CMS paid $84M for nursing home services that didn't meet Medicare rule, audit finds

CMS made $84 million in improper payments for skilled nursing facility services that did not meet Medicare's three-day inpatient hospital stay requirement from 2013 through 2015, according to an audit from the HHS Office of Inspector General.

The review initially covered about $135 million in Medicare payments for more than 22,000 skilled nursing facility claims for patients who, according to the Medicare National Claims History file, had preceding inpatient hospital stays of less than three consecutive calendar days, excluding the discharge date. After developing a sample frame, the office considered a sample of 99 skilled nursing facility claims.

The inspector general found CMS improperly paid 65 of the 99 skilled nursing facility claims sampled when Medicare's three-day inpatient hospital stay requirement was not met. Based on its findings, the office estimated CMS improperly paid $84 million for skilled nursing facility services that did not meet the requirement from 2013 through 2015.

Federal law requires Medicare patients to be a hospital inpatient for at least three consecutive calendar days before discharge to be eligible for posthospital extended care coverage.

The office attributed the improper payments to "lack of a coordinated notification mechanism" among hospitals, patients and skilled nursing facilities to ensure three-day rule compliance.

Minus that coordination, "CMS does not have sufficient documentary evidence to prevent SNFs from submitting erroneous claims that result in improper payments and to determine whether SNFs were at fault for the improper payments," the inspector general wrote in its audit.

"The 'at fault' consideration affects the determination of whether the SNF or beneficiary would be financially liable for the overpayment," the audit stated.

The inspector general made six recommendations to CMS, including ensuring that the CMS common working file system for verification, validation and payment authorization "is enabled and operating properly to identify SNF claims ineligible for Medicare reimbursement."

The audit also recommended requiring written notification from hospitals to patients whose discharge plans include posthospital skilled nursing facility care, "clearly stating how many inpatient days of care the hospital provided and whether the three-day rule for Medicare coverage of SNF stays has been met."


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