Knowledge Center

  • RSS Feed
  • Contact
  • Print


Impact of the 2014 Office of the Inspector General Work Plan on the Nursing Home Industry

July 18, 2014

George W. Thomas, CPA, CHFP

The Department of Health and Human Services' Office of Inspector General (OIG) has issued its 2014 Work Plan, and five items have been identified as areas of review for nursing homes. The items identified include billing, administrative and quality of care issues. The five items (directly taken from the OIG's work plan) are identified below:

Medicare Part A Billing by Skilled Nursing Facilities (SNF)

Policies and Practices—We will describe SNF billing practices in selected years and will describe variation in billing among SNFs in those years.

Context—Prior OIG work found that SNFs increasingly billed for the highest level of therapy even though beneficiary characteristics remained largely unchanged. OIG also found that SNFs billed one-quarter of all 2009 claims in error, resulting in $1.5 billion in inappropriate Medicare payments. The Center for Medicare and Medicaid Services (CMS) has made substantial changes to how SNFs bill for services for Medicare Part A stays.

Questionable Billing Patterns for Part B Services During Nursing Home Stays

Billing and Payments—We will identify questionable billing patterns associated with nursing homes and Medicare providers for Part B services provided to nursing home residents during stays not paid under Part A (for example, stays during which benefits are exhausted or the three day prior inpatient stay requirement is not met). A series of studies will examine several broad categories of services, such as foot care.

Context—Congress explicitly directed OIG to monitor Part B billing for abuse during non-Part A stays.

Hospitalizations of Nursing Home Residents for Manageable and Preventable Conditions

Quality of Care and Safety—We will determine the extent to which Medicare beneficiaries residing in nursing homes are hospitalized as a result of conditions thought to be manageable or preventable in the nursing home setting.

Context—A 2013 OIG review found that 25 percent of Medicare beneficiaries were hospitalized for any reason in FY 2011. Hospitalizations of nursing home residents are costly to Medicare and may indicate quality-of-care problems in the nursing homes.

State Agency Verification of Deficiency Corrections

Quality of Care and Safety—We will determine whether state survey agencies verified correction plans for deficiencies identified during nursing home recertification surveys.

Context—A prior OIG review found that one state survey agency did not always verify that nursing homes corrected deficiencies identified during surveys in accordance with federal requirements. Federal regulations require nursing homes to submit correction plans to the state survey agency or CMS for deficiencies identified during surveys (42 CFR § 488.402(d)). CMS requires State survey agencies to verify the correction of identified deficiencies through onsite reviews or by obtaining other evidence of correction.

Program for National Background Checks for Long-Term Care Employees

Quality of Care and Safety—We will review the procedures implemented by participating states for long-term care facilities or providers to conduct background checks on prospective employees and providers who would have direct access to patients and determine the costs of conducting background checks. We will determine the outcomes of the states' programs and determine whether the programs led to any unintended consequences.

Context—This mandated work is ongoing and will be issued at the program's conclusion, as required.

Implications for Your Nursing Home

Most of these items have been identified by the OIG or CMS previously. This is consistent with prior behavior of the departments and should be concerning for providers as, in prior cases, multiple identification of specific items has subsequently resulted in investigations of specific providers.

Facilities should consider a review of these areas as part of its compliance program to reduce the risk of being chosen for an investigation. The indicated billing issues related to Part A and Part B would fit in well as part of your facility’s monitoring and auditing functions of the compliance plan. The background checks would also mirror one of the steps required in your compliance function. The re-hospitalization item should be on all facilities’ radar as they begin to explore Accountable Care Organization relationships and bundled care arrangements, as this will be a key component of your success in these arrangements. These expectations of the OIG should be used as an opportunity to make your organization stronger and more successful to survive in the new world of long-term care.

George W. Thomas, CPA, is a principal with BlumShapiro, the largest regional accounting, tax and business consulting firm based in New England, with offices in Connecticut, Massachusetts and Rhode Island. The firm, with nearly 400 professionals and staff, offers a diversity of services which includes auditing, accounting, tax and business advisory services. In addition, BlumShapiro provides a variety of specialized consulting services such as succession and estate planning, business technology services, employee benefit plan audits, litigation support and valuation, and financial staffing. The firm serves a wide range of privately held companies, government and non-profit organizations and providesnon-audit services for publicly traded companies.


Advisors | Auditors | Consultants | CPAs - Blum Shapiro is one of the premier public accounting firms in the northeast and a Top 100 CPA Firm in the U.S. Our professionals serve businesses, individuals and organizations in Boston (MA), Hartford (CT), Cranston (RI), Shelton (CT) ,Quincy (MA) and Newton (MA) with audit, tax and business consulting services. Our firm has developed practice areas in automotive, construction, education, government, healthcare, hospitality, manufacturing, nonprofit organizations and professional service firms. New Haven CT, Fairfield CT, Norwalk CT, Waterbury CT.