California Nursing Homes Join Hospitals in Faulting Medicare Audits
Nursing home administrators in California are the latest critics of a Medicare claims auditing program that has denied tens of millions of dollars in reimbursements for rehabilitation hospitals in the state, the San Luis Obispo Tribune reports (Whitney, San Luis Obispo Tribune, 2/13).
Under a contract with CMS for a pilot program, PRG-Schultz International reviews Medicare claims submitted by hospitals to help root out improper payments.
The auditor has rejected more than 90% of the claims submitted by California hospitals for rehabilitation services to patients with knee and hip replacements. Under its CMS contract, PRG-Schultz receives up to a 30% commission on such claims.
The CMS program is scheduled to expand permanently to 20 more states in March. Along with California, the program is being piloted in New York and Florida.
The large percentage of rejected claims prompted CMS to temporarily suspend PRG-Schultz's audits in 2007 and order an independent review of the firm's work. The review disagreed with nearly 40% of the denied claims (California Healthline, 12/11/07).
Roland Rapp -- chief administrative officer for Skilled Healthcare Group, which operates more than 30 nursing homes in California -- said the audit program "is the most irrational, counterproductive program of its kind I have seen in my 25 years of experience in long-term care."
Auditors denied more than 2,500 claims worth more than $6 million at the company's nursing homes.
Rapp said the facilities have been forced to borrow against lines of credit to meet "basic cash needs." He added, however, that as the cases are reviewed through an appeals process, the majority are being reversed.
Reps. Lois Capps (D-Calif.) and Devin Nunes (R-Calif.) introduced a measure last year that would suspend the auditing program for a year (San Luis Obispo Tribune, 2/13). The bill would require Medicare administrators and the Government Accountability Office to review the program (California Healthline, 11/26/07).
Last month, the American Medical Association endorsed the legislation.
Capps argued that the program is intended to reduce costs, but instead, the government is spending additional money to defend the auditor's decisions. She added that the program "could ultimately cost taxpayers more money than it ends up saving" (San Luis Obispo Tribune, 2/13).