Medicaid Revenue Loss From Unit, Census, and Eligibility Errors
Definition
Nursing facilities regularly lose Medicaid revenue through incorrect units billed, wrong census data (e.g., dates of death or discharge), and sending claims to the wrong payer, which result in denials, delayed payments, or write‑offs. CMS and industry guidance on home- and facility-based Medicaid services highlight unit and documentation errors as a leading cause of improper payments.
Key Findings
- Financial Impact: $5,000–$50,000 per facility per year in denied or written‑off Medicaid claims
- Frequency: Monthly
- Root Cause: Manual census management, failure to update admission/discharge/death dates, misunderstanding of dual-eligibility billing order, and miscalculation of service units (15‑minute vs hourly). CMS PERM analysis identifies number‑of‑units errors and insufficient documentation as common root causes of Medicaid improper payments, while industry billing specialists cite wrong census and dual-eligibility errors as a primary reason for Medicaid denials.
Why This Matters
This pain point represents a significant opportunity for B2B solutions targeting Nursing Homes and Residential Care Facilities.
Affected Stakeholders
Medicaid billing specialists, Admissions and census coordinators, Business office managers, Revenue cycle managers, Facility administrators
Deep Analysis (Premium)
Financial Impact
$10,000-$30,000 annually from Medicaid claim denials, write-offs, and delayed reimbursement due to unit, census, or eligibility errors caught post-submission • $10,000-$35,000 per year from MCO-denied units and rework • $10,000–$30,000 annually from premature discharges billed to Medicaid when Medicare Part A was still active; delayed unit submissions after discharge
Current Workarounds
Administrator maintains separate payer matrix in Excel; manual verification of VA vs. Medicaid primary payer status before claim submission; phone calls to VA facility coordinators to confirm eligibility; paper files tracking benefit verification dates • Administrator negotiates payer with hospice agency via phone/email; manual tracking of which services are hospice-covered vs. facility-covered in Word documents; nursing staff use separate documentation sheets for hospice vs. facility billing units • Administrator tracks length-of-stay manually to determine when to discharge from facility system; therapy staff document units in paper logs that are manually transcribed into EHR; post-discharge reconciliation of billed units vs. delivered units via Excel comparison
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Methodology & Sources
Data collected via OSINT from regulatory filings, industry audits, and verified case studies.
Related Business Risks
Chronic Medicare Part A SNF Denials From PDPM Coding and Documentation Errors
Operational Cost Overruns from Rework on Denied and Audited Claims
Cost of Poor Quality Documentation Leading to Repayments and Revenue Loss
Extended Time-to-Cash from High Denial and Resubmission Rates
Billing and Clinical Staff Capacity Consumed by Documentation and Audit Burden
OIG and CMS Overpayment Recoveries and Sanctions for Noncompliant SNF Billing
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