Therapy hours could go down and depression to go up at SNFs.
A depression diagnosis is often hard to make. Clinical depression can be demonstrated in many ways and requires the subjective findings of a clinician. Some clinically depressed individuals seem to withdraw, while others can become irritable or even agitated. Eating and sleeping patterns can be affected. Clinical depression may cause a person either to sleep or eat to excess or almost refuse to eat or not be able to sleep. In skilled nursing homes, patients may have symptoms of depression that are situational or impacted by medications.
Under the old Resource Utilization Group (RUG) system, skilled nursing facilities (SNFs) had reimbursement driven mainly by the number of minutes of physical, occupational, and speech therapy services provided.
Now, SNFs can increase their Medicare payments dramatically just by claiming that all their patients are depressed.
Let’s look at an example of how this works. We took a sample claim for a nursing home we know well and assumed a 31-day stay. We assumed a patient had a hip replacement. We also assumed that they were cancer-free.
The patient is morbidly obese, so they have an NTA of 1 to 2. We also assume their function score is 6 to 14. (If you need some of these terms explained, contact me).
If this patient is not depressed, the Medicare per diem is $599.59. With the same patient, if depression is present, the per diem payment is $647.41. This is a whopping 7.98 percent increase in payment.
In addition to the potential for abuse of the depression diagnosis, there’s the fact that the diagnosis is subjective, and based on the opinion of the clinician. What if SNFs hire clinicians to diagnose all their patients as depressed? The appeals are much harder for Medicare to fight since they are based not on hours of therapy, but a clinical finding.
Will the Zone Program Integrity Contractors (ZPICs) and Recovery Audit Contractors (RACs) hire their own psychiatrists to dispute a diagnosis of depression? Will SNFs be under-reimbursed because they fail to make a proper diagnosis? Will some nurses and Minimum Data Set (MDS) coordinators simply click the boxes on their electronic medical record (EMR) forms to denote depression?
We are left with many more questions than answers, and here in South Florida, I expect therapy hours to go down and depression to go up at SNFs.
Lots of things happening last week for me to talk about. First, still no sign of the 2026 Outpatient Prospective Payment System (OPPS) Final Rule.
The Medicare audit landscape has undergone a fundamental transformation, evolving from ad hoc enforcement practices to scientifically rigorous methodological frameworks. This evolution spans two critical
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