Skilled Nursing Facilities & Hospice Fraud

A skilled nursing facility is a long-term care option for patients who suffered a debilitating injury or illness (like a stroke). After a qualifying stay in the hospital, Medicare beneficiaries frequently need time in a rehabilitation center to recover. A skilled nursing facility provides services like physical therapy, occupational therapy and speech therapy and specialized services for patients dealing with conditions like stroke recovery, Parkinson’s disease care or injury care.

However, a skilled nursing facility is a business and is therefore susceptible to improper practices, illegal deal making and fraud for financial gain. There are a few common types of skilled nursing facility fraud:

• RUG fraud – A patient in a skilled nursing facility may be placed in the highest resource utilization groups (RUG). This category reimburses the rehab center the most Medicare money. The patient may receive excess or unnecessary care that can be harmful to their recovery. For example, a patient recovering from a stroke may receive unnecessary physical therapy on their knee or ankle that was not in their care plan.
• Upcoding – Providers may file for reimbursement at a higher level of care than the level actually provided or medically necessary. The procedure codes used are often reimbursed at a higher rate.
• Unbundling – Skilled nursing facilities can also commit fraud by unbundling the services they provide. In order to increase revenue, providers may code services individually that cost more than the service normally would under a different code.
• Kickbacks – Kickbacks or bribes are also a prevalent form of skilled nursing facility fraud. This occurs when a provider receives a monetary benefit from referring a patient to a specific care institute. It’s illegal for anyone to provide or offer anything of value in order to have that person give them referrals or generate healthcare business.
• Medicare Eligibility Requirements – A facility may be billing Medicare for services rendered to patients who do not meet Medicare’s eligibility requirements for the types of services being billed.

These forms of skilled nursing facility fraud are illegal under a number of statutes and regulations; most importantly the False Claims Act (FCA). In such cases, the victims are the residents, receiving improper or unnecessary care so that providers can illegally obtain more funding through healthcare programs like Medicare and Medicaid.

With the help of an attorney, whistleblowers can put a stop to this kind of Medicare fraud. In skilled nursing facility fraud cases, settlements can range between $10 million up to $145 million.