Pinnacle Multicare Nursing and Rehabilitation Center received overpayments exceeding $31.2 million, as a result of noncompliance with Medicare requirements under the Payment Driven Payment Model (PDPM), a federal watchdog group estimated in a report posted Tuesday.

However, Pinnacle is countering that coding guidelines were misapplied and the audit failed to consider waivers in place during the pandemic.

Of sampled claims reviewed by the Office of the Inspector General (OIG) for services provided in 2020 and 2021, the 480-bed Bronx facility was noncompliant for 99 of 100, totaling $1.1 million for these cases alone.

“Data analytics indicated that Pinnacle had a significant increase in Medicare Part A reimbursement for skilled nursing services under the PDPM as compared to the prior RUG payment model,” OIG reported.

Pinnacle is one of the largest nursing homes in New York City and serves as a critical safety-net facility for the Bronx and surrounding boroughs.

Medical records didn’t support that patients were assigned the correct reimbursement rate code, the agency said, and that some patients received skilled nursing care that didn’t require it, according to Medicare billing. Services didn’t meet documentation requirements either, OIG found.

Pinnacle’s clinical and billing staff didn’t follow procedures to properly assign reimbursement code rates in accordance with Medicare requirements in many cases, or provide sufficient clinical review to verify that enrollees required skilled nursing services.

Procedures weren’t followed to ensure Medicare documentation requirements were always followed either.

The agency suggested Pinnacle refund $31.2 million for claims that didn’t meet Medicare requirements, as well as conduct one or more internal audits or investigations for claims before and after OIG’s audit period.

Additional training was also suggested for clinical and billing staff on procedures to properly claim skilled nursing services.

Pinnacle pushes back

Pinnacle didn’t agree with any of OIG’s recommendations, claiming the repayment would bankrupt the facility.

“This is not a theoretical concern. A forced repayment of this magnitude would result in mass layoffs, forced discharge of residents, and likely closure of the facility,” Pinnacle said in response to the report.

Pinnacle provided clinical rebuttals to two examples in the report, stating that OIG’s independent medical reviewer misapplied coding guidelines and the audit failed to consider waivers in place during the pandemic.

“OIG’s audit retroactively applies normal regulatory expectations to a time when providers were instructed explicitly to prioritize care over compliance,” Pinnacle said in its response to OIG. “To disregard these federal and state-level waivers is to ignore the law in place at the time and unfairly penalize providers for saving lives and maintaining daily operations under extraordinary conditions.”

Pinnacle went on to say that the error rate in the report was “statistically implausible,” and called out the medical review contractor’s employees for their lack of knowledge, experience and limitations.

“To suggest that nearly all skilled nursing claims were in error – without considering the [public health emergency] PHE conditions – is not only irrational but could evidence confirmation bias,” Pinnacle said.