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. 

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.

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)

Trailblazer , the MAC J4 contractor has released a DRAFT Physical Medicine & Rehabilitation Outpatient LCD (local coverage determination).   The draft LCD is posted as of October 30, 2009 for a 45 day comment period that ends December 14, 2009.  According to Trailblazer:

This LCD establishes frequency limitations of 5 (15-minute) PT or OT services per day and 60 (15-minute) PT or OT services per month. Providers of PT/OT services must be aware however, that any service reported to Medicare, even when reported at a frequency within the following stated covered guidelines, may be denied if done so in association with medical review of the patient’s record. Likewise, providers of PT/OT services must understand that though Medicare will allow the following units of service, each service must be medically reasonable and necessary for the specific patient and his or her condition. Additionally, Medicare expects that the patient’s medical record will clearly demonstrate that medical necessity. Further, Medicare does not expect that maximum allowable services will be routinely necessary, necessary for multiple week periods, or necessary for the entirety of the patient’s course of treatment.

This LCD also include a procedure to diagnosis edit list (78 pages long).

CGI, the Region B Recovery Audit Contractor has added several new CMS approved issues.  The issue of untimed codes for therapy is now approved for Illinois, Indiana, Kentuckhy, Michigan, Minnesota, Ohio and Wisconsin.  The issue was approved on 9/30/2009 and covers services from 10/1/2007 forward. 

According to CGI: Untimed Codes – 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.

Untimed codes will be reviewed by Region B, C and D.  Therapy providers should prepare in advance with an audit of their charge processes, as well as a review of billed and reimbursed claims on untimed codes to ensure compliance.  For providers suspecting a problem it is advisable to seek the advice of your compliance attorney where an audit under attorney-client privelege may assist in charting the proper course.

 The indictment of a Detroit area sham therapy operation was announced this summer, and in a United States Department of Justice (USDOJ) press release on Monday, the main conspirator plead guilty to a $18.2 million scheme to defraud the Medicare program.  According to the DOJ press release

“…Chand admitted that in order to create the false therapy files, he and his co-conspirators paid cash kickbacks and other inducements to Medicare patients in exchange for their Medicare numbers and signatures. Chand acknowledged recruiting hundreds of Medicare patients, and paying them with cash and prescriptions for Vicodin and Xanax. Chand admitted that he obtained the prescriptions for these drugs from a physician who had never seen the patients. Chand also admitted that he prepared false prescriptions and files for the physician’s signature. ……. Chand admitted that he and others would obtain signatures from licensed therapists on false progress notes indicating that the therapists had provided therapy, when they had not. Chand admitted that the licensed therapists were paid to help falsify the files.”

In the therapy community we have become incensed with the blantant misuse of the outpatient therapy process to defraud the Medicare system, particularly since most of these fraduent schemes have operated without the complicity of licensed physical and occupational therapists.  In this scheme the conspirator indicated that part of his scheme, in addition to paying beneficiaries to use their Medicare number, that physical therapists were enlisted and paid to falsify the plan of care documents.

 Automated reviews of rehab untimed codes are underway by the Recovery Audit Contractors in Region C & Region D.  It is entirely possible that rehab providers have received recoupment letters as you read this.  Simultaneously within CMS the conversion from fiscal intermediaries and carriers to the Medicare Administrative Contractor format has resulted in the development/conversion and updating of local coverage determinations (often called “policies” or “LCDs”) for therapy services.

As you update your current facility policies and produres to comply with new LCDs it is important to keep track of legacy LCDs as I noted in this article published today in RACMonitor.com:  Local Coverage Determinations:  Scrapbooking Your Way to Success in a RAC World.