With therapy services accounting for the majority of Medicare Part A reimbursement, it’s little wonder the Centers for Medicare & Medicaid Services is placing skilled nursing operators’ coding and billing practices under the microscope. 

And now, in light of the recent Office of Inspector General report that revealed rampant upcoding for therapy reimbursement claims, CMS is sure to dial up the scrutiny even more.

“We’re seeing more elderly with complex medical problems, many of whom require therapy to get their level of function back to where it was or prevent it from declining further,” says David Gifford, M.D., senior vice president of quality and regulatory affairs for the American Health Care Association. “So it’s not surprising that we’re seeing significant growth in the amount of therapy services being provided and, as a result, greater scrutiny from CMS.”

Therapy providers and facility administrators who aren’t self-auditing and ensuring that their services are warranted, well documented and properly coded are placing themselves right in the line of fire. Unfortunately, many aren’t heeding the warning.

“I am doing active compliance audits and record reviews throughout the United States on a regular basis for facilities with all the possible types of therapy organizational options — whether facility-owned and directed, or those who contract with national therapy providers, and everything in-between,” says Leah Klusch, RN, BSN, FACHCA, executive director for The Alliance Training Center. “I can tell you that noncompliance with coding requirements is about the single most pervasive issue we’re seeing in Medicare Part A right now.”

Inflated services, billing

The reasons behind therapy coding noncompliance are varied, with each as risky as the next. Providing more therapy than what is prudent or necessary for the sake of higher-paying Resource Utilization Group scores is one area, in particular, being increasingly eyed by federal regulators. 

Not everyone agrees that blatant submission of false claims is as prevalent as the OIG report suggests, but employee whistleblower cases and Medicare compliance audits nonetheless reveal that the problem isn’t limited to just a few isolated incidents.

“Many therapy companies have pushed the envelope too far,” confirms consultant Pat Boyer, MSM, RN, NHA, president of Boyer & Associates LLC. “Therapy — even aggressive therapy — can be very beneficial, but it’s definitely not for everyone. There is a big difference between getting a higher RUG that’s based on a patient’s true needs and getting higher RUGs for the sake of reimbursement.”

Klusch, too, acknowledges instances in which therapy services providers appear more focused on profit margins than resident outcomes. Still, she and Boyer believe that most noncompliance issues stem more from lack of knowledge than flagrant disregard for coding requirements.

“I think most therapists are great and trying to do the right thing, but they’re just not aware of the recent CMS revisions under MDS and how that impacts them,” reasons Klusch. “The revisions were so extensive and I don’t know that CMS went out to the therapy providers themselves to inform them of the changes that directly impacted their services.”

 Complicating matters further, skilled nursing operators had to wade through so many changes that many administrators didn’t make therapists aware, either.

“About every place I’ve visited since last spring has had the same issues. There’s a communication deficit that is having a very real impact on compliance,” Klusch continues, noting that some therapists may be part-time or also work in a hospital setting where Medicare Part A has an entirely different set of rules and parameters. To help bridge the gaps, Klusch copies pages of the revised RAI Manual — particularly pages O15-O29 of Section O — and personally delivers them to therapists. 

  “Overall, they’ve been grateful to know all the specifics and have the changes right in front of them. From there, they usually do quite well.”

Collaboration cuts risk

Ongoing education of therapists is indeed crucial for ensuring that residents receive proper levels of therapy and that therapy minutes are properly documented on the MDS, but it’s not enough. Running an effective, compliant therapy program also hinges on active involvement and oversight from facility administrators and clinical staff.  

“Facility operators often have a false sense of security when they’re partnering with a therapy provider. But if inspectors come into the building with questions or concerns, whose office do you think they’ll visit first?” reasons Boyer. “Ultimately, facility operators are responsible for what’s going on in their building, so they have to start monitoring all their internal and external operations.” 

Facility operators can’t overestimate the value of active physician involvement, either. 

