OIG: Higher than average nursing home payments might indicate fraud

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Nursing homes will be subject to escrow for all civil monetary penalties, CMS announces
Nursing homes will be subject to escrow for all civil monetary penalties, CMS announces

Nursing homes that collect daily Medicare Part B payments that are more than three times the national average should be closely monitored for possible fraud and abuse, according to a new Office of the Inspector General report that was issued Friday.

The OIG found that in situations where Medicare won't pay for a nursing home stay, but will pay for certain procedures, medications, medical equipment and other supplies, some nursing homes were being paid three times the national average.

“For example, at one nursing home with an average daily payment of $40, there were 23 beneficiaries who received DMEPOS (durable medical equipment, prosthetics, orthotics, and supplies),” the report wrote. “Of those, nine had average daily payments ranging from $34 to $160 — higher than the national average of $3.39. Such high average daily payments lend themselves to concerns of potential fraud, waste and abuse.”

The OIG says it will conduct further in-depth analyses focusing on service type. It also encourages the Centers for Medicare & Medicaid Services to continue to use fraud detection services such as Medicare Administrative Contractors and Recovery Audit Contractors. The report was issued directly in final form because it contains no recommendations. Comments or questions about the report (reference number OEI-06-07-00580) should be submitted within 60 days, officials said.

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