Over recent years, the Federal government has trained its sights on potential billing abuses in the Medicare Part A program for Skilled Nursing Facilities ("SNFs") in the provision of rehabilitation therapy services. The U.S. Health and Human Services Office of the Inspector General ("OIG") issued a report in September 2015, finding that the current methodology "creates a strong financial incentive for SNFs to bill for higher levels of therapy even when beneficiaries do not need such levels."1 The OIG recommended that the Centers for Medicare & Medicaid Services ("CMS") restructure the payment system to address "longstanding concerns" over "the method of paying for therapy."2 Just last month, OIG underscored the priority of replacing the current SNF payment system by identifying the reevaluation and replacement as one of its top 25 unimplemented recommendations for CMS.3 The OIG reiterated another of its core findings, that "Medicare payments for therapy greatly exceeded SNFs' costs for therapy."
Earlier last month, the Medicare Payment Advisory Commission ("MedPAC") voted to recommend that CMS establish a "site neutral" prospective payment system for reimbursing nursing homes, home health agencies, and rehabilitation hospitals for post-acute care services that is based on medical acuity, rather than the setting where care is delivered.4
Meanwhile, CMS has initiated several demonstrations and initiatives to tie nursing home payment to quality performance, to broaden bundled payments, and generally to incentivize facilities and other providers to better coordinate post-acute care and contain costs. As CMS explores alternative models for reimbursing SNFs, CMS along with OIG and the U.S. Department of Justice continues to focus enforcement attention on the billions of dollars allegedly over-billed under the existing model.
CMS Releases Data to Highlight Suspicious Therapy Billing
CMS has now made it easier for RACs and other government auditors -- as well as whistleblowers -- to target SNFs that bill Medicare for residents receiving therapy at higher rates than its peers. On March 9, 2016, CMS released a Public Use File ("PUF") of data on Medicare claims and payments to SNFs during 2013,5 allowing the public to get a granular view of each SNF's billing practices, including RUG scores and associated therapy minutes for their rehabilitation residents. With this data, CMS has given auditors and False Claims Act ("FCA")6 lawyers alike the ability to target potentially vulnerable SNFs and, in the case of FCA counsel, to recruit current or former employees to serve as qui tam relators against potential SNF defendants.
The PUF includes the names and addresses of SNFs; lists the number of resident-days, number of residents, and reimbursement level; and...
