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OFFICE  OF INSPECTOR  GENERAL 
The mission of the OffIce of ~pector  &ner~  (OIG), as mandated by Public Law 95-452, as 
amended, is to protect the integrity of the Dep~ent  of Health and Human Services (HHS) 
programs as well as the health and welfare of benefici~im served by those programs.  This 
statutorymissionis carried outthrougha nationwidenetworkof audits, investigations,and 
inspections conducted by three OIG operating components: the OffIce of Audit Services, the 
Office of Investigations, and the Oftlce of Evaluation and Inspections. The OIG also informs the 
Secretary of HHS of program and Wgement  problem  and recommends courses to correct them. 
OFFICE  OF AUDIT  SERVICES 
The OIGSOffIceof AuditServices(OAS)providesall auditingservicesfor HHS, either by 
conducting audits with its own audit resources or by overseeing audit work done by others.  Audits 
examine the performance of HHS programs and/or its grantees and contractors in carrying out 
their respectiveresponsibilitiesandMeintendedto provideindependentassessmentsofHHS 
programs and operations in order to reduce w~te,  abuse, and mismanagementand to promote 
economy and efficiency throughout the Department. 
OFFICE  OF INVESTIGATIONS 
The OIGSOfficeofInvestigations(01) conductscriminal, civil, andadministrativeinvestigations 
of allegations of wrongdoing in HHS progr~  or to HHS beneficiaries and of unjust enrichment 
by providers.  The investigative efforts of 01 lead to criminal convictions, administrative 
sanctions, or civil money penalties.  The 01 alSO oversees  State  Medicaid fraud control units which 
investigate and prosecute fraud and patient abuse in the Medicaid program. 
OFFICE  OF EVALUATION  AND INSPECTIONS 
The OIGSOffIce of Evaluation and Inspections (OEI) conducts short-term management and

program evaluations(calledinspections)that focuson issuesof concernto the Department, the

Congress, and the public.  The findingsand recommendationscontied  in these inspectionreports

generate rapid, accurate, and up-todate information on the efilciency, vulnerability, and

effectivenessof departmentalprograms.

This report was prepared in the New York Regional OffIce under the direction of Regional

Inspector General Alan S, Meyer, Ph.D.  Project staff included:

New York  Headquarters

Renee C. Dunn, P.T. (Project Leader)  Jennifer Antico

Lucille M, Cop, R.N. (Lead Analyst)  Barbara R. 
Tedesco

Nancy Harrison  Brian Ritchie

Steven B. Harris (Intern)

Sheila Weigert (Intern)  Mti i~  Review Ccmtractor

FMAS, Inc., Rockville, MD 
To obtain a copy of this report contact the New York Regional Office at (212) 264-1998  Department  of  Health  and  Human  Services 
OFFICE  OF 
INSPECTOR  GENERAL 
MENTAL  HEALTH  SERVICES  IN 
NURSING  FACILITIES 
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oEI-02-91-()()8fj()  EXECUTIVE  SUMMARY 
PURPOSE 
To identifi  possible vulnerabilities  to the Medicare  program  in the provision  of mental 
health  services to nursing  facility residents. 
BACKGROUND 
Events in the past few years have focused attention  on mental  health care for nursing 
facility  residents.  The number  of nursing  facility  residents  with mental  disorders  has 
increased;  the Nursing Home Reform  Act,  which provided  new protections  for residents 
and sweeping reforms  of many aspects of life in nursing  homes was implemented;  and 
Medicare  payments  tripled  in the wake of an expansion  of Part B coverage  of these 
services.  Many nursing home residents  have benefitted  from  services not previously 
available  to them.  However,  some problems  remain.  On the one hand,  some may not be 
getting the care they need.  On the other hand,  the Office  of Inspector  General  has 
received  allegations  of abusive practices  relating  to these services,  primarily  about 
Medicare  being billed for unnecessary  or inappropriate  services. 
Our study is meant to draw an overall picture  of the kinds of mental  health  services being 
provided  in nursing facilities  and to identify  any potential  vulnerabilities  for the Medicare 
program. 
We based our results on a review of medical  records  maintained  by nursing homes for the 
five Medicare  codes that were most commonly  reimbursed  to psychiatrists,  clinical 
psychologists,  and clinical  social workers  in 1993.  We also interviewed  knowledgeable 
persomel  and reviewed  pertinent  policies  and documents.  We selected nursing  facility 
records  as the basis of our sampling because  these records  are generally  used by HCFA 
and its contractors  to assess the appropriateness  and quality  of care provided  to Medicare 
beneficiaries,  and they are the primary  source  of information  for records  reflecting  care 
actually  delivered  to a patient  during  a stay in a nursing  facility.  These records  also 
provide  a full accounting  of all services delivered.  We contracted  with FMAS,  Inc.,  a 
medical  review contractor,  which employed  psychiatrists,  psychologists,  and social 
workers  to review the records  and the services provided  by their peers. 
FINDINGS 
In 32 percent  of the records received,  Medicare paid for  medically  unnecessary  services; 
this projects  to $17 million,  or 24 percent  of all 1993 Medicare payments for  mental 
health services for  nursing home residents. 
Of the 397 medical  records  received  for review,  126 contained  medically  unnecessary 
services.  In forty-one  records,  all services  were unnecessary;  and in 85 some were 
umecessary.  Medically  unnecessary  services  are those which our medical  reviewers 
i  concluded  were inappropriate  based on information  in the medical  record  concerning  the 
patients  condition,  need for treatment,  and ability to benefit  from the treatment. 
In 16 percent  of the records received,  Medicare paid for  highly  questionable  services; 
this projects  to $10 million  in Medicare payments 
In sixty-three  records,  all services  were highly questionable.  Highly  questionable  services 
are those where the medical  record  led the reviewers  to raise serious questions about the 
medical  necessity of the services,  but where the evidence  in the medical  record  was 
insufficient  for the reviewers  to make a deftitive  determination. 
In another forty the documentation  was so poor they could not be reviewed.  These forty 
records  did not contain enough  information  for the screeners  to even refer the records  to 
the, clinical  reviewers, 
In 30 percent  of the records,  the wrong code appears to have been billed 
According  to the medical  reviewers,  in thirty percent  of the 225 cases where they had 
enough  information  to determine  what the correct  procedure  code should be,  the code 
billed appeared  to have been incorrect.  In over half of these cases the service appeared  to 
be medication  management  without  any documentation  of psychotherapy,  but 
psychotherapy  was billed. 
At the same time,  difficulties  remain in delivering  needed mental  health services to 
beneficiaries 
We found that some beneficiaries  are not getting  the care they need.  For example,  some 
received  psychotherapy  without  being evaluated  for medication  which might have been 
helpful.  Others received  erratic,  inconsistent  services when they needed consistent 
psychotherapy.  We also found that the skill levels of some providers  may not have been 
adequate. 
Certmntypes of procedures,  providers,  residents,  and re~ons are more likely than others 
to be associated  with unnecessary  and questionable  services 
Psychological  testing and group therapy  are more  likely  (79 percent)  to be medically 
unnecessary  or questionable  than evaluation  and individual  therapy  (47 percent).  Among 
the provider  types,  clinical  psychologists  and clinical  social workers  had the highest 
percentage  (61 percent)  of unnecessary  and questionable  services billed to Medicare. 
Among age groups,  the  old,  old (over 85) were most likely to have unnecessary  or 
questionable  services.  Sixty-two  percent  of these residents  had such services compared  to 
47 percent  of those under  85.  Those residents  with a mental  health  diagnosis of dementia 
including  Alzheimers  disease,  were more likely  (58 percent)  to receive  questiomble  or 
umecessary  services than those with other diagnoses  (45 percent).  Records from nursing 
facilities  in the South were slightly more likely to have unnecessary  or questionable 
services than other parts of the country. 
ii  Billings
Many Factors Make Mental  Health  Service  Vulnerable  To Abuse 
We  found the following  conditions  which might jeopardize  Medicare  payment  integrity: 
.  Lack of physician  involvement,

