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Nursing Home pays $500,000 for therapy provided by contractor

Posted by Margaret Scavotto, JD, CHC on 7/9/14 1:08 PM

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The United States Department of Justice recently entered a $500,000 settlement with an Iowa skilled nursing facility, to resolve allegations that the SNF billed the government for improper therapy provided by a third party therapy services contractor.

The Medicare claims at issue involved therapy services that “were not justified by…residents’ conditions.” The government also asserted that “by including costs for the therapy services in cost reports submitted to the Medicaid program, [the SNF] erroneously submitted inflated cost reports.”

This is an eye-opening settlement for nursing homes and therapy companies. Nursing homes often believe that if the government finds false claims arising out of unnecessary therapy, the therapy company will be responsible (after all, they provided the services). Likewise, therapy companies often believe the nursing home will be responsible (after all, the SNF is submitting the bills under its Medicare number). We have known for some time that the government holds therapy companies responsible.  Now we know SNFs will be held accountable, too.

Do your therapy utilization statistics put you at risk?

The government compares your RUG distribution to regional and national norms, and so should you. Otherwise, you are unaware if your RUGs make you an outlier, and therefore a government target. For example, do you know what percent of your therapy days are ultra-high?  Do you know if this % is above average? If so, have you investigated to find out if these claims are documented as medically necessary? MPA recommends incorporating RUG distribution comparisons into your compliance program’s monthly auditing and monitoring strategy. This will allow you to identify if you are a compliance outlier, and to work with your therapy company to research and correct any problems—before the government does.

Learn more

What is the point of comparing our RUG distribution to regional or national norms if we are confident that we are doing a good job?

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Topics: Penalties and Enforcement, PEPPER, Billing and Claims Submission, medical necessity, Therapy

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