Comprehensive Outpatient Rehabilitation Facilities: High Medicare Payments in Florida Raise Program Integrity Concerns: GAO-04-709

Aronovitz, Leslie G.
August 2004
GAO Reports;8/12/2004, p1
Government Document
Comprehensive Outpatient Rehabilitation Facilities (CORF) are highly concentrated in Florida. These facilities, which provide physical therapy, occupational therapy, speech-language pathology services, and other related services, have been promoted as lucrative business opportunities for investors. Aware of such promotions, the Chairman, Senate Committee on Finance, raised concerns about whether Medicare could be vulnerable to overbilling for CORF services. In this report, focusing our review on Florida, we (1) compared Medicare's outpatient therapy payments to CORFs in 2002 with its payments that year to other facility-based outpatient therapy providers and (2) assessed the program's effectiveness in ensuring that payments to CORFs complied with Medicare rules. In Florida, CORFs were by far the most expensive type of outpatient therapy provider in the Medicare program in 2002. Per-patient payments to CORFs for therapy services were 2 to 3 times higher than payments to other types of facility-based therapy providers. Higher therapy payments were largely due to the higher volume of services--more visits or more intensive therapy per visit--delivered to CORF patients. This pattern of relatively high CORF payments was evident in each of the eight metropolitan statistical areas (MSA) of the state where nearly all Florida CORFs operated and the vast majority of CORF patients were treated. A consistent pattern of high payments and service levels was also evident for patients in each of the diagnosis categories most commonly treated by CORFs. Differences in patient characteristics--age, sex, disability, and prior inpatient hospitalization--did not explain the higher payments that Florida CORFs received compared to other types of outpatient therapy providers. Steps taken by Medicare's claims administration contractor for Florida have not been sufficient to mitigate the risk of improper billing by CORFs. After examining state and national trends in payments to CORFs in 1999, the contractor increased its scrutiny of CORF claims to ensure that Medicare payments made to CORFs were appropriate. It found widespread billing irregularities in Florida CORF claims, including high rates of medically unnecessary therapy services. Since late 2001, the contractor has intensified its review of claims from new CORF providers and required medical documentation to support certain CORF services considered at high risk for billing errors. It has also required that supporting medical records documentation be submitted with all CORF claims for about 650 beneficiaries who had previously been identified as receiving medically unnecessary services. The contractor's analysis of 2002 claims data for this limited group of beneficiaries suggests that, as a result of these oversight efforts, Florida CORFs billed Medicare for substantially fewer therapy services than in previous years. However, our analysis of all CORF therapy claims for that year indicates that the contractor's program safeguards were not completely effective in controlling per-patient payments to CORFs statewide. With oversight focused on a small fraction of CORF patients, CORF facilities continued to provide high levels of services to beneficiaries whose claims were not targeted by the contractor's intensified reviews.


Related Articles

  • A New Benefit. Bachenheimer, Cara C. // HomeCare Magazine;May2009, Vol. 32 Issue 5, p42 

    The article offers the author's views on the need of separating Medicare's benefit such as the complex rehabilitation technology from other benefits in 2009 in the U.S. She believes that the U.S. Congress should segregate the rehabilitation benefit as a separate category, because it is important...

  • Medicare Payments: Use of Revised 'Inherent Reasonableness' Process Generally Appropriate: HEHS-00-79.  // GAO Reports;7/5/2000, p1 

    In 1998, Medicare paid at least $5.9 billion for medical equipment and supplies on behalf of beneficiaries who live at home or in long-term-care facilities. The Health Care Financing Administration (HCFA) is authorized to use a revised inherent reasonableness process to adjust Medicare payments...

  • AHIP Studies Health Choices For The Poor. Brady, Matt // National Underwriter / Life & Health Financial Services;5/16/2005, Vol. 109 Issue 19, p7 

    Reports that low income beneficiaries are opting in significant numbers for Medicare Advantage and Medigap insurance over Medicare fee-for-service alone, according to two studies in the United States. Studies by the America's Health Insurance Plans' Center for Policy and Research; Indication...

  • Medicare Advantage Sales Changes Sought. Postal, Arthur D. // National Underwriter / Life & Health Financial Services;5/28/2007, Vol. 111 Issue 21, p6 

    The article reports on the actions designed to change the marketing of Medicare Advantage plans by the insurance industry, which are provided under Medicare's prescription drug program. CMS has proposed new regulations aimed to strengthen oversight in the plans through a requirement for...

  • 4 Criteria You Must Meet Before Filing an Incident-to Claim.  // Gastroenterology Coding Alert;Mar2012, Vol. 14 Issue 3, pp20 

    The article discusses the criteria to consider prior to filing an incident-to claim. It mentions that under incident-to rules, qualified non-physician practitioners (NPPs) can treat specific patients and still bill the visit under the physician's National Provider Identifier (NPI), bringing in...

  • CMS Flip Flops--Again--on PECOS.  // O&P Almanac;Aug2010, Vol. 59 Issue 8, p12 

    The article offers information on the implementation of Provider Enrollment, Chain, and Ownership System (PECOS). It states that PECOS is an automated system of Medicare online enrollment for physicians which has been created by U.S. based Centers for Medicare and Medicaid Services (CMS)....

  • Accountable care organizations could save Medicare 20%. Reese, Shelly // Managed Healthcare Executive;Mar2010, Vol. 20 Issue 3, p26 

    The article reports on the Medicare savings as a benefit in implementing accountable care organizations (ACO) in the U.S. According to John Bertko, former chief actuary for Humana, ACO is created to do the right thing and a team to organize clinical delivery. It states that ACO is responsible...

  • Medicare margins trending downward. Schuhmann, Thomas M. // hfm (Healthcare Financial Management);Dec2007, Vol. 61 Issue 12, p30 

    The article reports on the study conducted on hospital's Medicare margins under the Inpatient Prospective Payment System (IPPS) in the U.S. Result shows that Medicare inpatient margins dropped from 12.8% to pro 4.6% while the total operating margins and total net income percentages remained...

  • New Legislation Affects Long-term Care Hospitals. StraubWilliams, Barbara; Hamme, Joel // hfm (Healthcare Financial Management);May2008, Vol. 62 Issue 5, p22 

    The article outlines the impact of the revisions on Medicare, Medicaid and State Children's Health Insurance Program (SCHIP) Extension Act of 2007 to long-term care hospitals (LTCH) in the U.S. Such changes modified many of the payment provisions of LTCH. The program was expanded requiring the...


Read the Article


Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics