• Improper Billing of ASC Services for SNF Residents
  • January 3, 2011 | Author: Stephanie L. Fuller
  • Law Firm: King & Spalding LLP - Atlanta Office
  • On December 17, 2010, the Department of Health and Human Services (HHS) Office of Inspector General (OIG) released a report, “Payments for Ambulatory Surgical Center Services Provided to Beneficiaries in Skilled Nursing Facility Stays Covered Under Medicare Part A in Calendar Years 2006 through 2008.”  According to the report, the OIG estimates that Medicare contractors made at least $6.6 million in overpayments to ambulatory surgical centers (ASC) for services provided to skilled nursing facility (SNF) beneficiaries in CYs 2006 through 2008.

    The report states that the objective of the review was to determine whether ASCs complied with consolidated billing requirements.  Under the prospective payment system, Medicare reimburses SNFs for all covered SNF services.  For services provided to Part A SNF beneficiaries by outside suppliers, the suppliers are generally required to bill the SNFs, not Medicare Part B.  According to the report, none of the 100 services sampled complied with the consolidated billing requirements.  Thus, Medicare paid twice for these services because Medicare paid the SNF under the Part A prospective payment system and paid the ASC under Part B.  The overpayments identified within the sample group totaled $102,879.

    The OIG report lists several factors that contributed to these overpayments.

    • ASCs were either unaware of or did not fully understand the consolidated billing requirements.
    • ASCs did not have the necessary controls to prevent improper Part B billing.
    • ASCs did not ask beneficiaries during the check-in process whether they were currently Part A SNF residents.
    • The Centers for Medicare and Medicaid Services’ (CMS) Common Working File was not designed to prevent and detect Part B overpayments to ASCs for services subject to consolidated billing.

    The OIG recommends that CMS instruct its contractors to recover the overpayments identified for the 100 sampled services.  In addition, the report recommends that CMS review the 20,806 Medicare Part B ASC facility services that were not reviewed and recover the estimated $6.5 million in additional overpayments.  The OIG report also recommends that CMS provide guidance to ASCs on consolidated billing requirements.  Finally, the OIG recommends that CMS establish an edit in the Common Working File to prevent Part B payments for ASC services that are subject to consolidated billing.

    According to the report, CMS concurred with the OIG’s recommendations and stated that it would share the report and the additional claims with recovery audit contractors (RACs).