OIG estimates medical group received millions in psychotherapy services overpayments

Oceanside Medical Group, a clinic providing mental health services in Santa Monica, California, is disputing an Office of Inspector General (OIG) report that estimated the group received $2.6 million in overpayments for psychotherapy services by failing to comply with Medicare billing and documentation requirements.

The OIG based its estimate off a sample of 100 beneficiary days, which included 103 individual psychotherapy services, although Oceanside provided supporting documentation for only 100 of the sampled services. The OIG’s auditors determined that none of the 100 sampled services complied with Medicare’s requirements. Specifically, the auditors determined that:

• Psychotherapy was not provided for 52 services
• Psychotherapy time was not documented for 49 services
• Adequate supporting documentation was not provided for two services

The sampled services represented an overpayment of $5,317, on the basis of which the OIG estimated Oceanside received at least $2.6 million in overpayments.

The report noted that psychotherapy services billed with E/M services were particularly problematic for Oceanside. Medicare beneficiaries may receive psychotherapy service on the same day as a medical E/M by the same qualified healthcare professional. For the provider to receive separate payment for the medical E/M and the psychotherapy services, the services must be significant and separately identifiable. For 50 of the 52 services the OIG determined that psychotherapy services were not provided, the medical records did not indicate that psychotherapy was provided. For the remaining two, Oceanside said the services were not provided and had been billed in error.

The OIG included an example of services provided by Oceanside where the medical record did not support psychotherapy service that was significant and separately identifiable from the medical E/M. In the example case, the medical record stated that the psychiatrist signed an order for a MRSA culture, a laboratory test unrelated to psychotherapy services. Oceanside billed Medicare for a 30-minute psychotherapy service in conjunction with an E/M service and was paid $53 for the psychotherapy service and $33 for the E/M service.

The OIG recommended that Oceanside repay a portion of the estimated $2.6 million overpayment for claims that are within the reopening period. For claims that are outside the reopening period, the OIG recommended that Oceanside identify and return overpayments according to the 60-day overpayment rule. The agency also recommended that Oceanside implement policies and procedures and strengthen oversight to ensure that psychotherapy services are correctly provided, documented, and billed.

Oceanside disagreed with the OIG’s findings and the agency’s first recommendation. Oceanside maintains that the documentation submitted supported that separately identifiable psychotherapy services were provided. Oceanside also stated that it disagrees that psychotherapy time was not properly documented because it does not believe that providers are required to document specific start and stop times.

The OIG did not concur with Oceanside’s statements and stands by the findings in its report.

Organizations should review internal policies for documentation and billing of psychotherapy services, specifically for psychotherapy services provided on the same day as a medical E/M as well as policies for documenting psychotherapy start and stop times.