The Washington Post had an article regarding the practice of "upcoding" in nursing homes, putting residents in ultra-high billing categories intended to be used for only 5% of residents needing highly specialized care and rehabilitation. To increase reimbursements and therefore profits, the nursing home represents that the residents need more care than they actually do.
Since the system was instituted over 10 years ago, the numbers of residents in the ultra-high categories has quadrupled and amount of waste and abuse could reach billions of dollars a year. This billing program is specifically targeted in the new health care legislation changing 2 rules that experts said have been exploited by nursing homes to inflate bills.
North American Health Care (NAHC) is one of the worst placing 64% of its residents in the highest category; the national average is 9%. HCR ManorCare is another chain that abuses the system.
Homes that provide the highest level of care are known as skilled nursing facilities and have become a big business. There are about 15,000 nationwide, and they rely heavily on Medicare to turn a profit. Last year, Medicare spent more than $25 billion on them.
"Upcoding, billing for services not rendered, and billing for worthless services have been significant problems for years, costing taxpayers many millions, if not billions, of dollars," said Marie-Therese Connolly, who headed the Justice Department’s Elder Justice and Nursing Home Initiative from 1999 to 2007.