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Anthony Cirillo

OIG Blasts Nursing Home Industry for Over Payments

By January 21, 2013

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The Office of Inspector General has identified a number of problems with billing by skilled nursing facilities (SNF), including the submission of inaccurate, medically unnecessary, and fraudulent claims. In addition, the Medicare Payment Advisory Commission has raised concerns about SNFs' improperly billing for therapy to obtain additional Medicare payments. In fiscal year (FY) 2012, Medicare paid $32.2 billion for SNF services.

SNFs billed one-quarter of all claims in error in 2009, resulting in $1.5 billion in inappropriate Medicare payments. The majority of the claims in error were upcoded; many of these claims were for ultrahigh therapy. The remaining claims in error were down-coded or did not meet Medicare coverage requirements. In addition, SNFs misreported information on the Minimum Data Set (MDS) for 47 percent of claims. SNFs commonly misreported therapy, which largely determines the resource utilization group (RUG) and the amount that Medicare pays the SNF.

The OIG based this study on a medical record review of a stratified random sample of SNF claims from 2009. The reviewers determined whether the information reported by the SNFs on the MDS was supported by and consistent with the medical record. The MDS is a standardized tool that SNFs use to assess each beneficiary. SNFs use the information on the MDS to classify beneficiaries into resource utilization groups (RUG). The RUGs determine how much Medicare pays the SNFs.

The OIG says that more needs to be done to reduce inappropriate payments to SNFs. They recommend that CMS:

  1. increase and expand reviews of SNF claims
  2. use its Fraud Prevention System to identify SNFs that are billing for higher paying RUGs
  3. monitor compliance with new therapy assessments
  4. change the current method for determining how much therapy is needed to ensure appropriate payments
  5. improve the accuracy of MDS items
  6. follow up on the SNFs that billed in error.

CMS concurred with all six recommendations.

"They're billing for therapy they don't provide or which the patient doesn't need," said Jodi Nudelman to the Wall Street Journal. She is the New York regional inspector general for evaluation and inspections, who oversaw the study. "What makes this report stand out is the sheer amount of dollars inappropriately spent."

Ms. Nudelman said the Office of the Inspector General will continue to examine nursing-home payments. The OIG has termed its overall look into the issue Operation Vacuum Cleaner.

That name alone should tell you something. If you want to avoid being sucked into the OIG vacuum cleaner, I suggest you start looking at your billing practices before they do.

Learn more ~ or join the conversation!


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March 2, 2013 at 5:35 pm
(1) Ann Stanton says:

My sister had been in a Pittsburgh PA skilled nursing home after being in various hospitals for 6 months and needed rehab and wound care. After two weeks, she ended up in a hypoglycemic coma with anoxic brain injury and respiratory arrest. It took a month to find out that she was not given Glucagen which was a verbal order from the doctor. They instead gave oral glucose gel to an unresponsive patient and eventually called their contract ambulance. It was 35 min by the time they got to her and by then it was too late to really help her. They then falsified her medical record stating they gave Glucagen and I had to prove they lied. My sister was on life support for over 3 months and I had to remove her due to worsening problems. She died 7/24/12. The PA Health Dept did an inspection and refused to cite them for any of the major problems which caused her death and only cited them for a minor problem of not properly documenting her insulin. No other government agency was willing to go against the Health Dept. I currently have a dispute going on with CMS at the Regional Office level in Phila about this problem. The nursing home got paid a nice amount from Medicare for refusing to give proper doctor-ordered medication for critical low blood sugar or calling 911. Maybe these problems would not occur if the government agencies and oversight offices would do their jobs properly. A nice touch was also that she went back to the ER with C-Diff and her sacral wound which had gotten worse.

March 5, 2013 at 11:30 am
(2) assistedliving says:

Did you try to use the ombudsman? All else fails you could contact a lawyer. This points out the need for family caregivers to be diligent and to document what goes on with the care of a loved one. Thanks for sharing your story.

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