OIG Workplan 2004 targets psychiatric and rehab in-patient services

By Paula Hartman-Stein, Ph.D.
November 1, 2003 - Last updated: May 31, 2011

Whether psychiatric in-patient and rehabilitation facility stays meet criteria for medical necessity are among the targets for scrutiny by the Office of Inspector General (OIG) in its 2004 Work Plan issued October 1. According to the Workplan, a blueprint for OIG projects determined annually, “Prospective payment (PPS)-exempt psychiatric units and specialty psychiatric hospitals received over $2.8 billion for Medicare in-patient stays in 2000.” Medical reviews found “very high rates of unsupportable or unallowable services in both types of facilities (58% and 42%, respectively).”

James Georgoulakis, Ph.D. (San Antonio), APA representative to the Relative Update Committee of the American Medical Association, said, “If the OIG homes in on Psychiatry, some will spill over on to us. Anytime the OIG is looking at payments for mental health services, we had better check if our services are medically necessary.”

In-patient rehabilitation facilities received over $4 billion from Medicare in 2000, according to the OIG. Because peer review organizations stopped routine medical reviews of PPS-exempt services in 1995, the OIG will be reviewing the adequacy of controls for improper payment.

According to the October 2, 2003 Report on Medicare Compliance, the Center for Medicare and Medicaid Services (CMS) has ordered fiscal intermediaries to audit both rehabilitation and psychiatric in-patient services.

Another 2004 OIG target includes “incident to” services, i.e., clinical services provided by allied health professionals or other therapists that are incident to the professional work of the psychologist or physician. Incident-to services are paid at the same rate that the Medicare provider receives, but are conducted by an employee of the psychologist or physician and works under direct supervision. According to the Workplan, “because little information is available on the types of services being billed, questions persist about the quality and appropriateness of these billings.”

Examples of other areas under scrutiny include:

  • Physician coding of evaluation and management services, costing Medicare over $23 billion in 2001.
  • Evaluation of payment for Medicare Part B services for nursing facility residents.
  • Appropriateness of prospective payments to skilled nursing facilities.
  • Place-of-service errors on claim forms. Under Medicare regulations higher payments are made for services conducted in physician offices compared to hospital outpatient departments or ambulatory surgical centers.

The OIG continues to issue program guidance to assist in the establishment of voluntary compliance programs that promote adherence to Federal statues and regulations governing Medicare and Medicaid programs. In 2004 the OIG will issue new compliance guidelines that pertain to hospitals.

The OIG functions as a watchdog over funds issued from the Department of Health and Human Services, source of Medicare payments. The Workplan 2004 can be found by logging on to www.oig.hhs.gov/publications/docs/workplan/2004.

Paula Hartman-Stein, Ph.D., is a clinical psychologist with a community-based practice for older adults in Kent, Ohio. She is President-elect of the APA section on clinical geropsychology and works as a consultant and trainer. She can be reached through her website, www.centerforhealthyaging.com

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