Medicare Over-Billing Most Common Among For-Profit Nursing Facilities

Following a November report from the Office of the Inspector General (OIG) revealing a $1.5 billion Medicare over-billiing by skilled nursing facilities, it turns out that for-profit providers are more prone to overcharge for unnecessary treatment than nonprofits, according to a recent article published by Bloomberg Businessweek.

Claims from for-profit homes that were deemed unsuitable for patients accounted for 30% compared to the 12% recorded for nonprofit facilities, according to data Bloomberg News obtained through a Freedom of Information Act from the U.S. Department of Health and Human Services’ Office of the Inspector General.

Having grown more than a third since 2004, for-profit care providers account for 96% of surgical centers, according to a 2012 report by the Medicare Payment Advisory Commission (Medpac). Meanwhile, 50% of home health, dialysis, long-term care hospitals, skilled nursing facilities and hospice sectors are for-profits, writes Medpac.


Accounting for such large shares of the health care market, for-profits have come under increased scrutiny in recent months by the OIG, whose November report urged the need for enhanced monitoring of falsified claims.

In the nursing home sector, for-profits raked in 78% of the $105 billion revenues, up from 72% in 2002, according to Bloomberg’s findings.

The number of cases against nursing homes have gone up drastically in the past four years, Bloomberg notes, as there has been a 60% increase in all department cases during that time frame.


“Federal prosecutors brought in 120 now-resolved civil and criminal cases against nursing homes and related individuals from 2008 to 2012, twice the number of the prior five years,” writes Bloomberg.

In one recent case, a settlement resolved allegations against a Texas-based operator of skilled nursing facilities located in Atlanta.

The settlement, announced by the U.S. States Attorney’s Office between the state of Georgia and GGNSC Holdings LLC of Plano, Texas, resolved allegations against the GGNSC “Golden Living” nursing home filed under the False Claims Act and the Georgia State False Medicaid Claims Act, Bloomberg writes.

“Golden Living fraudulently billed Medicaid for nursing services which were substandard and, tragically, resulted in harm to patients,” said Attorney General Sam Olens in announcing the settlement.

The government alleges that GGNSC submitted false claims to Medicare, Medicaid and the Veterans Administration because it provided patients at a number of its various facilities with inadequate and worthless treatment from January 1, 2006 through May 31, 2011.

GGNSC has agreed to pay $613,300 to resolve the allegations against them. The U.S. share of the the settlement is $423,544, according to the U.S. Attorney’s Office of Georgia’s Northern District.

The claims settled in the dispute are allegations only and there has been no determination of liability, writes the U.S. Attorney’s Office.

Read the Bloomberg BusinessWeek article.

Written by Jason Oliva