Review of GEM Physical Therapy, Inc.

EXECUTIVE SUMMARY:

This final report provides you with the results of the Review of Outpatient Rehabilitation Facility (ORF) services provided by GEM Physical Therapy, Inc. (the Provider), during Fiscal Year (FY) ended December 31, 1997.

The objectives of this review were to determine: (1) whether Medicare payments to the Provider were for services which met the Medicare eligibility and reimbursement requirements, and (2) whether the costs claimed were in accordance with Medicare guidelines.

Our review showed that the Provider was reimbursed for $475,996 in unallowable services and non reimbursable costs.

The Provider was reimbursed $258,185 for services that did not meet the Medicare eligibility and reimbursement requirements. The Fiscal Intermediary (FI) medical reviewers concluded that all 20 selected beneficiaries had been provided services which were not authorized by physicians, not documented, and/or not reasonable or medically necessary.

The Provider also claimed $217,811 in costs that were not reimbursable according to Medicare guidelines.

We believe the Provider claimed unallowable services because it did not ensure that the services were billed in accordance with Medicare reimbursement guidelines. We also believe unallowable and non reimbursable costs were claimed because the Provider did not ensure that Medicare guidelines relating to cost reimbursement were applied correctly.

We also found $14,604 in interim payments made to the Provider by the FI and not reflected in the Medicare Cost Report FY 1997. This was due to a 4 month lag between the filing of the actual Cost Report and the processing and the issuance of the Provider Statistical and Reimbursement Report.

We are recommending the Health Care Financing Administration (HCFA) direct the FI to:

• recover the $475,996 in overpayments for 1997;
• conduct additional claim reviews to identify other unallowable services; and
• adjust the 1997 Medicare cost report to reflect the $14,604 and any other updated interim payment information.