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 <www.theFOCUSgroup.net>.

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.


Peter R. Kovacek, MSA, PT
KovacekManagementServices, Inc.
The FOCUS Group, Inc.
20225 Danbury Lane
Harper Woods, MI 48225
(313) 884-8920
(313) 884-8510 Fax
Email [log in to unmask]
<http://www.theFOCUSgroup.net>


%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%