Under Part A, skilled nursing facilities bill by the exact number of minutes
of services that they provide to patients. Under Part B, skilled nursing
facilities bill by “units” that are based on the number of
minutes of therapy given to the patient. Some SNFs are rounding up the
minutes of service they provide in order to pad their bills to Medicare.
A minute here, a minute there — pretty soon you’ve got millions
of dollars in Medicare fraud.
I am a lawyer who represents whistleblowers, and in today’s blog
I am going to talk about a recent False Claims Act case in which two whistleblowers
helped the Government get back $125 million from a rehabilitation services
provider accused of several kinds of fraud, including rounding up minutes
of therapy. The whistleblowers were paid $24 million for their work in
helping the Government get the recovery.
Part B: The Rule of 8
Under part B, Medicare pays per service that a patient receives. For therapy,
Medicare looks at “units” (or increments) of time that the
patient receives skilled therapy. Medicare pays the SNF for the units
of therapy that it provided to the patient.
Medicare uses 15 minutes as the standard for a "unit" of therapy.
Under what Medicare calls "The Rule of 8", if therapy lasts
7 or fewer minutes, the time is rounded down and the SNF does not get
paid for a unit. But if the therapy lasts between 8 and 15 minutes, the
SNF is allowed to claim a full “unit.” If the therapist spends
more than 15 minutes, Medicare applies the same principle. The same principle
applies to therapy that takes longer than 15 minutes. For example, if
the therapist provides between 16 and 23 minutes of service, then the
time rounds down and the provider can only bill for one unit of therapy.
On the other hand, if the provider spends anywhere between 24 and 30 minutes,
the provider can round up to 30 minutes and bill for 2 full units.
Part A: Exact Minutes of Therapy
Under both Part A and Part B, Medicare looks at the amount of time that
a therapist spends with a patient when it determines how much to reimburse
the medical provider. Under Part A, however, rehab is billed by the exact
number of minutes of therapy that are provided. The therapist does not
round the number of minutes at all. The therapy company adds together
the minutes for all the types of therapy that the patient receives. Based
on the total number of minutes of therapy, the patient is slotted into
a reimbursement category; patients who needed more therapy are assigned
categories that pay more.
Estimating and Rounding Minutes Can Result in Overbilling Medicare
A SNF can overbill Medicare by rounding under either Part A or Part B.
If a therapy group provides 10 minutes of therapy under Part A, but counts
the time as 15 minutes, then the patient may get shifted into a higher-paying
reimbursement category, meaning that the therapy group will overbill Medicare.
Similarly, if a therapy group is billing under Part B and it provides
20 minutes of therapy, but rounds up to 23 minutes so that it can bill
2 units, it will bill Medicare for an extra unit of therapy that should
not have been counted.
Kindred/Rehab Care Group Pays $125 Million
In January 2016, RehabCare Group paid $125 million to the Government to
settle allegations that it overbilled for therapy that it provided at
skilled nursing facilities. Two whistleblowers, one a physical therapist
and the other an occupational therapist, brought suit under the False
Claims Act and alerted the Government to the overbilling.
The whistleblowers detailed a number of fraudulent practices. One type
of fraud, they said, was that RehabCare was having its therapists estimate
or round up the number of minutes they spent on therapy, instead of entering
the exact number of minutes.
RehabCare contracted with over 1000 skilled nursing facilities in 44 states
to provide therapy services to patients. The SNFs then billed the Government
for the therapy. A number of SNFs also settled with the Government; the
Government said the skilled nursing facilities had turned a blind eye
to the therapy fraud.