CMS Takes Steps to Lower SNF Medicare Payment Error Rates

Sheppard Mullin Richter & Hampton LLP

Sheppard Mullin Richter & Hampton LLP

With the Medicare Comprehensive Error Rate Testing program projected error rate for skilled nursing facilities (SNFs) showing a significant increase in 2022 (15.1%, up from 7.9% in 2021), the Centers for Medicare and Medicaid Services (CMS) has instructed each of its Medicare Administrative Contractors (MACs) that review SNF Medicare claims to initiate a five-claim probe and educate medical review for each SNF in the MAC’s jurisdiction.

CMS surmises that the source of the increase in improper payments may lie with the change from resource utilization group (RUG) IV to the patient driven payment model (PDPM) and has noted that the primary root cause of SNF errors is missing documentation. 

MACs are instructed to implement the five-claim probe on a rolling basis beginning with the top 20% of SNFs that show highest risk. If any improper payments are identified, the MAC will adjust (or deny) the claim(s) and offer either widespread education or 1:1 individualized education depending on the error rate. 1:1 education will include claim specific information and allow the SNF to review the claim decision, ask questions and receive feedback.

Beginning June 5, 2023, SNFs nation-wide should be on the lookout for a prepayment probe and educate record request from the MAC and be prepared to respond within 45 days. 

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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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