Infusion Therapy Services Provided in Skilled Nursing Facilities

This final report points out that infusion services provided in 22 skilled nursing facilities (SNFs) were often unnecessary, overpriced, and/or misclassified on SNF cost reports. As a result, the 22 SNFs were reimbursed unallowable costs totaling approximately $5.3 million ($4.8 million for services not medically necessary) out of $9 million claimed during 1995 through 1998. The primary problem was the old retrospective reasonable cost-based reimbursement system which was vulnerable to abusive billing schemes. Currently, SNFs are paid under a prospective payment system (PPS). We recommended that the Health Care Financing Administration (HCFA) consider the impact of improper payments for infusion therapy services before making any refinements or updates to the SNF prospective payment rates. We also recommended that HCFA identify and recover overpayments which were made to SNFs for unnecessary and overpriced infusion services prior to the adoption of PPS, and direct its contractors to perform medical reviews of selected SNF patients to ensure that patients are receiving appropriate levels of infusion therapy. The HCFA generally agreed with our recommendations.