CMS Announces New “SNF 5-Claim Probe & Educate Review”

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On June 8, 2023, the Centers for Medicare & Medicaid Services (CMS) announced a new nationwide audit of all skilled nursing facilities (SNF) and Hospital swing bed providers that submit claims for reimbursement to Medicare (the “SNF 5-Claim Probe & Educate Review”).^[1]  The audits will involve the Medicare Administrative Contractors’ (MAC) review of one small number of claims followed by education geared towards addressing any error identified to help prevent future claim denials and adjustments.

CMS implemented the new audit review due to an increased improper payment rate in 2022.  The Comprehensive Error Rate Testing (CERT) program projected an improper payment rate of 15.1% for SNFs in 2022, as compared to a 7.79% CERT error rate in 2021.^[2]  CMS believes the significant increase in the improper payment rate may be due to a misunderstanding related to how to bill properly under the Payment Driven Payment Model (“PDMP”) (claims of service on or after October 1, 2019).^[3][4]

The SNF 5 Claim Probe & Educate Review audits will begin on June 5, 2023, and consist of the following steps:

• The MACs will review 5 claims from each SNF and Hospital swing bed provider.^[5]
• Claims on or after October 1, 2029 may be reviewed, except for claims with a COVID-19 diagnosis.
• The MAC review will be limited to one request of 5 claims.
• The MAC will issue results letter with denial rationales (if errors are identified).
• One-on-one education with the MAC will be offered based on any errors identified in the audit.^[6]

The educational component is intended to decrease the CERT payment rate that may be driven by misunderstandings related to billing under the PDPM.

As far as the similarly structured Targeted Probe and Educate (TPE) reviews, the SNF 5 Claim Probe & Educate Review is different in that the SNF 5 Claim Probe & Educate audits will be limited to one 5 claim sample versus 1 to 3 rounds of review under a TPE audit.^[7]  At this point, SNFs that are currently undergoing TPE audits will continue with the TPE program.  However, SNFs that recently passed a TPE review will not have to undergo a SNF 5 Claim audit for one year.

Finally, the SNF 5 Claim Probe & Educate Review highlights CMS’ concern with a rise in errors related to the PDPM.  SNFs should consider conducting their own claims review, through a self-audit or the engagement of a professional consultant, to review current claims being submitted to Medicare to understand compliance with PDPM billing.  Also, SNFs should be on the lookout for the new audit requests from the MAC to ensure timely responses to the request.

If you need assistance with navigating the SNF 5 Claim Probe & Educate audits or defending billing audits, please reach out to Maynard Nexsen’s health care team for assistance. 

_{[1] Skilled Nursing Facility 5-Claim Probe and Educate Review | CMS; MM13164 - Skilled Nursing Facility Probe and Educate Review (cms.gov)
[2] CMS noted that the SNF errors were the “top driver of the overall Medicare Fee-For-Service improper payment rate.”  Id.
[3] Id.
[4] The CMS SNF billing model changed from the Resource Utilization Group (“RUG”) IV to PDBM on October 1, 2019. Details regarding the PDPM are available at: Patient Driven Payment Model | CMS
[5] MM13164 - Skilled Nursing Facility Probe and Educate Review (cms.gov)
[6] Skilled Nursing Facility 5-Claim Probe and Educate Review | CMS
[7] Targeted Probe and Educate | CMS}