OIG reports Medicare nursing home upcoding

Upcoding for therapy services accounted for most of the more than $1 billion in payments in 2009 that investigators deemed improper.

By — Posted Nov. 21, 2012

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Skilled nursing facilities in many instances may be billing for higher-paying therapies that aren’t always necessary, according to a report from the Dept. of Health and Human Services Office of Inspector General. OIG determined that these facilities improperly billed a quarter of all claims in 2009, resulting in $1.5 billion in inappropriate payments out of the nearly $27 billion paid to them that year.

Medicare typically pays higher rates for therapies than it does for nontherapy services. OIG determined that most of the facilities’ incorrect claims were due to upcoding, or billing for therapies in higher payment categories that weren’t necessarily warranted. Another small percentage of these claims failed to meet Medicare coverage requirements, the report stated (link).

In many cases, facilities didn’t report the correct amount of therapy a patient either received or needed, or they misreported information on whether patients were receiving special care or on the amount of help they needed with daily activities. Beneficiaries are placed into higher payment categories if they require more assistance. In one instance, a facility reported that a patient needed extensive help in moving from a bed to a chair, even though the medical record revealed that the patient could do this independently.

In recent years, OIG has cited various problems associated with skilled nursing facilities filing fraudulent, inaccurate or medically unnecessary claims. The Medicare Payment Advisory Commission also has flagged inappropriate Medicare billing by these facilities, according to OIG. Among its recommendations, the report called on the Centers for Medicare & Medicaid Services to expand its review of claims for skilled nursing facilities.

In a statement, Mark Parkinson, president and CEO of the American Health Care Assn. and the National Center for Assisted Living, said the OIG was second-guessing the decisions of facilities that are providing life-changing therapies. He said the office compiled its report without input from patients “or even acknowledging what a doctor prescribes.”

The OIG findings also must be taken in perspective, given that changes have occurred since 2009 to improve the way payments are allocated, Parkinson said. “In cases where there were abuses, that must stop. AHCA has supported actions in the past to reduce those fraudulent practices, and will continue to do so. But to imply that clinical decisions made in consultation with doctors and therapists at the time of treatment somehow constitutes wrongdoing goes too far.”

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