Medicare pays for therapy because it can foster healing and rehabilitation
for sick patients. But can there be too much of a good thing?
The answer, unfortunately, is yes. Medicare pays skilled nursing facilities
(SNFs) based on the amount of medical services they provide to patients.
Some SNFs are trying to pump up their profits by providing intensive therapy
that a patient does not need — and then sticking Medicare with the
bill. Sometimes the extra therapy can even be harmful to the patient.
Short of intensively auditing every, single SNF claim, Medicare has no
way of ferreting out this fraud by itself. But a recent case shows how
whistleblowers can help Medicare figure out when SNFs are providing more
therapy than a patient needs. Two whistleblowers helped the government
get back $125 million from RehabCare, a company that contracted to provide
therapy to SNF patients.
OIG Report Says ¼ of Claims Submitted by SNFs Are “In Error”
Unfortunately, SNFs billing for ultrahigh levels of therapy is probably
costing Medicare untold millions of dollars. Medicare’s Office of
Inspector General looked at a set of claims from 2009, and concluded that
¼ of all the claims it reviewed had been
billed in error. The majority of these bills were upcoded, which means that the SNF charged
for an expensive service when it either provided or could have provided
a less expensive service instead. Yet other claims were for services that
did not meet coverage requirements, meaning that Medicare also paid too
much for those claims.
Wow! Imagine the small business that sent out a quarter of its bills in
error, asking customers to pay more than they owed. Think it would stay
in business long?
OIG says that most of the upcoded claims were for ultrahigh therapy, when
in fact the patient did not need the most expensive therapy level.
Two Case Studies: Whistleblowers Help Stop SNFs Charging for Excessive Therapy
* In 2016, two whistleblowers earned $24 million for helping the government
recovered $125 million from a company that provided therapy in skilled
nursing facilities. RehabCare Group and its parent company, Kindred Healthcare,
were accused of billing for ultrahigh levels of therapy for patients who
did not need it.
The company was supposed to individually evaluate each patient to figure
out what level of therapy that particular patient would need. Instead,
the government says that RehabCare presumed that patients would be put
into the ultrahigh therapy level unless it had proof the patient could
not tolerate that amount of therapy.
The government found out about the excessive billing from two whistleblowers
who were former employees of RehabCare, one a physical therapist and former
rehabilitation manager, and the other an occupational therapist.
* Thanks to two whistleblowers, the government recovered $145 million from
Life Care Centers of America and its owner. The whistleblowers were paid
$29 million for their help.
The allegations were heartbreaking, proving that excessive therapy can
be bad for patients as well as pocketbooks. According to the Department
of Justice, while working at Life Care Centers of Columbia, South Carolina,
RehabCare gave unnecessary therapy to a frail, lethargic, 80-year-old
man. The man had to have help to support his head and could not open his
eyes — yet Life Care’s therapists put him in a standing frame.
In fact, the occupational and physical therapist recorded that they EACH
gave him 42 minutes of standing therapy. The extra minutes of therapy
allowed Life Care to bill at the “ultra high” rate —
but the patient died five days later.
The government said that the South Carolina facility also billed Medicare
for group therapy standing exercises for a man who was unable to stand
and in fact required the maximum level of assistance to simply sit up.