In “Overbilling and Killing? An Examination of the Skilled Nursing Industry” (Oct. 2024), (Abstract includes a link to the full paper), John M. Griffiin (University of Texas) and Alex Priest (University of Rochester) document the increasing domination of the nursing home industry by “opportunistic” interconnected systems of nursing facilities. These systems gamed the prior Medicare Part A reimbursement system (Resource Utilization Groups) to get high reimbursement based on therapy but immediately changed their coding behavior when the new Part A reimbursement system (Patient Driven Payment Methodology), which dramatically changed the financial incentives, was implemented in October 2019.
Opportunistic nursing facility systems overbilled Medicare by $4.3 billion between October 2019 to December 2022, while reducing nurse staffing levels (providing 37% fewer registered nurse hours) and manipulating their quality measures to underreport pressure ulcers, urinary tract infections, and traumatic falls. These facilities had “lower inspection ratings, more serious health deficiencies, and more substantiated resident complaints.” The researchers calculate that residents of these nursing facility systems experienced an additional 10,200 preventable conditions, 35,000 hospitalizations, and 31,000 deaths in the three-year period.
Finding that “many SNF systems . . . simultaneously and consistently defraud Medicare while simultaneously providing subpar care” (p. 36), the researchers recommend increasing enforcement penalties (including criminal enforcement), prohibiting facilities from syphoning funds to related parties, and approving any mergers and acquisitions only “for systems that are both providing quality care to patients and within the norms of appropriate billing” (p. 37).
October 24, 2024 – T. Edelman