Recovering improper costs in SNF and IRF claims

 

Claims related to long-term care are complex. Members who require long-term care typically face a variety of different post-acute care situations, such as extended recovery related to a significant injury or complicated illness, or managing day-to-day care as they reach old age. Two options for managing care in these cases are skilled nursing facilities and inpatient rehab facilities. While these facilities provide crucial care to recovering members, both are known for being costly and complex, with significant clinical expertise necessary for expert review.

But despite SNF and IRF claims being a niche segment of health plans’ claim volume, lost costs from improperly filed SNF and IRF claims can add up quickly. With the right support, SNF and IRF claims represent high-value, high-opportunity reviews even in small volumes.

What is the purpose of skilled nursing facilities (SNFs) and inpatient rehab facilities (IRFs)?

Skilled nursing facilities

A skilled nursing facility (SNF) is a healthcare setting that provides the highest quality of care to members post-discharge to reduce complications. The goal of these facilities is to assist members in their recovery process so that they can safely return home. Some examples of care where a SNF is necessary are for rehabilitation following a stroke, post-surgery recovery, or specialty wound care. Services provided can include round-the-clock supervision, tube feedings, IV therapy, and medication management; assistance with eating, hygiene, and toileting; and physical therapy, speech therapy, and occupational therapy.

Inpatient rehabilitation facilities

An inpatient rehabilitation facility (IRF) is a hospital or part of a hospital that provides intensive rehabilitation services to members who are recovering from severe injuries, illnesses, or surgeries. The goal of these facilities is to help members regain physical, cognitive, and emotional abilities to allow them to return to their homes and communities while regaining as much independence as possible. Some examples of care where an IRF is necessary include cancer, senility, stroke, complex chronic illness, neurological illness, amputations, and major traumas that result in temporary or permanent impairments. Services include physical therapy, occupational therapy, speech-language pathology, and prosthetic and orthotic services. Members are typically obligated to attend therapy a minimum of three hours each day, five or six days a week.

The complexities and costs of SNF and IRF claim reviews

Due to the nature of illness or injury required for care at a SNF or IRF, the claims for these facilities tend to be extremely complex, requiring a specialized auditor to validate documentation, coding and clinical criteria.

There are two payment methodologies per review type, which are driven by specific health plan policies established with their provider networks:

• SNF per diem and SNF Patient Driven Payment Model (PDPM)
• IRF per diem and IRF Prospective Payment System (PPS)

These reviews each have their own unique payment methodologies and configuration requirements that must be followed to remain in line with regulations. This can be challenging to perform in-house at a health plan without the right level of expertise at the key intervention point to identify areas of overpayments.

Navigating these complex systems without experts can leave behind costs that add up quickly. Skilled auditors need to examine a litany of questions:

• What was documented during the initial assessment and was that billed correctly?
• Does the documentation within the medical records support what was billed during the stay?
• Does the documentation for quality-of-care match what the patient received during their stay?

Recovering the value of SNF and IRF claims

Adding an extra layer of review to SNF and IRF claims increases the inpatient cost savings potential of an existing clinical review program—and the recovered costs can be substantial. For example, in 2023, Cotiviti identified more than $30 million in SNF and IRF claims across four health plans.

To recapture lost costs that may have slipped through the cracks due to complexity, and to get the expertise they need to assess these claims without overloading existing teams, many plans can benefit from vendor support for SNF and IRF claims. Experts can quickly navigate the intricacies of these claim structures to sort out patterns that might point to inappropriate coding or fraud, waste, and abuse. Adding incremental value, with built-in expertise, support teams can help health plans to manage SNF and IRF claim reviews for better accuracy and compliance.