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On March 9, skilled nursing facility (SNF) therapy providers were put on notice by the Centers for Medicare & Medicaid Services (CMS) about upcoming Recovery Auditor (RA) scrutiny as the agency also released Medicare SNF transparency data on its website. In releasing this transparency data, CMS pointed to a high percentage of resource utilization group (RUG) scores in the RU and RV categories for which the assessment reference date (ARD) reflected total therapy minutes provided within 10 minutes of the minimum required to achieve the RUG score. To quote the language of the release: 

“Based on this information, we found:

  • 51 percent of all RV assessments showed therapy provided between 500 and 510 minutes.
  • 65 percent of all RU assessments showed therapy provided between 720 and 730 minutes.
  • For 88 providers, all of their RV assessments showed therapy provided between 500 and 510 minutes.
  • For 215 providers, all of their RU assessments showed therapy provided between 720 and 730 minutes.
  • More than one in five providers had more than 75 percent of both RU and RV assessments that showed therapy provided within 10 minutes of the minimum threshold. 

To help ensure that patient need rather than payment incentives (is) driving provision of therapy services, CMS is providing approval to the Medicare Fee-for-Service Recovery Auditor Contractors (RACs) to investigate this issue.” 

This notice does not come as welcome news to SNF providers, who are already reeling due to the overwhelming number of additional development requests (ADRs) related to patients who have exceeded the $3,700 manual medical review threshold.  

Now that this new information has been released and the SNF provider community knows that the Recovery Auditors will be on their way, it is important to know your potential liability and how to respond. Following these steps will help you navigate this important issue: 

  1. Start by reviewing the RUG data on your specific facility. Visit https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Medicare-Provider-Charge-Data/SNF.html and scroll to the bottom of the page to find the downloadable Excel document titled “Medicare Therapy Minutes Aggregate Table, CY 2013, Microsoft Excel (.xlsx).” For any given facility, the data will include the percentage of RV and RU RUGs within 10 minutes of the minimum; these percentages will assist you in determining how pertinent this issue is to your specific facility and your potential risk.
  2. After you have identified any potential concerns, the next step is education. Start by educating your therapy team. This education should include instructing the therapy team to bill the exact number of therapy minutes that were provided – never rounding to the nearest 5 or 0. Previously it has been common practice in some locations that therapists round their minutes and bill the number of planned therapy minutes for a given patient instead of the actual number of therapy minutes provided. There may be a variety of reasons that this occurred, but suffice to say, this practice must stop today. Billing exact minutes of therapy provided to a given patient is now the accepted standard of the industry. 
  3. After identifying potential risk and educating your therapy team, consider performing an audit of your own (you may want to consider conducting your audit under attorney-client privilege). As part of your program’s quality assurance and compliance plan, ARDs with RUG scores in the RU or RV category should be pulled in instances in which the total minutes billed falls within 10 minutes of the minimum amount to achieve the RUG. In addition, audit the clinical documentation for medical necessity and look for language that clearly spells out how the services were medically necessary and required the skills of a therapist. Why is this important? It is suspected that this type of audit is what the Recovery Auditor will perform. We are not clear on precisely what type of audit will be performed; however each provider should know what is in its documentation before preparing to defend claims. As a community, we will not know for sure how the Recovery Auditors will address this specific issue, but several key figures in the industry have speculated that this type of audit could be how the issue is investigated. Whatever process is taken, if the resulting decision is “unfavorable” for a facility, the result could be as minimal as downcoding the RUG to a lower RUG score, or if it is determined that the requisite documentation proving medical necessity is insufficient, then related payment days could be coded as “provider liable” days. Either way, the sheer volume of ADRs implicated by this CMS announcement will place an administrative burden on the provider community that thus far is unprecedented.

Some important things to keep in mind as you work through the steps: SNFs that have chosen to outsource their therapy program may think that they are shielded somewhat from liability through the indemnification clause in their therapy contract. An important distinction to remember is that your indemnification (in most contracts) is related to what you paid the therapy contractor, and not what the government reimbursed you. For example, the therapy contractor may indemnify the provider for ~$100/day, but the provider would owe the government the full amount of the RUG per day – up to ~$700/day in some cases. It is essential to understand that it is ultimately the SNF’s responsibility to ensure that their therapy providers (whether in-house or contract employees) are providing and billing for clinically appropriate care, and that defensible documentation exists to justify the care. This burden of liability resting on the SNF has been reinforced by several recent U.S. Department of Justice (DOJ) settlements, regardless of whether therapy services were rendered in-house or by contract.  

If a SNF needs help analyzing its therapy program or cleaning up an identified issue, consider engaging a compliance expert who has experience is in this arena. Keep in mind, not all clinical expert consultants are proficient in compliance. And should the issues uncovered be of a legal nature, be sure to seek legal counsel immediately. 

Answering this loud wake-up call by digging deeper into your therapy program will help assess your potential risk and ensure going forward that services are being provided appropriately, allowing you to avoid costly surprises. 

About the Author

Mark McDavid, OTR, RAC-CT is the president of Seagrove Rehab Consulting + Education where he assists in-house and contract therapy clients with compliance issues and therapy operations. He serves on AANAC’s Expert Advisory Panel and as a board member-at-large for the National Association of Rehabilitation Providers and Agencies. 

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