OIG Looking into SNF Consolidated Billing Claims

Over the past few weeks, we have been contacted by a number of ambulance suppliers that have received letters from the HHS Office of the Inspector General (OIG). These letters indicate that the OIG is conducting a national review of ambulance services that are subject to the consolidated billing provisions of the skilled nursing facility (SNF) prospective payment system. The review covers claims for ambulance services with dates of service from July 2014 through June 2016.

In each case, the ambulance supplier is being asked to provide documentation on a handful of round trip transports of an SNF patient. The letter indicates that these services were furnished to a Medicare beneficiary during the beneficiary’s Part A SNF stay, and therefore “may be subject to consolidated billing.” The letter asks the ambulance supplier to complete a short (3-page) questionnaire related to the identified transports, and to return the completed questionnaire to the OIG within seven business days.

The questionnaire asks some fairly basic questions related to the identified transports, including whether the ambulance supplier actually furnished the identified transports, whether it was paid by Medicare, the point of pickup and destination, and information on who called to request the transport. The questionnaire also asks for information on how the ambulance supplier determined whether the patient was in the Part A period, and what information the ambulance supplier obtained in order to make its determination that the claims were separately payable by Medicare Part B.

The OIG has conducted similar reviews in the past. For example, in August 2009, the OIG issued a report on payments for ambulance transportation provided to SNF beneficiaries during calendar year 2006. That report concluded that 61 of the 114 claims it reviewed (53%) were incorrectly billed to Medicare Part B, as opposed to the SNF. Based on its sample, the OIG estimated that Medicare made $12.7 million in incorrect payments to ambulance suppliers during calendar year 2006.

It is possible that the OIG is simply updating its previous report on SNF Consolidated Billing and ambulance transports. However, there is another possible explanation for the OIG’s renewed interest in these types of transports. Many of the claims the OIG has requested information on relate to transports to what appears to be a physician clinic located on a hospital’s campus. If correct, the SNF would have been responsible for payment for the physician’s services (in addition to the ambulance claims). If so, it is possible that the OIG’s interest was triggered by the lack of a corresponding hospital claim being submitted to Medicare on that date.

If this sounds familiar to you, it should.

In September 2015, the OIG issued a report in which it highlighted seven so-called “questionable billing practices” by ambulance suppliers. One of these billing practices was the existence of an ambulance claim for a particular date of service, but where there was no corresponding hospital claim (or any other claim from a Part A institution) for the beneficiary on that same date. The OIG identified $30.2 million in payments during the first half of 2012 that tested positive for this measure.

In an earlier blog post, we discussed the Supplemental Medical Review Contractor (SMRC), StrategicHealthSolutions, LLC. The SMRC is tasked with lowering the improper payment rate and increasing efficiencies of the medical review functions of the Medicare and Medicaid programs. The SMRC has recently started auditing ambulance suppliers, and it appears to be focusing, in large part, on claims where patients were evaluated at a physician’s clinic located on a hospital’s campus. It is possible that the OIG is conducting its own inquiry of this same issue.

This leaves us with a basic question: Is the OIG simply updating an earlier report, or is this sort of audit going to be become the new “normal” for ambulance suppliers? Ultimately, time will tell.

However, regardless of the OIG’s motives, this recent string of audits serves as a valuable reminder to the industry that many hospitals do sublease space to physician practices, and that these independent practices are licensed separately from the hospital. A transport to these independent physician practices would be bundled to the SNF under SNF Consolidated Billing. As an industry, we need to identify these transports when they occur, and be sure to bill the SNF, whenever appropriate. Otherwise, the OIG is likely to continue these sorts of audits.

Have an issue you would like to see discussed in a future Talking Medicare blog? Please write to me at bwerfel@aol.com.

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Brian Werfel

Brian S. Werfel, Esq. is a partner in Werfel & Werfel, PLLC, a New York based law firm specializing in Medicare issues related to the ambulance industry. Brian is a Medicare Consultant to the American Ambulance Association, and has authored numerous articles on Medicare reimbursement, most recently on issues such as the beneficiary signature requirement, repeat admissions and interrupted stays. He is a frequent lecturer on issues of ambulance coverage and reimbursement. Brian is co-author of the AAA’s Medicare Reference Manual for Ambulance, as well as the author of the AAA’s HIPAA Reference Manual. Brian is a graduate of the University of Pennsylvania and the Columbia School of Law. Prior to joining the firm in 2005, he specialized in mergers & acquisitions and commercial real estate at a prominent New York law firm. Werfel & Werfel, PLLC was founded by David M. Werfel, who has been the Medicare Consultant to the American Ambulance Association for over 20 years.

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