.  Impediments  of social service staff involvement,

.  Missing treatment  plans,

.  Lack of utilization  guidelines,

  Lack of carrier  policies  and screens specific to nursing  facilities,  and

.  Difficulty  identifying  patients  nursing  facilities.

RECOMMENDATION 
HCFA  needs to take steps to prevent  inappropriate  payments  for mental health  services  in

nursing  facilities.  The challenge  lies in ensuring  the integrity  of Medicare  payments  while

promoting  the delivery  of needed care.  There probably  is no one simple solution.

Instead,  a battery  of carefully  applied remedies  is needed.

Based on the mture  of the problems  we identified,  we suggest the following  approaches

that HCFA,  in concert  with the carriers,  might take:

  Develop  guidelines  for carriers  with delineation  of exactly  what the psychiatric 
procedure  codes mean,  what can be billed for,  who can bill,  and how often; 
  Develop  screens to implement  these guidelines; 
  Conduct  focused medical  reviews; 
  Provide  educational  activities  to providers  of mental  health  services; 
  Clarify  who can provide  services incident  to physician  or clinical  psychologist 
services; 
  Assure that the nursing  facility provider  number  and name is on all claims  for 
patients  in nursing  facilities; 
  Clari@ the requirements  needed to become  an independent  mental health  provider; 
  Identi~  and disseminate  information  about effective  ways to help residents  adjust 
quickly to the nursing  facility to prevent  the need for later clinical  intervention; 
and 
(cid:1) Convene  a group of medical  professionals  to develop  best practices  in documenting 
the nursing  facility  medical  record  and provide  guidance  to nursing  facility 
professionals. 
OPERATION  RESTORE  TRUST STRATEGIES 
This inspection  is a part of a Department  of Health  and Human  Services anti-fraud 
initiative  called  Operation  Restore Trust designed  to target  fraud,  waste,  and abuse related 
to home health  agencies,  nursing homes,  and durable  medical  equipment  suppliers.  This 
initiative  targets  California,  Florida,  Illinois,  New York,  and Texas,  the five States with 
the highest number  of Medicare  and Medicaid  beneficiaries. 
... 
111  We will work with HCFA  and the Administration  on  to follow up on issues 
Aging  (AoA) 
raised  in this report  in a variety  of ways as they relate  to Operation  Restore  Trust.  For 
example,  we will refer possible cases of fraud  and abuse found  in this inspection  for 
additional  review by HCFA  and our own audit and investigations  units,  as appropriate. 
HCFAS protocol  for survey and certification  staff to look at mental  health  services in 
nursing  facilities  when on-site will be beneficial  not only in preventing  inappropriate 
payments,  but also in improving  the quality  of services.  We will also communicate  with 
the Administration  on Aging to make the State Ombudsmen  aware  of possible 
inappropriate  or inadequate  mental health services.  We intend to issue a follow-up  report 
providing  information  specific to the five project  ORT States. 
COMMENTS 
The HCFA  and the Assistant Secretary  for Planning  and Evaluation  (ASPE) concurred 
with our recommendation.  The HCFA  details the actions they are taking  in response to 
carry  it out.  The HCFA  and ASPE also made  suggestions  for changes  in wording, 
clarifications  of the text and technical  changes  which we have for the most part 
incorporated  into the final report.  The actual comments  received  are in Appendix  D. 
iv  TABLE  OF  CONTENTS 
PAGE 
EXECUTIVE  SUMMARY 
INTRODUCTION  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  1

