Medicare: Tighter Rules Needed to Curtail Overcharges for Therapy in
Nursing Homes (Letter Report, 03/30/95, GAO/HEHS-95-23).

Nursing homes and rehabilitation centers are taking advantage of
ambiguous payment rules and lack of guidelines to bill Medicare at
inflated rates for therapy services.  State averages for physical,
occupational, and speech therapists' salaries range from about $12 to
$25 per hour, but Medicare has been charged upwards of $600 per hour.
The extent of overcharging and its precise impact on Medicaid outlays
are unclear; however, billing schemes uncovered in recent years suggest
that the problem is nationwide and growing in magnitude.  Extraordinary
markups on therapy can result from providers exploiting regulatory
ambiguity and weaknesses in Medicare's payment rules. Payment rules and
procedures developed when the therapy industry was much smaller and less
sophisticated have proved no match for increasingly complex business
practices designed to generate increased Medicare revenue and skirt
program controls.  Although the overbilling problem has been known since
1990, no action has been taken to close loopholes that allow payment for
these overcharges.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  HEHS-95-23
     TITLE:  Medicare: Tighter Rules Needed to Curtail Overcharges for 
             Therapy in Nursing Homes
      DATE:  03/30/95
   SUBJECT:  Medicare programs
             Nursing homes
             Billing procedures
             Therapy
             Medical fees
             Overpayments
             Medical expense claims
             Insurance claims
             Health insurance cost control
             Beneficiaries
IDENTIFIER:  Medicaid Program
             
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