Harmony Healthcare Blog

What The OIG is Saying About Medicare Part A SNF Billing

Posted by The Harmony Team on Wed, Mar 23, 2011

Edited by Kris Mastrangelo


The Medicare Part A SNF benefit covers skilled nursing care, therapy services, and other services for Medicare beneficiaries. In recent years, the Office of Inspector General (OIG) has identified a number of problems with SNF billing for Medicare Part A payments. Notably, an OIG report found that 26 percent of claims submitted by SNFs were not supported by the medical record, representing over $500 million in potential over payments. Further, the Medicare Payment Advisory Commission has raised concerns about SNFs' improperly billing for therapy to obtain additional Medicare payments. 

The OIG conducted a study based on an analysis of Medicare Part A claims from 2006 and 2008 and on data from the Online Survey, Certification and Reporting system.


Findings from this study include the following:


  • From 2006 to 2008, SNFs increasingly billed for higher paying RUGs, even though beneficiary characteristics remained largely unchanged. From 2006 to 2008, the percentage of RUGs for ultra high therapy increased from 17 to 28 percent. The percentage of RUGs with high ADL scores increased from 30 percent in 2006 to 34 percent in 2008. Even though SNFs significantly increased their billing for these higher paying RUGs, beneficiaries' ages and diagnoses at admission were largely unchanged from 2006 to 2008.
  • A number of SNFs had questionable billing in 2008. Some SNFs billed much more frequently for higher paying RUGs than other SNFs. Some SNFs also had unusually long average lengths of stay compared to those of other SNFs. These billing patterns indicate that certain SNFs may be routinely placing beneficiaries into higher paying RUGs regardless of the beneficiaries' care and resource needs or keeping beneficiaries in Part A stays longer than necessary.

What did the OIG recommend to Medicare?

  • Vigilantly monitor overall payments to SNFs and adjust RUG rates annually.
  • CMS should consider several options to ensure that the amount of therapy paid for by Medicare accurately reflects beneficiaries' needs.
  • CMS should develop thresholds for the indicators and instruct its contractors to conduct additional reviews of SNFs that exceed them.
  • CMS should consider requiring each SNF to use the beneficiary's hospital diagnosis and other information from the hospital stay to better predict the beneficiary's therapy needs.


CMS concurred with three of the four recommendations.


What does this mean for your Medicare Part A program?  The SNF setting is now under strict scrutiny from several auditing agencies including the Medicare Contractors.  The interdisciplinary team must be acutely aware of the risk involved with having poor, illegible or absent documentation to support the intensity and daily skilled care delivered in the SNF.  Regularly scheduled peer review and external audits are imperative to insulate the generated revenue from Medicare Part A as well as Medicare Part B.


See How Harmony Can Help with your Audit or Prevent Denials


Medicare Part A

Tags: Medicare Part A, CMS, OIG, SNF Billing

Subscribe to The HHI Blog

Posts by Topic

see all
New Call-to-action

Stay connected!