According to the report by the Office of Inspector General of Health & Human Services, the erroneous claims — the majority of them too high, most of them for therapy — resulted in inappropriate Medicare payments of $1.5 billion, more than 5 percent of their total Medicare reimbursement.

The report acknowledged that CMS has recently made “several significant changes” to its payment systems to skilled nursing facilities but said more still needs to be done. It also noted the Medicare Payment Advisory Commission’s concerns that the current payment system encouraged therapy “even when it is of little or no benefit.”

CMS agreed with the recommendations, the report said, and also will be working to address the fact that 47 percent of claims included at least one Minimum Data set item inconsistent with the medical record. Minimum Data Set is part of the process for clinical assessment of residents.

Click here to read the report.