Fraud and Abuse: Providers Target Medicare Patients in Nursing Facilities
HEHS-96-18
Published: Jan 24, 1996. Publicly Released: Feb 07, 1996.
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Highlights
Pursuant to a congressional request, GAO reviewed allegations of fraud and abuse related to services and supplies provided to nursing facility patients, focusing on: (1) the nature and extent of such fraud and abuse exist; (2) why nursing facility patients are an attractive target for miscreants; and (3) options for reducing fraudulent billing practices.
Recommendations
Matter for Congressional Consideration
| Matter | Status | Comments |
|---|---|---|
| To curtail the practice of giving providers unauthorized access to beneficiary medical records, Congress should authorize the Health and Human Services Office of Inspector General to establish monetary penalties that could be assessed against nursing facilities that disclose information from patients' medical records not in accord with existing federal regulation. |
Closed – Not Implemented
|
Section 1177 of the Health Insurance Portability and Accountability Act of 1996 (signed by President Clinton on August 21, 1996) provides that any person who obtains individually identifiable health information relating to an individual or discloses individually identifiable health information to another person shall be fined no more than $50,000, imprisoned not more than 1 year, or both. The penalties increase if the offense was committed under false pretenses or with intent to sell, transfer, or use such information for commercial advantage, personal gain, or malicious harm. This legislative change addresses the issue in a broader context than just nursing facilities releasing data from individual medical records. |
Recommendations for Executive Action
| Agency Affected Sort descending | Recommendation | Status |
|---|---|---|
| Department of Health and Human Services | The Secretary of HHS should direct the Administrator, HCFA, to undertake demonstration projects designed to assess the relative costs and benefits of alternative ways to reimburse nursing facilities for Part B services and supplies. These alternative should include such options as unified billing by the nursing facility and some form of capped payment. |
Closed – Implemented
Options under consideration for changing Medicare reimbursement for nursing facility patients cover SNFs, not the larger population in Medicaid nursing facilities. HCFA is conducting a prospective payment demonstration project in 6 states that involves a single per-diem payment to cover routine services and nonroutine therapy in SNFs. Another project is testing managed care plans for all Medicare covered services provided to nursing facility residents at three sites. Also, the President's budget proposal includes a consolidated billing provision in which SNFs would be responsible for billing Medicare for virtually all covered services that residents receive. Although this proposal addresses Medicare covered services in SNFs only, it does directly address the accountability issue. HCFA favors adoption of the consolidated billing proposal for Medicaid nursing facilities, but did not make it part of its legislative proposals because Congress is considering Medicare and Medicaid separately.
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| Department of Health and Human Services | The Secretary of Health and Human Services (HHS) should direct the Administrator, Health Care Financing Administration (HCFA), to establish, for procedure billing codes by provider or beneficiary, thresholds for unreasonable cumulative levels or rates of increase in services and charges, and to require Medicare carriers to implement automated screens that would suspend for further review claims exceeding those thresholds. |
Closed – Implemented
HCFA agreed with the recommendation and has directed its carriers to establish utilization screens for unusual levels of utilization or questionable billing practices. In its August 1995 revisions to the Carriers Manual, HCFA described how the carrier may put screens in place to address egregious overutilization. In its April 1996 revisions, HCFA placed greater emphasis on this provision and instructs and encourages implementation of prepayment screens to address egregious billing of items or services.
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Topics
Billing proceduresClaims processingFraudHealth care programsHealth insurance cost controlMedical expense claimsMedical information systemsMedicareNursing homesProgram abusesMedical necessity