News: OIG estimates New York provider received $1.1 million in Medicare overpayments for psychotherapy services

A New York City provider received an estimated $1.1 million in Medicare overpayments for behavioral health services that did not comply with billing requirements, according to a recent Office of Inspector General (OIG) report.

A previous OIG audit found that Medicare had made millions of dollars in improper payments for behavioral health services that were billed incorrectly, provided by unqualified providers, undocumented, inadequately documented, or medically unnecessary. The objective of this audit was to determine whether a New York-based provider, who is one of the highest-paid individual providers in the nation, complied with Medicare Part B requirements when billing for psychotherapy services.

The OIG reviewed a sample of 100 psychotherapy services billed by the provider from April 1, 2018, through August 31, 2020, with payments totaling $7,286. The sample included 88 claims for 45 minutes of psychotherapy, 10 claims for 30 minutes of psychotherapy with an evaluation and management (E/M) service, and two claims for 45 minutes of psychotherapy with an E/M service, JustCoding reported. 

For each psychotherapy service, the OIG requested medical records from the provider and reviewed the documentation to determine whether the provider complied with Medicare billing requirements.

The OIG found that the provider did not comply with Medicare requirements when billing psychotherapy services for all 100 sampled beneficiary days. Reviewed medical records were billed with one or more of the following deficiencies:

• Psychotherapy services did not comply with incident-to requirements
• Psychotherapy services were not documented
• The therapist was not licensed or authorized to provide the services
• The treatment plan did not comply with Medicare requirements
• The treatment plan was not signed

On the basis of the sample results, the OIG estimates that the New York City provider received at least $1,118,789 in Medicare overpayments for psychotherapy services during the audit period.

The OIG recommends that the New York City provider refund the estimated $1.1 million in overpayments to Medicare and exercise reasonable diligence to identify, report, and return any overpayments. In addition, it recommends that the provider develop policies and procedures to ensure that providers are educated on appropriate documentation and billing for behavioral health services.

The provider disagreed with the OIG’s first recommendation to refund to the Medicare program the estimated $1.1 million in overpayments but agreed with its remaining recommendations.

Editor's note: This article originally appeared in JustCoding.