OIG Clears Nursing Home with 93% Very High, Ultra-High Therapy After Review

In an unusual outcome, the federal government’s top health care watchdog arm publicly cleared a nursing home it suspected of providing unnecessarily intensive therapy services.

The Department of Health and Human Services (HHS) this week determined that the skilled nursing facility at an Oklahoma continuing care retirement community (CCRC) properly supported all its therapy minutes associated with the highest levels of Medicare reimbursement.

The finding was notable, given that previous reports from the HHS Office of Inspector General (OIG), have found that SNFs billed for higher levels of therapy Resource Utilization Groups (RUGs) than were supported by documentation, officials observed in the report, initially published on June 4 and posted on the OIG website this week.


The OIG chose the SNF at Epworth Villa Retirement Community, located in Oklahoma City, because more than 93% of its RUGs were for “ultra-high” or “very high” therapy levels. In addition, the therapy minutes for 94% of those RUGs were within 10 minutes of the minimum amount of minutes needed to bill for those levels.

Medicare payment increases with the volume of therapy services provided under the RUG system. In the case of Epworth, the OIG wanted to determine whether the CCRC’s SNF claims of “ultra-high” or “very high” therapy RUGs were properly supported.

The review covered approximately $4.43 million in Medicare payments for 710 SNF claims for services provided from July 1, 2016, through June 30, 2017. The OIG chose a stratified random sample of 100 SNF claims with payments totaling $751,782, and used a medical review contractor to go over each seven-day assessment period associated with the sample of claims to ensure support of minutes in the records.


“Epworth Villa’s therapy minutes associated with ultra high and very high RUGs were properly supported,” the review concluded. “Accordingly, this report contains no recommendations.”

The review of internal controls was limited to those applicable to ensuring the support of SNF therapy claims, and the OIG did not review Epworth Villa’s overall control structure.

A report from the OIG from March of last year found that more than 60% of outpatient therapy claims filed over a six-month period didn’t meet Medicare’s requirements, and other reports zeroing in on other areas of care — ranging from durable medical equipment to violations of the three-day hospital stay rule — have also reported millions in improper payments.

The structure of the new Patient-Driven Payment Model (PDPM) for Medicare reimbursements was in part designed to reduce fraud by shifting incentives from therapy volume to resident needs; the OIG has routinely gone after providers accused of artificially inflating therapy hours for financial gain under the False Claims Act, leading to multiple million-dollar settlements.

“PDPM adjusts the SNF per diem payments to reflect varying costs throughout the stay and incorporate safeguards against potential financial incentives to ensure that beneficiaries receive care consistent with their unique needs and goals,” the Centers for Medicare & Medicaid Services (CMS) noted when announcing the model last year.

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