01-066 Schizophrenia in SNF Findings of Medical Review

Noridian Healthcare Solutions, LLC (Noridian), as the Supplemental Medical Review Contractor (SMRC) for the Centers for Medicare & Medicaid Services (CMS), has conducted a post-payment review of claims for Medicare Part A Skilled Nursing Facility (SNF) billed on dates of service from January 1, 2020, through December 31, 2021. Below are the review results:

Project ID Project Title Error Rate for Reviewed Claims
01-066 Schizophrenia in SNF 20%


In May of 2021, the Office of Inspector General (OIG), published an issue brief (OEI-07-19-00490) titled “CMS Could Improve the Data It Uses to Monitor Antipsychotic Drugs in Nursing Homes”. OIG noted that in 2018, more than one in five Medicare long-stay nursing home residents aged 65 or over received an antipsychotic drug. While these drugs can be effective in treating a range of conditions, they must be prescribed appropriately.

OIG noted that 2018 MDS data showed that there were 98,227 residents aged 65 and older whom nursing homes reported as having schizophrenia. Approximately 30% of those residents had no record of a schizophrenia diagnosis in any of their 2017 and 2018 Medicare Part A, B or C claims.

Reason for Review

The SMRC was tasked to perform data analysis and conduct medical record review of SNF claims for beneficiaries with initial diagnosis of schizophrenia on antipsychotic medication with dates of service January 1, 2020, through December 31, 2021. The SMRC conducted medical record reviews in accordance with applicable waivers/flexibilities/statutory, regulatory, and sub-regulatory guidance.

Common Reasons for Denial

  • No response to the documentation request.
    • Internet-Only Manuals (IOM), Medicare Program Integrity Manual (MPIM), Publication 100-08, Chapter (Ch.) 3, Section states “During post-payment review, if no response is received within the expected timeframes (or extension), the MACs, RACs, UPICs and SMRC shall deny the claim as not reasonable and necessary.”
      • Providers are required to respond to requests for documentation within 45 calendar days of the additional documentation request. The documentation was not submitted or not submitted timely therefore the claim was denied.
  • Doumentation did not include certification or recertification.
    • IOM, Medicare Benefit Policy Manual (MPBM), Pub. 100-02, Ch. 15, Section 220.1.3 references Pub. 100-07 Ch. 4, Section 20, “A physician must certify that medical and other health services covered by medical insurance which were provided by (or under arrangement made by) the hospital were medically required.”
      • Skilled nursing certification or recertification records were not submitted for review.


Title XVII of the Social Security Act (SSA)

  • §1812(a)(2)(A), (b)(2) Scope of Benefits
  • § 1813(3) Deductibles and Coinsurance
  • § 1814(2)(B) Conditions of Payment and Limitations on Payment for Services
  • § Section 1815(a) Payment to Providers of Services
  • § 1819(a)-(f) Requirements for, and Assuring Quality of Care In, Skilled Nursing Facilities
  • § 1833(e) Payment of Benefits
  • § 1861(a) (1-2), (h)-(j) Definitions of Services, Institutions, Etc.
  • § 1862(a)(1)(A) Exclusions from Coverage and Medicare as Secondary Payer
  • § 1879(a) Limitation on Liability of Beneficiary where Medicare Claims are Disallowed
  • § 1888(e) Prospective Payment
  • § 1888(g) Skilled Nursing Facility Readmission Measure
  • § 1888(h) Skilled Nursing Facility Value-Based Purchasing Program
  • § 1893(b) Medicare Integrity Program
  • § 1899(f) Waiver Authority

Balanced Budget Act of 1997 (BBA), Public Law 105-33

  • § 4432(b) Prospective Payment for Skilled Nursing Facility Services

42 of the Code of Federal Regulations (CFR)

