January 23, 2017 - Posts

Is Your Rehab Hospital Committing Fraud? A Recent OIG Report Points to an Alarming Trend of Improper Admissions

According to a December 2016 report from the Office of the Inspector General (“OIG”), rehab hospitals that bill Medicare appear to be improperly admitting significant numbers of patients and in turn submitting improper or false claims to Medicare. We believe inpatient rehab hospitals will be increasingly subjected to False Claims Act litigation in the coming years. Our firm has direct experience in representing whistleblowers asserting claims for improper admissions in both acute and post acute facilities.


In this instance, the OIG’s report, which will soon be followed by the release of a detailed audit, indicates that rehab hospitals may be admitting a significant number of patients who simply cannot tolerate the requisite therapy. Patients who are recovering from a major surgery, injury, or illness often require significant amounts of therapy as part of the treatment process. For patients who need such therapy on an in-patient basis, the two major options covered by Medicare are rehab hospitals (or rehab units within a hospital) and skilled nursing facilities.


The major difference between the two options is the intensity of the therapy provided. Rehab hospitals are designed to provide far more intensive therapy than skilled nursing facilities—usually three or more hours per day, five days a week—and Medicare typically reimburses these rehab hospitals at much higher rates. Because this therapy is so intensive, rehab hospitals are only supposed to admit patients who can be reasonably expected to participate in and benefit from intensive therapy. Certain categories of patients are generally incapable of enduring such a high level of therapy, including:


Based on the OIG’s recent report, it appears that rehab hospitals have been admitting significant numbers of patients who do not satisfy these basic admissions requirements—which means that these rehab hospitals should not have been billing Medicare for those patients.  In a targeted review of 426 hospital stays, OIG reviewers found 39 examples—approximately 9%—where the patient should not have been admitted. In 32 of those 39 cases, the patients remained in the rehab hospital for significant periods of time—with an average stay of about 15 days—despite being medically unsuited for such intensive therapy.


While the report does not directly address why so many patients have been improperly admitted to, it strongly suggests that at least some rehab hospitals have been putting their own financial interests ahead of their patients’ well-being. A more extensive OIG audit of inpatient rehab hospitals and rehab units is expected in 2017, which should provide more data and information on these issues.


The full OIG report is available here.


If you believe you have information about any improper admissions that are impacting a government program such Medicare, then you should speak to a qualified attorney to assess your rights. In 2016, the Department of Justice paid out over $500 million to individuals who came forward and blew the whistle on fraud.


To learn more about our Whistleblower & Qui Tam practice, click here. Our firm is located in Nashville, Tennessee but we represent whistleblowers all around the country.

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