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 issued CR6899  indicating that effective 10-1-2010 outpatient rehab providers will no longer have to report value codes for the number of visits (Code 50 for PT, Code 51 for OT, Code 52 for SLP and Code 53 for Cardiac). 

This change affects Part A outpatient therapy providers (billing on CMS 1450/UB04) including CORFs, Rehab Agencies, Hospitals, SNFs, Home Health Agencies.  A corresponding MLNArticle has also been published.

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 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)

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).

 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.

On July 20, 2009, CMS published a proposed rule regarding the Medicare Hospital Outpatient Prospective Payment System (HOPPS) for CY 2010.  Among other items, the Proposed Rule addresses “long-standing” physician supervision requirements for hospital outpatient diagnostic and therapeutic services.

From 42 CFR 410.27(f) “Services furnished at a provider-based department of a hospital must be furnished under the “direct supervision” of a physician.  “’Direct supervision’ means the physician must be present and on the premises of the location and immediately available to furnish assistance and direction throughout the performance of the procedure.  It does not mean that the physician must be present in the room when the procedure is performed.”

Also from Section 20.5.1 of the Medicare Benefit Policy Manual,  Effective January 1, 2009, CMS also revised Section 20.5.1 of the Medicare Benefit Policy Manual to specify that for services furnished at a provider-based department of a hospital, “direct supervision” means: the physician must be “present and on the premises of the location (the provider-based department of the hospital) and immediately available to furnish assistance and direction throughout the performance of the procedure”

This proposed rule provides definitions on on-campus, off-campus and provider-based outpatient therapy services.   For CY 2010,  CMS is proposing to allow non-physician practitioners (NPPs)—PAs, NPs, CNSs, CMWs—to directly supervise all hospital therapeutic services that they may perform themselves in accordance with their State law and scope of practice and hospital-granted privileges such as: 

• Clinical psychologists may already provide and directly supervise hospital outpatient therapeutic services
• Direct supervision of cardiac rehabilitation (CR), intensive cardiac rehabilitation (ICR) and pulmonary rehabilitation (PR) services must still be furnished by a physician, as specified in the proposed coverage policies and regulations for said services
• Collaboration rules for these NPPs remain the same

According to compliance attorney Brian Annulis, Partner with Meade & Roache, LLP in Chicago, this rule would not apply to outpatient rehab services that are offered on the hospital campus and paid as part of the Medicare Physician Fee Schedule (MPFS), as well as those off-campus locations that have been deemed to have provider-based status that are also paid under the MPFS.  It also does not apply to hospital outpatient rehab facilities that are certified as Rehab Agencies or Comprehensive Outpatient Rehabilitation Facilities (CORFs), also paid under the MPFS.  In a recent audio conference on the new proposed rule, sponsored by Aegis Compliance & Ethics Center, Annulis commented that “the billing methodology is the key.  If it is billed under Part B HOPPS then the rule applies.  If  billed under Part B MPFS then rule is not applicable.”