Skilled Nursing Facilities Sent Incorrect Medicare Claims, Report Finds

One-quarter of all Medicare claims submitted by skilled nursing facilities in 2009 included errors that resulted in $1.5 billion in inappropriate payments to the facilities, according to a report released Tuesday by the HHS Office of Inspector General, Modern Healthcare reports (Barr, Modern Healthcare, 11/13).

Report Details

The report found that most of the incorrect claims were "upcoded" for an ultra-high therapy that was unnecessary. Overall, the inappropriate payments accounted for nearly 6% of the $26.9 billion that was paid to skilled nursing facilities in 2009, the report noted (Terhune, Los Angeles Times, 11/13).

According to CQ HealthBeat, the report is one of several that have been critical of the skilled nursing facility industry. Two years ago, an HHS OIG report found that the facilities increasingly overcharged Medicare for higher-paying categories of care.

The new report acknowledges that CMS reduced Medicare payments to skilled nursing facilities by $3.9 billion in fiscal year 2012 to correct for overpayments made in the previous year. In 2011, CMS changed the number of treatment categories that qualify for Medicare coverage from 53 to 66 to improve accuracy. "However, more needs to be done to reduce inappropriate payments," the report states (Adams, CQ HealthBeat, 11/13).

Recommendations

The new report also recommends that CMS:

• Increase and expand skilled nursing facility claims reviews;
• Use its fraud prevention system to identify facilities that bill for high-paying categories of care;
• Monitor compliance with new therapy assessments;
• Alter the method for determining how much therapy is needed to ensure appropriate payments;
• Improve the accuracy of skilled nursing facility reporting; and
• Follow up with facilities that billed in error (Modern Healthcare, 11/13).

Industry Responds

Industry officials said it was unfair to penalize facilities for actions taken three years ago.

American Health Care Association CEO Mark Parkinson acknowledged the need to curb fraudulent payments, but he added, "Bureaucrats questioning these services after three years and saying they know what's in the best interests of patients is not good medicine and doesn’t make sense" (CQ HealthBeat, 11/13).