Skilled Nursing Improper Payments Double Medicare Average; Compliance Vital

Skilled nursing facilities (SNFs) face improper payment rates more than double the overall Medicare rate, highlighting the critical importance of stringent documentation and validation processes to avoid allegations of fraud. While many improper payments stem from errors, failure to maintain robust internal controls increases the risk of audits, payment clawbacks, and potential False Claims Act investigations. Experts emphasize the distinction between unintentional errors and fraud, noting that high error rates often trigger deeper scrutiny to determine if improper billing is deliberate or accidental. Medicare contractors, including MACs, RACs, and the Comprehensive Error Rate Testing Program, focus audits on whether nursing and therapy services billed as Medicare claims are reasonable, necessary, delivered in the correct setting, and properly coded with appropriate supporting documentation. Failure to promptly and comprehensively respond to record requests can escalate reviews from limited samples to full pre-payment audits, which can severely impact nursing home cash flow. In 2024, skilled nursing improper payment rates reached 17.2%, accounting for $5.9 billion in improper payments, double the Medicare program-wide rate of 7.6%. Documentation deficiencies, especially relating to case mix groupings, HIPPS levels, and missing physician orders, are among the largest contributors to improper payments. To address these challenges, facilities are advised to implement interdisciplinary plans involving MDS coordinators and therapy managers to collect and verify documentation accurately, using compliance programs, internal auditing, and external voluntary reviews. Adherence to guidance from the Office of Inspector General (OIG) on compliance programs and proactive quality assurance processes, such as health Triple Checks, can mitigate risks related to coding inaccuracies and documentation gaps. The government emphasizes the risk of "reckless disregard" in claims submission, meaning facilities without effective controls and compliance oversight increase vulnerability to fraud allegations even without intent to defraud. Nursing providers must prioritize comprehensive compliance frameworks to navigate the complex Medicare landscape and safeguard against costly recoupments and legal consequences.