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15-11-2012 | Article

Skilled nursing facilities’ false billing brims over $ billion mark


HHS report

medwireNews: The Department of Health and Human Services (HHS) Office of Inspector General (OIG) reports that an estimated one quarter of all claims filed by skilled nursing facilities (SNFs) in 2009 were in error, resulting in $ 1.5 billion in inappropriate Medicare payments.

The majority of the claims were found to be false on account of a practice called "upcoding," which occurs when facilities bill for "more services than the patient needed or that the facility actually provided," explained Jodi Nudelman, Region II Inspector General for the Office of Evaluation and Inspections in New York, in an OIG press interview.

"Our prior work has uncovered numerous problems with how these facilities bill Medicare," Nudelman said. "We also recently found a concerning trend: facilities are increasingly billing for the highest amount of therapy even though the types of patients and their medical conditions have not really changed."

According to the HHS report, SNF billing issues are not new: 26% of claims submitted by SNF in the 2002 fiscal year were unsupported by medical records, which equated to $ 542 million in potential overpayments. One SNF recently reached a settlement agreement on allegations of fraudulent billing.

Additionally, in a 2007 report to congress to promote greater efficiency in Medicare, the Medicare Payment Advisory Commission criticized how the payment system "encourages SNFs to furnish therapy, even when it is of little or no benefit."

Nudelman observed that "a huge vulnerability exists with how Medicare pays for therapy," adding: "How much nursing facilities get, depends on how much therapy is provided. So they have an incentive to bill for more therapy."

The HHS study reviewed medical records of a random sample of SNF claims from 2009. Specifically, the reviewers scrutinized how SNFs assessed and classified each beneficiary into so-called resource utilization groups (RUG), which determine how much payment SNFs receive from Medicare. In general, SNFs were often found to misreport the therapies, which in turn affected RUG payment classifications.

The study authors urge the Centers for Medicare and Medicaid (CMS), which is responsible for Medicare, to expand the review of SNF claims, use its Fraud Prevention System to identify SNFs that bill for inflated RUGs, monitor compliance with new therapy assessments, better determine the extent of therapy that a beneficiary needs, improve the accuracy of patient assessment systems, and follow up on SNFs that commit billing errors. According to the report, the CMS "concurred" with the above proposals.

By Peter Sergo, medwireNews Reporter