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OIG finds 61% therapy services error rate

Posted by Margaret Scavotto, JD, CHC on 5/23/18 7:02 AM

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In March 2018, the OIG issued Report A-05-14-00041, Many Medicare Claim for Outpatient Physical Therapy Services Did Not Comply with Medicare Requirements

The OIG reviewed 300 random Medicare outpatient PT claims for services provided between July and December of 2013.

Based on its review, the OIG found:

  • 61% of outpatient Medicare PT services did not comply with Medicare requirements.
  • Medicare paid an estimated $367 million for these services.

The OIG identified three types of claims errors: medical necessity, coding, and documentation. Here is a breakdown of the errors by type:

Medical Necessity Errors (91 claims out of 300)

  • 98%: Services not reasonable
  • 33%: Services not effective
  • 31%: Services did not require the skills of a therapist
  • 29%: No expectation of significant improvement

Coding Errors (145 claims)

  • 59%: Timed units claimed did not match units in treatment notes
  • 54%: Missing modifiers
  • 41%: Incorrect codes

Documentation Errors (112 claims)

  • 71%: Plan-of-care deficiencies
  • 66%: Treatment note deficiencies
  • 8%:  Recertification deficiencies

Providers of outpatient physical therapy can expect increased claims monitoring by CMS, as well as more education from CMS.

Same song different tune?

 While this review focused on outpatient physical therapy provided in an office setting, the OIG has similar concerns about therapy provided in nursing homes.  A 2012 OIG report found errors involving coding, medical necessity, and documentation in SNFs.

In November 2012, the OIG released a report: Inappropriate Payments to Skilled Nursing Facilities Cost Medicare More than a Billion Dollars in 2009.    

The OIG found that 25% of all SNF Medicare claims were erroneous. The errors included:

  • 20.3%: Claims with an inaccurate RUG (upcoded). In 57% of these claims, SNFs provided more therapy on the MDS than was documented in the medical record; and 25% of these claims involved therapy listed in the medical record that was not reasonable and necessary
  • 2.5%: Claims with an inaccurate RUG (downcoded)
  • 2.1%: Claims that did not meet Medicare coverage requirements (e.g. no physician order)

The OIG also found that 47% of claims involved inaccurate MDS information. The primary reporting error was the amount of therapy received or needed, followed by special care, ADLs, oral/nutrition status, and skin conditions/treatment.

What you can do

The takeaway here is: whether you are providing outpatient therapy, skilled nursing therapy – or another Medicare service involving therapy – medical necessity, documentation and coding errors remain common errors of OIG concern. Incorporating these items into your regular compliance audits will help you find and correct errors internally and improve claims accuracy.

MCS Sig Aug 2017

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Topics: Auditing and Monitoring, Billing and Claims Submission, OIG compliance resources

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