A Government Accountability Office report released earlier this month has helped build greater skepticism about the operators of comprehensive outpatient rehabilitation facilities, industry experts said.
The same week the GAO report was made public, HealthSouth Corp., Birmingham, Ala., said it has been converting its 16 comprehensive rehabilitation facilities into outpatient clinics that will offer fewer services. HealthSouth spokesman Andy Brimmer said the conversions aren't a result of the GAO report.
Comprehensive rehabilitation facilities offer an array of services that typically include psychological or social services, as well as physical therapy and rehabilitation.
The GAO report only examined Florida comprehensive rehabilitation facilities, which account for about one-third of these types of clinics in the U.S. It concluded they received at least twice as much reimbursement per Medicare patient for therapy services as rehabilitation outpatient departments in skilled-nursing facilities, hospitals and rehabilitation agencies. The GAO called for increased scrutiny of Medicare claims from the Florida facilities.
HealthSouth doesn't operate any comprehensive rehabilitation facilities in Florida but operates 14 in Alabama, one in Michigan and one in New Hampshire. Brimmer said HealthSouth is converting the facilities in an effort to better align their designation with the type and intensity of therapy services they are providing.
The results in the GAO report, which examined 2002 data, were similar to the results of a 2001 investigation conducted by the Florida Medicare contractor, First Coast Service Options. The First Coast investigation led to comprehensive rehabilitation facilities repaying Medicare about $1 million because of improper billing, including billing for services that maintained patients' condition instead of improving it, a stipulation of Medicare reimbursements for therapy services.
First Coast has been reviewing claims from comprehensive rehabilitation facilities since its investigation, and the GAO acknowledged that First Coast's efforts have been effective in reducing improper payments to these clinics.
However, it recommends that more claim reviews be conducted to clamp down on improper billing. In a response letter, CMS Administrator Mark McClellan said the contractor had already taken steps to review more claims but noted that resources are limited.
Dave Mason, the American Physical Therapy Association's vice president of government affairs, said the report indicates a need for Congress to allocate more funds to the Medicare contractor to review the clinics' claims.
Comprehensive rehabilitation facilities have somewhat "lost their way," said Cherilyn Murer, president and chief executive officer of Murer Consultants, a healthcare consulting firm. Murer lobbied Congress for funding to launch these types of facilities about 25 years ago.
She said the idea behind them was to offer more Medicare reimbursable services-such as speech and occupational therapy-than other outpatient rehabilitation departments. How-ever, many operators have opened with the idea of making money instead of offering good patient care, Murer said. The GAO report said that in 2003 a total of 96% of the 220 comprehensive rehab facilities in Florida were for-profit. The number of facilities has increased in recent years, jumping to 653 in 2004, up 24.6% from 524 in 1997, according to CMS data.