OIG: Many Outpatient PT Claims Fail to Comply

OIG: Many Outpatient PT Claims Fail to Comply

The Office of Inspector General (OIG) did a study of physical therapy claims and documentation for Medicare patients and issued a report this month in March. Their findings are of great concern for the PT and rehabilitation specialty.
The OIG reviewed claims from 2013 and found that 61 percent of the Medicare claims for outpatient PT services that were reviewed did not comply with Medicare requirements for medical necessity, coding, or documentation requirements. The study was based on 300 claims that were randomly selected and of those 300 claims, 184 did not comply with the Medicare requirements according to the OIG report.
The OIG then extrapolated based on the findings from that 300 claim audit and felt that Medicare overpaid $367 million on services provided by outpatient PT from July 1 through December 31, 2013 (a half of one year). The OIG is recommending that the Centers for Medicare & Medicaid Services (CMS) instruct their Medicare Administrative Contractors (MAC) to notify providers of the potential overpayments so the providers can do their own investigation before the MAC audits them and self remit any refunds that they identify from these reviews. CMS also wants the MACs to educate providers about the Medicare requirements for submitting correct outpatient PT claims for reimbursement.

CMS and OIG Disagree

Interestingly, CMS disagreed with the OIG with their findings (generally) because they were not in agreement with the OIG’s interpretation of the CMS policies. CMS feels that more analysis should be performed on the sampled claims to determine if they met Medicare requirements. CMS did agree they did need to establish better mechanisms to better monitor the appropriateness of the PT claims as recommended by the OIG, and they also agreed that further education of providers was needed.
This debate between the reviewers for the OIG and those for CMS is another example of how difficult it is to put many CMS guideline in practice and consistently meet their requirements. We find not only do the OIG and CMS reviewers disagree about how to implement the standards, but reviewers from different MACs interpret the rules differently and one may even see that reviewers within a single MAC with different interpretations.

The OIG Findings and You

What does that mean for you? That means that you should put your understanding of the rules, interpretations of the guidelines, and how you will apply them to your facility, providers, and patients in your compliance manual. That way, even if your interpretation is different than your MAC’s or CMS’ or the OIG’s, you can defend your processes and procedures and show consistent application of them across all patients, providers, and facilities. Having such a document will make a huge difference when defending your processes and patient treatment vis a vie your understanding of the Medicare guidelines. This is how a practice protects themselves should there be any misunderstandings.
All outpatient physical therapy organizations should read this OIG report and make sure that you are doing all you can to meet the Medicare guidelines for medical necessity, coding, and documentation. Some of the key take-aways from the OIG report are:

  • Don’t confuse time based services with single unit based services. Code them and document them properly.
  • Do not forget to use the appropriate G codes and modifiers when appropriate.
  • Follow Medicare requirements for plans of care and re-evaluation documentation.
  • Follow Medicare requirements for patients that reach full benefit and are not expected to receive any more significant benefit.
  • Services that do not require the skills of a therapist should be given to the patient as a home exercise program.

Audit your coding and documentation with this report as a road map and see how well you are doing. Make sure that your organization can support your billed services to Medicare because this may become a new focus area for RAC audits. This also may become part of the next OIG Work Plan. This report gives outpatient PT organizations an opportunity to get ahead of the identified problems and show that they are following Medicare’s rules for medical necessity, coding, and documentation.

Barbara Cobuzzi

About Has 99 Posts

Barbara J. Cobuzzi, MBA, CPC, COC, CENTC, CPC-P, CPC-I, CPCO, CMCS, is CEO of CRN Healthcare Solutions and formerly owned a medical billing company. Cobuzzi is a subject matter expert in otolaryngology coding. She provides litigation support as an expert witness for providers and payers and often presents for many local and national organizations. She is also a consulting editor for AAPC’s Otolaryngology Coding Alert newsletter. In 1999, Cobuzzi was named AAPC’s Networker of the Year, and she is a past member of the National Advisory Board. She is one of four founding members of the Monmouth/Ocean, N.J., local chapter and is still active with the chapter.

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