FINDINGS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  8

  unnecessaryServices  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  8

. Questionable Services  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  8

. Wrong Procedure Codes.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  9

. Needed Se~ices  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10
  characteristics  of  Questio~ble  Services  . . . . . . . . . . . . . . . . . . . . . . . . . .  12

  vu~erabfiities  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

RECOMMENDATION  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 .  17 
APPENDICES  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
A:  Description  ofProcedureCodes.  . . . ... . . . . . . . . . . . . . . .  . . . . . . . .  A-1 
B:  Sampling and Projections  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  B-1 
c:  Non-Respondent  Analysis  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  c-1 
D:  Comments.  . . . . . . . . . . . . . .  . . . . . . . . . . . . . . . . . . . . . . . . . . ..D-l  INTRODUCTION 
PURPOSE: 
To identify possible vulnerabilities  to the Medicare  program  in the provision  of mental 
health  services to nursing  facility residents. 
BACKGROUND: 
Events  in the past few years have focused attention  on mental  health care for nursing 
facility  residents.  ~enumber  ofnurshg  facili&  residents  witimen~l  disorders  has 
increased;  the Nursing  Home Reform  Act,  which provided  new protections  for residents 
and sweeping reforms  of many aspects of life in nursing homes was implemented;  and 
Medicare  payments  tripled  in the wake of an expansion  of Part  B coverage  of these 
services.  Many nursing  home residents have benefitted  from  services  not previously 
available  to them.  However,  some problems  remain.  On the one hand,  some may not be 
getting  the care they need.  On the other hand,  the Office of Inspector  General  has 
received  allegations  of abusive practices  relating  to these services,  primarily  about 
Medicare  being billed  for unnecessary  or inappropriate  services. 
The number  of individuals  with psychiatric  disorders  residing  in nursing  facilities 
surpasses the number  in psychiatric  hospitals,  according  to the American  Psychiatric 
Association  (APA).  Recent studies have also shown that psychiatric  disorders  and 
emotional,  behavioral,  and cognitive  problems  are present  in a majority  of nursing  facility 
residents.  However,  it is difficult  to precisely  quantify  the extent  and types of problems 
because these conditions  are not always the primary  reason for institutionalization,  and are 
not always accurately  reported  in patients  medical  records. 
The Nursing Home Reform Act 
As a pmt of the Omnibus Budget Reconciliation  Act (OBRA) of 1987, Congress  passed 
the comprehensive  Nursing  Home Reform Act (PL  100-203).  This expanded  requirements 
that nursing  facilities  had to meet for Medicare  certification.  It focused  on each residents 
highest potential  for physical,  mental,  and psychosocial  well-being  with reasonable 
accommodation  for individual  needs and preferences.  The Act mandated  that all 
applicants  to Medicaid  certified  nursing facilities  and all nursing  facility  residents  must be 
screened  to determine  whether  they have a mental  illness or mental  retardation,  whether 
they need active treatment,  and whether they need the level of nursing  care provided  by a 
nursing  facility.  This Preadmission  Screening  and Annual Resident  Review  (PASARR), 
implemented  in 1988, is the screening process used to determine  those nursing  facility 
residents  who need both specialized  mental health  services  and nursing  facility  care and 
can stay in a nursing  facility  and those residents  that need specialized  services,  but not 
nursing  facility  care,  and must be transferred  to a more appropriate  setting unless they 
have lived in a nursing  facility more than 30 months  and choose  to stay.  The State is 
responsible  for making  sure that the residents  get the specialized  services they need.  The Nursing  Home Reform Act also requires  that residents  appropriately  placed  in nursing 
facilities  receive  a full range of services  to address their psychosocial  needs and 
behavioral  problems.  This range of services  is not precisely  defined,  but nursing  facilities 
must  conduct standardized,  reproducible  assessments  of each residents  functional 
capacity...    within  14 days of admission,  if the patients  condition  changes,  and at least 
every  12 months to determine  the appropriate  services.  This assessment uses the Resident 
Assessment Instrument  which is a multidimensional,  clinically  focused  evaluation  tool.  It 
provides  a basis for identifying  problems  and developing  a residents  plan of care.  The 
instrument  has two parts:  the Minimum  Data Set which is the basis of the resident 
assessment process  and the Resident Assessment  Protocols  (RAPS) which identify the 
residents  unique problems.  This information  is used by the interdisciplimry  team and the 
resident  when developing  the residents  individualized,  comprehensive  care plan.  Seven 
of the  18 RAPs specifically  address mental  health problems  commonly  found in nursing 
facilities  such as delirium,  cognitive  loss/dementia,  psychosocial  well-being,  sad and 
anxious moods,  behavior  problems,  psychotropic  drug use,  and use of physical  restraints. 
The Nursing  Home Reform Act also mandated  the development  of regulations  constraining 
the use of psychotropic  drugs.  The Health  Care Financing  Administration  (HCFA) 
regulations  state that residents must be free from unnecessary  drugs,  not be given 
antipsychotic  drugs except to treat a specific  condition,  and be given gradual  dose 
reductions. 
Medicare  Coverage of Mental Health  Services 
As with all Part B Medicare  services,  covered  mental  health  services must be  reasonable 
and necessary  for the diagnosis or treatment  of an illness or injury  or to improve  the 
functioning  of a malformed  body member.   Payment  is prohibited  for medical  services 
that are for prevention,  palliation,  research  or experimentation.  In the absence of mtional 
policy,  local carriers  determine  their  own policies. 
Services may be provided  by different  professionals.  Medicare  defines  each of these 
specialties  for the purposes  of coverage.  While psychotropic  drugs may be prescribed 
only by a physician,  behavioral  and psychotherapeutic  approaches  may be carried  out by a 
psychiatrist,  a clinical psychologist  and/or  a clinical  social worker. 
While clinical  psychologists  and social workers  services  are covered  the same as services 
by a physician,  they may only provide  those services  they are legally  authorized  to 
perform  in their  State,  Additionally,  independent  clinical  social workers  may not bill 
Medicare  Part B for services finmished to an inpatient  of a skilled nursing  facility  that the 
