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OIG finds 25% of SNF claims faulty

Posted by Margaret Scavotto, JD, CHC on 11/16/12 3:30 PM

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This week, the Office of Inspector General (OIG) released a report: Inappropriate Payments to Skilled Nursing Facilities Cost Medicare More than a Billion Dollars in 2009. The OIG found that 25% of SNF claims submitted in 2009 were in error, amounting to $1.5 billion in overpayments. To read the full report, click here.

 What the OIG found

The erroneous 25% of claims include:

  • 20.3%: Claims with an inaccurate RUG (upcoded). In 57% of these claims, SNFs provided more therapy on the MDS than was documented in the medical record; and 25% of these claims involved therapy listed in the medical record that was not reasonable and necessary
  • 2.5%: Claims with an inaccurate RUG (downcoded)
  • 2.1%: Claims that did not meet Medicare coverage requirements (e.g. no physician order)

The OIG also found that 47% of claims involved inaccurate MDS information. The primary reporting error was the amount of therapy received or needed, followed by special care, ADLs, oral/nutrition status, and skin conditions/treatment.

It is clear that the government is increasing its focus on therapy services provided in nursing facilities--and therapy services should be a high, and possibly the highest, compliance priority for SNFs.

What to expect

The OIG recommended, and CMS agreed with, the following government action plan: 

  • Increase and expand review of SNF claims
  • Identify SNFs that are billing for higher paying RUGs
  • Monitor compliance with new therapy assessments
  • Change the method for determining how much therapy is needed
  • Improve the accuracy of MDS items
  • Follow up on the SNFs that billed in error

MPA TIPS: How to prepare

  • Compare your RUG distribution to your historical average and to regional benchmarks, in order to identify any over-utilization patterns
  • Conduct an audit of your billing accuracy to identify your most frequent billing errors
  • Use sample audits to determine if your MDS information is backed by medical record documentation
  • Review therapy treatment plans and goals for appropriateness
  • Strengthen your partnership with your therapy provider in order to identify and address any RUG assignment inaccuracies

Learn more

Documentation: the first and best defense

Topics: Compliance Basics, Auditing and Monitoring, Billing and Claims Submission, medical necessity

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