Subsequently, the number of rehabilitation agencies providing physical, occupational, and speech therapy increased dramatically—as did Medicare spending on therapy services delivered in nursing homes. The absence of information on the amount of time spent providing a service also makes it difficult to determine whether a claim is reasonable prior to payment. Under current HCFA regulations, OPTs and SNFs are not required to specify on their claims how much therapy time they are billing for or what specific service was provided. HCFA Attempts to Implement Salary Guidelines Have Not Yet Been Successful

Since 1990, HCFA has taken a number of interim and long-term actions to curb inappropriate charges for SNF therapy services. HCFA has focused its efforts on implementing salary equivalency guidelines for those providing occupational and speech therapy services under arrangement. 2). For a long-term solution to the problem of therapy overcharges, HCFA officials emphasized the importance of more systematic legislative approaches, such as requiring unified billing. Comments From the Health Care Financing Administration

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Why GAO Did This Study

Pursuant to a congressional request, GAO reviewed the Health Care Financing Administration's (HCFA) progress in curbing overbilling for occupational speech and physical therapy services.

What GAO Found

GAO found that: (1) therapy charges billed to Medicare by skilled nursing facilities (SNF) and rehabilitation agencies have more than doubled since 1990; (2) some providers are exploiting weaknesses in Medicare's payment system, since HCFA places no absolute dollar limit on Medicare reimbursements for occupational and speech therapy; (3) HCFA is unable to determine whether a claim is reasonable prior to payment, since SNF are not required to specify how much therapy time they are billing for specific services; (4) HCFA has taken a number of interim actions to curb inappropriate charges, such as implementing salary equivalency guidelines for those SNF providing occupational and speech therapy services; and (5) HCFA officials have emphasized the importance of more systematic legislative approaches, such as unified billing, to solve the problem of therapy overcharges.