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A New Jersey-based outpatient therapy provider should pay back the government for $3.1 million in improper Medicare reimbursements identified in a recent audit, according to the Department of Health and Human Services‘ Office of Inspector General.

The OIG audit looked at Medicare Part B claims that Spectrum Rehabilitation LLC filed in 2009 and 2010. Out of 100 representative claims, 83 did not comply with Medicare requirements, according to the audit report. The deficiencies were varied, including medically unnecessary therapy, inadequate treatment notes and physician certification issues, the report states. More than half the claims contained more than one deficiency. 

“These deficiencies occurred because Spectrum did not have a thorough understanding of the Medicare reimbursement requirements … and did not have adequate policies and procedures in place,” the auditors wrote.

Spectrum concurred with OIG recommendations to improve its policies and mandate employee education. However, it did not concur with the recommendation to repay the disputed reimbursements.

Spectrum did not respond to a request for comment. However, the company’s response to the OIG, via its lawyers, is attached as an appendix to the audit report. In this letter, the company disputes many of the deficiencies and says the “repayment demand in this case would put Spectrum out of business.”

Click here to access the complete report.