facility  is required  to provide  as a Medicare  condition  of participation. 
Medicare Expanswn  of Mental Health  Bene@s 
From  1966 until  1988, Section  1833 of the Social Security  Act placed  a cap on each 
Medicare  beneficiarys  psychiatric  outpatient  costs incurred  during  a calendar  year.  Prior 
to 1988, Medicare  paid no more than $250 annually  for covered  outpatient  treatment  of 
2  mental,  psychoneurotic,  or persomlity  disorders.  This was based on 62.5 percent  of a 
maximum  of $500 in reasomble  charges  and subject to a fhrther  reduction  of 20 percent 
for co-insurance.  Charges  for initial diagnostic  services,  i.e.,  psychiatric  testing and 
evaluation  to diagnose  the patients  illness,  were never  subject to this limitation. 
The  1987 OBRA liberalized  Medicare  Part B coverage  of outpatient  psychiatric  services. 
Beginning  in 1988, reimbursement  for outpatient  psychiatric  services increased  to $450 
annually,  based on 62.5 percent  of $900 in reasomble  charges  and a further  reduction  of 
20 percent  for co-insurance.  In January  1989, this was increased  to $1100 annually, 
based on 62.5 percent  of $2,200  with a 20 percent  co-insurance,  This legislation  also 
expanded  Medicare  coverage  to include therapeutic  services  directly  finmished by clinical 
psychologists,  effective  July  1988, but covered  services  were restricted  to those furnished 
in certain  settings such as community  mental health  centers. 
The  1989 OBRA further  expanded  the Part B Medicare  psychiatric  benefit.  It eliminated 
the dollar  cap on outpatient  psychiatric  reimbursement,  effective  January  1, 1990, 
although  the reasonable  charges  are still reduced  by a 62.5  percent  limitation  and the 20 
percent  co-insurance  remains  in effect.  Brief office visits for the sole purpose  of 
monitoring  or changing  drug prescriptions  and any partial  hospitalization  services not 
furnished  by a physician  were excluded  from the 62.5  percent  limitation,  effective  January 
1989.  In addition,  effective  July  1990, direct payment  to clinical  psychologists  can be 
made  in all settings and to clinical  social workers  in most settings. 
fiends  in Medicare  Reimbursement 
Medicare  reimbursement  for the five most commonly  reimbursed  mental health HCPCS 
codes for psychiatrists,  clinical  psychologists  and clinical  social workers  for all Part  B 
services  show a 57 percent  increase,  from $353 million  in 1991 to $555.6 million  in 1993. 
However,  these same codes for the same three provider  types for services provided  in 
nursing  facilities  showed a 244 percent  increase,  from  $20.8  million  in 1991 to $71.7 
million  in 1993.  Deftitions  of the procedure  codes are in Appendix  A. 
Concerns About  Possible Fraud and Abuse 
During  the years prior  to liberalization  of the outpatient  psychiatric  benefit  in 1988, 
postpayment  claims monitoring  by HCFA  and Medicare  carrier  staff identified  a variety  of 
abusive and fraudulent  physician  practices.  Among the most common  were those 
involving  nursing  home and old age home patients,  many often incapable of 
communication,  whose Medicare  accounts were billed  for lengthy psychotherapy  sessions, 
individual  and group.  In some cases no service was rendered;  in many others a brief  visit 
to check and/or  adjust drug prescriptions  was the actual  service.  However,  outpatient 
psychiatric  services  were not usually given  intense scrutiny  by HCFA,  presumably 
because  of the cap on outpatient  reimbursement. 
After three  and one-half  years of uncapped  Part B psychiatric  benefits  and three years  of 
covered  clinical  psychologist  and clinical  social worker  services,  only limited HCFA 
3
 review  of the mture  and extent of these services and the practices  of their providers  takes 
place.  One kind of review that carriers  have available  is called  focused medical  review 
which targets  more in-depth medical  review efforts  at claims  for items,  services  or 
providers  that present  the greatest  risk of inappropriate  payments.  In  1992 and  1993, 
there  was minimal  Medicare  carrier  focused medical  review  of @ese services.  However, 
in one identified  instance of carrier  focused review of psychological  testing,  the review 
established  that the psychological  testing conducted  in nursing homes  by certain  clinical 
psychologists  was excessive and unnecessary. 
A HCFA-funded  Medicare  carrier  study in Arkansas has been looking  at ancillary  services 
in nursing  facilities.  While  reviewing  beneficiary  records,  this carrier  discovered 
problems  involving  consultation  and psychotherapy  services provided  by non-physicians  in 
nursing  facilities.  One problem  involved clinical psychologists  in group practice  billing 
for therapy  provided  by unsupervised  non-clinical  social workers.  After  readjudicating 
claims  from the group which billed  for these services from  1988 to early  1992, the carrier 
has recovered  nearly a quarter  million  dollars and may assess additional  overpayments. 
Cases of suspected fraudulent  practices  involving  outpatient  psychiatric  services have been 
recently  identified  by carriers  and referred  to the OIG.  An August  1992 OIG fraud alert 
addresses  concerns  about excessive  and fraudulent  billing  for psychotherapy  services 
provided  by a clinical psychologist.  It reports  a pattern  of aggressive  marketing  of 
psychological  services to Medicare  beneficiaries  in certified  retirement  and nursing 
facilities. 
AARP Public Policy Institute  Study 
A 1994 report  Barriers to Mental Health  Services for Nursing  Home  Residents  was 
published  by the AARP Public Policy Institute.  The goal of the project  was to develop 
data about the need of nursing  home residents  for mental  health  services,  the availability 
of such services,  and the barriers  to obtaining  needed care. 
Policy  makers  and researchers  who contributed  to the report  agreed  that many mentally  ill 
nursing  home residents  would benefit  from increased  attention  from mental  health 
professionals.  These residents  often respond well to short-term  interventions.  They go on 
to say that mental health  services are scarce in nursing  facilities  because  of low Medicare 
and Medicaid  reimbursement  rates;  lirnhs to mental health  coverage  under  these programs; 
and difficulties  that facilities  face in recruiting  mental health professiomls  to work in 
nursing  homes, 
They concluded  that the presence  of mental  health professionals  such as psychiatrists, 
psychologists,  psychiatric  and geriatric  nurses,  and clinical  social workers  in nursing 
facilities  is the key to helping residents  with mental disorders.  They felt that timely 
treatment  can forestall  further  decline  and that attracting  the necessary  mental  health 
professiomls  to nursing  facilities  would require  improved  reimbursement  rates and fewer 
restrictions  on services, 
4
 We based our results on a review of medical  records  maintained  by nursing homes for the

