SNF Reimbursement Model Leads to False Claims

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Medical necessity is foundational to payment by government payers (Medicare, Medicaid, Tricare, FEHBP) for health care services.  If services are not medically necessary, any claims filed constitute false claims. In a recent DOJ False Claims Act (FCA) case, a civil settlement of a whistleblower action was reached in resolution of allegations that over a more than six-year period, a rehabilitation therapy contractor violated the FCA by causing the submission by 12 skilled nursing facilities (SNFs) of false claims for “medically unnecessary, unreasonable, and/or unskilled rehabilitation therapy services.”  Under the Settlement Agreement, the rehabilitation therapy provider agreed to pay $8.4 million to resolve the matter.


In order to understand the case, it is important to understand (at least at a basic level) SNF reimbursement.  This case arises during the time period 2010-2016 when SNFs were paid by Medicare under the Resource Utilization Groups (RUGs).  By way of background, RUGs are a prospective payment model which includes a system of grouping a SNF’s residents according to their clinical and functional statuses which information derives from the minimum data set (MDS) assessment for the resident.  Soon after adoption, many SNFs and rehabilitation therapy providers adjusted their model of care delivery to increase the level of reimbursement.  The methodology created an incentive to deliver more therapy than skilled nursing services since those RUGs were reimbursed at a higher rate.Continue reading

COVID Home Health Care Trend Here to Stay

With governments locking down communities to combat the COVID-19 pandemic, health care providers and practitioners scrambled to find ways to deliver care to patients at their homes or residences. CMS relaxed restrictions on providing health care via telehealth, allowing for all Medicare patients to receive care via two-way, audio and video communications, and even via telephone calls notwithstanding that patients may not reside in rural zip codes. Hospitals pivoted to providing services to patients in their homes, again using telehealth modalities or by deploying practitioners to a patient’s home. Skilled nursing facilities also adopted strategies of keeping patients in their homes, deploying needed skilled caregivers to the patient. And while home health services may have hit a lull in the first couple months of the pandemic, services provided by home health agencies soon started to soar. Home health agencies started to become busier than ever, with many providers reporting overall growth due to demand to receive services at home instead of hospitals, skilled nursing facilities or nursing homes.Continue reading

A Telehealth Break for Medicare Patients and Providers

new medicare laws for telehealth related to corona virus

new medicare laws for telehealth related to corona virusBy: David J. Davidson

Up until now, Medicare has been fairly structured in how telehealth services are reimbursed. Medicare would pay for telehealth services only if certain, very narrow criteria were met. These rules covered the patient, the patient’s location, the provider, the types of services rendered, the telehealth equipment used and the way the services are coded. Those rules can now be relaxed under recent federal legislation.

On March 6, 2020, President Trump signed the Coronavirus Preparedness and Response Supplemental Appropriations Act of 2020 into law. That law relaxes the current Medicare criteria, in order to expand the use of telehealth as a resource against COVID-19. Pursuant to this law, the Secretary of HHS has the authority to waive the “site” requirements for telehealth services provided to Medicare beneficiaries who are located in an identified “Emergency Area” during an “Emergency Period.” Since the whole country is currently is experiencing a public health emergency, as declared by both the President and the Secretary of HHS, the Emergency Period and Emergency Area requirements are met on a nation-wide basis.

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Medicare Open Enrollment – What Physicians Need to Know

With special thanks to Dr. Brent Schillinger

The open enrollment period for Medicare Advantage plans runs from October 15 through December 7, 2012.  That is precisely the reason why every form of communication—– be it internet, television, radio or your mailbox is loaded with recruitment messages from the big and not so big companies.  Medicare Advantage Plans is the contemporary name given to the old Medicare HMO insurance programs.  The difference is that today the marketing is particularly intense and slick because under current federal legislation, passed several presidential administrations back, the profits for the commercial insurers is huge.  When the first Medicare HMOs appeared on the scene, they were providing care to seniors at an average cost savings (to the federal Medicare budget) of 5% less than traditional Medicare.  Today, they provide care at upwards of 115% of the average cost per patient per year for traditional Medicare.

The plans market themselves to seniors offering more services for less money than a person would have to pay under traditional Medicare.  In most cases there are savings in terms of reduced monthly out of pocket costs.  And there may be extra services I such as a gym membership or a low-priced pair of eyeglasses.  But there are many tradeoffs for patients tradeoffs that are not referenced in the marketing material.  Patients are limited to doctors who are specifically contracted with the plan, specialist referrals are generally rationed, and it may be difficult, should a person desire care in a specific hospital if that facility is not contracted.

Seniors have options. They can choose from many different Medicare Advantage Plans and probably save some money, but they  need to understand that they are giving up many of the choices they have with the other option, keeping traditional Medicare and adding supplemental medical and pharmaceutical insurance. Identified problems include:

  1. Care can cost more than  it would under original Medicare
  2. Private plans may not be stable and may suddenly cease coverage
  3. Members may experience difficulty in getting emergency care
  4. Continuity of care may be broken if the plan drops a provider
  5. Members have to follow plan rules to get covered,
  6. Members are restricted in their choices of doctors, hospitals, and other providers
  7. It can be difficult to get care away from home
  8. The extra benefits offered often turn out to be less than promised.

Physicians will be approached by patients about the confusion in the choice of the Medicare Advantage plans vs. traditional Medicare.  As your patients’ advocate you should become knowledgeable about the different plans so you can give reasonable guidance to your patients.   This would also be a good time to review your contracts and reimbursement schedules as well the ability to obtain authorizations for prescription drugs and specialist referrals.

From an economic point of view, most physicians, in our area who participate in these Medicare Advantage plans receive reimbursements that are substantially lower than traditional Medicare.   Take the United Health Care product for example.  While United is paid by the government upwards of 115% of the average traditional Medicare cost, many specialists receive less than 70% of the normal Medicare allowable.   Some of the Blue Cross plans work with a number of tightly restricted capitated networks so patients may not be able to see the doctor of their choice, individual physicians may not be able to join these restricted networks,  and the same time the reimbursements through the capitated networks are pathetically low, often less than half of the traditional Medicare allowable.

Doctors need to take all of these factors into consideration in order to give their patients good advice.  For additional information and patient resources you can visit or email Dr. Schillinger at [email protected].



Senate OKs Two-Month Freeze on Doc Pay

Wrapping up legislative business before the Christmas recess, the Senate on Saturday approved legislation that freezes Medicare payments to physicians until Feb. 29.

In a vote of 89-10, the Senate passed an amended version of the House payroll tax bill that the lower chamber approved earlier this week. The legislation from Senate Majority Leader Harry Reid (D-Nev.) and Minority Leader Mitch McConnell (R-Ky.) (PDF)—which extends a payroll tax holiday for two months—provides no payment update in Medicare reimbursement levels for the nation’s doctors in January and February 2012, which prevents a 27.4% cut that was scheduled to tax effect on Jan. 1.

Meanwhile, the bill also extends for two months a host of Medicare and health-related provisions that would otherwise have expired by year’s end. These measures include reimbursement raises for ambulance services, mental health reimbursements, the Qualifying Individual (QI) program, the outpatient “hold harmless” provision, and transitional medical assistance, which provides Medicaid benefits for low-income families who are transitioning from welfare to work.

In a statement, American Medical Association President Dr. Peter Carmel said waiting until the final week of the legislative session to address an issue Congress knew about all year is no way to conduct business for the country.

Read more: Senate OKs two-month freeze on doc pay – Healthcare business news and research | Modern Healthcare