Deeper Than the Headlines: The Results of a Skilled Nursing Facility Audit

The OIG’s most recent audit of an Arkansas Skilled Nursing Facility (SNF) resulted from claim data-mining it had previously conducted. For the audit, the OIG singled out the Highlands of Little Rock West Markham (Highlands), because during a 1-year period, 92 percent of its Resource Utilization Groups (RUGs) were for ultra-high or very-high therapy, and the therapy minutes for 89 percent of those RUGs were within 10 minutes of the minimum number of minutes required to bill for ultra-high or very-high therapy.

SNF claims include RUGs that identify whether a beneficiary received therapy, and also the range of therapy minutes provided. For example, claims with a RUG that begins with “RU” or “RV” indicate that an ultra-high or very-high level of therapy was provided and that during a 7-day period, the beneficiary received 720 (ultra-high) or 500 - 719 (very-high) minutes of therapy. The higher the volume of therapy services provided, the higher the Medicare payment.

The OIG performed previous work on these kinds of claims and found that SNFs billed for higher levels of therapy RUGs than were supported. For this review, the OIG aimed to determine whether the therapy minutes associated with Highlands’s claims containing ultra-high or very-high therapy RUGs were properly supported. The OIG audit covered $2.5 million in Medicare payments for 363 claims for services provided from October 1, 2016, through September 30, 2017, at Highlands. OIG selected a stratified random sample of 100 SNF claims with payments totaling $882,159.

Additional SNF Requirements

SNF services must be ordered by a physician and provided by, or under the supervision of, skilled nursing or rehabilitation professionals, and be for a condition previously treated during an inpatient hospital stay. The beneficiary must require skilled nursing or skilled rehabilitation services (or both) on a daily basis. Daily skilled services must be services that, as a practical matter, can only be provided in a SNF, on an inpatient basis. Daily skilled services include physical, occupational, and speech therapy. SNF personnel record a beneficiary’s functional status and therapy services provided, if any, during 7-day assessment periods using a data collection tool called the Minimum Data Set (MDS) to classify Medicare beneficiaries into RUGs. The therapy minutes reported in MDS are a contributing factor in determining the RUGs for billing purposes.

According to the Centers for Medicare & Medicaid Services (CMS) guidance:

Only skilled therapy time (i.e., requires the skills, knowledge and judgment of a qualified therapist and all the requirements for skilled therapy are met . . .) shall be recorded on the MDS. In some instances, the time a resident receives certain modalities is partly skilled and partly unskilled time; only the time that is skilled may be recorded on the MDS. For example, a resident is receiving TENS (transcutaneous electrical nerve stimulation) for pain management. The portion of the treatment that is skilled, such as proper electrode placement, establishing proper pulse frequency and duration, and determining appropriate stimulation mode, shall be recorded on the MDS.

Findings and Recommendations

According to the OIG report, Highlands did not properly support all therapy minutes because it inappropriately included unskilled time for electrical stimulation therapy for 14 of the sampled claims. The errors occurred because Highlands staff did not understand that unskilled time should not be included in the MDS minutes. As a result, the SNF was overpaid $17,430 for the sampled claims. Based on the sample results, the OIG estimated that Highlands was overpaid at least $25,494 during the audit period.

The OIG recommended that the skilled nursing facility refund the $25,494 in questioned costs, and  educate staff to only include skilled minutes for MDS purposes.

The SNF did not comment on the OIG’s draft report.

Similar data mining technique, and subsequent audits like those employed by the OIG under this audit, would be a good idea if your compliance program oversees SNF services.