five Medicare  codes that were most commonly  reimbursed  to psychiatrists,  clinical

psychologists,  and clinical  social workers  in 1993.  We also interviewed  knowledgeable

personnel  and reviewed  pertinent  policies  and documents.

First,  we selected a simple random  sample of 540 beneficiary  claims  from the  1993

HCFA  Common  Working  File which meet certain  conditions.  The sample consists of

beneficiaries  who received  any one of five of the six top HCFA  common  procedure

coding system (HCPCS)  services:  psychiatric  diagnostic  interview  (90801);  psychological

testing with written  report  (90830);  individual  psychotherapy,  20 to 30 minutes  (90843);

individual  psychotherapy,  45 to 50 minutes  (90844);  and group  psychotherapy  (90853)

provided  in a nursing  facility.  A more detailed  description  of these procedure  codes is

given in Appendix  A.  Pharmacologic  management  and review  of medication  with no

more than minimal  medical psychotherapy  (90862)  was eliminated  from the universe  prior

to sampling  because that procedure  code can only be billed  by a medical  doctor  and not a

psychologist  or social worker.  All claims by a psychiatrist  for an evaluation  only were

also omitted.  The place of service for all sample beneficiaries  was either  skilled nursing

facility  (SNF) or nursing facility  (NF).  Although  in the course  of this study we reviewed

only services billed to Medicare,  the beneficiaries  may have been Medicaid  eligible  as

well.

Beneficiary  claims in this sample were handled by 33 Medicare  carriers  who we contacted

to obtain copies of claims in order to identify the nursing  facility  where  services were

provided.  Next,  we asked the nursing facilities  to send us copies  of the sample patients

medical  records.  We requested:  the initial admission  evaluation;  all mental health

documentation  during the patients  entire stay;  and for  1993, all nurses notes,  medication

orders,  physicians  notes,  including  consultations;  and any patient  assessments  that were

done.

We selected  nursing  facility records  as the basis of our sampling  for several reasons.

First,  these records  are frequently  used by HCFA  and its contractors  to assess the

appropriateness  and quality of care provided  to Medicare  beneficiaries.  In conversations

with HCFA  contractors,  we were told that they generally  rely  on records  maintained  at the

site of service  for these purposes.  1hus,they are the primary  source of information  for

records  reflecting  care actually  delivered  to a patient  during  a stay in a nursing  facility.

Second,  these records  contain  a full accounting  of all services  delivered  and thus provide

better  documentation  from which to assess medical  necessity  than fragmented  provider

based records.  Third,  nursing  facilities,  like hospitals,  are required  to maintain  patient

records  reflecting  the care provided  to their patients.

We received  397 (74 percent)  of the 540 records  requested.  We contracted  with FMAS,

Inc.,  a medical  review contractor  to review the medical  records  which did not pass the

screens.  The screening  was done by either the inspection  team  or FMAS,  Inc.  screeners.

The instrument  used for screening  the records  was developed  by the contractor  using

