The Medicare Payment Advisory Commission (MedPAC) relased their June report to Congress last week.  Of note to the rehab and therapy community is Chapter Eight:  “Addressing the Growth of Ancillary Services in Physician Offices.”

The chapter on ancillary services addresses outpatient therapy including physical, occupational and speech therapies.  Of note is the discussion regarding the growth of ancillary services which includes eliminating outpatient therapy from the in-office ancillary exception to the Stark regulations, noting that “incident to” services declined from 30 percent share to 16% share of spending for therapy services.  Also discussed is limiting the exception to practices that are clinically integrated.

The report consists of eight chapters:  2 chapters on the themes of Medicare payment accuracy and moving away from the   inherent volume incentives present in Medicare fee-for-service.  Three chapters highlight systemic changes to better align provider incentive with a “reformed delivery system.”  The role of beneficiaries in the delivery system reform.  The report also includes a chapter that discussed the role of CMS as a “value” purchaser vs. a “claims payer”.

For private practitioners working or employed in physician offices (billing under their own Medicare provider number assigned to the group), as well as those billing “incident to” under the physician number, put Chapter 8 on your summer reading list.

Lewis Morris, the Chief Counsel to the Office of the Inspector General (OIG) of HHS provided testimony this morning before the subcommittes on Health & Oversight of the U.S. House Ways and Means Committee.  The text of Mr. Morris’s message provides insight into successful fraud and abuse intitatives by the OIG as well as the success of combined initiatives, as well as insight into future fraud efforts that have been enabled by the Patient Protection and Affordable Care Act (ACA).

In an excerpt from his prepared remarks Mr. Morris describes health care fraud: 

Health care fraud schemes commonly include billing for services that were not provided or were not medically necessary, purposely billing for a higher level of service than what was provided, misreporting costs or other data to increase payments, paying kickbacks, and/or stealing providers’ or beneficiaries’ identities. The perpetrators of these schemes range from street criminals, who believe it is safer and more profitable to steal from Medicare than trafficking in illegal drugs, to Fortune 500 companies that pay kickbacks to physicians in return for referrals.

Also clarified in his testimony is the fact that the ACA authorizes the Secretary

to require providers and suppliers to adopt, as a condition of enrollment, compliance programs that meet a core set of requirements, to be developed in consultation with OIG. In addition, the ACA requires skilled nursing facilities and nursing facilities to implement compliance and ethics programs, also in consultation with OIG. These new requirements are consistent with OIG’s longstanding view that well-designed compliance programs can be an effective tool for promoting compliance and preventing fraud and abuse.

While this testimony is for the purpose of updating the noted sub-committees, it is also a concise read for providers to keep them up to date on fraud and abuse initiatives. 

In a recent RACMonitor.com article on The Curious Case of the CORF   the CORF was described as an “orphan” program that had conflicting regulatory advice for providers in recent years.  The Conditions of Participation, the State Operations Manual Interpretive Guidelines, and various instructions from the Medicare Contractors (fiscal intermediaries and MACs) put the provider at a disadvantage.  Many long-time rehab providers with Medicare certification as a CORF found that claims were being denied based upon the confusion between the requirement that the physician “wholly” develop the plan of care in a respiratory CORF and the requirement that the physician develop the plan of care in a physical therapy CORF.  Implicit in the physical therapy CORF is that the physical therapist will provide  input from the therapy evaluation to develop (or develop in concert with the physician) the CORF plan of care.  What is different about the CORF is that that therapy cannot begin until the plan of care is certified, whereas in other outpatient rehab settings there is a timeframe of up to 30 days for the physician to certify the plan of care.

For current CORFs providing respitory therapy programs, it is imperative that the plan of care for respiratory therapy be wholly developed by the physician (this can be the referring physician, or the CORF medical director).  For physical therapy programs in a CORF it is equally imperative that providers understand that the plan of care must be certified prior to therapy commencing, and that includes provding any services on the day of the evaluation other than the evaluation.

For all CORFs, as you get prepared for review under the Recovery Audit Contractor (RAC) program, make sure that you have all your regulatory reference material pulled together, particularly as it relates to the particular time period that is under review.  The RAC look-back period is 3 years, but no earlier than October1, 2007.  Scrapbooking your way to success is a good way to get started.

CMS has updated the “Rehabilitation Therapy Information” Fact Sheet and it is now available for downloading at the CMS website.  The 4 page flyer inlcudes highlights over therapy changes over the past year including the therapy cap, DME Instructions, SLP in Private Practice, and Therapy Personnel Requirements.  There are also links to rehab related Medicare Learning Network (MLN) articles, as well as information on the CCI edits.

Other linked resources include the CMS Therapy Services webpage, rehab sections in the Medicare Benefit Policy Manula as well as the Medicare Claims Processing Manual, provider enrollement information and therapy studies and reports.  In other there are other general provider resouces links for fraud and abuse, beneficiary notices, and the physician fee schedule look-up.

