training and education and fulfilling their duties for completing the annual disclosure statement.

· Monitoring compliance education activities and scope and providing input to the overall content of annual training. Where necessary, the CC will also consult with facilities and monitor the implementation of specialized compliance training sessions based on the facility’s specific needs.

· Implementing a compliance performance assessment to identify business risks and evaluate internal compliance controls necessary for an effective compliance program.

The CC consists of the following members:

Chief Financial Officer

Senior Vice President of Operations

Senior Vice President of Clinical Operations

Corporate Director of Financial Operations

Corporate Director of Clinical Reimbursement

Corporate Director of Information Technology

Corporate Director of Risk Management

Corporate Director of Human Resources

Clinical Service Point Click Care Coordinator

Regional Director of Clinical Therapy Services

Facility Administrator

Facility Business Office Manager

Our governing body may also approve adjustments to Corporate Compliance Committee membership, from time to time.

The Corporate Compliance Officer

The Corporate Compliance Officer (“CCO”) is a senior member of management who has been authorized by the Board of Directors to oversee and implement the Compliance and Ethics Program and the Code of Conduct. The CCO has the authority and independence to provide candid advice and information to the Chief Executive Officer and makes regular reports directly to the Board of Directors.

Our Board of Directors has appointed Robert Barnes as the CCO. The CCO works with the Corporate Compliance Committee and various personnel in our community to ensure the proper development and implementation of the Compliance and Ethics Program. In furtherance of this responsibility, the CCO oversees the following areas of compliance activity:

· Informing, training, and educating our community about our Compliance and Ethics Program and Code of Conduct (“Code”) and ethical obligations under that Code.

· Monitoring and implementing compliance activities, including policies, procedures, training and education programs.

· Serving as a resource to us on matters of compliance and legal and regulatory changes, and assessing and identifying areas of risk.

· Maintaining the anonymous hotline for confidential reporting of compliance matters.

· Ensuring that open lines of communication between our personnel and management exist to ensure the proper reporting of compliance issues.

· Ensuring that there is no retaliation against those who report alleged noncompliance in good faith.

· Assisting operational units in developing corrective action plans.

· Recommending and reviewing disciplinary action for violations of the Code.

· Coordinating investigations to ensure proper review and resolution of potential compliance issues.

· Reporting to the Board of Directors on a regular basis regarding corporate compliance.

We may engage outside legal counsel and/or expert consultants to assist the Corporate Compliance Committee or Corporate Compliance Officer, as appropriate.

Board of Directors

The Board receives training and briefings at least quarterly from the CCO on areas of significant compliance risk.

Compliance Liaison

The Compliance Liaison is responsible for implementing and monitoring compliance with the Program on a day-to-day basis at the facility. The Compliance Liaison provides quarterly compliance reports to the CC.

Our Code of Conduct

Our Code of Conduct provides the guiding standards of conduct for all members of our community, and sets forth our commitment to good practices and compliance with applicable laws and regulations. Management is responsible for ensuring that the Code of Conduct is observed by all members of our community under their direct and indirect supervision.

The following areas are covered in our Code of Conduct:

· Reporting possible violations of the Code of Conduct.

· Protecting those who report possible violations of the Code of Conduct from retaliation.

· Following all federal healthcare program rules and regulations.

· Complying with the law.

· Provide Patient care to meet the needs of each individual

· Preparing and submitting accurate claims.

· Protecting confidential information.

· Adhering to anti-referral and health care fraud and abuse legislation.

· Not accepting inappropriate gifts or gratuities.

· Prohibiting inappropriate gifts to patients, physicians, and vendors.

· Avoiding conflicts of interest.