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Audit (A-02-11-01044)

Spectrum Rehabilitation, LLC, Claimed Unallowable Medicare Part B Reimbursement for Outpatient Therapy Services

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We estimated that Spectrum Rehabilitation, LLC (Spectrum), operating in New Jersey, improperly received at least $3.1 million in Medicare reimbursement for outpatient occupational and physical therapy services that did not comply with certain Medicare requirements.

Of the 100 claims in our random sample, Spectrum properly claimed Medicare reimbursement for 17 claims. However, Spectrum improperly claimed Medicare reimbursement for the remaining 83 claims. Of these 83 claims, 44 contained more than 1 deficiency. These deficiencies occurred because Spectrum did not have a thorough understanding of Medicare reimbursement requirements related to outpatient therapy services and did not have adequate policies and procedures to ensure that it billed services that met Medicare requirements.

We recommended that Spectrum (1) refund $3.1 million to the Federal Government; (2) strengthen its policies and procedures to ensure that outpatient therapy services are provided and documented in accordance with Medicare requirements; and (3) obtain a better understanding of the Medicare reimbursement requirements related to outpatient therapy services, through such means as attending provider outreach and education seminars. Spectrum disagreed with our first recommendation and agreed with our remaining recommendations.

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