Skilled Nursing Facilities (SNFs) are frequently subject to post-payment audits under the Medicare Recovery Audit Contractor (RAC) program. One of the key RAC contractors performing these audits is Performant Recovery Inc., operating under the oversight of the Centers for Medicare & Medicaid Services (CMS).
RAC audits targeting SNFs are highly focused on medical necessity, skilled level of care, and documentation integrity. These audits often result in significant recoupments when facilities cannot fully support Medicare Part A stays.
What Is a Performant RAC Audit?
The RAC program is designed to identify and recover improper Medicare payments. Performant Recovery conducts audits based on CMS-approved issues, often targeting high-risk billing areas.
SNF RAC audits are typically:
Retrospective (post-payment reviews)
Triggered by data analytics or CMS-approved issues
Focused on Part A skilled stays
Financially impactful (recoupment and appeal exposure)
Facilities receive documentation requests requiring full clinical records for selected stays.
Scope of SNF RAC Reviews
Performant evaluates whether SNF services met Medicare coverage criteria for skilled care. The audit is comprehensive and reviews the entire stay, not just isolated services.
Key areas of review include:
Medical necessity for skilled nursing services
Admission appropriateness from hospital to SNF
Daily skilled care documentation
Therapy services and intensity
Length of stay justification
Discharge planning
The central question: Did the resident require daily skilled care that could only be provided in a SNF?
Core Documentation Requirements
Skilled Level of Care
The most critical requirement in SNF audits is demonstrating that the resident required daily skilled services.
Documentation must support:
Skilled nursing or therapy needs requiring professional staff
Daily monitoring and assessment
Clinical complexity beyond custodial care
If documentation reflects routine or maintenance care, claims are at high risk for denial.
Physician Certification
Physician certification is required to validate the SNF stay.
Facilities must ensure:
Initial certification is:
Recertifications are completed as required
Physician involvement is evident throughout the stay
Missing or late certifications are common denial triggers.
Nursing Documentation
Nursing documentation must demonstrate ongoing skilled care and clinical oversight.
Key expectations:
Daily skilled interventions
Monitoring of patient condition
Response to treatment
Documentation of changes in status
Documentation must show why care required skilled personnel, not just that care was provided.
Therapy Documentation
Therapy services are heavily reviewed in SNF RAC audits, especially regarding intensity and necessity.
Documentation must demonstrate:
Individualized treatment plans
Measurable goals
Patient participation and progress
Skilled need for therapy services
Over-documentation of therapy minutes without clinical justification is a common issue.
MDS and Care Plan Alignment
The Minimum Data Set (MDS) must align with the clinical record.
Facilities must ensure:
MDS reflects actual patient condition
Care plans are individualized
Documentation supports coded assessments
Inconsistencies between MDS and clinical documentation raise audit concerns.
Common Denial Drivers in SNF RAC Audits
Performant RAC audits consistently identify similar patterns of deficiencies across SNFs.
Most frequent denial reasons include:
Lack of skilled level of care
Documentation reflecting custodial care
Incomplete or inconsistent nursing notes
Weak or unsupported therapy documentation
Missing or late physician certifications
Lack of evidence for daily skilled need
These issues often result in full denial of entire stays.
High-Risk SNF Audit Scenarios
Certain types of SNF stays are more likely to be targeted.
High-risk scenarios include:
Short stays with minimal documentation
Long stays without clear ongoing skilled need
Therapy-driven admissions without nursing complexity
Plateaued patients with continued therapy billing
Readmissions without clear clinical justification
Facilities should closely monitor these cases internally.
Responding to a Performant RAC Audit
A RAC audit requires a structured and defensible response. The quality of the submission directly impacts the outcome.
Recommended response approach:
Immediately log and track audit request
Assign responsibility to an audit response team
Conduct internal clinical review of the stay
Verify:
Skilled need is clearly documented
Physician certifications are present
Documentation is consistent across disciplines
Organize records chronologically
Submitting incomplete or disorganized records significantly increases denial risk.
Building a Strong Audit Defense
A successful audit defense is not just about submitting records. It is about clearly telling the clinical story.
Strong defense strategies include:
Providing a clinical summary explaining skilled need
Highlighting key documentation supporting medical necessity
Demonstrating progression or complexity of care
Ensuring alignment across:
Nursing notes
Therapy documentation
Physician records
Clear, well-structured submissions improve reviewer interpretation.
Strategies to Reduce RAC Audit Risk
SNFs must implement proactive systems to minimize audit exposure.
Key strategies include:
Conduct routine skilled level of care audits
Train staff on Medicare coverage criteria
Strengthen nursing documentation practices
Align therapy documentation with clinical need
Monitor MDS accuracy and consistency
Perform mock RAC audits
Facilities that audit themselves regularly perform significantly better during RAC reviews.
Alignment with CMS SNF Coverage Requirements
RAC audits are based on Medicare SNF coverage rules under CMS guidelines. Facilities must ensure compliance with these standards at all times.
Strong-performing SNFs demonstrate:
