OIG Reports that Many Medicare PT Claims Did Not Comply With Medicare Requirements

April 2, 2018
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The U. S. Office of Inspector General just released a report on Medicare PT claims. (Link to OIG Report) The purpose of the OIG’s review was to determine the extent of PT claims that do not comply with Medicare requirements. This review covered claims from July 1 through December 31, 2013.

The OIG found that 61% of the reviewed claims did not comply with Medicare medical necessity, coding or documentation requirements. The following is a summary of the OIG’s finding. (Please note that many claims were denied for multiple reasons, such as lack of medical necessity and coding deficiencies, so the percentages of noncompliant claims add up to more than 100%.)

  • Medical Necessity (30% of claims did not meet Medicare medical necessity requirements)
    • Services Were Not Reasonable. For 30% of claims, medical reviewers determined that the amount, frequency, and duration of PT services were not reasonable and consistent with standards of practice.
    • No Evidence Services Would Be Effective. For 10 % of claims, the documentation did not show that the treatment would have been effective. For example, a patient was receiving therapy for lumbago and spinal stenosis; however, the medical review determined that the patient had already reached a functional plateau.
    • Services Did Not Require the Skills of a Therapist. For 9 % of claims, the therapy services did not require the skills of a therapist. For example, the documentation failed to substantiate that skilled intervention by a therapist was necessary. The medical reviewer determined that the patient was performing redundant and repetitive exercises that could have been performed as part of a home exercise program and did not require the skills of a therapist.
    • No Expectation of Significant Improvement. For 9% of claims, the medical reviewers determined that the expected rehabilitation potential was insignificant in relation to the extent and duration of the PT services required to achieve that potential or that the patient did not improve significantly enough in a reasonable period of time to justify continued treatment. For example, the documentation showed no expectation of significant improvement to warrant the claim or further therapy.
  • Coding (48% of claims did not comply with Medicare coding requirements)
    • Timed Units Claimed Did Not Match Units in Treatment Notes. For 29% of claims, the number of timed units claimed did not match the number of timed units documented in the treatment notes. For example, a claim for one patient included three units of 97110; however, the treatment notes supported two units of 97110 and one unit of 97116.
    • Missing Modifiers. For 26% of claims that should have included functional reporting information, the medical record or claim or both were missing the proper G-codes or modifiers. For example, a claim did not contain the required G-codes or modifiers to show the patient’s functional status as required at that interval of his or her treatment.
    • Incorrect Codes. For 20% of claims, providers incorrectly coded the services. For example, a patient received four units of therapy services and had a reevaluation. Rather than billing four units of 97530 and one unit of 97002 (reevaluation), the provider billed for five units of 97530.
  • Documentation (37% of claims did not comply with Medicare documentation requirements)
    • Plan-of-Care Deficiencies. For 27% of claims, there were plan-of-care deficiencies. For example, the medical reviewer deemed a patient’s plan of care to contain vague goals, to not be signed by a physician or a non-physician practitioner, and to not list the duration and frequency of the therapies.
    • Treatment Note Deficiencies. For 25% of claims, there were treatment note deficiencies. For example, a patient’s treatment notes did not contain total treatment minutes for timed codes or total minutes for the entire therapy session.
    • Recertification Deficiencies. For 3% of claims, there were recertification deficiencies. For example, a patient’s medical record did not contain a recertification justifying the need for additional therapy after the initial therapy phase under the original plan of care.

Based on its review, the OIG recommended that CMS (1) instruct the Medicare Administrative Contractors to notify providers of potential overpayments so those providers can exercise reasonable diligence to investigate and return any identified overpayments, (2) establish mechanisms to better monitor the appropriateness of outpatient PT claims, and (3) educate providers about Medicare requirements for submitting outpatient PT claims.

Interestingly enough, the OIG report says that CMS generally disagreed with the OIG’s findings and the first recommendation above. CMS stated that it disagrees with some of the OIG’s policy interpretations and believes further analysis of the sampled claims is warranted to determine whether the claims met Medicare requirements. However, CMS agreed with the OIG’s second and third recommendations above.

Regardless of any disagreement between the OIG and CMS, the OIG’s study points to the importance of regular PT/OT documentation and coding reviews, training and following up to correct any significant ongoing deficiencies.

PTM offers PT/OT chart review services and recently sponsored a webinar on Keys to Effectively Documenting Outpatient Therapy which can be accessed at https://pt-management.com/purchase-recorded-webinars/.