Study by Federal Regulators Finds Higher Rate of Medicare Fraud Among For-Proft Nursing Homes

A substantial percentage of Medicare claims made by for-profit nursing homes were found to be “improper,” according to a report issued late last year by the U.S. Department of Health and Human Services (HHS). The percentage of improper claims among for-profit facilities was reportedly more than double the rate for non-profit facilities. Bloomberg News profiled several companies that operate for-profit nursing homes, highlighting allegations of unnecessary and even harmful treatments. We have previously explored how for-profit facilities might cut costs in order to boost profits, resulting in neglect of nursing home patients. Similarly, a desire to increase revenue through Medicare billings might lead to unnecessary, abusive treatments. For people selecting a nursing home for themselves or a loved one, this information could be critical to making an informed decision.

For-profit nursing homes vastly outnumber not-for-profit facilities around the country. According to a report by the Medicare Payment Advisory Commission (MedPAC), about seventy percent of skilled nursing facilities (SNFs), which are generally part of a nursing home, are operated on a for-profit basis, while nearly eighty percent of long-term care hospitals (LTCHs) are for-profit. MedPAC, “Report to the Congress: Medicare Payment Policy” at 17 (March 2012). During the period from 2005 through 2009, the number of for-profit LTCHs increased by eighteen percent, while the number of not-for-profit facilities decreased by eight percent. Id.

HHS’s Office of the Inspector General (OIG) released a report in November 2012 entitled “Inappropriate Payments To Skilled Nursing Facilities Cost Medicare More Than A Billion Dollars In 2009.” The report found that SNFs submitted nearly one-fourth of all erroneous Medicare claims in 2009, resulting in $1.5 billion in “inappropriate Medicare payments.” OIG report at 10. The report further found that SNFs misreported basic information about Medicare beneficiaries in almost half of all claims. Id. at 11. It did not expressly draw a connection between for-profit facilities and inappropriate Medicare claims.

A report by Bloomberg News found that the number of civil and criminal claims brought against nursing homes between 2008 to 2012 was more than twice the number of similar claims brought during the prior five-year period. While the companies profiled by Bloomberg denied any wrongdoing, the report includes multiple allegedly unnecessary treatments connected to inappropriate Medicare claims. An eighty year-old resident of a South Carolina nursing home, owned by the third-largest nursing home chain in the country, reportedly died two days after spending eighty-four minutes in a standing frame for occupational and physical therapy. The resident allegedly received this treatment despite being unable to control her head or hold her eyes open. At a Florida facility, a ninety-two year-old male patient allegedly received more than two hours of occupational and physical therapy, according to Medicare billing records, despite having just coughed up blood due to lung cancer. He also died several days later.

The examples cited in the Bloomberg report should not be read as an indictment of for-profit nursing homes in general. Many for-profit facilities provide high-quality professional services to their patients. The rise in both the number of for-profit nursing home facilities and claims for abuse and negligence against nursing homes, however, is a cause for concern for residents, their families, and the attorneys who advocate on their behalf.

At Lebowitz & Mzhen, our nursing home lawyers help residents and their families in Maryland obtain compensation for injuries caused by abuse or neglect. To schedule a free and confidential consultation, contact us today online or at (800) 654-1949.

Web Resources:

Inappropriate Payments To Skilled Nursing Facilities Cost Medicare More Than A Billion Dollars In 2009 (PDF file), Office of the Inspector General, U.S. Department of Health and Human Services, November 2012
Report to the Congress: Medicare Payment Policy (PDF file), Medicare Payment Advisory Commission, March 2012

More Blog Posts:

Does Quality of Care Differ Between For-Profit and Non-Profit Healthcare Facilities? Maryland Nursing Home Lawyer Blog, January 9, 2013
Mandatory Arbitration Clauses in Maryland Nursing Home Admissions, Maryland Nursing Home Lawyer Blog, October 3, 2012
Feds Help Families Choose the Right Nursing Home With Improved Website, Maryland Nursing Home Lawyer Blog, August 19, 2011

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