For-profit nursing homes more likely than nonprofits to bill for higher-paying RUG levels, report finds

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Price increases, not a larger senior population, are responsible for exploding healthcare costs: ana
Price increases, not a larger senior population, are responsible for exploding healthcare costs: ana

For-profit nursing homes may be overbilling Medicare for the costliest services, a report released Thursday by the Office of Inspector General suggests.

Between 2006 and 2008, for-profit skilled nursing facilities billed 32% of resource utilization groups (RUGs) for ultra-high therapy. That compares to 18% from nonprofits and 13% from government SNFs. For-profit SNFs also had a higher use of RUGs with high activities of daily living (ADL) scores than nonprofit and government SNFs. RUGs refer to payment groups that reflect the level of care and therapy residents require. The new RUG-IV system increases the number of case-mix groups to 66 from 53.

A number of skilled nursing facilities had questionable Medicare billing in 2008, the report noted. Certain skilled nursing facilities may be routinely placing beneficiaries into higher-paying RUG categories. That occurs regardless of the beneficiaries' care and resource needs or keeping beneficiaries in Medicare Part A stays longer than necessary, the report said. The OIG makes several recommendations, including changing the current method for determining how much therapy is needed to ensure appropriate payments.