OIG 2014 Work Plan – Skilled Nursing Facilities


Recently, the Department of Health and Human Services Office of the Inspector General (the “OIG”) released its work plan for 2014. The work plan provides stakeholders in the health care industry with a broad overview of the OIG’s activities in the coming year as they relate to its enforcement priorities and issues it will review and evaluate during the year. This article is one in a series of articles that will outline the OIG’s activities, as discussed in the 2014 work plan, for a specific industry sector – skilled nursing facilities.

For 2014, the OIG’s activities relating to skilled nursing facilities are focused on billing and payments and quality of care.

Billing and Payments

Medicare Part A Billing. In 2009, an OIG report concluded that skilled nursing facilities billed 25% of all claims in error, resulting in $1.5 billion in inappropriate Medicare payments. Prior OIG investigations also discovered that skilled nursing facilities routinely billed for the highest level of therapy, even in cases where the patients’ characteristics remained largely unchanged. As a result, the 2014 work plan indicates that the OIG plans to carefully scrutinize Medicare Part A billing by skilled nursing facilities, including variation in billing practices among SNFs. The OIG intends to issue a report later in FY 2014 to report its findings in this regard.

Questionable Billing for Part B Services. The extent to which ancillary providers bill Medicare Part B for services provided to residents in non-Part A stays will again be a continuing focus area for the OIG. Podiatry services will be a particular area of focus for 2014, along with stays during which benefits are exhausted, and failure to meet the 3-day prior inpatient stay requirement.

Quality of Care

State Agency Verification of Deficiency Corrections. A prior OIG examination concluded that one state survey agency did not always appropriately verify the correction of deficiencies identified during survey investigations. Federal regulations require nursing homes to submit plans of correction to address identified deficiencies. In turn, CMS requires state survey agencies to verify the correction of identified deficiencies. As a result, the OIG will examine whether state survey agencies are appropriately verifying plans of correction. The OIG intends to issue a report later in FY 2014 to report its findings in this regard.

Background Checks. Previous OIG reports concluded that a large number of skilled nursing facilities employ at least one individual with a criminal record. As such, the OIG intends to monitor the effectiveness of the current program for national background checks. The results of this analysis could lead to additional investigations and/or rulemaking. This item is a work in progress, however, the results of which are not expected to be released for several more years.

Hospitalizations of Nursing Home Residents. Hospitalization and rehospitalization of nursing home residents is costly to the Medicare program, and may indicate quality of care problems. In addition, a 2011 OIG investigation concluded that 25% of nursing home residents were hospitalized at some point during the year. As a result, the OIG intends to investigate hospitalization rates, particularly with respect to conditions thought to be manageable or preventable.

Skilled nursing facility providers should be aware of each of the above areas of inquiry in the OIG’s 2014 work plan, as OIG work plan priorities often result in additional enforcement actions, significant change in CMS policy, or both.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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