(The Center Square) – Virginia lawmakers are calling on federal officials to strengthen oversight of nursing home spending after a federal audit revealed millions in Medicare overpayments and lax cost reporting.
In a letter to the Centers for Medicare and Medicaid Services, Rep. Rob Wittman, R-Va., and Sens. Mark Warner, D-Va., and Tim Kaine, D-Va., urged the agency to adopt recommendations from a December 2024 audit by the U.S. Department of Health and Human Services Office of Inspector General.
Medicare spent $27.6 billion on skilled nursing care in 2019 alone, according to Stanford Institute for Economic Policy Research, accounting for nearly half of all post-acute care spending and underscoring the financial stakes as federal watchdogs push for stronger oversight.
The audit found that 7 out of 14 sampled skilled nursing facilities overstated more than $1.7 million in Medicare-related party costs — expenses tied to companies owned or affiliated with the facilities themselves.
The lawmakers also cited troubling findings from a Virginia facility, Colonial Heights Rehabilitation and Nursing Center, where the state health department previously reported cases of abuse, neglect and falsified records.
”These reports are simply heartbreaking; it is critical that our seniors receive the quality care they’ve earned and deserve,” they wrote.
The OIG recommended that CMS require Medicare contractors to review nursing home cost reports and improve guidance on what counts as an allowable expense.
However, CMS rejected the first recommendation, saying it does not have the authority to require reviews without additional funding or statutory changes.
CMS said it supports more transparency but argued it can’t carry out the recommended cost report reviews without additional funding or legislative authority.
Wittman’s letter urges CMS to reconsider and take more aggressive steps to track related-party spending. It cites a growing need for transparency and accountability in how public funds are used to support long-term care.
The OIG warned that without stronger oversight, Medicare could continue paying for services and contracts that may not be justified, putting patients and taxpayers at risk.
