Study Finds For-Profit Nursing Homes Lead in Overcharging

White Plains, NY (Law Firm Newswire) February 25, 2013 – The nursing home industry has been over-billing Medicare.

According to federal inspectors, the nursing home industry is guilty of over-billing Medicare by $1.5 billion each year, charging for treatments and care that patients either do not need or never receive.

Research from the inspector general’s office of the U.S. Department of Health and Human Services found that more than 30 percent of claims from for-profit nursing home care centers were “padded,” either for care never given or not needed in the first place, a stark difference from the estimated nonprofit nursing homes pad rate of 12 percent.

For-profit medical care is a growing industry, taking up 78 percent of $105 billion in yearly nursing home revenue as of 2010, up from 72 percent in 2002. A 2012 Medicare Payment Advisory report found that for-profit providers “dominate most health care sectors”; health care researchers and Medicare overseers estimate that for-profit care billing fraud and waste is a major issue in the $2.8 trillion U.S. health care sector.

Since 2008, federal prosecutors have brought more than 120 civil and criminal cases against nursing homes and nursing-home related individuals, a doubling of the number of cases compared to the prior five years. For-profit care has expanded dramatically in most medical areas compared to the same care in the not-for-profit sector; for-profit hospice has grown at a rate 10 times faster than nonprofit hospice care from 2004 through 2009. For-profit outpatient surgery centers make up 96 percent of all such centers in the country, and 84 percent of all U.S. home-health care agencies are for-profit.

Nursing homes are responsible for employing more than 1.6 million care workers, second only to hospitals in the health care sector. Hospitals, meanwhile, are overwhelmingly still nonprofit: 88 percent of U.S. hospitals are nonprofit or government-run as of 2010, according to the U.S. Census Bureau.

Private investment and private ownership of medical facilities and medical care helps to push innovation and competition for quality care, according to advocates of private medical care, while critics contend that when medical care focuses on the bottom dollar, the quality of care can be at risk, especially for those without deep pockets.

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