Medicare fraud takes many forms and its astute practitioners know all the angles when it comes to illegally going after the government and the people’s taxpayer dollars. One particular prevalent Medicare fraud practice involves long term acute care hospitals (LTACH) and Medicare patients needing their services.

Here’s how the long term acute care hospital system works: Medicare pays for LTACH stays based on a prospective payment system (PPS). What this means is that payments are based on a preset, fixed amount. That amount is determined based on the type of service provided and the geographic area in which the LTACH is located.

As an example, the payment for a patient admitted to a long term acute care hospital for respiratory problems would differ from one admitted for care after a stroke.

LTACH facilities differ from more traditional general hospitals in that they specialize in long term acute care services while general hospitals serve many functions, such as maternity, acute care, emergency and the like.

Where Does Medicare Fraud Come In?

Under the LTACH PPS when a patient is discharged from the facility, he or she is assigned to a specific diagnosis-related group. Reimbursement to the facility is based on the average cost to treat such a patient in that diagnosis-related group, adjusted for geographic wage variations.

One qualification a LTACH hospital must meet is that its average inpatient length of stay for Medicare patients has to exceed 25 days. If it fails to meet that stay requirement during any reporting period, it receives a different reimbursement amount.

One often-encountered type of fraud in the LTACH environment involves the “interrupted stay” regulation.

This regulation stipulates that any patient discharged to either his own home or some other care facility who is subsequently readmitted to the LTACH facility before a certain number of days have passed will not receive another LTACH payment.

The regulation was written to prevent premature discharge prior to the patient’s physical readiness for the purpose of receiving additional reimbursement.

The fraud scheme used here attempts to capture two diagnosis-related group (DRG) payments as a patient nears his end of his first DRG stay. Such patients are not eligible for a second DRG payment if he is discharged to a short-term acute care hospital and then readmitted to the original LTACH facility within nine days. This nine-day period is referred to the “interrupted stay threshold”.

In this case, long term acute care hospitals have been known to block re-admission until the nine days have passed, with greater regard for its financial health than the patient’s.

Report Long Term Care Hospital Fraud/Medicare fraud here.

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