CMS Improperly Paid Millions of Dollars for Skilled Nursing Facility Services When the Medicare 3-Day Inpatient Hospital Stay Requirement Was Not Met

Submitting OIG:

Department of Health & Human Services OIG

Report Description:

According to Federal law, to be eligible for coverage of posthospital extended care services, a Medicare beneficiary must be an inpatient in a hospital for not less than 3 consecutive calendar days (3-day rule) before being discharged from the hospital. CMS improperly paid 65 of the 99 skilled nursing facility (SNF) claims we sampled when the 3-day rule was not met. Improper payments associated with these 65 claims totaled $481,034. On the basis of our sample results, we estimated that CMS improperly paid $84 million for SNF services that did not meet the 3-day rule during 2013 through 2015.

Date Issued:

Thursday, February 14, 2019

Agency Reviewed / Investigated:

Department of Health & Human Services

Submitting OIG-Specific Report Number:

A-05-16-00043

Component, if applicable:

Centers for Medicare & Medicaid Services

Location(s):

Agency-Wide

Type of Report:

Audit

Questioned Costs:

Funds for Better Use:

Number of Recommendations:

View Document:

Attachment	Size
51600043.pdf	1.82 MB

Additional Details Link:

https://oig.hhs.gov/oas/reports/region5/51600043.asp

Recommendation Number	Recommendation Status	Significant Recommendation
266437	Open	Yes
CMS should ensure that when SNF claims are being processed for payment, the Common Working File (CWF) qualifying inpatient hospital stay edit for SNF claims is enabled and operating properly to identify SNF claims ineligible for Medicare reimbursement;
266438	Open	Yes
CMS should require hospitals to provide a written notification to beneficiaries whose discharge plans include post-hospital SNF care, clearly stating how many inpatient days of care the hospital provided and whether the 3-day rule for Medicare coverage of SNF stays has been met (if necessary, CMS should seek statutory authority to do so)
266439	Open	Yes
CMS should require SNFs to provide written notice to beneficiaries if Medicare is expected to deny payment for the SNF stay when the 3-day rule is not met (if necessary, CMS should seek statutory authority to do so);
266440	Open	Yes
CMS should educate hospitals about the importance of explicitly communicating the correct number of inpatient days to beneficiaries and whether the inpatient days qualify subsequent SNF care for Medicare reimbursement so that beneficiaries understand their potential financial liability related to SNF care
266441	Open	Yes
CMS should require SNFs to obtain from the hospital or beneficiary, at the time of admission, a copy of the hospital’s written notification to the beneficiary and retain it in the beneficiary’s medical record (if necessary, CMS should seek statutory authority to do so);
266442	Open	Yes
CMS should educate SNFs about their responsibility to submit accurate and valid claims for payment that are supported with documentation that clearly shows that the SNF services qualify for reimbursement.

Recommendation Number

Recommendation Status

Significant Recommendation

Additional Details

266437

Open

Yes

CMS should ensure that when SNF claims are being processed for payment, the Common Working File (CWF) qualifying inpatient hospital stay edit for SNF claims is enabled and operating properly to identify SNF claims ineligible for Medicare reimbursement;

266438

Open

Yes

CMS should require hospitals to provide a written notification to beneficiaries whose discharge plans include post-hospital SNF care, clearly stating how many inpatient days of care the hospital provided and whether the 3-day rule for Medicare coverage of SNF stays has been met (if necessary, CMS should seek statutory authority to do so)