  • § 409.20-409.27 Posthospital SNF Care
  • § 409.30-409.36 Requirements for Coverage of Posthospital SNF Care
  • § 411.15 Particular Services Excluded from Coverage
  • § 413.1 Introduction and General Rules
  • § 413.330-413.360 Prospective Payment for Skilled Nursing Facilities
  • § 424.5(a)(6) Sufficient Information
  • § 424.20 Requirements for Posthospital SNF Care
  • § 425.612 Waivers of Payment Rules or Other Medicare Requirements
  • § 483 Requirements for States and Long-Term Care Facilities. Subpart B. Requirements for Long Term Care Facilities; and Subpart F. § 483.315 Specification of Resident Assessment Instrument

Federal Register

  • Interim Final Rule with Comments (IFC), CMS-1744-IFC. Medicare and Medicaid Programs; Policy and Regulatory Revisions in Response to the COVID-19 Public Health Emergency. Effective March 1, 2020. Retrieved from CMS-1744-IFC external link icon
  • IFC, CMS-5531-IFC. Medicare and Medicaid Programs, Basic Health Program, and Exchanges; Additional Policy and Regulatory Revisions in Response to the COVID-19 Public Health Emergency and Delay of Certain Reporting Requirements for the Skilled Nursing Facility Quality Reporting Program. Effective March 1, 2020. CMS-55341-IFC external link icon

Internet Only Manual (IOM), Medicare General Information, Eligibility and Entitlement Manual, Publication (Pub.) 100-01

  • Chapter (Ch.) 1 General Overview. § 10.1 Hospital Insurance (Part A) for Inpatient Hospital, Hospice, Home Health and SNF Services – A Brief Description; and § 20 Administration of the Medicare Program
  • Ch. 4 § 40 Certification and Recertification by Physicians for Extended Care Services

IOM, Medicare Benefit Policy Manual (MBPM), Pub. 100-02

  • Ch. 8 Coverage of Extended Care (SNF) Services Under Hospital Insurance
  • Ch. 15 § 250 Medical and Other Health Services Furnished to Inpatients of Hospitals and Skilled Nursing Facilities
  • Ch. 16 General Exclusion from Coverage; § 10 General Exclusion from Coverage; § 20 Services not Reasonable and Necessary; and § 110 Custodial Care

IOM, Medicare Claims Processing Manual (MCPM), Pub. 100-04

  • Ch. 1 General Billing Requirements
  • Ch. 6 SNF Inpatient Part A Billing and SNF Consolidated Billing
  • Ch. 30 § 40 and 50 Advance Beneficiary Notice of Non-coverage (ABN)
  • Ch. 30 Financial Liability Protections. § 130.2 Prior Hospitalization and Transfer Requirements for SNF Coverage as Related to Limitation on Liability; § 130.3 Application of Limitation on Liability to SNF and Hospital Claims for services Furnished in Noncertified or Inappropriately Certified Beds

IOM, Medicare Program Integrity Manual (MPIM), Pub. 100-08

  • Ch. 3 Verifying Potential Errors and Taking Corrective Actions
  • Ch. 3 § Time Frames for Submission
  • Ch. 3 § Additional Documentation Request Required and Optional Elements
  • Ch. 3 § No Response or Insufficient Response to Additional Documentation Requests
  • Ch. 3 § Documents on Which to Base a Determination
  • Ch. 3 § Signature Requirements
  • Ch. 3 § 3.3.3 Reviewing Claims in the Absence of Polices and Guidelines

Local Coverage Determination (LCD)

  • L35008 Non-Covered Services. Effective October 1, 2015 (Retired June 30, 2020)
  • L36219 Non-Covered Services. Effective October 1, 2015 (Retired June 30, 2020)

Local Coverage Article (LCA)

  • LCA A55503 Skilled Therapy Services in the SNF PPS Setting. Effective October 23, 2015.
  • LCA A55505 Skilled Therapy Services in the SNF PPS Setting. Effective October 23, 2015.


Last Updated Apr 14, 2023