Medicare Payment Guidelines Driving Therapy Decisions

There was an article in the Wall Street Journal today about the increasing percentage of patients on ultra high therapy in nursing homes. Over the past twelve years, the percentage of patients receiving the highest level of federal payments for nursing care has skyrocketed from under 10% in 2002 to more than 50% in 2013.

Although not conclusive, this sort of increase seems characteristic of a system fraught with Medicare fraud. With numbers like these, we expect to see more whistleblowers filing False Claims Act lawsuits (or presently filed cases becoming unsealed). There have already been at least three filed against HCR ManorCare. In April, the Justice Department announced it would intervene in the lawsuits and pursue an enforcement action against the skilled nursing facility operator.

The complaints that we have seen in cases like this one are generally pretty horrific. They recount stories of nursing homes providing lengthy therapy sessions to deteriorating patients incentivized by the Medicare billing guidelines. Nursing homes which provide more than 720 minutes of therapy per week could bill the U.S. Government’s Medicare program for an average of $559 per day.

The article also draws attention to the number of patients getting the highest level of therapy in nursing homes and then going into hospice care. Hospice payments have been made for those patients who are dying and seems a bit contradictory for the facilities to be using high levels of rehab on patients who are about to be declared beyond hope for treatment.

This is not the only area where newspapers have noted problems among health care providers. This article follows one published in the Wall Street Journal at the beginning of June noting the large percentage of long term care patients discharged by hospitals around the time of maximum earnings. The study of ventilator patients published by Health Affairs concluded that decisions are not being driven by patient need.

Instead, the even distribution of discharges before the prospective payment system was implemented soon led to a large and noticeable grouping of patients discharged on or immediately after the highest level of Medicare payments kicked in. This suggests either that patients were kept longer than medically necessary in order to fraudulently obtain additional government payments or they were released earlier than warranted to put their health at risk.

In April, President Obama signed a bill passed by Congress that would stop Medicare payment reductions to doctors and focus more on the quality of care they provide. This legislation followed up on an earlier initiative under the Affordable Care Act to reward doctors with more pay when they provide high quality care at lower cost. Until initiatives like these begin solving the problems identified in these two areas, we will have to depend on whistleblowers to inform the government about fraudulent billing practices.

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