Some Medicare Claims Do Not Meet Requirements

Most Medicare claims filed by physician offices for physical therapy fail to meet program requirements, resulting in $136 million in improper payments during the first six months of 2002, according to a study by the HHS Office of Inspector General, CQ HealthBeat reports. Researchers from the HHS OIG examined medical records from a sample of physical therapy services provided during the first six months of 2002 and found that 91% of claims filed by doctors did not meet Medicare requirements.

Medicare rules require that physical therapy be administered by a doctor or a physician office staff member under the supervision of the doctor. Staff members must have the same training as licensed physical therapists but do not need to be licensed.

In settings other than a physician office, Medicare will cover the care only if it is provided by a licensed physical therapist. Medicare physical therapy claims for all settings totaled $528 million during the study period.

According to licensed physical therapists who viewed the medical records, $33 million of the $136 million in improperly paid claims were for services not demonstrated to be medically necessary. In addition, many improper claims resulted from insufficient documentation or provision of services under an incomplete plan of care.

The analysis also finds "unusual billing patterns" between 2002 and 2004 "that suggested fraud," CQ HealthBeat reports. One such pattern showed that about 4% of all doctors who submitted physical therapy claims in 2004 made up more than half of all claims allowed by Medicare that year.

Noting that CMS already has taken steps to address some problems detailed in the study, the researchers did not issue formal recommendations. However, they said that licensure rules should apply to physician offices in the same way they do to physical therapists in nursing homes' rehabilitation facilities and the offices of independent physical therapy practitioners.

A spokesperson for CMS did not comment on the study.

The American Physical Therapy Association, which represents licensed physical therapists, said Congress should stop Medicare payments for physical therapy services provided by physician office staff (Reichard, CQ HealthBeat, 5/5).

The report is available online. Note: You must have Adobe Acrobat Reader to view the report.