Industry Insights

OIG Focuses on Skilled Nursing Facility COTs

August 2015
Author:  Carol Smith

Carol Smith

Managing Consultant

Consulting

Health Care

3230 Hammons Boulevard, Suite A
P.O. Box 1824
Joplin, MO 64802-1824 (64804)

Joplin
417.624.1065

In fiscal year 2012, the Centers for Medicare & Medicaid Services (CMS) introduced several types of “unscheduled” prospective payment system assessments for skilled nursing facilities (SNF). These new assessments were intended to more quickly capture changes in beneficiaries’ therapy services, causing their resource utilization group (RUG)—and the corresponding payment rate—to increase or decrease.

According to a report delivered in 2010, the Office of Inspector General (OIG) noted CMS was paying for therapy services at a higher level than was being provided to the Medicare beneficiary in the SNF. The change of therapy (COT) assessment introduced in FY 2012 specifically instructed the SNF to report any changes in therapy services that would affect reimbursement for Medicare beneficiaries on a weekly basis during their Medicare Part A stay.

In June, the OIG released another study related to how SNFs were conducting the “use” or completion of these other Medicare-required assessments (OMRA). The OIG reviewed billing from FY 2010 through FY 2013 and “found that SNF billing for changes in therapy increased only slightly. In addition, SNFs used assessments very differently when decreasing therapy than when increasing it, costing Medicare $143 million over two years. Further, SNFs frequently used the new start-of-therapy (SOT) assessments incorrectly.”

The OIG recommended to CMS that more effective oversight be implemented to “ensure that Medicare beneficiaries are receiving the proper amount of therapy they need and that Medicare is paying appropriately.” The report further suggested CMS change its payment structure by basing reimbursement on “beneficiary characteristics” rather than the amount of therapy received. 

According to the OIG, until CMS develops this new payment structure, it should do both of the following:

  • Reduce the financial incentive SNFs receive when the level of therapy services change. One suggestion was to eliminate the SNF’s ability to choose a scheduled assessment instead of a combined COT assessment when changing therapy levels.
  • Increase claims review for facilities that use COTs more frequently than others. According to the OIG report, “CMS stated it will work to monitor SNF billing for changes in therapy and to target for education and review claims of SNFs that rarely bill for changes in therapy or that frequently use therapy assessments incorrectly.”

CMS concurred with both recommendations.

For more information on how these findings could affect your organization, contact your BKD advisor.

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