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Medicare Funding & Nursing Home Overbilling

One question many New York seniors (and their loved ones) considered during the presidential campaign was how each candidate’s election might affect programs like Medicare and Medicaid. While it is hard to say with certainty what changes, if any, will be made to these areas, much of the discussion between candidates centered around general approaches to tackling financial problems as they relate to Medicare and Medicaid.

In general, Governor Romney’s approach was more far-reaching, favoring structural changes to the programs, including shifting more responsibility to the states. It was claimed that this would result in more flexibility on top of cost savings. Conversely, President Obama was more inclined to focus on attacking “waste” within the system as well as fully implementing Obamacare to lower healthcare costs overall by better insuring all Americans.

Of course, with the President’s re-election, Obamacare is preserved and the approach championed by his opponents is less likely to become law. In fact, a new report out last week from the U.S. Department of Health and Human Services suggests that the administration may be going strong with its attempts to root out overbilling, waste, and fraud in the system.

The report details that an investigation shows that a staggering 1/4 of all Medicare expenditures going to nursing home might be unnecessary. That amounts to nearly $1.2 billion annually in wasted spending from public coffers. The majority of this is apparently connected to “upcoding.” This refers to billing by the nursing home for services that either were not provided, are more expensive than the ones provided, or were unnecessary.

It can be confusing to keep it all straight, but Medicare does not pay for extended long-term stays at a skilled nursing facility. Instead, they may pay for the extra care needed beyond the basics. Medcaid is the program that provides most payment for the common costs associated with moving into a nursing home. This report focused only on Medicare expenditures. As such, the overbilling refers to things like speech therapy, occupational therapy, and physical therapy provided to nursing home residents. Many of these residents are seniors who are on both Medicare and Medicaid.

What does this mean for New Yorkers thinking about their long-term care? It is hard to say, other than it will be important to keep on eye on any reimbursement changes by the government to these companies. If the payments are cut, it will be incredibly important for local families to be vigilant about chosing a long-term care facility that best prioritizes resident well-being over profit margin. Not all nursing homes are the same–even among those that rely primarily on funds from Medicare and Medicaid. Proper investigation of local facilities often means the difference between a loved one thriving or languishing in their golden years.

See Our Related Blog Posts:
What the Election Might Mean for Long-Term Care Issues in New York

Remember Our Seniors in Sandy’s Aftermath

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