OIG Study on Therapy in SNF

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In April of 1998, the Office of the Inspector General (OIG) published a

report on an inspection that was undertaken " to determine, through a sample

probe, whether sufficient evidence of medically unnecessary physical and

occupational therapy exists to warrant a national study. " (OIG quote)

A copy of this report in Adobe acrobat format is available at the OIG web

site and at .

There are several concerns about the study (other than the fact that they

found sufficient reason to recommend a national study). The sample size

was very small (6 SNF) and limited geographically (all 6 were in California).

Here is a listing of the findings:

Medically unnecessary PT and OT at sampled facilities ranged from less than

4 to more than 80%.

Multiple factors account for the high volume of medically unnecessary

services.

-Skilled services are frequently provided when non-skilled services would

be more appropriate.

-Therapists sometimes ignore the beneficiary's prior level of function and

set unrealistic goals.

-The frequency of therapy is sometimes excessive.

Other observations raise additional concerns about how therapy services are

provided.

-Time billed for therapy exceeds the actual time that services are provided.

-Recurring hospitalization may trigger unnecessary therapy services.

Conclusion of OIG

" Our probe sample detail some significant concerns about how therapy

services are provided to SNF patients. We found that, with the exception of

one facility, more than a quarter and as many as 80 percent of recent

therapy services are medically unnecessary in sampled SNFs. With almost $7

billion in therapy charges nationally in 1996 and the upward trend not

abating, we believe that Medicare is paying significant amounts for

medically unnecessary physical and occupational therapy.

The Balanced Budget Act, with its implementation of a prospective payment

system for Part A beneficiaries and a S1,500 cap on therapy services for

Part B beneficiaries, creates an appropriate structure to control the cost

of therapy services. At the same time, we believe that the cost formulas

being used to develop the prospective payment rates and Part B cap could be

significantly compromised by the volume of medically unnecessary services.

During 1998, we will conduct a full national study to quantify the extent

of medically unnecessary services and to develop baseline data to compare

therapy utilization before and after implementation of the Balanced Budget

Act "

APTA's response:

1) The purpose of the OIG inspection was only to determine whether OIG

should conduct a full study into the medical necessity of therapy services

in the future. Therefore, this report should not be used as a resource of

information with respect to the medical necessity of therapy services when

developing policy and for other purposes.

2) The sample size of the study was very small. It consisted of six skilled

nursing facilities that billed Medicare for more than $291,500 in therapy

charges in 1996. The SNFs were all located in California. It is unclear how

these facilities were selected and whether they are representative of the

field.

3) At each skilled nursing facility, the medical reviewers examined 15

randomly selected claims. This resulted in a total review of 80 claims. It

is not clear whether these claims were Part A or Part B claims. Because

this sample is so small, the results should not be used to draw broad

conclusions about medical necessity of therapy services.

4) OIG states (p.8) that the percentage of medically unnecessary services

is based on instances where (1) they determined the services failed to meet

Medicare coverage criteria; and 2) the patient's file lacked the physician

order or documentation that services were provided. It is not appropriate

to conclude that because a physician order is missing or documentation is

missing, that the service itself was medically unnecessary.

5) In the report, OIG states that strength and endurance is a nursing

service. Building strength and endurance is a skilled physical therapy

service. and therefore it should be provided by a skilled physical

therapist, not a nurse. Physical therapists are properly trained in this

area and thus are the most appropriate provider to render strength and

endurance building services (i.e. therapeutic exercise).

6) The inspection makes assumptions that therapists ignore prior level of

function and set unrealistic goals. One example provided states that the

therapist listed goals that included performing independent activities of

daily living that the beneficiary had not performed for several years

because that beneficiary had a full-time care giver. It is not appropriate

for a reviewer to conclude that a therapists goal is unrealistic just

because the beneficiary had a caretaker at home in the past and therefore

did not perform independent activities of daily living.

7) The report makes broad statements, such as a statement that the Balanced

Budget Act with its implementation of a Prospective Payment System and a

$1500 cap creates an appropriate structure to control the cost of therapy

services. It is not appropriate for OIL to make this statement as it is not

based on any reliable data or research.

8) OIG states that during 1998 it will conduct a full national study to

quantify the extent of medically unnecessary services and will develop

baseline data to compare therapy utilization before and after

implementation of the BBA. The $1500 cap, which will go into effect in

January 1999, will impact the utilization of therapy services. However,

this impact will have no relationship to whether medically necessary

services were furnished. If a beneficiary exceeds the cap, that beneficiary

will not receive the service even if it is medically necessary. Therefore,

the comparison is not appropriate.

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Question to the Forum: What are your thoughts?

R. Kovacek, MSA, PT

KovacekManagementServices, Inc.

The FOCUS Group, Inc.

20225 Danbury Lane

Harper Woods, MI 48225

Fax

Email Pkovacek@...

<http://www.theFOCUSgroup.net>

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