According to the Office of the Inspector General for Health and Human Services,
fraud and “errors” by skilled nursing facilities (SNFs) are
bleeding Medicare coffers at the rate of $1.5 billion a year. I am a lawyer
who represents whistleblowers who file suit under the False Claims Act
to try to stop fraud against taxpayers. Given the magnitude of the
fraud by skilled nursing facilities, we desperately need whistleblowers who will expose SNFs that are cheating
taxpayers. I am doing a blog series to help whistleblowers recognize SNF
fraud so that they can stop the facilities that are abusing the Medicare system.
Many therapists, coders, rehab managers and other whistleblowers know that
their employer is asking them to do something wrong – like bill
for minutes when they are not providing therapy. But they may not understand
why it is that the SNF is pushing them to do what is wrong. The blog series
I am in is designed to help whistleblowers understand more about the fraud
so that they can help stop it. Whistleblowers who file suit under the
False Claims Act are entitled to between 15% and 30% of all the money
that the government gets back from the skilled nursing facility.
Skilled Services and Reasonable and Necessary Services
SNFs can provide services under Medicare Part A (inpatient) and also under
Medicare Part B (outpatient), and the billing looks different for each.
But two general rules apply regardless of whether the billing is for inpatient
or outpatient services.
First, Medicare will only pay for
skilled, healthcare services. Medicare has a limited amount of funding, and the taxpayer dollars it
gets each year have to be spent on its primary focus: healthcare. Other
government agencies address other types of needs, such as housing. And
while many types of services might be useful for someone’s health,
Medicare cannot afford them all; it only pays for
Second, Medicare will only pay for healthcare services that are reasonable
and necessary. If Medicare spends money on funds that patients do not
need, it will not have enough left over for the truly necessary services.
Taxpayers cannot afford to pay for services that patients do not truly
Part A and Part B
But with those two givens out of the way, the billing system for SNFs varies
depending on whether the patient is being treated as an inpatient or an
Under Part A, the SNF uses a set of Medicare guidelines to group patients
into RUG categories and then subcategories. Medicare pays a set amount
for each patient who falls into a specific category and subcategory. In
order to figure out what category to assign a patient, the SNF looks at
how many minutes of treatment the patient received. The more treatment
the SNF gave the patient, the more Medicare pays the SNF. Under Part B,
the SNF counts “units” of treatment that the patient received.
But while the billing system may look different, the overall point is
the same: the more treatment a SNF gives to a patient, the more the SNF can bill.
And therein lies the conflict.
The Root of SNF Fraud
Medicare and the patient want to receive enough services – and no more.
But an unscrupulous SNF wants to provide a lot of services so that it
can get as much money as possible from Medicare. The way SNFs cheat the
government can range from billing for services that a patient does not
truly need, to upcoming the services it gave to a patient, to providing
excess therapy — but the upshot is always the same. Medicare is
asked to pay for services it cannot afford, which ultimately undermines
its ability to pay for the medical services that American must have.
Do you know of a SNF that is overbilling Medicare?
Email me now and let’s talk about how we can stop it.