Skilled nursing facilities (SNFs) are getting paid too much for therapy services. This is the conclusion of the Office of Inspector General (OIG, 2015c) Fiscal Year (FY) 2016 Work Plan and two OIG reports released this past summer (OIG, 2015a; OIG, 2015b).
According to the Work Plan, OIG will focus on oversight of SNF claims billed under therapy Resource Utilization Groups (RUGs), with a particular emphasis on documentation. Additionally, OIG will conduct a status check on the Centers for Medicare & Medicaid Services (CMS) requirements for implementing the Patient Protection and Affordable Care Act (ACA) national background check program for long term care employees.

Overpayments Cited As Problem

An OIG study released in September 2015 (2015a) found that SNFs receive on average 29 percent more than they spend to provide therapy services. With the implementation of the Minimum Data Set (MDS) 3.0 and with the Start of Therapy, End of Therapy, and Change of Therapy SNF Prospective Payment System (PPS) assessments, CMS fully expected that therapy payments would be more reflective of residents’ clinical conditions and changing therapy regimens. The study revealed that while the percentage of RUGs in the highest therapy group (Ultra High) rose sharply from FY 2011 to FY 2013 (from 21 percent to 34 percent), data show no appreciable change in clinical characteristics of residents served. OIG concluded that the complex PPS assessment and payment process pays for volume rather than value and is not working to get Medicare payments under control.

Inconsistencies Found

The OIG study released in June also revealed errors in setting dates for required assessments that set the RUG payment for skilled services (OIG, 2015b). In comparing claims to MDS submission data, OIG noted that facilities would submit a Start of Therapy assessment and yet not bill for any therapy days.

Conversely, unintended therapy use patterns were noted in the September OIG report (OIG, 2015a). “For example,” the report said, “SNFs must provide therapy for 720 minutes or more during the seven-day assessment period to bill for Ultra High therapy, and SNFs increasingly provided exactly 720 minutes.”

To get a better handle on why inappropriate Medicare payments continue to rise, OIG will focus on medical record documentation, according to the Work Plan. OIG suspects that charting will show significant problems with therapy use and assigned RUGs. “For example, a beneficiary—who received hospice care before and after her SNF stay—received physical therapy five days a week for five weeks, even though her medical records indicated that she asked that the therapy be discontinued,” the September study said.

Reasonable And Necessary Therapy

The Work Plan indicates that, in an effort to stop overpayments, OIG intends to review Medicare Part A claims to determine whether the therapy treatment is based on care that meets the requirement of “reasonable and necessary.”

The “Medicare Benefit Policy Manual” (BPM) says that to cover a resident under Medicare Part A, the facility must ensure that “the services delivered are reasonable and necessary for the treatment of a patient’s illness or injury, i.e., are consistent with the nature and severity of the individual’s illness or injury, the individual’s particular medical needs, and accepted standards of medical practice. ... The [therapy] services must be reasonable and necessary for the treatment of the patient’s condition; this includes the requirement that the amount, frequency, and duration of the services must be reasonable” (CMS, 2015b).

Therapy Documentation

The Work Plan will focus on components of documentation required to meet the “reasonable and necessary” mandate as described above. Each Medicare Part A claim should be supported by specific documentation in the medical record to support the services billed.

The BPM says that “the documentation must also show that the services are appropriate in terms of duration and quantity and that the services promote the documented therapeutic goals” (CMS, 2015b). The Work Plan cites three elements that OIG auditors will be looking for in FY 2016 as they determine levels of compliance:

■ A physician order at the time of admission for the resident’s immediate care;
■ A comprehensive assessment; and
■ A comprehensive plan of care prepared by an interdisciplinary team that includes the attending physician, a registered nurse, and other appropriate staff.
Judi Kulus, NHA, RN, MAT, C-NE, RAC-MT, is vice president of curriculum development for the American Association of Nurse Assessment Coordination. She can be reached at (800) 768-1880.