Heads Up: OIG Eyeballs Three-Day Hospital Rule.

The Department of Health and Human Services Office of Inspector General (OIG) will be auditing skilled nursing facility records in fiscal 2001 to determine if the Medicare three-day prior hospitalization rule is being followed. The project is part of the 2001 work plan for the agency, which is responsible for ferreting out fraud and abuse in HHS programs.

Stimulus for the study is a September 15 OIG review of claims submitted by Illinois SNFs. Choosing a sample of claims, the OIG found more than $900,000 in Medicare reimbursement for stays that did not meet the coverage conditions. "Based on the state error rate, we estimate that Medicare could be paying over $20 million a year for ineligible nursing stays nationwide," the OIG concluded.

Given a chance to comment on the Illinois data, then-HCFA Administrator Nancy-Ann DeParle didn't see cause for alarm, noting that the sample the OIG chose to investigate was exceptionally small (100 out of a 1996 universe of 152,139 claims). Nevertheless, HCFA lost and OIG won--and the national review is on. So providers should make sure their admissions paperwork has the is dotted and the t's crossed, lest OIG try to dun them for improperly paid claims.

Some reassuring words: HCFA has promised to work with its fiscal intermediaries to educate providers and prevent improper payments in the first place.