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Department of Health and Human Services

Office of Inspector General -- AUDIT

"Review of Medicare Reimbursement for Outpatient Cardiac Rehabilitation Services for Calendar Year 2001," (A-09-03-00052)

November 7, 2003

Complete Text of Report is available in PDF format (743 KB). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


The objective of this review was to determine whether Medicare properly reimbursed Tucson Medical Center (the Hospital) for outpatient cardiac rehabilitation services.  We determined that even though physician supervision is generally assumed to be met in an outpatient hospital department, the Hospital did not designate a physician to directly supervise the services provided by its cardiac rehabilitation program staff.  Further, the Hospital’s policies and procedures did not fully meet the Medicare requirement that outpatient cardiac rehabilitation services should be provided “incident to” a physician’s professional services.  In addition, from our specific claims review for a nonstatistical sample of 10 beneficiaries who received 273 services during Calendar Year 2001, we determined that the Hospital received from Medicare approximately $1,156, for which the diagnosis used to establish the patient’s eligibility for the services may not have been supported by medical record documentation, or which were otherwise unallowable.  We attributed these questionable services to weaknesses in the Hospital’s internal controls and oversight procedures.  We recommended that the Hospital (1) work with its Medicare fiscal intermediary regarding physician supervision and “incident to” requirements; (2) work with its Medicare fiscal intermediary to establish the amount of repayment liability, estimated to be as much as $1,156; and (3) implement controls to ensure that documentation is maintained in the medical records to support the services that are provided.  The Hospital concurred with our findings and recommendations.