5  clinical  screens generally  accepted  among mental health  care peer review organizations. 
These screens are used for reviewing  records  for all patients  requiring  mental health care. 
In developing  the screening  instrument,  the medical  review  contractor  did a literature 
search and talked to people who had leadership  roles in their professioml  organizations. 
The screening  instrument  included  variables  such as the patients  diagnosis  and treatment, 
both medical  and psychological,  how the mental health  treatment  was initiated,  its goals, 
indications  for testing,  how the tests are used,  the existence  of a treatment  plan,  and any 
changes  in the patients  status after treatment. 
The first listed service in 1993 which was one of the five sampled procedure  codes was 
screened  against the clinical  guidelines  in the case screening  instrument  (397 medical 
records).  We will call this the sample service.  In forty records  documentation  was so 
poor they could not be reviewed.  Cases failing the clinical  screens for this fwst service 
were referred  to the contractors  clinical  reviewer  of the same provider  type as that on the 
claim for fhrther  review of all 1993 mental health  services  (248 medical  records).  Those 
passing the screens were not reviewed  any further  (109 medical  records).  In those 
referred,  the medical  reviewers  determined  which services  were medically  necessary, 
which services were medically  unnecessa~  or which were highly  questiomble. 
We also selected a random  subsarnple,  from the sample of 540 claims,  of 120 nursing 
facilities  in which the sample beneficiaries  resided to interview  the administrator  by 
telephone.  We were able to contact  102 nursing  facility  administrators  or their designees 
who were directors  of nursing  and/or  social workers  on their  staffs to get their  views on 
the increased utilization  of the mental  health benefit,  any problems  associated  with it, its 
impact on nursing facility residents,  barriers  to services  and effects of adding clinical 
psychologists  and clinical  social workers  as Pafi B providers. 
We obtained  from the carriers  beneficiary  histories  for each case to determine  how many 
and what types of mental health professionals  were involved  in the beneficizuys care and 
how often mental health services  other than those sample procedure  codes were provided 
in each case. 
We asked all 42 Medicare  carriers  for their policies,  procedures  and guidelines  for mental 
health  services,  as well as any related  bulletins  or provider  education  materials.  We also 
asked about any cases they are developing  related  to fraud  and abuse in mental  health 
services in nursing facilities,  whether  they conduct  focused medical  review  in this area, 
and what their thoughts are on the inspection  issues. 
Lastly,  we purposively  selected  16 carriers  from the universe  of 42 to include:  at least one 
carrier  from each of the five Operation  Restore  Trust States (a total of 6 carriers);  and 
another  10 carriers  based on their activities  in the mental  health  area and having  a 
substantial  number  of claims  in our sample.  One or more  officials  from each of the 
carriers  were asked about documentation  of claims,  complaints,  monitoring,  barriers  to 
services and effects of adding clinical  psychologists  and clinical  social workers  as Part B 
providers. 
6
 The Chi-square  statistic was used to test the statistical  significance  of differences  in 
medical  necessity by types of procedures,  providers,  residents  and regions.  All 
differences  reported  are statistically  significant  at the 95 percent  cotildence  level.  Details 
of this are in Appendix  B.  The precision  for questions  in the medical  review  screening 
instrument  and the nursing  home administrator  questionnaire  is reported  in Appendix  B. 
The cofildence  intervals  for the estimates  in the sample are also given in Appendix  B. 
The results of the respondent,  non-respondent  amlysis  are in Appendix  C. 
Strengths  and Limittions  of Methodology 
As discussed  earlier,  the strengths  of this kind of review  include: 
	 the nursing  facility  record  presents a total picture  of the patient,  with a whole 
range of relevant  information  regarding  the patients  condition,  not just  information 
for the particular  services under review,  and 
	 the study reflects  the level of quality control  and payment  suppofi available  in the 
nursing  facility,  which is required  by HCFA  to retain  all documentation  about the 
patient  in the nursing  facility record. 
The limitations  of relying  on the nursing facility medical  records  include: 
.  documentation  may not reflect  the actual services, 
  documentation  may be incomplete  or in other ways inadequate,  and 
  other relevant  documentation  available  elsewhere  is not considered. 
We conducted  our review  in accordance  with the Standards for Inspections issued by the 
Presidents  Council  on Integrity  and Efficiency. 
7
 FINDINGS 
In 32 Percent  of the Records Received,  Medicare  Paid for Medically  Unnecessary 
Services;  This Projects to $17 Million,  or 24 Percent  of All 1993 Medicare  Payments 
for Mental  Health  Services for Nursing Home Residents 
Of the 397 medical  records  received,  126 contained  medically  unnecessary  services.

Forty-one  had all 1993 services unnecessary  and 85 had some of the  1993 services

unnecessary.

Medically  unnecessary  services are those which our medical  reviewers  concluded  were

inappropriate  based on information  in the medical  record  concerning  the patients

condition,  need for treatment,  and ability to benefit  from  the treatment.  For example,  an

85 year old woman with a mental health diagnosis  of dementia  had weekly billings  for

group therapy.  The medical  reviewer  says the notes clearly  reflect  the patient  had no

complaints,  no anxiety or depression,  and no need for group  therapy.  Another  85 year

old woman in a different  facility  with dementia  and Parkinsons  syndrome  had periodic

billings  for longer psychotherapy  sessions.  The record  showed  she was unable  to

converse  and had no understanding  due to dementia.  One psychologist  who saw her stated

that one to one psychotherapy  was inappropriate  for this patient.

Based on our sample we project  that this represents  $17 million  in 1993 Medicare

payments.  This is 24 percent  of $71.7 million  for all Medicare  payments  for mental

health  services provided  to residents  of nursing  facilities  for that year.

