HHS Calls For Reevaluation Of Medicare Payment System

Posted on Thursday, October 1, 2015 9:02 AM

According to a new report from the Department of Health and Human Services, the Medicare payment system for skilled nursing facilities (SNF) needs to be reevaluated to weed out exploitative providers. The report notes that SNF Medicare payments for therapy greatly exceeded the costs of therapy over a 10-year period. Despite beneficiary characteristics such as age and reasons for hospitalization remaining unchanged, an increasing number of SNFs overbilled Medicare for the highest level of therapy. In 2009, nearly 25% of all claims to Medicare by SNFs were billed in error, resulting in $1.5 billion in inappropriate payments, according to the OIG. The majority of those inappropriate claims came from facilities that billed for higher levels of therapy than were provided or necessary. The report recommends that CMS reform the SNF payment system to save money and provide care that is “better aligned with beneficiaries’ care needs.” It also recommends that CMS evaluate the extent to which therapy payment rates be reduced, change the payment methodology for therapy, and adjust payments to eliminate increases that aren’t tied to beneficiary characteristics and increase billing oversight. However, the American Health Care Association believes the HHS report does not tell the full story, adding that evaluating only the Medicare portion of the services SNFs provide gives a limited picture of the situation SNFs face. Click here to read more.

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