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For the period January 1 through December 31, 2002, we
estimate that Medicare overpaid Four Seasons Nursing Center (Four Seasons)
$792,000 for skilled services that were not (1) medically necessary at the level
provided in a skilled nursing facility (SNF) and/or at the Resource Utilization
Group (RUG) level claimed, (2) adequately supported by adequate documentation, and
(3) properly billed. Medicare pays SNFs a daily rate to cover skilled services
provided to Medicare beneficiaries. For billing purposes, SNFs complete an
assessment form that places a patient in a specific payment group, known as a
RUG, based on the patientís care and resource needs.
We recommended that Four Seasons (1) refund to the Medicare program $792,000 in overpayments, (2) work with CMS to resolve the potential overpayment set-aside totaling approximately $91,000, (3) ensure that future claims with skilled services comply with Medicare requirements for medical necessity, (4) strengthen its procedures to ensure that all Medicare claims are supported by adequate medical documentation and properly billed, and (5) work with its fiscal intermediary to determine the amount of any overpayments made subsequent to our audit period. Four Seasons disagreed with most of our findings and took issue with many aspects of the review. However, we rely on the knowledge and expertise of our medical reviewers and stand by our findings and recommendations.