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Department of Health and Human Services

Office of Inspector General -- AUDIT

"Five-State Review of Partial Hospitalization Programs at Community Mental Health Centers," (A-04-98-02145)

October 5, 1998

Complete Text of Report is available in PDF format (2.5 mb). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


This final report points out that for the year ended September 30, 1997, Medicare fiscal intermediaries (FI) paid community mental health centers (CMHC) in five States $229 million (about 91 percent of the total amount paid of $252 million) for unallowable or otherwise highly questionable partial hospitalization program (PHP) services. The services were unallowable or questionable because: (1) beneficiaries were ineligible for PHP services; (2) the services were not reasonable and necessary for the patient's condition; (3) the services were not properly authorized by or furnished under the general supervision of a physician; and (4) services were not documented or were inadequately documented. Among other things, we recommended the recovery of improper payments, and that the Health Care Financing Administration take strong action against those facilities which did not meet the requirements to be CMHCs , including termination of provider agreements, where appropriate. The HCFA concurred with our recommendations.