Overbilling Neglect

A researcher from the University of Texas found a pattern of poor health outcomes in skilled nursing facilities that fraudulently overbilled Medicare. The paper, “Overbilling and Killing? An Examination of the Skilled Nursing Industry,” revealed how patients at fraudulent Skilled Nursing Facilities suffered worse health outcomes because those facilities sought to increase revenue rather than care. Profits over people.

These facilities have overbilled Medicare by $4.3 billion since 2019. John Griffin, the paper’s lead author, is a professor of finance and the James A. Elkins Centennial Chair in Finance at The University of Texas at Austin’s McCombs School of Business. Griffin is a forensic finance expert investigating potentially illegal, illicit, or immoral actions in financial markets.

The paper asks, “Do opportunistic systems use the additional revenue to provide better patient care? Alternatively, could upcoding indicate a corporate culture that prioritizes profit extraction over patient needs and cuts costs at the expense of patients?” The answers to this question are “no” and “yes.”

Griffin and his co-author, Alex Priest from the University of Rochester, both found that patients in Skilled Nursing Facilities suffered from “3,100 cases of preventable health conditions, 10,800 additional hospitalizations, and more than 9,200 additional deaths every year compared to other facilities.” Based on 64,000 consumer reviews, SNFs with fraudulent billing practices had “2.5 times as many cases of patient neglect, 37 percent fewer registered nurses per patient, and 60 percent more deficiencies during health inspections.”

These patients develop 50 percent more conditions that are preventable and have twice as many reviews of alleged abuse. Additionally, these fraudulent SNFs are more likely to upcode, meaning providers intentionally submit incorrect codes to relieve higher reimbursement rates from government payers, such as Medicare. Patients at these upcoming SNFs are 60 percent more likely to develop bed sores and other preventable conditions than those at other SNFs.

The top third of systems with fraudulent rehab practices before 2019 are likely responsible for “10,200 cases of preventable health conditions, 35,000 hospitalizations, and more than 30,000 deaths under the new billing model.” The report also provided information regarding an anonymous facility with bed sore rates 65 percent higher than those of other facilities. The 11 facilities of this rehab system have collectively reported bedsore rates 45% higher than those of other systems.

Additionally, Urinary Tract Infections at this facility are 50% higher than average. These poor patient outcomes are not a matter of inadequate funding but neglect. The system is billing Medicare at one of the highest in the country, $32,794 per patient on average, compared to $15,021 in other systems. The system upcodes by documenting false “comorbidities” or pre-existing conditions that patients do not have. This report found that half of the patients in the system are coded to be suffering from depression, which is 5 times more than the national average and the 3rd highest rate in the country. The false and inaccurate coding is also inconsistent with the hospital that the patients are treated at. 80% of the patients had a different recorded diagnosis for the system than the hospital, which immediately preceded their SNF stay.

These patients were twice as likely to be coded with a comorbidity that impedes speech and language. The report highlights testimonies from patients’ families at the unnamed system regarding poor care. One daughter described how she had to beg for over 13 days to provide her father showers despite him being scheduled for them. She assumes they were billing Medicare for this service, although it was never completed. The daughter also described how one of the aids acted against her, begging for showers by leaving her father wet and in a soiled diaper for hours, causing his skin to open and lead to infected wounds.

She said, “I am horrified how this place is run for profit by a group of people that nurses told me to run other rehab nursing homes.”