Medicare pays nursing homes to provide skilled services (therapy, wound care, etc) to patients, and trusts nursing homes to accurately report each patient's healthcare status.  The only time that Medicare audits a patient's chart is when a problem has been identified.  With over 16,000 nursing homes and thousands of assisted livings and group care homes in the US, many things are overlooked when it comes to auditing patient care.  But there are many ways th
     The more complicated a patient's needs, the higher the amount that Medicare will pay a nursing home.  Nursing homes are able to increase their billings by listing every possible diagnosis for the patient.  For example, if a doctor lists "Confusion possibly due to Alzheimer's Dementia" on the hospital History & Physical, a nursing home can list 1) Alzheimer's Disease, 2) Dementia, and 3) Altered Level of Consciousness.  Since they are only able to bill for conditions for which the patient is being actively treated, nursing homes can ask their physician to order low doses of medications commonly used to treat those diagnoses.  The physicians are usually willing to do so, and are able to increase their billed amounts accordingly.  They'll tell the patients/families that they're concerned about the patient, but it can be very difficult for patients to have all of their medications changed in order for the nursing home to increase its revenue.
     Those medications have certain side effects, which can mean additional diagnoses of agitation and difficulty sleeping.  The patient will also require speech therapy, physical therapy, and occupational therapy.  If the reason that the patient was sent to the hospital in the first place was a fall, there are additional potential diagnoses of pain management, constipation (due to the pain medications), dizziness ... and of course, the patient's usual home medications (such as high blood pressure, etc). 
     It's possible for a patient with virtually nothing wrong with him when he left home to return with 15-20 new diagnoses.  When he arrives at home, his primary doctor can discontinue all of the new medications - the patient might go through hell with all of the changes to his system, but the nursing home would have been able to bill at the maximum rates that Medicare will pay.  For more information about how nursing homes operate, order The Nursing Home Survival Guide on this site.  
     Have a nice week!  More next weekend!
   It's a two-for weekend - this story is about a hospice and a care home that are both out of business due to these, and other, practices:
     A patient lived in a group home, which is a home that is licensed by the
state to care for seniors.  The group home referred “Mr. Jones” for hospice so that they wouldn’t have to pay for all of the supplies and provide all of the personal care that he required.  Mr. Jones’ family lived out-of-state, so my general manager decided to allow the group home worker to  sign the Consent to Treat – but this is illegal.   Only the patient or his legal representative can give permission for a patient to receive medical
   Everything was fine until the unthinkable happened: Medicare asked for a
copy of the patient's chart.  The general manager called the Jones family in a panic, and faxed them the consents.  He told them just to sign and ignore the fact that he had back-dated the form.  To make things even worse, the family missed a signature and the general manager signed their name for them in his best imitation of their signature.  The new consent forms were faxed to Medicare and the general manager thought that he had resolved the issue.
    The manager wasn’t detail-oriented; the forms he sent to Medicare not
only had the actual date the family signed stamped at the top of the page, but his assistant also sent the fax cover sheet that instructed the family to sign and ignore the “back-dating,” along with the original form that the facility worker had signed on the patient’s behalf.  
    The Medicare program was not amused and asked for all of its money
back.  The state visited the care home as well.  Both the hospice and the group home were out of business within a couple of years.

    Mrs. Smith was an elderly woman with dementia whose husband was her
caregiver.  Both of them were admitted to a nursing home after her husband broke his hip.  They shared a room, with Medicare paying $700 + per
day for his care while their family paid about $200 per day for her room &
board.  This way, they could stay together.  
    The nursing home administrator had another idea; she directed me to
complete the paperwork that would send Mrs. Smith to the hospital against her will on a 72-hour hold because she was a danger to herself due to her Dementia.  If Mrs. Smith remained there for three days, she could return to the nursing home and they could bill Medicare for all sorts of treatments she didn’t need.  
   This was a blatant manipulation in order to game the system. 
Mrs. Smith wasn’t experiencing a mental breakdown and it wasn’t appropriate to send her to a psych ward; the hospital never should have accepted her.  I should mention that the nursing home administrator had bragged on several occasions that the local psychiatric ward would accept any patient she sent and hold them for at least three days – the magic number that allows the nursing home to bill Medicare when patients return.  
    After I refused to complete the forms that certified Mrs. Smith was a
danger to herself and to society, the administrator screamed at me for a few
minutes and then found a nurse who agreed to complete the paperwork (She later fired me).
  Mrs. Smith returned 3 days later and the nursing home billed Medicare at
the $700+ rate for the maximum amount of therapy for several months. 
Under the administrator’s direction, the nursing home then billed Medicare for three hours of therapy each day, even though she was so confused she wasn’t able to remember and benefit from the treatments.  
    The only benefit was to the nursing home and to the nursing home
administrator who received bonuses for behaviors such as this.