New CMS utilization data links SNF payments to high therapy levels

Skilled nursing facility (SNF) utilization and payment data from from the Centers for Medicare & Medicaid Services (CMS) has reignited concerns that the current payment structure is incentivizing unnecessary levels of therapy.

The Skilled Nursing Facility Utilization and Payment Public Use File contains payment data from more than 15,000 SNFs and more than 2.5 million patient stays totaling $27 billion in Medicare payments during 2013. CMS focused its analysis on rehabilitation utilization groups (RUGs) used to bill for various levels of therapy.

The three highest RUG scores--both in total days and total Medicare payment amounts--were "ultra-high rehab," the highest therapy designation in which residents receive a minimum of 720 minutes of physical therapy, occupational therapy and/or speech therapy. Medicare spent $16.6 billion on three ultra-high RUGs in 2013.

The data set also shows that a large number of ultra-high and very-high RUG categories fell within minutes of the minimum threshold. Just over half of very-high therapy claims stopped within 10 minutes of the 500 minute threshold; 65 percent of ultra-high therapy stopped within ten minutes of the 720-minute threshold. Certain SNFs had all of their ultra-high and very-high therapy claims fall within ten minutes of the threshold, prompting CMS to further investigate those claims.  

"CMS strives to ensure that patient need, rather than payment system incentives, are driving the provision of therapy services," Shantanu Agrawal, M.D., deputy administrator for program integrity and director of the Center for Program Integrity said in an announcement.

"These concerns have prompted us to refer this issue to the Recovery Auditor Contractors (RAC) for further investigation, and our hope is that data transparency will facilitate real changes." 

SNF therapy costs have emerged a major cost concern for CMS. In October, the Office of Inspector General (OIG) found Medicare overpaid SNFs $1.1 billion in 2012 and 2013 for therapy services, noting that the current payment structure incentivizes SNFS to bill for higher levels of therapy than medically necessary. That report echoed a previous analysis from the Wall Street Journal indicating that patients receiving ultra-high levels of therapy rose from seven percent in 2002 to 54 percent in 2013.

In January, a subsidiary of Kindred Healthcare paid $125 million to settle claims the therapy contractor provided medically unnecessary therapy services, a huge settlement that revived the discussion of the flawed SNF payment structure.  

For more:
- read the CMS announcement
- here's the CMS fact sheet

Related Articles:
Medicare rules may encourage nursing homes to over-treat patients
Report: Medicare overpays skilled nursing facilities by more than $1B
Skilled nursing facility providers pay the price for a flawed system
Kindred Healthcare pays $125M to settle claims against subsidiary

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