CMS Concurs with OIG Recommendations for Monitoring  

SNF Part B Outpatient Billing   

Outpatient therapy is designed to improve, restore, and/or compensate for loss of functioning following illness or injury. Medicare expenditures for outpatient therapy increased 133 percent between 2000 and 2009, from $2.1 billion to $4.9 billion, while the number of Medicare beneficiaries receiving outpatient therapy increased only 26 percent, from 3.6 million to 4.5 million.

 Medicare limits (i.e., caps) its annual per-beneficiary outpatient therapy expenditures. Providers may exceed a beneficiary's cap if the services are medically necessary and are supported by medical record documentation. If services are expected to exceed an annual cap, providers must indicate this when submitting the claim to Medicare.

During the OIG investigation into outpatient SNF billing, 20 counties were identified that had in 2009 (1) the highest average Medicare payment per beneficiary and (2) more than $1 million in total Medicare payments for outpatient therapy (i.e., high-utilization counties).  The OIG then determined the extent to which levels of outpatient therapy billing characteristics in the 20 high-utilization counties differed from national levels.

These included the following six questionable billing characteristics that may indicate fraud:

1.      Services for which providers indicated that an annual cap would be   exceeded

2.      Beneficiaries whose providers indicated that an annual therapy cap would be exceeded on the beneficiaries' first date of service

3.      Payments for beneficiaries who received outpatient therapy from multiple providers

4.      Payments for therapy services provided throughout the year,

5.      Payments for services that exceeded an annual cap,

6.      Providers who were paid for more than 8 hours of outpatient therapy provided in a single day.

The OIG did not assess the medical necessity of outpatient therapy services.

There were four major recommendations resulting from this investigation:

1.      Target outpatient therapy claims in high-utilization areas for further review.

2.      Target outpatient therapy claims with questionable billing characteristics for further review.

3.      Review geographic areas and providers with questionable billing and take appropriate action based on results.

4.      Revise the current therapy cap exception process.

CMS concurred with all four recommendations and is engaged in data analysis of outpatient therapy services. For example, CMS is monitoring specific geographic areas and has already identified claim characteristics and utilization patterns that may detect and deter fraud and abuse in certain designated high-risk areas. CMS's analyses have already resulted in investigations and referrals to law enforcement.

CMS also stated that in identified geographic areas with high or increasing outpatient therapy utilization, it takes corrective actions, such as onsite reviews, prepayment edits, and postpayment reviews.

For the long term, CMS is developing a therapy-related data collection instrument that includes measurement items relevant to payment.

The OIG Questionable Billing For Medicare Outpatient Therapy Services report can be found at the following link: http://oig.hhs.gov/oei/reports/oei-04-09-00540.pdf