January 14, 2011

OIG Targets Medicare Outpatient Therapy Billing

The Department of Health and Human Services, Office of the Inspector General (OIG) conducted a review of national Part B Medicare outpatient therapy (i.e., physical therapy, occupational therapy, and speech-language pathology) claims from 2009. The OIG was concerned that Medicare expenditures for outpatient therapy rose 133 percent between 2000 and 2009 while the number of Medicare beneficiaries grew only 26 percent.

The OIG report,  Questionable Billing for Medicare Outpatient Therapy Services [PDF] (OEI-04-09-00540, December 2010), identified 20 counties that had (1) the highest average Medicare payment per beneficiary and, (2) more than $1 million in total Medicare payments for outpatient therapy services. These counties were in Florida, Georgia, Indiana, Louisiana, Mississippi, New York, and Texas. One of these counties, Miami-Dade County, Florida, had the highest average Medicare payments per beneficiary among the high-utilization counties and the highest total Medicare payments for outpatient therapy in 2009. The OIG analyzed this county separately and found that Medicare-beneficiary spending on outpatient therapy services was three times the national average. Miami-Dade County also had at least three times the national levels for five of the six questionable billing characteristics in Medicare outpatient services. These questionable billing characteristics include:

  1. Average number of outpatient therapy services per beneficiary that providers indicated would exceed an annual cap.
  2. Percentage of outpatient therapy beneficiaries whose providers indicated that an annual cap would be exceeded on the beneficiaries' first date-of-service in 2009.
  3. Average Medicare payment per beneficiary who received outpatient therapy from multiple providers.
  4. Percentage of outpatient therapy beneficiaries whose providers were paid for services provided throughout the year.
  5. Percentage of outpatient therapy beneficiaries whose providers were paid for services that exceeded one of the annual caps. (The OIG identified beneficiaries who received either a combination of PT and SLP services or OT services, excluding those provided in hospitals, for which Medicare allowed more than $1,840.)
  6. Percentage of outpatient therapy beneficiaries whose providers were paid for more than 8 hours of outpatient therapy provided in a single day.

The other 19 targeted counties had 72 percent greater than the national average for Medicare per-beneficiary spending in 2009 and also exhibited questionable billing characteristics, although not to the extent of Miami-Dade County.

 The OIG made the following four recommendations, and CMS agreed with them:

  1. Target outpatient therapy claims in high-utilization areas for further review.
  2. Target outpatient therapy claims with questionable billing characteristics for further review.
  3. Review geographic areas and providers with questionable billing and take appropriate action based on results.
  4. Revise the current therapy cap exception process.

The February edition of The ASHA Leader will contain a detailed article about this report. For further questions, contact Kate Romanow, ASHA's director of health care regulatory advocacy, at kromanow@asha.org or 301-296-5671.


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