INSPECTOR GENERAL FINDS THAT

INSPECTOR GENERAL FINDS THAT, IN 1999, MEDICARE PAID FOR SERVICES UNDER MEDICARE PART B THAT WERE COVERED UNDER PART A=S PROSPECTIVE PAYMENT SYSTEM FOR SKILLED NURSING FACILITIES

Following up a pilot review on duplicate billing under the Medicare program, the Office of Inspector General reported that Medicare paid twice for services provided to residents of skilled nursing facilities (SNFs). Although the consolidated billing provisions of the prospective payment system (PPS) make SNFs responsible for billing Medicare for most services provided to residents during a Part A-covered stay, some suppliers nevertheless billed Medicare carriers under Part B. The pilot review found that in more than one-third of SNF PPS reviews they conducted, Medicare paid for claims for beneficiaries under both Part A and Part B.

Based on a nationwide computer match and a Ajudgmental sample@ of 65 claims by six skilled nursing facilities in Connecticut and Massachusetts and 71 associated Part B services, Review of Potential Improper Payments Made by Medicare Part B for Services Covered Under the Part A Skilled Nursing Facility Prospective Payment System (A-01-00-00538, Jun. 5, 2001) identified a Apotential $47.6 million@ in improper payments under Part B for services that were included in (and paid for by) the consolidated billing provisions of the prospective payment system under Part A. The Inspector General found that improper payments were made Abecause HCFA has not yet established edits within the CWF [Common Working File] and contractors= claims processing systems to detect improperly billed claims and prevent payments.@ Report 3. The services most vulnerable to improper payments under Part B were, from highest to lowest overpayments, outpatient hospital department, ambulance, laboratory, radiology, and durable medical equipment.

The report and recommendations focused on suppliers= and contractors= conduct, but did not address skilled nursing facilities= conduct. Skilled nursing facilities should be aware of the supplies being provided to residents. One example discussed in the report involved a DME supplier who billed the DMERC $1644 for enteral nutrition supplied to a SNF resident during a three and a half month period. Quite clearly, the facility had to be aware that the resident was receiving enteral nutrition. The OIG report discusses recouping improper payments from suppliers, but has no recommendations about training SNFs or requiring them to pay suppliers out of their Part A reimbursement.

The report is available at http://www.hhs.gov/progorg/oas/reports/region1/10000538.pdf. For further information, contact Toby Edelman, Washington, DC office.