In 16 Percent  of the Records Received,  Medicare  Paid for Highly  Questionable 
Services;  This Projects To $10 Million in Medicare  Payments 
In sixty-three  records,  all services were highly questiomble.  Highly  questiomble  services 
are those where the medical  record  led the reviewers  to raise serious questions  about the 
medical  necessity  of the services,  but where the evidence  in the medical  record  was 
insufficient  for the reviewers  to make a definitive  determination. 
For example  an 87 year old woman who is confused,  cannot  hear,  and is severely 
demented  had weekly billings  for group therapy  with occasioml  longer  sessions of 
individual  psychotherapy.  The medical reviewer  felt the patient  was in need of 
socialization  such as art or movement  therapy;  but the documentation  did not assess how 
she was benefiting  from group therapy.  Thus he questioned  the need for the group 
therapy.  An 88 year old man with no mental  health  diagnosis,  but a medical  diagnosis  of 
seizure disorder  and stasis ulcers  was billed for weekly  short,  individual  psychotherapy. 
The reviewer  questioned  this treatment  because  he could not fmd any reasons  for the 
referral  to the psychologist  and the medical record  shows the patient  doing very well and 
not in need of psychotherapy. 
8
 In another  forty records the documentation  was so poor they could not be reviewed. 
These forty did not contain enough  information  for t.he screeners  toeven  refer  the records 
to the clinical  reviewers. 
In 30 Percent of the Records,  the Wrong  Code Appears  To Have Been Billed 
Improper  Coding 
According  to the medical  reviewers,  in thirty percent  of the 225 cases where they had 
enough  inforrnationto  determine  what the correct  procedure  code should be,  the code 
billed  appeared  tohave  been  incorrect.  Inoverhalf  of these cases theservice  appeared  to 
bemedication  maagement  witiout  anydocumentition  ofpsychotierapy,  but 
psychotherapy  was billed. 
In16percent  ofthose  with the questionable  code,  alonger  psychotherapy  session was 
billed either  with no documentation  to support the longer  time or with the record  showing 
a profile  of a patient  who could not benefit  from a longer  session.  The clinical  reviewers 
found it difficult  to determine  whether  brief psychotherapy  or longer psychotherapy  was 
the appropriate  code,  since the length of the psychotherapy  session was rarely 
documented. 
Often,  the clinical  psychologist  or clinical  social worker  may evaluate  a resident  and make 
treatment  recommendations  to the primary  care physician  and the nursing  facility  staff. 
The clinical  reviewers  say there is no procedure  code for a follow-up  visit to see how the 
resident  is responding  to the treatment.  They probably  use a psychotherapy  code even 
though no psychotherapy  is performed.  Another  problem  the reviewers  mentioned  was 
when a clinical  psychologist  evaluates  the resident  and refers her/him  to a social worker. 
The social worker  often does another  evaluation  and bills for it.  The clinical  reviewers 
feel this is inappropriate. 
Routine Billing  of Additional  Codes 
The majority  of the beneficiary  histories  that contained  adequate  information  and could be 
reviewed  indicated  that no other psychiatric  codes or evaluation  and management  codes 
were billed to the program  in addition  to the five sample codes. 
However,  questionable  billing practices  were found in some carriers.  We found billing 
for a variety  of psychiatric  codes in addition to the codes in our sample.  Depending  on 
the carrier,  some codes are more popular  than others.  One carrier  in the Northeast  had 
psychiatrists  billing  for initial and follow up consultation  codes as well as the evaluation 
and mamgement  codes on a frequent  basis on each of their patients.  Social workers  in 
this carrier  bill for environmental  intervention  on the patients  behalf  repeatedly  for the 
same beneficiary.  All of this is in addition  to procedure  codes in our sample. 
9
 Another  carrier  had psychiatrists  billing  the code for medication  management  more 
frequently  than had other carriers.  Thk  was in addition  to billing  for psychotherapy 
which includes  medication  management. 
In other carriers,  atypical  billing patterns  are limited  to individuals  or groups of providers. 
One such group  in the South has the psychiatrist,  psychologist,  and social workers  treat 
patients;  and a frequently  billed code is evaluation  of hospital  records  as well as the 
medication  management  code.  Another  popular  code used by a psychologist  is the 
interactive  diagnostic  interview  which is designed to utilize  physical  aids and non-verbal 
communication  with patients  who have difficulty  in communicating.  Another  Southern 
carrier  had a group alternating  billing  between  nursing  facility  and office for group 
therapy  sessions.  In some instances,  when the bill was denied  in one location  it was billed 
to the other  location  and paid. 
The billing  practices  in some Midwest  carriers  indicate that psychiatrists  are also billing 
for the evaluation  and mamgement  codes on their patients  as well as for the sample codes. 
They also bill for interactive  individual  psychotherapy  more  frequently  than providers  in 
other carriers. 
At the Same Time,  Difficulties  Remain in Delivering  Needed Mental  Health  Services 
To Beneficiaries 
Some Beneficiaries  Are Not Geting Needed  Care 
The medical  reviewers  found some of the patients  had billings  and were receiving  certain 
kinds of services  without  any benefit  when they really would have benefitted  from 
different  services.  One 89 year old woman who had a major  depressive  disorder  and 
would have really benefitted  from intensive psychotherapy  had irregular  and inconsistent 
social work sessions which did not document  any benefit.  Another  84 year old woman 
with severe dementia  who could not converse  and was not really capable  of making 
changes had billings  for psychotherapy  when she really required  medication  management. 
The reviewers  also questioned  the case of an 85 year old woman  who had billings  for 
longer psychotherapy  sessions once or twice a month with no change when she could have 
benefitted  from psychotropic  medication  which she did not get. 
Seventy-eight  percent  of the nursing  facility  respondents  cite barriers  nursing  facility 
residents  face in getting  needed mental  health  services.  They say there are still areas in 
the country  where providers  are not available  and providers  who do not want to go into 
nursing  facilities  since they are not interested  in this type of patient.  Some say there  is a 
stigma associated  with mental health  services and patients,  or their  families  refuse needed 
services.  At times,  the attending  physician  reportedly  feels this way and refines  to order 
what nursing  facility  staff see as needed  services.  Also noted is a lack of awareness  of 
mental  health  illness on the part of some of the nursing  facility  staff working  with these 
patients.  Some nursing  facility  respondents  mention  that depression  is under  diagnosed 
and therefore  not treated  or sometimes  leads to a misdiagnosis  of dementia. 
