Medicare paid $1.5 billion in improper therapy claims in 2009

A new federal report says skilled-nursing facilities overbilled Medicare for therapy and other care, costing taxpayers $1.5 billion in 2009.
(Wally Skalij/Los Angeles Times)

Medicare paid $1.5 billion in improper claims for skilled nursing care in 2009, federal investigators found.

The inspector general of the Department of Health and Human Services said Tuesday that 25% of all Medicare claims submitted by skilled nursing facilities had errors and the majority of those bills were “upcoded” for ultra-high therapy that wasn’t necessary.

About 15,000 nursing homes and other facilities provide this physical therapy, rehabilitation and other care to patients, often after a hospital stay. Medicare generally covers these services for up to 100 days related to an illness.

The inspector general’s office urged Medicare to increase its scrutiny of these skilled-nursing claims, particularly in light of previous reports identifying billing problems in this area.

Medicare officials agreed with the recommendations and said it has already taken steps to reduce inaccurate and fraudulent billing.


The $1.5 billion in improper payments represented nearly 6% of the $26.9 billion paid overall to skilled-nursing facilities in 2009, according to the report. Medicare’s overall payouts for these services rose to $32.2 billion in fiscal year 2012.

In this latest report, the inspector general said in one case the skilled-nursing facility provided the highest level of therapy even though the physician refused to authorize it. In another case, speech therapy was billed for even though it wasn’t medically necessary or given.

The Obama administration has tried to crack down on fraud and abuse in Medicare in hopes of recovering some of the estimated $60 billion lost annually in the federal program. The government’s enforcement efforts have taken on added importance at a time of rising entitlement spending and mounting federal debt.


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