Knowledge base

Skilled Nursing Facility Payment Fraud

Under the PPS system for SNF’s, each beneficiary is designated to over 40 resource utilization groups (RUGs), each containing patients with similar service needs that are expected to require similar amounts of resources. The daily rate for each RUG is calculated using the sum of three components: 1) a fixed amount for routine services (such as room and board, linens, and administrative services); 2) a variable amount reflecting the intensity of nursing care patients are expected to require; and 3) a variable amount for the expected intensity of therapy services. Much like the other PPS’s, the RUG rates are computed separately for urban and rural areas and a portion of the total rate is adjusted to reflect labor market conditions in each SNF’s location. Qui Tam lawsuits often arise from upcoded RUG rates. Questions to ask include, are the rehabilitation and infusion therapy services provided to Medicare beneficiaries in skilled nursing facilities medically necessary, adequately supported, and actually provided as ordered? What is the extent and nature of consecutive Medicare hospital inpatient stays for its patients in general? Is the SNF billing for services on the day of discharge? Is there a failure to submit no-pay bills (which could contribute to inappropriate calculations of Medicare SNF eligible benefit periods)?

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