More than a decade ago, Congress set out to squeeze the fraud out of Medicare billing at nursing homes, requiring more precise justifications for costs. It created new "ultra-high" billing categories intended to be used for only 5 percent of the patients needing highly specialized care and rehabilitation.
But within a few years, nursing homes flooded the ultra-high categories with patients, contributing to $542 million a year in potential overpayments, federal analysts found.
Since then, the numbers in the ultra-high categories have quadrupled, and the amount of waste and abuse could reach billions of dollars a year, according to nursing home experts and a Washington Post examination of the program. The billing program is specifically targeted in President Obama's health-care legislation passed last week by Congress, changing two rules that experts said have been exploited by nursing homes to inflate bills.