The federal government likely overpaid about $84 million for improper skilled nursing services during a two-year period, according to a new report from the HHS Office of the Inspector General.

In the the results of its latest investigation, OIG officials noted that providers frequently violated the three-day rule, requiring that Medicare beneficiaries stay at a hospital for at least three consecutive days before being discharged to a SNF.

Of the 99 SNFs in the sample survey, investigators found that CMS improperly paid 65 for instances when the three-day rule was not met, totaling more than $481,000. Based on that sample, the OIG estimated that the federal government improperly paid more than $84 million for SNF services from 2013 to 2015.

OIG attributes the improper payments to the absence of a coordinated notification system among hospitals, patients and SNFs to ensure compliance with the three-day rule. Often, nursing facilities reported erroneous hospital stay information on their claims, and hospitals sometimes provided incorrect inpatient stay info to their post-acute partners.

While nursing homes shouldn’t have to pay back the government, the OIG said hospitals should be required to give patients a written notice of the number of inpatient days, and whether they have qualified for SNF care, according to the report.

Clifton Porter II

The findings calls into attention a long-standing issue and reinforces what providers “have known for years,” said Clifton Porter II, senior VP of government relations at the American Health Care Association. He noted that there are “significant barriers” to Medicare beneficiaries accessing such post-acute services.

Porter agreed that there needs to be a timely and formal way to share information with SNF residents as early as possible in the process.

“Ultimately, patients should not be surprised by high out-of-pocket costs simply because of bureaucratic rules that do not reflect the reality of their care needs,” Porter told McKnight’s.

Proficient policy pundit
Barbara Gay

“Payment rules should be followed,” added Barbara Gay, VP of public policy communications for LeadingAge. “We want to see more integration and information sharing among all providers who care for Medicare beneficiaries. And when issues like the one in the OIG report arise, we want hospitals as well as SNFs to be held accountable. Nursing homes do not bear the sole responsibility in this.”