Medicare billing fraud schemes of skilled nursing facilities sapping the system

In 2010, the Office of Inspector General (OIG) conducted a study of billing by skilled nursing facilities (SNF) after the Medicare Payment Advisory Commission raised concerns about SNF’s improperly billing for ┬átherapy to obtain additional Medicare payments. In 2012, Medicare paid $32.2 billion for SNF services.

What the OIG found was that skilled nursing facilities fraudulently billed more than $1 Billion to Medicare each year, conservatively. The majority of the claims were “upcoded” and were for ultrahigh therapy.

Despite this public study, the practices continue unabated. The continuing fraudulent billing at skilled nursing facilities often includes enlisting patients who do not need and do not benefit from physical, occupational or speech therapy or other skilled care.

Frequently, illegal kickbacks are paid between skilled nursing facilities and hospices for their cross referrals.

In addition, therapies provided are frequently not related to patient needs or requirements. Normally a skilled nursing facility receives about $700 per day from Medicare for a qualifying skilled nursing patient.

Under law, a doctor must approve services of a skilled nursing facility and it is supposed to be based on a patient’s medical needs. However, in many cases, the therapy companies are screening in patients and physicians to not see the evaluation forms for weeks or months after the patients have been put into therapy.

The Department of Justice is investigating.