OIG report calls for changes in skilled nursing facility billing

A new report from the Office of Inspector General (OIG) recommends changing billing and payment methods for therapy in skilled nursing facilities (SNF), saying the current policies are too complex and have cost Medicare an additional $143 million in fiscal years 2012 and 2013.

In FY 2011, the Centers for Medicare & Medicaid Services (CMS) implemented new therapy assessments for starting, ending and decreasing or increasing therapy in SNFs. These assessments were intented to align changes in therapy with the SNF billing schedule so that CMS paid for the appropriate level of therapy provided. However, the OIG found that SNF billing for changes in therapy increased marginally, from 27 percent in 2010 to 31 percent in 2013.

In particular, providers were more likely to use scheduled assessments as opposed to change-of-therapy assessments when decreasing therapy, which allowed them to delay billing for a lower reimbursement rate and increased costs to Medicare. SNFs also frequently used start-of-therapy assessments incorrectly, the report found.

The OIG concluded that these therapy billing policies "create challenges for effective oversight," and recommended CMS "accelerate its efforts to implement a new method for paying therapy" that structures payments around beneficiary characteristics rather than therapy levels. In the meantime, CMs should modify policies so that SNFs aren't incentivized to use assessments incorrectly when decreasing therapy, and strengthen oversight for changes in therapy. CMS agreed with both the recommendations.

Earlier this year, legal experts pointed to the OIG's focus on therapy utilization trends as an indication that False Claims Act (FCA) liability is at an all-time high for SNF providers. Post-acute care cases, including a $17 million settlement by a Florida SNF network, have highlighted the government's focus on SNF therapy billing. In April, HCR ManorCare was hit with a federal FCA lawsuit claiming that the SNF provider billed Medicare and Tricare for medically unnecessary rehab services.

For more:
- read the OIG report

Related Articles:
Legal report highlights key takeaways for SNFs regarding False Claims Act liability
HCR ManorCare hit with False Claims Act complaint
Florida post-acute care providers settle for tens of millions
Legal experts keep watchful eye on 'worthless services' cases
Feds settle substandard care allegations with Extendicare for $38M

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