OIG issues fraud alert for nursing homes

Federal authorities have issued a warning to health care providers involved with nursing home care, listing a number of activities that are potentially fraudulent and should be avoided. The warning comes from the U.S. Department of Health and Human Services' Office of the Inspector General (OIG). The fraud alert is the first from the OIG concerning nursing homes and hospices. These are the high points of the OIG's warning:

· Hospices should avoid these situations because they can constitute kickbacks:

- referring patients to a nursing home so the nursing home will refer patients to the hospice;

- providing free or discounted goods to a nursing homes to encourage referrals;

- providing payment to nursing homes for "additional" services Medicaid considers to be part of the overall room and board payment;

- providing free or discounted care to nursing home patients who haven't sought hospice care, in hope the patient will select hospice services after exhausting benefits for skilled nursing care;

- making hospice staff available at no cost to the nursing home to provide services that would normally be performed by nursing home staff.

· Hospices must not pay nursing homes more than the fair market value for noncore services, such as medical supplies, the nursing home may provide to hospice patients. Paying more than the fair market value may be seen as a kickback.

· Hospices may pay nursing homes up to 100% of the "room and board" Medicaid payments the nursing home would have received if the patient had not been enrolled in the hospice. Some hospices have paid more than that in the past, and the OIG says it can be a kickback.