Lessons Learned From the OIG Investigation of Improperly Billed Physical Therapy Claims

In March 2017, the Office of Inspector General (OIG) released a report that detailed the findings of an investigation related to how 61% of Medicare claims for outpatient physical therapy services were not in compliance with one or more of the following requirements: Medicare medical necessity, coding, or documentation.

On the basis of the sample, OIG estimated that Medicare inappropriately paid $367,039,705.

One element of practice that AOTA always emphasizes with practitioners is the importance of clear documentation to substantiate the necessity of a skilled intervention by a practitioner. In this report, one overarching flaw that the OIG noted was the deficiency in the documentation to demonstrate that the skills of a physical therapist were necessary to validate Medicare reimbursement.

Critical areas where documentation did not meet Medicare requirements were found in 112 claims that were submitted but deficient in accordance with one or more Medicare documentation requirements—this would include deficiencies such as the plan of care not containing the type, amount, frequency, and duration of the PT services to be furnished and reflected in a measurable way and pertain to identified functional impairments; requirements to recertify a plan of care when a significant modification of the plan is needed at least every 90 days after the initial treatment; and creating and maintaining treatment notes to be in line with the requirements in the Medicare Benefit Policy Manual. There was evidence of Plans of Care (POC) that contained vague goals, were not signed by a physician or a NPP, and included therapy notes that illustrated a lack of total treatment minutes for timed codes or total minutes for the entire therapy session. Instances relating to re-certification reflected that the medical record did not contain a recertification justifying the need for additional therapy after the initial therapy phase under the original POC, but the beneficiary continued to receive the therapy anyway.

Another position the OIG takes in the report is that CMS’ controls and PT education were not always effective in preventing payments for PT services that had not been in compliance with Medicare requirements from the onset. One example of this is the fact that enforcement of the functional reporting requirements was not effective in preventing claims from being processed and paid—these issues included the lack of proper codes and modifiers.

As a result, additional recommendations were made in the report to include instruction to the Medicare Administrative Contractors to notify providers of potential overpayments so that investigations and returned payments in accordance with the 60-day rule could happen.

AOTA urges practitioners to be cognizant of the fact that documentation is being monitored, and audits of Medicare reimbursed claims can occur at any time. OT practitioners should strive to use best practices and judgment when documenting their important skilled services. AOTA continues to develop user friendly resources and has valuable documentation resources located at https://www.aota.org/Practice/Manage/Reimb.aspx. In addition, AOTA addresses Medicare rules, requirements, and Local Coverage Determinations at https://www.aota.org/Advocacy-Policy/Federal-Reg-Affairs/Medicare.aspx. You can read the full report by visiting the OIG’s website.