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Report (OEI 05 10-00090)

South Florida Medicare Comprehensive Outpatient Rehabilitation Facilities

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Eighteen of the one hundred one Comprehensive Outpatient Rehabilitation Facilities (CORF) in South Florida were not operational. Ten were not at the location on file with CMS. Eight were not open during business hours.

CORFs provide multidisciplinary outpatient rehabilitation services at a single location. Medicare allowed approximately $70 million for almost 40,000 beneficiaries nationwide who received CORF services in 2010. Of this amount, more than $22 million was for claims by South Florida CORFs. In 2010, over 25 percent of all CORFs were in South Florida.

Previous work has demonstrated that CORFs in South Florida may be vulnerable to fraud, waste, and abuse. For example, OIG estimated that in 2003, three South Florida CORFs received between $720,000 and $1.6 million each in inappropriate payments for services. A 2004 report by the Government Accountability Office found that per-beneficiary payments to CORFs in South Florida were two to three times higher than per-beneficiary payments to other outpatient therapy providers.

As a result of a special enrollment project and routine oversight, CMS took action against 16 of the 18 nonoperational CORFs in the months after we completed our site visits. The special enrollment project resulted in actions against 10 nonoperational CORFs, and routine oversight resulted in 6 such actions.

Given the number of CORFs that OIG and CMS found to be nonoperational, we recommend that CMS continue its attempts to protect the integrity of Medicare by periodically conducting unannounced site visits to CORFs and by using additional program safeguards for CORFs.

CMS concurred with our recommendations. In response to our first recommendation, CMS stated that it conducts unannounced enrollment and revalidation site visits to CORFs and that it plans to increase the frequency of unannounced, out-of-cycle site visits. In response to our second recommendation, CMS stated that it will continue to take administrative actions, as appropriate.

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