Hundreds of nursing homes overcharge Medicare every year for so-called skilled services, adding $1.5 billion in annual costs to the program, according to a federal report. About one-fourth of Medicare bills from facilities examined in the report were incorrect. The majority of these claims involved "upcoding," where a nursing home or other provider inflates the cost of its bill to Medicare by claiming more intensive services were done than actually performed.
In other cases, nursing homes provided treatments that were inappropriate for the patient. Documents show that facilities billed for high-intensity work, such as speech therapy and occupational therapy, that went to patients who couldn't benefit from it. One patient under hospice care refused physical therapy but was given the therapy anyway, and Medicare was billed, officials said.
The report was prepared by the The Office of Investigations (OI), which conducts criminal, civil, and administrative investigations of fraud and misconduct related to Health and Human Service programs, operations, and beneficiaries. OI utilizes its resources by actively coordinating with the Department of Justice and other Federal, State, and local law enforcement authorities. The investigative efforts of OI often lead to criminal convictions, administrative sanctions, and/or civil monetary penalties.
In recent years, the Office of Inspector General had identified a number of problems with billing by skilled nursing facilities (SNF), including the submission of inaccurate, medically unnecessary, and fraudulent claims. Further, the Medicare Payment Advisory Commission has raised concerns about SNFs’ improperly billing for therapy to obtain additional Medicare payments. In fiscal year (FY) 2012, Medicare paid $32.2 billion for SNF services.
The Report made a number of recommendations. Recognizing that the Centers for Medicare & Medicaid Services (CMS) had recently made several significant changes to SNF payments, the Report stated that "more needs to be done to reduce inappropriate payments to SNFs." Accordingly, it was suggested that CMS: (1) increase and expand reviews of SNF claims, (2) use its Fraud Prevention System to identify SNFs that are billing for higher paying services, (3) monitor compliance with new therapy assessments, (4) change the current method for determining how much therapy is needed to ensure appropriate payments, (5) improve the accuracy of Minimum Data Set items, and (6) follow up on the SNFs that billed in error. CMS concurred with all six recommendations.
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