OIG tells CMS to take immediate action on SNF billing

Although the Centers for Medicare & Medicaid Services (CMS) made changes to the billing of concurrent therapy and higher levels of therapy at skilled nursing facilities (SNFs) that were supposed to be budget neutral, Medicare payment rates increased by $2.1 billion, or 16 percent, between the last six months of 2010 to the first half of 2011, said a report from the Department of Human Services’ Office of the Inspector General (OIG).

In a letter to CMS, the OIG noted that CMS made changes to how SNFs billed for concurrent therapy, believing that those billing changes would cause a decrease in billing for higher therapy. However, for the first half of 2011, SNFs billed for higher levels of therapy and billed less for concurrent levels of therapy, which caused an overall increase in payments. Other CMS billing changes, such as for extensive services and for high levels of assistance with activities of daily living, resulted in decreased payments.

“Given the current trends,” noted the OIG’s report, “Medicare will pay over $4 billion more to SNFs in FY 2011 than in FY 2010,” so CMS “should take immediate action,” to correct the billing issues.

The OIG said it plans to conduct a full review of SNF billing at the end of 2011, at which time it may issue formal recommendations to CMS.