OIG Report Finds CMS Paid for SNF Care When 3-Day Inpatient Stay Not Met

February 28, 2019
Health Policy

The Office of Inspector General (OIG) recently released a report looking at nursing home claims between 2013 and 2015 that had hospital stays of less than three consecutive calendar days and as such did not meet Medicare’s three-day stay requirement. The report found that the Centers for Medicare & Medicaid Services (CMS) improperly paid many of them anyway. OIG estimated that CMS improperly paid more than $84 million for nursing home services that didn’t meet the 3-day stay rule during that time, based on its audit.

The OIG notes that they attribute the improper payments to the “absence of a coordinated
notification mechanism among the hospitals, beneficiaries, and SNFs [skilled nursing facilities] to ensure compliance with the 3-day rule.” The OIG noted that hospitals did not always provide correct inpatient stay information to SNFs, and SNFs knowingly or unknowingly reported erroneous hospital stay information on their Medicare claims to meet the 3-day rule. “We determined that the SNFs used a combination of inpatient and non-inpatient hospital days to determine whether the 3-day rule was met. In addition, because CMS allowed SNF claims to bypass the Common Working File (CWF) qualifying stay edit during our audit period, these SNF claims were not matched with the associated hospital claims that reported inpatient stays of less than 3 days,” the OIG said.

The OIG recommended that CMS ensure that the CWF qualifying inpatient hospital stay edit for SNF claims is enabled when SNF claims are processed for payment. In addition, the OIG recommended that “CMS should require hospitals to provide beneficiaries a written notification of the number of inpatient days of care provided during the hospital stay and whether the hospital stay qualifies subsequent SNF care for Medicare reimbursement so that beneficiaries are aware of their potential financial responsibility before consenting to receive SNF services. CMS should require SNFs to obtain a written notification from the hospital and retain it as a condition of payment for their claims. Further, CMS should educate both hospitals and SNFs about verifying and documenting the 3-day inpatient hospital stay relative to supporting a Medicare claim for SNF reimbursement.”

CMS concurred with the OIG’s recommendations concerning the CWF qualifying inpatient hospital stay edit and educating hospitals and SNFs but did not concur with the remaining recommendations related to a coordinated notification mechanism among hospitals, beneficiaries, and SNFs.

To read the full report click here.