RFK, Jr.-Dr. Oz Fraud Scrutiny Raises the Bar for SNFs

Now that the Trump Administration has expanded exclusion authority to the Centers for Medicare and Medicaid Services (CMS), clinical leaders are saying that providers must realize a more aggressive policing for fraud and abuse by the feds will demand a coordinated plan to ensure more than just the billing department has its records straight.

Anyone who has kept up with the news in recent months has noticed a surge in attention by the Dept. of Health and Human Services (HHS) and CMS to crack down on fraud, waste, and abuse, even if a portion of the crackdown is in the allegations stage and has not been proven out.

HHS Sec. Robert Kennedy, Jr. this week, along with CMS Administrator Mehmet Oz (Dr. Oz), deferred $1 billion in federal Medicaid payouts to California and Minnesota pending receipt and review of documentation these states have been required to submit, to address allegations of fraud in certain Medicaid claims. These allegations do not involve skilled nursing facilities.

New Powers a ‘Potential Concern’ 

The kicker though was not the state news, but that RFK, Jr. said he was delegating exclusion authority to CMS, which could use the power to apply a permanent exclusion from participating in the Medicare and Medicaid programs.

To this point, such authority on exclusions was contained to the HHS Office of Inspector General (OIG).

In a primer Secretary Kennedy Extends Exclusion Authority to CMS on LeadingAge’s website, the association said “with both OIG and CMS now having the authority to exclude providers, this consolidation of power is potentially concerning, and we will continue to monitor the intersection with other policy proposals.

Frontline Impacts

For skilled nursing facility providers, the announcement from HHS reinforces the need for greater vigilance in claims submission, documentation, and compliance oversight, said Amy Stewart, RN, chief nursing officer, American Association of Post-Acute Care Nursing (AAPACN).

She said CMS has the ability to compare data across multiple sources, including MDS assessments, PDPM classifications, nursing and therapy documentation, diagnoses, hospital records, Payroll-Based Journal staffing reports, pharmacy data, and Medicare claims.

“Inconsistencies among these sources may trigger additional scrutiny—even when the discrepancies result from inadequate processes rather than intentional misconduct,” Stewart said.

Medical necessity is another critical area of concern, she noted.

“Providers must ensure that documentation clearly supports that skilled services were reasonable and necessary, required the expertise of qualified professionals, and met the criteria for delivery in the SNF setting. Documentation should consistently demonstrate the resident’s clinical condition, the skilled interventions provided, and the resident’s response to those services,” Stewart said.

Staffing information may also receive increased attention. “Inaccurate PBJ reporting, unsupported agency hours, discrepancies between reported staffing and billed services, or care that could not reasonably have been delivered with the available workforce may raise compliance concerns. Recent OIG findings regarding the accuracy of PBJ information further emphasize the importance of validating staffing data before submission,” she added.

Third-party vendors can create additional exposure for facilities. Arrangements involving laboratory testing, wound-care products, durable medical equipment, pharmacies, therapy providers, hospice referrals, and physician services should be reviewed for medical necessity, financial or ownership relationships, potential kickbacks, and unusual billing practices, Stewart said.

“Ultimately, Kennedy’s initiative increases the likelihood that documentation, staffing, quality, and billing information will be evaluated collectively. Preventing fraud, waste, and abuse can no longer be viewed primarily as a billing-department responsibility. It requires coordinated oversight and accountability across nursing, MDS, therapy, medical services, human resources, finance, compliance, and administration.”

AHCA/NCAL Has Concerns, Too

Also, in response to the development, John Kane, senior vice president of reimbursement policy, American Health Care Association/National Center for Assisted Living (AHCA/NCAL), said there are nuances to the HHS/CMS crackdown that need watching.

“While AHCA/NCAL supports CMS’ stated goal to combat fraud, waste, and abuse, effective program integrity depends not only on strong enforcement authorities, but also on targeted, risk-based policies that distinguish intentional misconduct from inadvertent administrative errors,” he said.

“This unprecedented use of the compliance process to withhold such a substantial amount of funding from providers risks creating significant access and quality of care issues for the vulnerable Americans Medicaid is meant to serve.”

Trickle Down

In addition, Kane said while CMS states that deferring these payments is intended to target only certain high-risk services within the Medicaid program, “withholding such substantial funds from these programs utilizing a method that lies outside of the standard disallowance process undoubtedly has trickle-down effects that could compromise the health and safety of Medicaid beneficiaries outside of these high-risk areas.”  

AHCA/NCAL, he said, hopes to continue to work with HHS to combat fraud, waste, and abuse within the Medicaid program in a manner consistent with ensuring that beneficiary access to high-quality care is maintained and that vulnerable populations are not threatened due to the actions of a few bad actors.

In California, the California Association of Health Facilities (CAHF) said it is reviewing the announcement from HHS and CMS regarding the deferral of federal Medicaid payments to California.

“While it is too early to determine the full implications, we are working to understand its potential impact on California's Medi-Cal program and those who depend upon it. We will continue to monitor developments as additional information becomes available,” said Corey Egel, director of public affairs, CAHF.

Questions or comments? Contact Patrick Connole at pconnole@parkplacelive.com.