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SNFs, Therapy Companies, and Billing Risk

Readers, followers (Twitter, etc.) and folks who have attended one or more of my industry conference presentations know that I routinely harp on the “risk/reward” relationship between SNFs and therapy companies (the contract therapy provides).  Last year at LeadingAge’s annual conference in Dallas, the principals from Theracore Management Group and me did a full session on the differences between in-house vs. contracted therapy programs, focusing on the risk areas of contracted therapy programs in the SNF.  In a recent post on this site regarding SNF compliance issues, I covered this topic “briefly” again (http://wp.me/ptUlY-h1 ). Just today, a daily briefing from McKnight’s reinforces “why” I harp on this subject as often as I can.  The article link is here: http://www.mcknights.com/38-million-settlement-shows-nursing-homes-must-oversee-their-therapy-providers-feds-say/article/370169/?DCMP=EMC-MCK_Daily&spMailingID=9388936&spUserID=MTU4ODcyNDAzNjMS1&spJobID=380417055&spReportId=MzgwNDE3MDU1S

Summarizing: Two SNF companies contracted with a division of RehabCare.  In the process of providing therapy services through the SNFs, RehabCare provided inappropriate levels of therapy services to residents covered by Medicare.  The problem here however, is that the liability for the inappropriate care and thus the repayment is the responsibility of the SNF, not the therapy company or in this case, RehabCare.  Why?  The provider of the service under the Provider Agreement with Medicare/Federal Government is the SNF, not the therapy company.  The SNF failed to exercise the required oversight to assure that the bills it was submitting to Medicare were accurate and clinically relevant.  As the same were not in this case, the Department of Justice on behalf of CMS collected $3.8 million in inaccurate payments.  The message (and one I HAVE POINTED OUT TIME AND AGAIN) is the SNF holds all the liability with respect to Medicare billing and the services/care provided.  This cannot be shifted to any contractor – therapy or other.  If the care is determined unwarranted or inappropriate, the SNF has the duty to identify the same, correct it, and file a notice with CMS to provide repayment.  Failure to do so opens the door for Civil Monetary Penalties and other damages, in addition to the amount inappropriately billed and received (see related posts on this site with regard to False Claims Act, Fraud, etc.).

In closing, I have five reminders/recommendations for SNFs on this subject area.  These are my standard “cautions” or action items in this arena but clearly, they bear repeating.

  1. Review in detail, your contract with your therapy provider.  The standard immunity clause in the industry is for the therapy company to immunize the SNF against the cost of therapy for any claim deemed inappropriate and thus, non-paid or requiring repayment from Medicare.  This language means that the therapy company will “write-off” the cost of the therapy services associated with the claim(s) to the SNF – a mere fraction of the overall revenue lost from the denied claim ($450 per day in revenue vs. $125 per day in therapy cost, for example).  The risk is that SNF can lose hundreds per day in this kind of contractual relationship.  Require shared risk agreements between your SNF and the therapy company.  For more on this concept, drop me a note in the comment section of this post with contact information and I’ll follow-up.
  2. Establish a “triple-check” system for all therapy related Medicare claims.  Don’t ever assume that any single claim or case doesn’t require a level of review beyond the RUG determined through the MDS process. This requires the SNF and the therapy company to review each claim.
  3. Have a member or group of members on your team that are MDS Bulls**t proof.  Get current on the MDS process (trained and ideally certified) and task that person or persons with periodic reviews of bills submitted and documentation.
  4. Utilize an outside resource to conduct periodic audits of your Medicare utilization, billed RUGs, etc. plus documentation.  Again, contact me for recommendations.  A few thousand is far “cheaper” than a few million.
  5. Never, never, ever dance the “happy dance” to higher revenue PPDs or greater billed volumes.  Take the skeptic approach which requires the question of, “why us”?  The old adage of something being too good to be true is right-on.  Any utilization pattern that is generating lots of days, lots of Ultra High days, high PPDs, etc. better be justified by your case-mix (high ortho, neuro, etc.) and lots of admission traffic.  If this isn’t reality, then the risk is high that the Medicare “envelope” is being pushed – and inappropriately so.
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September 8, 2014 Posted by | Skilled Nursing | , , , , , , , , | 6 Comments