Therapy policies in need of rehab

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Therapy reimbursement has to be one of the more complicated subjects in long-term care. I have a hard time understanding all the ins and outs of it myself.

The complex rules regarding billing under Medicare Part A Resource Utilization Groups (RUGs) alone are enough to give therapy experts doubts. And that's not even taking into account those pesky Medicare Part B therapy caps.

What concerns me, though, as I try to stay on top of all the new regulations and developments, is that the federal government hasn't helped make these issues any less confusing—or sensible.

That became clear as I read a recent Washington Post story about companies shifting more residents into higher Part A RUG therapy and high-acuity groups to boost their profits. 

The paper, which has been writing quite a few eye-opening pieces on long-term care lately, discussed allegations of abuse of the RUGs system by North American Health Care (a nursing home chain that has 35 facilities, primarily in California) and other companies.

North American Health Care allegedly is billing a high number of patients in the “high” category of reimbursements, according to the Post. The Service Employees International Union, which compiled data regarding the company's billing practices, alerted the federal government. An investigation is now underway.

Rep. Pete Stark (D-CA) has alleged that NAHC "may have overbilled Medicare more than $180 million through a system-wide pattern of 'upcoding,' " the Post reported.

The nursing home community generally has been more sympathetic about such billing. But news of possibly dubious upcoding should hardly come as a surprise. In a sense, the government has been asking for trouble with its therapy policies.

Here's what I mean: As the paper reported, more than 10 years ago, federal regulators created new "ultra-high" billing categories for a supposed small percentage of patients needing highly specialized care and rehabilitation.

That resulted in (surprise!) nursing homes placing more residents in these ultra-high categories. Potential overpayments totaled $542 million a year, according to federal analysts, the Post reported.

Then in 2006, regulators implemented another sweetener. It expanded the number of RUG groups to 53 from 44. That regulation provided incentives for nursing homes to bill for more expensive therapy services.

So given the government's track record on failing to curb excessive spending, should we really be stunned by the latest findings? A company taking advantage of an opportunity to make more money?

You have to wonder what the government was expecting when it created more high-reimbursement groups? That they weren't going to be used, or even exploited? That especially would be true when nursing homes already are hurting from Medicaid underfunding.

I'm not excusing the actions of anyone who puts patients in higher categories under false pretenses. Companies shouldn't game the system—no matter how easy or tempting it might be for them to do. 

But when an opportunity to make profits presents itself, people are going to take advantage of it, loopholes and all. That's human nature.  

There's no getting around the fact that therapy is a tricky business. But if the government is going to reward facilities for upgrading services, it shouldn't be surprised when they do.
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McKnight's Daily Editor's Notes features commentary on the latest in long-term care news. Entries are written by Editorial Director John O'Connor on Monday and Friday; Staff Writer Tim Mullaney on Tuesday, Editor James M. Berklan on Wednesday and Senior Editor Elizabeth Newman on Thursday.

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