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OIG Requests $1.1M in Overpayments From New York Provider

Analysis  |  By Amanda Norris  
   May 02, 2022

A New York City provider received an estimated $1.1 million in Medicare overpayments for behavioral health services that did not comply with billing requirements.

A recent audit by the Office of Inspector General (OIG) sought to determine whether a New York-based provider, who is one of the highest paid individual providers in the nation, complied with Medicare Part B requirements when billing for psychotherapy services.

The OIG was interested in this matter since a previous OIG audit found that Medicare had made millions of dollars in improper payments for behavioral health services that were billed incorrectly, provided by unqualified providers, undocumented, inadequately documented, or medically unnecessary.

During the audit of the New York City provider, the OIG reviewed a sample of 100 psychotherapy services billed by the provider from April 1, 2018, through August 31, 2020, with payments totaling $7,286.

For each psychotherapy service, the OIG requested medicals records from the provider and reviewed the documentation to determine whether the provider complied with Medicare billing requirements.

The OIG found that the provider did not comply with Medicare requirements when billing psychotherapy services for all 100 sampled beneficiary days. Reviewed medical records were billed with one or more of the following deficiencies:

  • Psychotherapy services did not comply with incident-to requirements
  • Psychotherapy services were not documented
  • The therapist was not licensed or authorized to provide the services
  • The treatment plan did not comply with Medicare requirements
  • The treatment plan was not signed

On the basis of the sample results, the OIG estimates that the New York City provider received at least $1,118,789 in Medicare overpayments for psychotherapy services during the audit period.

The OIG recommends that the New York City provider refund the estimated $1.1 million in overpayments to Medicare and exercise reasonable diligence to identify, report, and return any overpayments. In addition, it recommends that the provider develop policies and procedures to ensure that providers are educated on appropriate documentation and billing for behavioral health services.

The provider disagreed with the OIG’s first recommendation to refund to the Medicare program the estimated $1.1 million in overpayments but agreed with its remaining recommendations.

Conducting audits is a necessary element of an effective revenue cycle, but simply going through the motions isn’t enough. An organization needs high-level, sophisticated audits to help prevent and detect potential risks.

Revenue cycle leaders can learn a great deal from audits conducted by the OIG as it routinely issues public reports on its audits of healthcare entities. Not only do the reports detail what the audit was about and where the entity’s shortfalls were, but they also reveal how the audit sample was created based on varying risk areas.

Amanda Norris is the Revenue Cycle Editor for HealthLeaders.

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