PDPM · MDS 3.0 · Therapy Documentation · UPIC and RAC Review

Skilled Nursing Facility Audit Defense

SNF audits turn on the assessment, not the bill. The MDS drives the payment, so that is where the reviewer starts.

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Bring us the records request and a sample of the MDS assessments at issue before anything is produced.
Skilled Nursing Facility Briefing

PDPM, the MDS and the Two Tracks a Facility Faces

Skilled nursing payment runs through the Patient Driven Payment Model, and PDPM is driven by the MDS assessment rather than by therapy minutes. That changed what auditors look at: the primary diagnosis mapping, the clinical categories, the non-therapy ancillary comorbidities and the assessment’s support in the clinical record.

A facility also lives with a second track. Survey and certification, deficiency citations and civil money penalties run alongside payment review and draw on the same records. A defense that resolves a payment dispute while creating a survey problem has not resolved anything.

PDPM
Assessment-Driven Payment Model
MDS 3.0
The Document Auditors Start From
2,000+
Audits and Investigations Handled
Immediate
Response for Audit Deadlines
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DOJ
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FBI
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HHS-OIG
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McKesson
NAMFCU
NAMFCU
U.S. Treasury
Treasury
Client Reviews
What Clients Say
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The Stakes
Payment review and the survey track feed on the same records

A postpayment review of PDPM coding can produce an extrapolated demand across the full claim population. The same clinical records, and the same conclusions about whether care matched the assessment, can support deficiency citations, civil money penalties and in serious cases a referral. Facilities that treat the audit as a billing matter and the survey as a clinical one repeatedly find that positions taken in the first are used in the second.

  • PDPM makes the MDS the centre of the audit
  • Postpayment review with extrapolation across the population
  • Survey, CMPs and referrals draw on the same clinical record
Case files binders
Case files
01
Assessment coding drives the whole payment

Under PDPM the primary diagnosis mapping, clinical category, functional scoring and comorbidity capture determine the rate. A reviewer who disagrees with the assessment disagrees with every claim built on it, which is what turns individual findings into population-level exposure.

Coding Exposure
02
Extrapolation multiplies a small sample

A postpayment review typically examines a sample and projects the error rate across the audited period. A modest number of contested assessments can produce a demand far beyond the value of the claims actually reviewed, and the statistical methodology is often the largest single defense.

Extrapolated Demand
03
The survey track runs on the same facts

Documentation that a payment reviewer reads as unsupported coding, a surveyor may read as care not delivered as planned. Deficiencies, civil money penalties and payment denial for new admissions follow a different process but the same records, so both have to be defended together.

Parallel Track
Why SNF Audits Are Different
The document that sets the payment is a clinical assessment, not a claim

Four features distinguish a skilled nursing review from most other Medicare audits.

Factor 01
PDPM moved the target
Under the previous model, therapy minutes drove the rate and audits followed the therapy logs. Under PDPM the assessment does, so reviews concentrate on diagnosis mapping, clinical category assignment and comorbidity capture. Defense material built for the old model answers the wrong question.
Factor 02
Assessment timing is substantive, not clerical
Assessment reference dates, completion timing and the interaction of scheduled and interim assessments all affect payment. Timing defects are treated as coding defects, and they are among the more common findings in a PDPM review.
Factor 03
Non-therapy ancillary capture attracts attention
The NTA component rewards documented comorbidities, which makes it a natural focus for reviewers looking for conditions coded but not clinically supported. Each captured condition needs to be traceable to the record, not merely present on a list.
Factor 04
Staffing and delivery evidence sits behind everything
Whether the care described was actually delivered is answered by nursing notes, therapy records, MAR entries and staffing data. Facilities that can produce that chain quickly are in a materially stronger position than those reconstructing it after a demand.
The assessment is where the audit starts, so it is where the defense has to start
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Illustrative stack of legal and medical records prepared for document review
Document review · Illustrative image, not a client record
Document Review

The document response shapes the next procedural stage

The first response is not a routine administrative task. It establishes the documents, timing, and record the contractor can later use in its findings and on appeal.

Notice and deadlineIdentify the review posture and protect the earliest response window.
Contractor and review typeConfirm whether the matter is a document request, prepayment review, postpayment review, or focused medical review.
Scope and requested recordsReview the claim universe and the requested records before producing a file that cannot be taken back.
Our Approach
How we defend a skilled nursing facility audit

Four stages, from records request to appeal or survey response.

