OIG Misses Mark with Claim that SNFs are Cheating on Medicare Billing

So, CMS makes the Medicare reimbursement rules. SNFs follow the rules. Health and Human Services publishes a special thank you: "SNFs, you're cheating."

It's tough business running a SNF. Medicaid underpays. (Really, really underpays—by $5.6 billion in 2010.) CMS establishes dizzyingly complex clinical assessments and categories for Medicare reimbursement (66 utilization groups in RUG-IV), and changes them periodically just to keep nursing homes on their toes.

Skilled nursing facility operators scramble, and rescramble, to keep up, and to apply and manage clinical and reimbursement programs to appropriately bill for reimbursements. They continuously invest in resources to provide services that meet the increasingly complex clinical needs of post-acute patients. They work diligently make their communities, hospital case managers and referring physicians aware of these entened services, from rehab/therapy to vent beds to dementia care and more.

So the HHS Office of Inspector General publishes a 37-page research report claiming SNFs are cheating on Medicare billing.

OK, it doesn't use the word "cheating," but the title "Questionable Billing By Skilled Nursing Facilities" doesn't leave much room for interpretation.

Before analyzing the results, let me say that OIG delivered a comprehensive, well-designed research report. The methodology and analysis are meticulous and exhaustive—with data from more than 12,000 skilled nursing facilities, controls for patient age and diagnosis, clinical breakdowns based on therapy levels and activities of daily living (ADL), and perspectives based on facility ownership (chain or independent).

But the quality methodology produces some spurious conclusions. There's a lot of detail and data, so I'll summarize: Between 2006 and 2008, nursing homes increased Medicare billings for ultra high therapy and high ADL requirements. SNF chains and for-profits billed at even higher levels in those categories. Therefore, OIG concludes that SNFs are possibly (probably?) "gaming" the system by performing or billing for unnecessary clinical/therapy services for patients.

That conclusion ignores many factors. Post-acute care has and continues to become more medically complex. Facilities work hard to add therapy, clinical and care services that patients need and hospitals request, at no small expense. It follows that billings and reimbursements in those categories would increase.

And citing increases in specialized care and high-reimbursement billings from SNF chains and for-profits paints an incomplete picture. Perhaps those larger chains have been able to invest more in providing extended therapy and care services. Maybe they have been more aggressive in pursuing billings in reimbursement groups that pay higher rates. Or perhaps not, but the study unfairly excludes these possibilities from its analysis.

It just seems frustrating for HHS/OIG to take such an accusatory tone in the report—especially given that the research methodology and data are so good. This would have been a great opportunity to share the data with the skilled nursing community for collaborative analysis and discussion about trends in care and reimbursement. Instead, it's yet another example of regulators acting with good intentions, but needlessly punishing SNFs instead of working with them on the common goal of quality care.

Comments

[Niyuta]

As a former Medicaid/Mrdicare (Title IXX & XVIII)Auditor and CEO of 120 Bed For Profit SNF, I am surprised by the title of this report. I can say that the purpose of OIG reporting is to make the agency in charge of the reimbursement aware of the fact that they are doing a poor job of policing their clients. The tools used in this business are the regulations, the authoritative interpretations (42 CFR etc) and the process and methods used to reach the conclusions. It is often based on the standard auditing and investigation procedures laid out in the Audit Manuals. There is not much room for the Auditors' judgement or rationality of findings in the process. Whether a facility is processing the Care Given Data and information correctly or not is not the question but what that process leads to; in this case to billing, is in accordance to the law, rules and regulation is the question and this often than not becomes a major problem logistically as well as financially for the providers. I have not seen the report or the underlying data but it is not a good practice to pin the findings on entire industry for all the anomalies found. If indeed majority of the community is doing something in one way and that is against the rules, then rules need to be reviewed for the interpretation and practicality. If some SNF have fallen outside the set segment of curve (2 STD from the mean) then question should be asked if they did it within the reimbursement rules or outside of it. Auditors often use comparison as a starting point to see who is likely to be a candidate for investigations and sometimes they are right and most cases may find that some SNF use professionals to achieve financial goals and most depend on the in house staff and results vary dramatically. In the current systems of Prospective Payments, there is not much room to be creative to enhance reimbursements and if someone is cleaver enough to do so, that entity sticks out as a sour thumb in the desk audit analysis of similar facilities. One can stretch therapy times to meet the next level but that too has a limitations which most professional service providers have discovered. It will be interesting to read the report and do rebuttal analysis of findings and methods used to arrive at them.

[Doug Walker]

Thanks for your comment. I find that the OIG consistently extrapolates findings to imply that the entire industry is behaving poorly based on data that doesn't support such broad characterizations. It is frustrating, because it ends up seeming punitive instead of constructive to SNFs. I have another post coming on just that topic.