The bad news: Medicare is losing $1.5 billion a year to fraud and “errors” at skilled nursing facilities (SNFs), according to the Office of the Inspector General for Health and Human Services.

The good news: if you know about SNF fraud — you can do something about it. And whistleblowers who report SNF fraud can get 15% to 30% of what the Government gets back.

I am a lawyer who is passionate about fighting for whistleblowers who are sick of fraud. We file suit under the False Claims Act to STOP fraud. Contact us today to see whether we can help you.

How Does SNF Fraud Work?

When whistleblowers call me, they already know that they are being asked to do something wrong, but they are not always sure why. An occupational therapist may wonder why her boss tells her to write down 8 minutes of therapy instead of 7; a speech therapist may be frustrated when her employer tries to force her to add e-stim for a patient who cannot get any benefit from it; a physical therapist may be puzzled about why the SNF wants her to give attended e-stim, when unattended would suffice; a nurse may puzzle over why virtually every patient is being given a certain drug.

To help my clients understand more about the “why” of the fraud, I have written a series of blog posts about how SNF billing works and how SNFs cheat. You can check the posts out on my blog.

What are some common ways that SNFs cheat Medicare?

You have to give the SNFs some credit — they have come up with some pretty creative ways to pick Medicare’s pockets. Here are just a few examples of the types of fraud that you may see if you work for a skilled nursing facility that is cheating Medicare:

(1) Adding Extra Minutes and Upcoding the RUG. If your SNF is trying to get you to increase the number of minutes of therapy, chances are the company is trying to increase the amount it bills Medicare. Medicare groups patients into tiers that relate to how much care they need, and pays the same amount for all of the patients in a certain tier. Under Part A, SNFs fill out MDS assessments for every patient based on the number of minutes of treatment. If the SNF can add extra minutes of therapy — e-stim, say, or therapeutic exercises — the SNF can push the patient into the higher reimbursement tier. A matter of a minute can take a patient from the “Very High” category to the “Ultra High” category — and add hundreds of dollars to how much Medicare pays the the SNF for taking care of the patient. Upcoding works a little differently under Part B, but it operates under the same general principle: adding minutes to increase pay.

(2) Excessive Therapy. Some SNFs will pile extra therapy minutes into a patient’s treatment in order to be able to bill more. If your SNF wants you to give therapy that the patient does not need, you already know that the patient is not being helped. In some situations, excessive therapy can even hurt a patient. In a particularly inhumane case, Life Care Centers was accused of placing a lethargic, hard-to-arouse, 80-year-old patient into a standing frame, even though the patient had to have help to support his head and could not open his eyes. In fact, not one but two therapies did that to the man for over half an hour each. Five days later, the man died.

(3) Unnecessary Services. If a patient does not need services, it makes no sense to spend Medicare’s limited resources on providing the services. DOJ intervened in a case brought by a whistleblower against HCR ManorCare, a chain with skilled nursing facilities in 30 states. Three whistleblowers accused the company of providing medically unreasonable and unnecessary services. According to DOJ, Manor Care set revenue goals that had nothing to do with the actual needs of individual patients, and threatened to fire managers and therapists who did not hit the goals. If your SNF is pressuring you to add services you know the patient does not need, you may be able to bring a False Claims Act lawsuit.

(4) Claiming Unskilled Services Are “Skilled”. Medicare will only pay for services that involve a medical skill. If a therapist sets up exercises for a patient, she is using a skill. But if she walks away to treat other patients while the first patient is doing his exercises, the therapist is no longer using her skill for the first patient, and the minutes should not be counted. A therapist is not using a skill that can be billed to Medicare if she simply stands around while a patient takes a trip to the bathroom; the therapist is supposed to go work with other patients. Thanks to a physical therapist and an occupational therapist, in 2016 Kindred RehabCare paid more than $100 million for several types of fraud, including billing Medicare for services that were not “skilled”. The therapists filed suit as whistleblowers under the False Claims Act and split nearly $24 million for their anti-fraud work.

(5) Overprescribing Drugs or Prescribing Particular Drugs. PharMerica paid $31.5 million to settle allegations that it dispensed oxycodone, fentanyl and other controlled drugs for patients in skilled nursing facilities without first obtaining a written prescription from a treating physician. SNFs also have been accused of overprescribing particular drugs, typically because the SNF profits in some way from prescribing large amounts of the drug. If you know about a SNF facility that is prescribing drugs that patients do not really need or are not authorized to get, you may be wondering why. You may also be suspicious if you see that large numbers of patients are receiving a particular drug. The answer may be that the drug company is pushing for more profits or that the SNF is getting a rebate or benefit from the pharmaceutical manufacturer.

(6) Unbundling. SNFs are paid a “bundled” rate for the services they provide. In other words, instead of paying for each individual service that a SNF provides, Medicare pays one, single rate for a all the treatment a patient receives. With “unbundling”, a provider tries to increase the reimbursement by billing Medicare separately for a particular item that ought to be part of the package deal. For example, DynaSplint Systems, Inc., had to reimburse the Government $10.3 million for billing for splints it had provided to SNF patients. DOJ said that DynaSplint pretended that the splints were being provided to the patients while they were in other settings, such as at their homes, so Medicare would not realize that it was being double charged.

(7) Billing for Services that Are Not Provided. Perhaps the simplest type of fraud is when a provider bills for a service that it never actually provides. If you know about a SNF that is billing for services or equipment that patients are not getting, you can file suit under the False Claims Act to stop that sort of costly fraud.

(8) Attended vs. Unattended E-Stim. In attended e-stim, the therapist stays with the patient throughout the treatment, working with the patient and manipulating the equipment. Generally patients do not need that sort of focused, one-on-one attention from the therapist, however. Usually a therapist can set up e-stim and then leave the room and move on to another patient while the first patient completes the treatment. If your SNF wants you to increase attended e-stim, it’s because Medicare pays more for attended e-stim than it does for unattended e-stim. If a SNF pushes you to use attended e-stim when unattended e-stim would work just as well, that’s fraud.

(9) Stark Act and Anti-Kickback Statute Violations. Recognizing that kickbacks will ultimately inflate the costs of healthcare, Congress has made it illegal to pay anything of value in order to get a referral in the healthcare business. In order to get a competitive advantage, some SNFs offer bribes to get patients. The definition of bribe is anything of value, which could range from cash to free trips to ultra-cheap rent on a physician’s office. Another law forbids a physician from referring business to an entity in which he has a financial interest. If you can stop this sort of fraud, you not only can get a piece of the government’s recovery, you also can get the satisfaction of guarding the integrity of the medical system so that patients can continue to have faith in their medical providers.

(10) Worthless Services. Sometimes the services a SNF provides are so bad that they are worthless. I find that my clients who know about this sort of fraud are really worried about their patients, who are not getting adequate care. Extendicare paid the Government $38 million to settle allegations that it did not keep a sufficient number of nurses to care for its residents. The government also said that the company did not take follow medical protocols for preventing pressure ulcers or falls. According to the allegations, some residents did not even get adequate catheter care. If you can blow the whistle on this type of fraud, you may save a life.

If you know about SNF fraud, contact us now at the law firmPassionate About Helping Whistleblowers Stop SNF Fraud.