Nursing Homes Overbilling Medicare Program

Hundreds of nursing homes overcharge Medicare annually for skilled services, which adds $1.5 billion in yearly costs to the program, according to an Office of the Inspector General  report released Tuesday.

Of the facilities examined, about a quarter of Medicare bills were incorrect. Many claims involve upcoding, in which the nursing home or provider inflates the bill cost to Medicare by claiming more intensive services were done than in reality. Other cases included providing inappropriate treatments.

Bills included high-intensity work like speech therapy or occupational therapy for patients who would not actually receive benefit from the treatment. On Hospice patient received physical therapy after refusing, and Medicare was billed, according to officials.

The report suggests that the government alter methods of determining how much therapy is needed, increase and expand reviews of claims from nursing facilities, and build up the monitoring of facilities that have been known to bill incorrectly.

The report, put out by the staff of Daniel R. Levinson, inspector general of the Health and Human Services Department, looks to rein in costs at 15,000 nursing homes that provide skilled nursing.

Medicare accounted for 13.5 percent of federal spending last year, according to the Congressional Budget Office. Medicare paid between $214 and $623 per patient per day in 2009, when auditors from the Office of Inspector General sampled spending patterns of 499 claims by 245 nursing facilities nationwide.

As negotiations continue to find ways to reduce the deficit, President Obama and lawmakers search for ways to minimize the growing costs of entitlement programs.  Fraud, waste, and abuse in Medicare are ways the administration looks to cut cost. As of July, $3.7 billion in fraudulently obtained health care funds were recovered over three years.