CMS has recently announced a new round of RAC informational sessions for providers.  The video features the slide show used in the original fall RAC informational sessions along with commentary by Commander Marie Casey.  This video production is one of many that have been posted by CMS/HHS on YouTube.  This video is being released as CMS announces a series of RAC 101 informational meetings to be held in the next several weeks.

www.youtube.com/watch?v=IHFXsfP99Bc

Medicare Strike Force Expands

 The Department of Health and Human Services announced today that it is expanding operation of its successful Medicare Strike Force to Tampa, Florida, Brooklyn, New York and Baton Rouge, Louisiana.  The announcement came simultaneously with announcemnt that  Continuing Strike Force Operations has Lead to Indictment of 30 Individuals Charged in Miami, Detroit and Brooklyn with more than $61 Million in Fraudulent Billing to Medicare.

Strike Force activities in Miami and in Detroit have been successful in uncovering schemes involving physical therapy, home health and infusion services.  Several more co-conspirators in th Detroit $18.2 therapy scam operation pled guilty last week including licensed physical therapists who recieved compensation for falsifiying thrapy plans of care according to an FBI Press Release.

CMS has announced the therapy cap for 2010 is $1860, representing a $20 increase over the 2009 therapy cap.  Transmittal R1851 to the Medicare Claims Processing Manual, dated 11/13/2009 and the accompanying MLN Article MM6660 provide information on the implementation.  The Balanced Budget Act of 1997 (BBA) established a $1500 therapy cap for physical therapy (including speech-language pathology) and a separate therapy cap of $1500 for occupational therapy.  The Deficit Reduction Act of 2005  implemented the therapy caps exceptions process based on medical necessity of therapy beyond the caps.

Although the Medicare Improvements for Patients and Providers Act of 2008 (MIIPPA), Section 141, extended exceptions to therapy caps through December 31, 2009, there is indications in the various healthcare reform proposals that the therapy caps exceptions process will be exteneded though 2011, although there is no certainly at this point. 

While Medicare beneficiaries will enjoy the benefit of an additional $20 annually of therapy services under under each therapy cap, therapy providers should brace for the projected 21.2% reduction in the conversion factor in the Medicare Physician Fee Schedule for 2010.

The therapy caps are applicable to outpatient settings including private practice physical, occupational and speech therapy practice, rehab agencies (ORFs) and comprehensive outpatient rehab facilities (CORFs).  Hospital outpatient therapy departments with provider-based status are exempt from the therapy caps and provide a safety net for beneficiaries to receive additional therapy that may not be covered by a diagnosis code, co-morbidity, or complexity identified to meet the medical necessity requirements.

Florida therapy providers are beginning to report the receipt of official “demand letters” from Connolly Healthcare, the Region C Recovery Audit Contractor.   A Florida therapy provider, who asked not to be identified, has reported receiving several demand letters related to the billing of speech therapy untimed codes in units greater than one.  This provider has multiple Florida facilities and the improper billing was found, upon internal investigation to be limited to one facility and individual and likely due to a communication error. 

Connolly (Region C) was the first RAC to post CMS approved issues for automated review.  Among those issues posted was Untimed Codes, as noted in the RACMonitor article predicting likely outpatient rehab targets: http://racmonitor.com/news/43-special-bulletin/198-likely-outpatient-rehab-rac-targets-hiding-in-plain-sight.html .

The same rehab provider has received additional RAC demand letters regarding speech therapy untimed evaluation codes being billed simultaneously with speech therapy untimed treatment codes.  The findings of an internal and external investigation has led the provider to initiate appeals on claims where two  different untimed codes were billed on the same day (on the same claim).

Untimed Codes being billed in increments greater than one were noted in the RAC Demonstration in California, New York and Florida.  The RAC issue with Speech untimed codes has been on the radar screen in rehab cirles for some time due to the $3.2 million in improper speech therapy payments discovered in the RAC demo.  

Health Data Insights (Region D) and CGI (Region B) both posted Untimed Codes as a CMS approved issue for automated review.  It is likely that DCS Healthcare (Region A) has also requested CMS to approve this issue .

Connolly describes the issue as “CPT Codes (excluding modifiers KX, and 59) where the procedure is not defined by a specific timeframe (untimed codes), the provider should enter a one (1) in the units billed column per date of service.”  Additional information for providers provided as a reference by Connolly:  CMS Pub 100-04, Transmittal 1019, dated 8.3.06, pages 7-11, and CMS Pub 100-04, Ch. 5, § 20.2.  The Connolly reference can be reviewed at: http://www.connollyhealthcare.com/RAC/pages/approved_issues.aspx

For a refresher on avoiding problems with the issue of Untimed Codes there are suggestions in the following article:http://www.racmonitor.com/news/43-special-bulletin/215-catch-me-if-you-can-staying-ahead-of-the-rac-reviews-of-untimed-codes.html  (originally published in RACMonitor.com)