“The amount of therapy services needed is determined by an interdisciplinary team’s assessment — in conjunction with the patient’s physician — based on the individual patient’s medical condition,” says Mary Van de Kamp, Senior VP of Clinical Operations for RehabCare. “The interdisciplinary team’s assessment drives the determination of clinical need and duration of care.”

Often, success requires a balance between encouraging the ways that therapy can positively impact the beneficiary, while managing the expectations of the beneficiary and his or her family, Van de Kamp added. For this reason, she says providers must educate beneficiaries and their family members on what therapy can do and how therapists will work to enable a return to a prior level of function or prevent further functional decline. 

“We believe there needs to be a better recognition across the board regarding the value of rehabilitation in shortening lengths of stay, preventing rehospitalization and an increased ability to discharge patients to home from nursing facilities,” Van de Kamp adds.

Data to illustrate a proven track record for patient outcomes is helpful in driving this discussion — and for demonstrating medical necessity of therapy services when claims have been denied by Medicare, she says.

Scrutinizing Medicare claims at least annually — whether done internally, by a sister or parent facility, or a third party auditor — is a good corporate compliance strategy, says Boyer. 

“This will also help facilities stay ahead of the game with Quality Assessment and Performance Improvement, which is just on the horizon,” she observes.

Diligent documentation is also essential for receiving proper reimbursement and staying out of hot water with CMS. Over the past two years, Boyer and her staff have done more than 500 medical review claims and most “dings” come from lack of documentation to prove medical necessity for the level and duration of therapy provided. 

Documentation must include a clear medical diagnosis for each resident. Documents also need to specify the resident’s prior level of function before being admitted to the hospital and discharged to the nursing facility. 

“If a person was walking up two flights of stairs at home, for example, before going to the hospital, then this needs to be documented. It’s also important to take into effect any limitations that a person might have upon admission to the facility that might impact their progress with therapy,” Boyer continues. 

She’s seeing occupational and speech therapies denied if the resident’s decline is not directly related to a hospital stay. 

“This is why it’s so important to be able to prove where a resident was before they went to the hospital,” she explains. “You have to prove it’s a new issue and document it properly if you want to get paid.”

Administrators and clinical staff should be working closely with therapists and evaluating resident-specific therapy plans, ensuring that they are effectively restoring or maintaining function, and are being coded and billed properly. If therapists are delegating to occupational therapy or physical therapy assistants, operators also must ensure that they are practicing under a licensed therapist’s supervision, stressed Klusch. 

Boyer adds this piece of advice: Nurses, who often only chart what they’re actually doing on Section G of the MDS, should also understand that therapy information is equally important to include for that section.

Outcomes measures 

As warnings about upcoding mount, there are concerns that regulators will question the need and duration of therapy to the point where resident care and outcomes suffer. What’s more, some operators may become so fearful of fraud charges that they become too conservative with their therapy services. 

“I can see where crude, hatchet-job restrictions aimed at limiting risk could restrict access to therapy for those who might really benefit,” says AHCA’s Gifford.

A lack of established criteria from Medicare and other payers on who should receive therapy is a lingering challenge. Instead of following the current fee-for-service model, Gifford says AHCA believes linking payment to actual outcomes is a better approach. 

Last year, AHCA and the National Center for Assisted Living launched an initiative to develop outcome measures for therapy provided to skilled nursing facility residents. The AHCA/NCAL Quality Cabinet is looking at risk-adjusted measures to determine how much people improve or maintain their function through therapy services. These data are about to undergo analysis, and AHCA and NCAL hope to have the outcomes measures ready by fall. CMS supports the initiative.

“If one can start measuring outcomes, then it becomes possible to determine whether therapy is necessary and if it’s actually helping,” Gifford explains.

But facility operators and therapy providers can’t afford to be complacent and assume that the status quo is acceptable. 

“CMS now has a tremendous amount of data and analytics. They are incredibly sophisticated and it’s becoming less likely that mistakes will slip through the cracks,” Klusch says. “I only expect that scrutiny to increase moving forward.”