Following the proposal by the Centers for Medicare and Medicaid Services (CMS), to conduct a limited audit of every facility in the country, nursing facility auditing has restarted in earnest. Is your facility prepared?
Announced in June, the SNF (skilled nursing facility) 5 Claim Probe & Educate Review program directs Medicare Administrative Contractors (MACs) to audit five claims from every SNF in the country and to offer education to address any errors. While similar to the Targeted Probe and Educate (TPE) medical review, there is just one round of review with the new program.
CMS acted after the Comprehensive Error Rate Testing (CERT) program projected an improper payment rate of 15.1% for skilled nursing services in 2022, nearly double the 2021 figure. In fact, SNF service errors were the top driver among Medicare fee-for-service payment rates. The agency believes part of the increase in errors can be attributed to the change from the Resource Utilization Group (RUG) IV to the PDPM (patient-driven payment model) for claims dating after October 1, 2019.
Nursing facility auditing on this scale is unprecedented and points to how seriously CMS is taking rampant error rates. While the education of facility operators is important, this announcement serves as a timely reminder that SNFs must employ the same auditing processes that hospitals and medical providers use to reduce errors and preserve legitimate revenue.
SNFs can’t afford reimbursement claw backs
As with many healthcare organizations, skilled nursing facilities are plagued by higher costs that are depressing operating margins. An analysis from McKinsey & Company shows that nursing homes, inpatient rehab facilities, and independent laboratories will see negative operating margins through 2026. This contrasts with assisted living facilities, home health, and hospice agencies, which are expected to see a 5% increase over the same period.
SNFs have been hit by the triple threat of higher labor costs, higher supply costs, and an increase in Medicare patients. The surplus of federal scrutiny could further depress profits should an audit lead to a refund, which can stretch back years and affect hundreds or thousands of claims.
This potential risk should serve as a clarion call to skilled nursing facility operators about the need for developed policies and processes to reduce errors and maximize legitimate revenue earnings. Focusing on error reduction through nursing facility auditing can reap benefits well beyond the initial findings, helping clinicians, billers, and coders understand proper practices going forward.
A call for better processes
For many organizations, errors are caused by a small number of procedures, codes, departments, or clinicians. Finding and fixing these persistent and continuing errors goes a long way toward creating a holistic billing and revenue cycle process.
As CMS continues to increase its auditing efforts, nursing facility audits are becoming one of several focus areas. To combat this, SNFs must create robust processes and leverage a software platform that facilitates timely audits, with precise details.
Connect with us to learn more about MDaudit’s solutions for billing compliance and revenue integrity teams.
