Review of Rehability Health Services, Incorporated's Outpatient Rehabilitation Facility Program in Texas for the Fiscal Year Ended September 30, 1998

This final report points out that Rehability Health Services (RHS) claimed payment for outpatient rehabilitation services that did not meet Medicare eligibility and reimbursement requirements. Specifically, the fiscal intermediary's medical review personnel identified claims for outpatient rehabilitation services which were not reasonable and necessary, authorized by a physician or supported by medical records. In many cases RSH could not locate any medical records for a claim. As a result, we estimate, based on a statistical sample, that at least $3.1 million was paid to RHS for improper charges for Fiscal Year (FY) 1998. We recommended that the fiscal intermediary apply the appropriate financial adjustment during settlement of RHS' FY 1998 cost report. However, the RHS is no longer a going concern and along with its parent corporation has filed for bankruptcy under Chapter 11.