Nursing Homes Patient Care in the Crosshairs of Medicare Investigations

by ParkmanLawFirm on February 24, 2013

Nursing Home operators should take heed to warnings coming from Washington that there entire industry is the target of an extensive federal criminal investigation for Medicare fraud. The United States Office of Inspector General (OIG) recently announced that they believe our nation’s healthcare system is being criminally defrauded of over One Billion Dollars annually by skilled nursing facilities. With federal budgets tighter than ever, government investigators see stopping Medicare fraud as a way to deal with impending budget cuts. That is why the OIG recently announced a plan to scrutinize the country’s nursing home industry. The problem with this strategy is that some of the areas they intend to scrutinize may interfere with patienpt care.

Everyone in the nursing home industry understands that it is a criminal Medicare Fraud offense to bill for services not provide, or to up code services into a higher pay category than the one actually performed. This is a clear form of Medicare fraud that leads to criminal Medicare Fraud charges, if uncovered. The problem with OIG’s recent warning, is that it appears the federal government intends to impose criminal sanctions based on their subjective determination of what is medically necessary for a nursing home resident.

One example of an area investigators will be analyzing is the use of anti-psychotic drugs paid for by Medicare in the nursing home population. Because federal regulations consider it healthcare fraud for nursing home residents to be prescribed unnecessary pharmaceuticals at government expense, more scrutiny will be given to the use of anti-psychotic medications given to the elderly. 42 C.F.R. § 483.25(L)(1) provides nursing home’s treatment of their patients be “free from unnecessary drugs.”

The question will be how do Federal attorneys from Washington decide what medication is needed, and what medication is unnecessary and therefore not covered by Medicare. This would be a controversial move by the government if they second-guess a patient’s physician opinion on a plan of treatment, but this appears to be part of OIG’s plan going forward.

Hospice Claims for nursing home patients will also undoubtedly be drawing the attention of federal investigators looking for evidence of Medicare fraud. OIG announced a recent study in which they claim over 80% of hospice care for patients residing in a nursing home did not meet Medicare coverage requirements.

The Department of Justice will likely be investigating relationships between nursing homes and Hospice businesses. Any financial relationship between the entities will throw up a red flag as prosecutors investigate evidence of kickbacks to nursing homes from Hospice programs that are benefiting from the increased business from nursing home referrals that should not be covered under Medicare. Again, this is understood, and such fraud should be stopped. However, federal investigators don’t intend to stop there.

It is expected that closer attention will be paid to the referral process from nursing homes to Hospice caregivers. Investigators have indicated a clear intent to question referrals that are made to Hospice to determine if, in their (subjective opinion) the nursing home resident meets all Medicare qualifications for Hospice care. This is another situation that pits government attorneys against treating physicians.

Everyone wants to see criminal Medicare Fraud to be curbed, but we don’t want to see criminal prosecutions of those that are entrusted with the care of our loved ones. Further, we don’t want to see government attorneys making the decision as to when our elderly loved ones receive medications and hospice care. This is a development the Medicare Fraud criminal attorneys will be watching closely.


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