Rehabilitation Service Claims Paid Without Adequate Information

HRD-87-91: Published: Jul 9, 1987. Publicly Released: Jul 9, 1987.

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GAO reviewed the need to improve the processes Medicare intermediaries use to review claims for outpatient rehabilitation services.

GAO visited three Medicare claims processing contractors and reviewed the documentation supporting the claims. GAO noted that the documentation necessary to establish initial eligibility for rehabilitation services included: (1) a medical history providing the basis for rehabilitation; (2) an evaluation of the beneficiary's condition; and (3) a treatment plan listing the therapy provided and its expected goals. However, GAO found that: (1) 29 percent of the 346 cases reviewed lacked a patient treatment plan, or a medical history; (2) documents were incomplete or unspecific; (3) claims processing contractors paid $50.2 million in rehabilitation service charges over a 2-year period without sufficient documentation; and (4) in many of the cases and services that were insufficiently documented, beneficiaries were probably not eligible for coverage. GAO also found that the Health Care Financing Administration (HCFA) required that all claims receive a medical review to determine coverage and developed physical therapy guidelines to improve internal controls over outpatient rehabilitation payments.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: HCFA guidelines and screens for outpatient physical therapy were issued in August 1988. These guidelines and screens were not applied to CORF, however.

    Recommendation: The Administrator, HCFA, after complying with the appropriate regulatory clearance process, should implement the physical therapy guidelines and utilization screens already developed and require intermediaries to apply them to rehabilitation physical therapy services provided in all outpatient settings, including comprehensive outpatient rehabilitation facilities (CORF).

    Agency Affected: Department of Health and Human Services: Health Care Financing Administration

  2. Status: Closed - Implemented

    Comments: HCFA issued guidelines in May 1989, but the requirements relate only to claims subject to medical review, not all claims.

    Recommendation: The Administrator, HCFA, should: (1) develop and implement guidelines that clearly identify the document types and contents needed by intermediaries to make appropriate Medicare coverage decisions for the other types of outpatient rehabilitation therapy services; and (2) require intermediaries to use the guidelines for reviewing providers' claims for rehabilitation services.

    Agency Affected: Department of Health and Human Services: Health Care Financing Administration


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