Six State Review of Outpatient Rehabilitation Facilities

EXECUTIVE SUMMARY:

This final report estimates, based on a statistical sample of 200 claims from outpatient rehabilitation facilities (ORF) in 6 States, that the ORFs were paid approximately $173 million for unallowable or highly questionable services for the 12-month period ended June 30, 1998. Services were unallowable or questionable because in the opinion of medical experts the services were not reasonable and necessary for the patient's condition. For example, services were provided to beneficiaries; (1) who exhibited no functional impairment, (2) who evidenced no active participation with a therapist, and/or (3) who had no expectation for significant improvement within a reasonable and predictable length of time. Other services were inadequately documented or were missing required documentation. The Health Care Financing Administration (HCFA) concurred with our recommendations detailing steps HCFA needs to take to shore up Medicare's reimbursement requirements for outpatient rehabilitation services.