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Nursing homes are still overpaid by Medicare

Published on September 9th, 2008

Naples Daily News had an article about Medicare overpaying nursing homes.  Watchdog groups have warned about the overpayment months ago.  The already extremely profitable nursing home industry is getting an extra $1.5 billion from Medicare despite a call from an independent Medicare advisory panel that reimbursement has been inflated for the past three years and needs to be scaled back.

The windfall to skilled nursing facilities comes with no strings attached and there is no reason to believe this windfall will help improve the quality of care or quality of life for nursing home residents,” said Toby Edelman, a senior policy attorney with the Center for Medicare Advocacy Inc., in Washington, D.C.

The overpayment remains even though the Medicare Payment Advisory Commission, an independent advisory group to Congress, recommended in May that the rates be adjusted because nursing homes are being overpaid. The Bush Administration decided this past month to "study" the issue further.

The Center for Medicare has been overpaying nursing homes since January 2006 after expanding the list of categories used in determining patients’ medical status for purposes of reimbursement  .By not addressing the issue now, the nursing home industry will reap an extra $780 million next year, Edelman said.

An Office of Inspector General report in 2006 found that 22 percent of nursing home claims were overcoded for higher reimbursement, he said.

The system used to determine reimbursement to nursing homes is complex. One component alone involves a patient evaluation form with 509 questions, Hamilton said. The forms help determine the nursing home’s reimbursement rates.  This raises questions about how much time staff members have to do the evaluation, how trained they are and whether the patient’s medical record matches the care rendered, Hamilton said.

On a second front, the nursing home industry is receiving a 3.1 percent inflation adjustment that will mean getting an additional $710 million next year from Medicare.  MedPAC had reviewed nursing homes’ operating margins and recommended no cost adjustment to the federal government but the inflation increase is moving forward.

 

Joe Pioletti
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