The OIG released a report entitled "Changes in Skilled Nursing Facilities Billing in Fiscal Year 2011."  The report discusses changes in skilled nursing facility (SNF) therapy reimbursement adopted in 2011 that unintentionally led to higher payments to SNFs. The OIG recommends that CMS make reimbursement changes in the FY 2012 rulemaking process to address the increased payments to SNFs. The OIG also recommends that CMS modify SNF group therapy billing policies and further adjust payments to reflect beneficiaries’ care and resource needs. Note that CMS’s May 6, 2011 proposed SNF PPS rule for FY 2012, apparently in alignment with the OIG recommendations, does set forth the option of applying a prospective adjustment to case mix weights to address the increase in Medicare expenditures associated with implementation of the Resource Utilization Groups, version four (RUG-IV) patient classification system, which would cut rates by $4.47 billion. CMS has not yet finalized this rule, but by law CMS is required to issue the SNF PPS update before August 1. In a separate report, the OIG examined the extent to which Medicare paid for Part B services for nursing home stays not paid for by Part A (non-Part A stays). Non-Part A stays are not subject to the same “consolidated billing” requirements as Part A stays, so individual providers may bill for services rendered to these individuals, which the OIG contends presents program integrity vulnerabilities. The OIG estimates that Medicare paid $4.9 billion in 2008 for Part B services during non-Part A stays; the OIG did not examine the medical appropriateness of these Part B services. Payments varied widely across service categories and by state. Three service categories – therapy services, evaluation and management, and major and minor medical procedures – accounted for 58% of the total payments, while the State of Louisiana had the highest average daily payments. The OIG concludes that its findings “will guide further review and identification of providers of Part B services warranting scrutiny by OIG and CMS.”