The Office of the Inspector General of the Department of Health and Human Services (OIG) recently issued a report concluding that 47 percent of the mental health services paid by Medicare Part B in 2003 did not meet program requirements, resulting in approximately $718 million in improper payments. Since 1996, OIG has issued several audits and evaluation reports regarding Medicare Part B mental health services and this latest report demonstrates the continued focus of enforcement efforts involving Medicare Part B mental health claims. Under the False Claims Act, providers could be liable for penalties of between $5,000 and $10,000 for each false claim plus up to three times the amount of the damages caused to the federal program. Specific intent to defraud the government is not required under the False Claims Act: the government need only establish that the claim submitted was false and that it was submitted knowingly.
The latest OIG report concluded that miscoded services accounted for 26 percent of all mental health services and undocumented services totaled 19 percent of all services in 2003. Medically unnecessary services and services that violated the "incident to" rule each accounted for 4 percent of all. Some services had more than one error.
Regarding services that were determined to be miscoded, the 2007 report found that in the majority of these medical records, practitioners had not documented any time spent with the patient. OIG also found that some services were billed incorrectly because the services were rendered during a subsequent visit rather than an initial visit. Reimbursement rates for subsequent visits are less than those for initial visits. Other miscoded evaluation and maintenance (E&M) services should have been billed as psychiatric diagnostic interview examinations, consultations or psychotherapy, which are reimbursed at a lower rate. In addition, some E&M services were miscoded because the place of service (e.g., inpatient) did not match the place of service indicated in the medical record (e.g., outpatient).
In addition, medical reviewers determined that some services were not medically necessary because the psychotherapy session was too long, the sessions were too frequent or no clinical problem was documented in the record.
Finally, some services that were billed "incident to" the billing practitioner's services were billed in error because the services were furnished in a skilled nursing facility or a hospital, which are violators of the federal regulations. Other improperly billed "incident to" services were furnished without the level of supervision required by regulations, which require that "incident to" services be furnished under direct supervision.
The 2007 report is the latest of OIG's audits and reports regarding Medicare Part B mental health services. Most recently, in 2001, OIG issued a report that concluded that approximately 31 percent of the claims were paid inappropriately in 1998, including 23 percent that were not medically necessary. At that time, OIG recommended that the Centers for Medicare and Medicaid Services (CMS) target certain mental health services for prepayment and postpayment review, promote provider awareness of requirements for Part B mental health services, and work with carriers and mental health professionals to ensure that psychological assessments are billed correctly. In response, CMS issued a Program Memorandum (Transmittal AB-03-037) that focused on Part B mental health services.
In its 2007 report, OIG determined that the CMS Program Memorandum did not provide specific guidelines for documentation of face-to-face time with patients or the requirement that "incident to" services be provided under direct supervision of a physician and billed only for patients in noninstitutional settings. Therefore, OIG recommends that CMS revise, expand and reissue its 2003 Program Memorandum to include an increased emphasis on the requirements for adequate documentation in the medical record, particularly with respect to psychotherapy and E&M, as well as additional information on the requirements for "incident to" services, especially the supervision requirements and the requirement that "incident to" can be billed only for patients in noninstitutional settings.
The 2007 OIG report is the latest of the continuing efforts aimed at increasing the propriety of Part B mental health payments, and the report demonstrates the continued focus of enforcement authorities in this area. Practitioners can expect that CMS will issue further guidance in the future.
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