  • Document request response and audit scope evaluation
  • Initial determination engagement and statistical methodology challenge
  • Formal appeals: redetermination, QIC reconsideration, ALJ hearing
  • Parallel FCA and criminal coordination if the contractor refers
Conference room
Where defense is built
01
Establish what kind of review this is

MAC probe, RAC review, UPIC program integrity work and SMRC review have different purposes and consequences. We identify the contractor, the period, the claim universe and whether extrapolation is in prospect before anything is produced.

02
Audit the assessments against the record

We test the sampled assessments the way a reviewer will: diagnosis mapping, clinical category, functional scoring, NTA capture, assessment timing, and whether each element is traceable to contemporaneous clinical documentation.

03
Produce with the survey track in mind

Records are produced organised to the request and to the coverage criteria, and the accompanying submission is written so that nothing said to defend the coding creates an admission about care delivery.

04
Appeal, and attack the methodology

Where findings are adverse we take them through redetermination, reconsideration and ALJ hearing. Where extrapolation is used, the sampling frame, sample size and statistical application are examined directly, because that is frequently where the largest recovery sits.

Health Law Alliance attorneys
The HLA Bench

The HLA Skilled Nursing Facility Audit Team

Health Law Alliance handles the response and any parallel appeal, licensing matter or referral as one coordinated matter, so the strategy does not change hands as the matter moves between forums.

The bench includes a former Assistant U.S. Attorney nominated for the DOJ Director's Award, senior healthcare-company counsel, and attorney-providers with experience across healthcare audits and investigations.

Health Law Alliance

Firm record

5,000+Matters handled
2,500+Clients represented
2,000+Audits overseen
ImmediateAttorney response
Former professional experience

Where Our Attorneys Served Before Health Law Alliance

Department of Justice Former Assistant U.S. Attorney
Drug Enforcement Administration Former DEA Diversion Control Program Manager
OptumRx Former senior executive experience
McKesson Former healthcare-industry experience

Agency and company marks identify former professional experience of individual HLA team members. They do not imply affiliation, endorsement, or a client relationship.

Common Questions
Frequently Asked Questions

Seven questions that come up on almost every first call. The answers below are general; specific situations require privileged consultation.

What do SNF audits actually look at?
Under PDPM, principally the MDS assessment and its support in the clinical record: primary diagnosis mapping, clinical category, functional scoring, non-therapy ancillary comorbidity capture, and assessment timing. The claim follows the assessment, so the assessment is the target.
Who audits skilled nursing facilities?
Medicare Administrative Contractors, Recovery Audit Contractors, the Supplemental Medical Review Contractor and Unified Program Integrity Contractors, depending on the purpose. A UPIC review sits within a program integrity function and carries different downstream risk.
What is extrapolation and why does it matter here?
The contractor reviews a sample, calculates an error rate and applies it across the full claim population for the period. It is how a review of a few dozen assessments becomes a demand measured in millions, and challenging the statistical methodology is often the most valuable part of the defense.
Does an audit affect our survey standing?
It can. The records are the same, and conclusions about whether care matched the assessment can support deficiency citations and civil money penalties. The two processes are separate but they are not independent, and they should be defended together.
How far back can a review go?
The lookback depends on the type of review and the authority relied on, and program integrity reviews generally reach further than routine claim review. Establishing the period and the claim universe early is essential to knowing the real exposure.
What is the single most common finding?
Coding that the record does not clearly support, particularly comorbidity capture and clinical category assignment where the underlying clinical documentation is thin, inconsistent or not contemporaneous. Most of these are documentation failures rather than clinical ones.
Speak with Skilled Nursing Facility Audit Counsel Today

Get the assessments reviewed before the records go out

Send us the records request and a sample of the assessments at issue. We will tell you how a reviewer will read them, whether extrapolation is likely, and what the survey exposure looks like on the same facts. Free, confidential, no retainer.

"The contractor sent a document request covering three years of claims. Health Law Alliance was on the call within two hours, walked us through the production framework, and ran a privileged pre-production review of every document before it left the practice. When the findings came back with extrapolation, the methodology challenge at the redetermination level reduced the recoupment demand to a small fraction of the original number. The procedural record built at the redetermination stage carried through the QIC reconsideration." - Practice administrator, multi-location practice (anonymized client, 2024)
SNF records request received? The MDS is where the reviewer starts.