Government spending on healthcare and the cost of healthcare in general has risen dramatically in the past few decades. With costs continuously escalating, the federal government has more incentive than ever before to root out the fraud and corruption in the healthcare sector that costs taxpayers billions of dollars each year.
Medicare and other government healthcare programs cover medically necessary admission to a skilled nursing facility (SNF) within 30 days of a covered inpatient hospital stay lasting no less than three days. However, in order for the SNF services to be covered, each of the qualifying requirements must be met and documented. For example, the patient must be receiving SNF care for a condition or injury that was treated or began during the qualifying inpatient hospital stay. Billing Medicare for SNF treatment that is not medically necessary or does not meet the established qualifications for coverage can be considered Medicare fraud under the False Claims Act.
Another form of Medicare fraud in skilled nursing facilities is RUG upcoding. Medicare-certified skilled nursing facilities must assess residents’ needs using the Minimum Data Set (MDS) tool. Using MDS information, Medicare then assigns one of seven categories to each patient using a computer program called the RUG III Grouper. Each of the categories has a different relative weight factor, which is used as a multiplier in determining the per diem Medicare payment that the SNF receives for that patient. Therefore, SNFs have substantial incentive to falsify or alter MDS information in order to move the patient into a higher-paying RUG category.