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Department of Health and Human Services

Office of Inspector General -- AUDIT

"Review of PCH Health Systems’ Medicare Claims for Outpatient Physical and Occupational Therapy Services for Calendar Years 2000 Through 2003," (A-09-04-00069)

June 30, 2006

Complete Text of Report is available in PDF format (400 kb). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


Our objective was to determine whether Medicare payments to PCH Health Systems, Inc. (PCH) for outpatient physical and occupational therapy services met Medicare reimbursement requirements.  None of PCH’s 114 sampled claims for outpatient physical and occupational therapy services provided from 2000 through 2003 met Medicare reimbursement requirements.  One hundred and three claims were for medically unnecessary services and eleven claims were not supported.  Most of the 114 claims also had other types of errors.

We recommended that PCH refund $9,984,065 to the Medicare program and work with the Centers for Medicare & Medicaid Services to determine the allowability of services billed after 2003.  Because PCH no longer treats Medicare patients or bills the Medicare program, we also recommended that it request its carrier to deactivate PCH’s Medicare provider number.  PCH did not provide comments to our draft report, issued March 13, 2006.  We received comments from National Heritage Insurance Company, the Medicare carrier for beneficiaries in California.