A judge bangs his gavel

An annual report outlining state fraud control activities in the nation’s Medicaid facilities portends a challenging year ahead for nursing homes.

There were more than 1,000 open investigations into patient abuse or neglect at skilled nursing facilities at the end of 2022, revealed the Health and Human Services Office of Inspector General report issued Wednesday. That was far more than in any other care setting. With 311 cases, nursing homes also led in open fraud investigations among inpatient and residential providers.

This is “not an isolated blip on the radar of MFCU fraud-fighting efforts,” one legal expert told McKnight’s Long-Term Care News Thursday. Providers should expect more enforcement activity in 2023 from Medicaid Fraud Control Units as various state and federal enforcement entities continue to ramp back up from early COVID-era delays.

“In terms of where enforcement resources are likely to be devoted, agencies typically prioritize situations where resident harm has occurred or there are clear risks to the health, safety and well-being of facility residents. I have no doubt that similar kinds of concerns will drive enforcement going forward,” said Jesse Berg, a partner with Lathrop GPM’s Minneapolis office.

“MFCUs and other enforcement agencies will also continue to concentrate on reimbursement concerns and instances of improper billing by providers. This can be daunting for providers because the complexity associated with Medicaid and Medicare payment rules.”

Berg also noted that the False Claims Act and its requirement that nursing facilities report and return overpayments within 60-days of identification “means the stakes are very high for getting things right.”

False Claims cases are not under the jurisdiction of state and territorial-level Medicaid fraud units. But the Justice Department’s own renewed commitment to post-COVID fraud enforcement and the Administration’s continued scrutiny of nursing homes adds to heightened provider concern about overzealous prosecutions and civil suits.

Overall in 2022, the Medicaid fraud units won 1,327 convictions, 381 for patient abuse and 946 for fraud. Convictions for patient abuse or neglect involved two provider types more than any others: nurse’s aides and nurses or physician assistants.

The units also won 553 civil judgments last year. On the criminal side, they recovered $416 million, with another $641 million taken on the civil side.

Total convictions in Medicaid fraud unit cases continued to increase from fiscal 2020, but remained lower than in fiscal 2019. 

Skilled nursing providers escaped some of the negativity of previous reports, with no major cases making the OIG’s narrative. Instead, the OIG noted a major win by the Texas MFCU against a hospice facility CEO, who was convicted of defrauding the Medicare and Medicaid programs. 

Among other missteps, the defendant billed Medicare and Medicaid for hospice services that were not provided, not directed by a medical professional and provided to patients not eligible for hospice care. In addition, the defendant used blank, pre-signed controlled substance prescriptions to distribute drugs without physician input.