OIG Issues A Report on Questionable Billing by Skilled Nursing Facilities

On December 22, 2010, The U.S. Department of Health and Human Services Office of the Inspector General’s (“OIG”) Office of Evaluation and Inspections released a report entitled “Questionable Billing by Skilled Nursing Facilities” (Report # OEI-02-09-00202). The study was designed to evaluate: (1) whether bills for Part A services for skilled nursing facilities (“SNF”) changed from 2006 to 2008; (2) Whether there were differences in billing type of SNF ownership in 2008; and (3) to identify SNFs that had questionable billing in 2008.

The OIG found that from 2006 to 2008, SNFs increasingly billed for higher paying resource utilization groups (“RUGs”), even though beneficiary characteristics remained largely unchanged. The changes in billing occurred primarily in the rehabilitation-related RUGs. Additionally, the OIG concluded that for-profit SNFs were far more likely than nonprofit or government SNFs to bill for higher paying RUGs. For-profit SNFs also had longer lengths of stay, on average, compared to those of the other types of SNFs. Additionally, the differences among types of SNF ownership did not appear to be related to differences in for-profit vs. non-profit beneficiary populations.

The findings of the OIG’s report are significant in that they represent an area in which SNFs can expect increased enforcement irrespective of the type of SNF ownership.  The OIG study found an increase in the utilization of ultra high therapy RUGs from 17-28 percent in the two year period it reviewed, 2006-2008. SNFs can expect CMS, the Medicare Administrative Contractors, the Recovery Audit Contractors and others involved in enforcement to focus on billing for ultra-high rehabilitation both prospectively and retrospectively. SNFs should take a new look at how they qualify residents for the ultra-high RUG categories to ensure that they are appropriately capturing the resident’s conditions, resource needs, diagnoses and all of the other clinical elements that support the RUG category.

A copy of the OIG’s study can be found here —-> OIG Report

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