Health care businesses are subject to complex rules and regulations, most of which are constantly changing. Providers of all types and sizes are constantly faced with licensure issues and compliance requirements. There are few industries as regulated as health care, but that is not to say that providers stand alone in the issues they face. In fact, one type of industry has a markedly similar oversight process: daycare centers.

In Kentucky, health care centers are inspected, monitored, licensed and certified by the Division of Health Care (“DHC”) within the Cabinet for Health and Family Services. DHC is responsible for investigating complaints against health care facilities, facility plans review and developing regulations. Also in the Cabinet for Health and Family Services is the Division of Regulated Child Care (“DRCC”). This division is responsible for licensing and investigating complaints against child day care programs, residential child caring facilities and child-placing agencies.

When Things Go Awry

Undoubtedly, the most worrisome event for a daycare center is an unannounced visit from a regulator. Likewise, nursing home facilities are subject to unannounced visits from the Cabinet’s OIG Division of Long Term Care State Survey Agency. No matter how well a business is run, how many procedures are in place, or how well-trained staff is, sometimes incidents occur. When these random check-ins happen, it is more likely than not that the inspector will find something wrong with how a center or facility is being operated. Any found or perceived violations, no matter how insignificant, will be documented during an unannounced visit. It is at this fork in the road that daycares, just like health care facilities, must know how to proceed to ensure they maintain their requisite licensing.

Once the DRCC finds a violation, a statement of deficiency (“SOD”) will be issued. Deficiencies can range from serious health code violations to everyday occurrences, like a child who sneaks in an impermissible sharp object from home. Once a SOD is issued, then a daycare center must act swiftly and efficiently. A plan of correction (“POC”) has to be drafted and corrective actions must be implemented.

When creating a POC, daycare centers should take heed from health care facilities that have had to respond to similar surveys and investigations. In a POC, a center should always:

• Fully understand what happened that caused the alleged deficiency. This may include conducting interviews with staff and/or parents. To remove any bias, it may be necessary to hire a third-party to conduct an investigation;

• Administer any necessary employee disciplinary actions;

• Provide and document any follow-up training of employees in personnel files;

• Implement any necessary remedies for the alleged deficiency (i.e. post signage, remove/add locks);

• Review center’s policies and procedures in the wake of the SOD; and,

• Notify proper parties, such as parents, of the SOD if necessary.

Some more serious types of incidents discovered by the DRCC will result in the creation of an Intermediate Sanction Agreement and may also involve the Child Protective Services. Many daycare providers enter an Intermediate Sanctions Agreement without fully understanding its terms or implications. By signing this contract, centers put themselves on the fast track to license revocation without even realizing it. An Intermediate Sanction Agreement can mean automatic revocation if, upon the next unannounced visit, there any discovered violations. It generally takes two outstanding follow-up visits to get an intermediate sanction agreement dissolved. In the event a daycare center has its license revoked, then the facility must navigate through the administrative appeals process, which can be lengthy and costly.

Health care attorneys have long preached the need for compliance programs, internal audits, and detailed policies and procedures for all health care facilities. Daycare centers are well advised to take heed and implement the same so as to maintain their license and comply with regulatory requirements.