OIG Uncovers Major PDPM Billing Noncompliance in Skilled Nursing Audit

The Office of Inspector General (OIG) has initiated audits into skilled nursing facilities' compliance with the Patient Driven Payment Model (PDPM), a system implemented on October 1, 2019. The initial audit focused on a New York provider and revealed significant noncompliance, finding that 99 out of 100 sampled claims were improperly billed.

Consequently, the provider is directed to repay more than $31 million. The claims under scrutiny largely stem from the COVID-19 public health emergency period, when admission and reporting guidelines were temporarily relaxed by the Centers for Medicare & Medicaid Services (CMS).

The audited facility disputes the OIG's findings, challenging the determination that most residents did not require skilled nursing care and arguing that the improper payment rate is statistically unlikely. The provider attributes some discrepancies to the unique circumstances and regulatory flexibilities during the early pandemic, which may have led to misinterpretations of the guidance by investigators.

These findings mark the first in a series of audits by the OIG examining Skilled Nursing Facility (SNF) practices under the PDPM. The OIG's focus arises from historical concerns about the susceptibility of skilled nursing billing to errors and noncompliance, potentially resulting in improper Medicare payments. Specific issues identified include inaccurate HIPPS code selection and the provision of skilled services to patients whose conditions did not meet Medicare requirements.

Industry experts advise providers to monitor these developments closely as the OIG's interpretations and audit outcomes may influence reimbursement approaches beyond the audited providers. This includes states employing PDPM Nursing Case-Mix reimbursement methodologies, potentially impacting broader SNF reimbursement structures.

Overall, the OIG's audits highlight a critical compliance and regulatory risk area within skilled nursing billing. Facilities may need to reassess their billing practices under PDPM, especially with regard to documentation and code accuracy, to mitigate repayment risks and ensure adherence to Medicare requirements amidst evolving regulatory scrutiny.