Federal Audit Sample Results Indicate CMS Paid Skilled Nursing Facilities $84 Million for Ineligible Post-hospital Extended Care Services
Providing post-hospital care for residents under Medicare Part A coverage who do not meet the 3-day rule may result in the submission of a false claim.
Compliance Perspective – CMS 3-Day Rule
Policies/Procedures: The Compliance and Ethics Officer with the Administrator, the Director of Nursing, and the Admissions Director, will review policies and procedures involving post-hospital care and the 3-day rule requirement for eligibility of Medicare Part A coverage and reimbursement.
Training: The Compliance and Ethics Officer will ensure that admissions department staff are trained to obtain hospital documentation on the length of stay for residents admitted for post-hospitalization care and to document that information noting whether the 3-day rule was met.
Audit: The Compliance and Ethics Officer should personally conduct an audit of post-hospital admissions to determine whether the 3-day rule was met, and if not, whether the facility is submitting improper claims for reimbursement under Medicare Part A.
Eligibility for coverage of post-hospital extended care services requires the resident to have been hospitalized for at least 3 consecutive calendar days (3-day rule) before being discharged to a Skilled Nursing Facility (SNF) for continuation of their treatment under Medicare Part A. A federal audit report of payments for post-hospital extended care services examined a sample of 99 SNF claims and found that out of the 99 claims examined, 65 did not meet the 3-day rule. Improper payments for those 65 claims totaled $481,034. Based on this sampling, it was estimated that the Centers for Medicare & Medicaid Services (CMS) improperly paid $84 million for SNF services that did not meet the 3-day rule during 2013 through 2015.
The report attributed improper payments to a lack of coordination between hospitals, beneficiaries, and SNFs ensuring compliance with the 3-day rule. Notably, hospitals did not always provide correct information about inpatient stays to the SNFs, and SNFs either knowingly or unknowingly reported erroneous hospital stay information on their Medicare claims indicating residents had met the 3-day rule. Also, CMS allowed SNF claims to bypass the Common Working File (CWF) qualifying stay edit where SNF claims are matched with the associated hospital claims.
The report recommended that CMS always enable the CWF qualifying inpatient hospital stay edit for SNF claims when SNF claims are processed for payment. Additionally, CMS should require hospitals to provide beneficiaries a written notification indicating the number of inpatient days of care provided during a patient’s hospital stay and to indicate whether the hospital stay met the 3-day rule qualifying subsequent SNF care for Medicare Part A reimbursement. CMS should also require SNFs to obtain a written notification from the hospital regarding the number of inpatient days they provided care for a resident.
