Every health care provider's compliance program should include policies and procedures for complying with the billing requirements of Medicare, Medicaid, and other payors. Undetected billing errors can lead to penalties under the False Claims Act, and/or hefty repayments to the government.

A compliance program is an excellent way to prevent and detect billing errors. As you know, the Affordable Care Act requires all SNFs to have compliance programs by March 23, 2013. Your compliance program should contain policies, procedures, and audit tools designed to prevent and detect billing errors such as:

• Submitting claims for services that are not medically necessary
• Duplicate billing
• Failing to detect and refund overpayments
• Upcoding levels of service
• Submitting claims that are not backed up by your documentation
• ...and many others

The stakes are high 

The OIG, which is now using data mining, is more efficient and thorough than ever in detecting questionable billing patterns. The financial consequences are steep:

• Hill-Rom, a national DME supplier, paid $41.8 million to resolve allegations that it submitted false claims for bed support surfaces for pressure ulcer treatment. The equipment was not medically necessary for these patients, who no longer needed the equipment or had died.
• Barnes-Jewish Hospital in St. Louis repaid Medicare $725,000 in overpayments it received between 2008 and 2011. The OIG alleged that the hospital did not have adequate controls to prevent billing errors such as excess charges, manufacturer credits for medical devices, and high-severity DRG codes.
• Senior Care Group, Inc., a nursing home company in Tampa, FL, agreed to pay $953,375 to settle allegations that it pressured employees to maximize billings, and billed for unnecessary services such as occupational therapy to elderly Alzheimer's patients who were not expected to work again.

Without compliance guidelines and controls, billing errors like these can happen in nursing homes--inadvertently.

MPA TIPS: How to use your compliance program to improve billing accuracy

• Conduct a baseline audit of your billing accuracy to identify your most common billing errors
• Use sample audits to determine if your MDS info is backed by care plans and medical record documentation
• Compare your RUG distribution and average length of stay to your 12-month historical average and to regional benchmarks, in order to identify and investigate any potential over-utilization patterns
• Implement a system for detecting and returning overpayments

MPA can help

Management Performance Associates can help you implement a compliance program or strengthen your current one. To learn more about how your compliance program can help you avoid penalties for billing and other errors, click here for information on MPA's cost effective Shared Compliance Program.  

  Margaret Scavotto 

MPA provides this material for general informational purposes only. Qualified, experienced MPA professionals write the contents of MPA materials. We urge you to carefully consider all of the facts and circumstances of your situation before applying specific information in our email communications. MPA is not a law firm and does not provide legal advice, and nothing herein is intended to be legal advice. Receipt of this email does not create an attorney-client relationship.