Medicare reimburses skilled nursing facilities, or SNFs, for “rehabilitation therapy” according to the amount and level of care they provide. The amount of care is measured in minutes per resident per week. The largest payments are awarded to SNFs for residents who receive “very high” or “ultra-high” therapy, respectively equal to at least 500 and 720 minutes per week.
Consumer advocates and experts have objected that this payment method incentivizes SNFs to subject some residents to excessive rehabilitation therapy to hit a higher-paying threshold. A Wall Street Journal report last August quoted current and former industry employees who said they faced financial pressure to maximize reimbursement rates for rehabilitation services. “The system really rewards high-intensity care,” David Grabowski, a Harvard University expert on nursing-home spending, told the Journal. “There are patients being treated who aren’t appropriate.”
At least 19 of those facilities, located in 11 states, administered 500 to 510 minutes of therapy to every resident billed to CMS as having received very high therapy and administered 720 to 730 minutes of therapy to every resident billed as having received ultra-high therapy. Collectively, according to the newly released CMS data, these 19 nursing homes billed Medicare for more than 2,000 residents whose therapy minutes fell into one or the other of those 10-minute bands. Not a single eligible resident treated at any of these facilities in 2013 received 511 to 719 minutes of therapy per week.
“To help ensure that patient need rather than payment incentives are driving provision of therapy services,” CMS stated in its release, “CMS is providing approval to the Medicare Fee-for-Service Recovery Auditor Contractors (RACs) to investigate this issue.”