Saint Joseph’s Hospital of Atlanta: Three Hospital Days to Open the Next Medicare Benefit

In the Saint Joseph Hospital Atlanta SNF fraud case, Saint Joseph’s Hospital of Atlanta agreed to pay $26 million to resolve hospital-billing allegations that included unnecessary admissions used to qualify patients for later skilled nursing facility coverage. For someone in hospital admissions, utilization review or nursing-home billing, the alleged admission decision affected Medicare payment beyond the hospital’s own bill.

The Justice Department announced the settlement on December 21, 2007. A registered nurse who had worked at the hospital brought the False Claims Act qui tam case. The SNF Medicare eligibility allegation concerned the hospital stay used to open the next benefit, placing the hospital’s clinical and billing decisions at the center of the case.

What the Hospital Settlement Covered

The government alleged that Saint Joseph’s charged taxpayers the higher inpatient rate for services that should have been billed as outpatient care. The investigation focused primarily on Medicare claims from 2000 through 2005.

The short-admission allegations concerned stays usually lasting one day or less, sometimes longer, that the government said should have been billed as outpatient observation or emergency-room visits. The skilled nursing facility allegations concerned three-day admissions that allegedly failed to meet the criteria for covered hospital care but allowed patients to qualify for subsequent nursing-facility coverage.

The government also included certain inpatient admissions for placement of carotid artery stents that Medicare did not cover.

What makes the skilled nursing facility allegation distinctive is the second payment it could enable. An unsupported inpatient admission could both command a higher hospital payment and supply the qualifying stay for the care that followed. Taxpayers would be paying on both sides of the transfer on the strength of the same hospital-status decision.

What Are the Medicare Billing Guidelines for Skilled Nursing Facility Care?

For the qualifying stay at issue here, Medicare ordinarily requires at least three consecutive medically necessary inpatient hospital days. The Medicare Benefit Policy Manual’s skilled nursing facility chapter explains that the admission day counts and the discharge day does not. Time spent in observation or the emergency room before inpatient admission does not count toward that requirement.

That makes observation hospital days counted toward the three-day SNF qualifying stay a concrete billing concern. A patient can sleep in a hospital without accumulating qualifying inpatient days. The admission status and medical need have to support the stay that the next facility relies on.

In Saint Joseph’s case, the government alleged that the hospital admitted patients for the qualifying period without meeting covered-admission criteria. The alleged purpose was to make subsequent skilled nursing facility services eligible for Medicare payment. The hospitalization was being used to open a benefit beyond the hospital door.

The economics had been moving across that door for years. The 1999 Monthly Labor Review paper Health Services Industry: Still a Job Machine? reported that, as growth in inpatient hospital and physician payments slowed, payments for services following hospitalization, including skilled nursing facility care, increased dramatically. That history helps explain why an admission classification matters to more than the hospital’s revenue. The next provider has a financial stake in the patient’s eligibility too.

What Evidence Is Needed to Prove Fraud?

For an eligibility case involving a hospital and a skilled nursing facility, the useful evidence connects the clinical reason for admission, the inpatient status, and the hospital dates to the later nursing-facility claim. Our work on proving nursing home fraud starts with that connection between the care record and what Medicare was told.

We would compare hospital admission orders and clinical notes with the receiving facility’s admission packet and Medicare claim. The question is where the account of the patient’s qualifying stay came from and how it reached billing.

These records cross an institutional boundary. The hospital identifies a discharge destination, while the nursing facility decides whether it can accept the resident. The information sent with the patient connects those decisions to the later claim. Someone who worked on that handoff may be able to explain a discrepancy that a claim alone cannot show.

For an insider, the valuable knowledge may be who decided the admission status, what the clinical team documented, or why billing used a different account. We work with you to connect that knowledge to the claims and the people responsible for the representations.

What Is a Red Flag for Health Care Fraud?

An inpatient admission arranged to obtain later skilled nursing facility coverage despite a clinical record that does not support hospital admission is a red flag. So is a receiving facility’s qualifying-stay information that conflicts with the hospital’s observation status or dates. The Saint Joseph allegations show why the status decision deserves attention before the nursing-facility bill is ever submitted.

Patient Cycling Through a Hospital to Renew Medicare Coverage

Patient cycling through a hospital to renew Medicare coverage puts the same qualifying-stay mechanism to work from the nursing-home side. In a separate case involving AJIT Healthcare, doing business as Westlake Convalescent Hospital, the government alleged that residents were cycled through Temple Community Hospital to renew eligibility for Medicare skilled nursing facility stays even when inpatient hospitalization was unnecessary.

A different whistleblower complaint described the alleged cycle at Riverside in unusually direct terms:

What connects these separate allegations is the use of a hospital stay to obtain nursing-facility payment: the admission decision and the later claim belong in the same inquiry.

The Settlement Required More Than a Payment

The Department of Health and Human Services’ Office of Inspector General required the hospital and health system to enter a Corporate Integrity Agreement as a condition of continued participation in federal health care programs. The announcement described required policies and procedures governing future use of federal healthcare funds.

What Is the Reward for a Medicare Fraud Whistleblower?

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. In the Saint Joseph case, the Justice Department announced that the former hospital nurse would receive a $4.94 million whistleblower reward as her share of the recovery.

You Know How the Patient Became Eligible

If you saw hospital status used to qualify a patient for nursing-facility payment, speak with our whistleblower experts about the admission decision and the bill it made possible. We build the case with you and bring in Medicare fraud whistleblower lawyers who understand hospital admissions and skilled nursing facility coverage. We stay beside you, from your first call, to build your strongest Medicare whistleblower case.