10
 Lesser Skilled People Provtiing  Services 
In 24 percent  of the records  it was impossible  to determine  who provided  the services. 
Either  there was not enough documentation  to tell or the person  who signed the record 
could not be identified.  In these services where we could  not identify  the provider,  the 
person  who submitted  the claim was usually  a psychiatrist  (41 percent)  or clinical 
psychologist  (34 percent)  and a lesser skilled person could well have provided  the service 
because  there were often no credentials  after the name.  Although  Medicare  permits  this 
through  incident to billing,   it is not clear that the professioml  who bills the service  is 
actually  in the nursing facility  supervising  while the service  is being  delivered  as required. 
Thirty-eight  percent  of the carriers  cited problems  around  services  given  incident to.  
The clinical  reviewers  also expressed  concern  about the effectiveness  of a lesser skilled 
person performing  psychotherapy.  They reported  that in many  cases when the provider 
type submitting  the bill was a psychiatrist  or clinical  psychologist,  the record  was clearly 
documented  that the service was performed  by another provider  type.  This included  but 
was not limited  to a person with a Bachelor  of Arts (BA),  a social worker  (with or 
without  licensing  credentials),  and a nurse (with or without  nurse practitioner  credentials). 
The reviewers  consider  this practice  inappropriate.  Typical  of this was an 84 year old 
woman with a diagnosis of depression  who had billings  for four hours of psychological 
testing.  The reviewers  found that person with a BA degree  administered  the tests and feel 
that a psychologist  would not be allowed by the State licensing  board to delegate 
responsibilities  in this way. 
In some cases the name of the clinical  psychologist  who submitted  the bill was 
documented  in the medical  record  as an M.A.  or Ed.D.  rather  than a Ph.D.  Some 
carriers  have questioned  the carrier  process  of giving out provider  numbers  and whether 
people  without proper  qualifications  are billing  Medicare. 
Clinical Psycholo@stsand Clinical Social  Workers Seen as Beneficial 
Perhaps  due,  in part,  to the lack of qualifications  and the shortage  of social service  staff, 
seventy percent  of nursing home respondents  see a beneficial  effect  and sixty-four  percent 
view patients  as better  off since clinical  psychologists  and certified  social workers  can bill 
Medicare  independently.  A psychologist  in our sample treated  a 94 year old resident  for a 
major  depressive  disorder  with suicidal ideation.  The reviewer  indicated  that the 
psychotherapy  was necessary  and the notes were comprehensive  and helpful. 
Most of the nursing home respondents  (70 percent)  say that allowing  clinical  psychologists 
and certified  social workers  to bill Medicare  Part B independently  has had a beneficial 
effect  on providing  mental health  services  in nursing  facilities.  These respondents  feel it 
has provided  better  access to mental health  services,  and that clinical  psychologists  and 
social workers  are more available  than psychiatrists  and are now more willing  to come 
into nursing  facilities  now that they can get paid.  They say that this,  in the end,  provides 
better  patient  care.  Almost two-thirds  (64 percent)  say that patients  are better  off now, 
since they are getting necessary  treatment. 
11  The carriers  generally  agree.  Sixty-three  percent  see some positive  results from adding 
clinical  psychologists  as Medicare  providers  and 44 percent  see some benefit  from  adding 
social workers. 
Certain Types of Procedures,  Providers,  Residents,  and Regions  Are More Likely 
Than Others To Be Associated  with Unnecessary  and Questionable  Services 
Psycholo~cal Testing and Group l%erapy 
Seventy-nine  percent  of psychological  testing and group  therapy  were found to be 
medically  unnecessary  or questionable  as compared  to 47 percent  of evaluation  and 
individual  therapy.  If we separate  all the procedures,  eighty percent  of the psychological 
testing  and three quarters  of group therapy  were found to be umecessary  or questionable. 
However,  the longer individual  psychotherapy  (59 percent,)  evaluations  (46 percent,)  and 
brief  individual  psychotherapy  (39 percent)  still had excessive  rates of questionable  and 
unnecessary  services.  These rates for testing,  group therapy,  and the longer  individual 
psychotherapy  are all higher  than the average  rate of 53 percent  for all types of services. 
An example  of unnecessary  testing  is the case of a 91 year old man admitted  to a nursing 
home with terminal  cancer  who died within  a month  of admission.  A psychologist  billed 
for many hours of testing.  The clinical  reviewer  questioned  the need for testing this 
resident  who had been admitted  to the nursing  facility  to spend his last weeks. 
Psychological  testing was poorly  documented  with often no evidence  of the actual tests in 
the record.  Testing was often billed  when rating  scales were administered  as opposed to 
those tests referred  to in the CPT manual  as psychological  testing.  The clinical  reviewers 
feel that clarification  should be provided  concerning  the appropriate  procedure  code to use 
for these rating scales,  such as the Beck Depression  Inventory  or the Geriatric  Depression 
Inventory.  These rating scales may not require  the same highly  specialized  administration 
and scoring as intellectual,  persomlity,  memory  or neuropsychological  tests.  The 
questions  on rating  scales are generally  self-explanatory  and they are usually  scored by 
totaling  relevant  response options. 
Half of the carriers  feel that group therapy  is a problem;  they point to services billed  for 
recreatioml  and socialization  activities.  Some carriers  also mention  each of the other 
services as problematic. 
The reviewers  noted that some of the group therapy  sessions claimed  were groups  like the 
tea time group  or the  wake up group which appeared  to be more  appropriately  social 
groups rather  than psychotherapy. 
Clinical Psycholo~sts and Clinical Sociul  Workers 
Among the various provider  types,  clinical  psychologists  and clinical  social workers  had 
the highest percentage  (61 percent)  of unnecessary  and questiomble  services billed  to 
12
 Medicare.  Incomparison,  46percent  ofpsychiatiisfi'  billkgs  were eitier  questionable  or 
unnecessary. 
Forexarnple,  apsychologist  billed for  10units  oftestingofa78  year oldman  witha 
diagnosis  of dementia  and there was no indication  in the record  as to why the patient  was 
tested,  and no test report  or even a brief report  of the findings  in the record.  The 
reviewer  questioned  the need for the testing and said a mental  status exam or 
psychological  evaluation  would have been appropriate. 
About two-fifths  of the carriers  reported  excessive entrepreneurialism,   particularly 
among psychologists.  They were generally  less likely to see these problems  with social 
workers.  Also,  half of the nursing  facility  respondents  mention  the marketing  practices  by 
groups of mental  health  workers  to their facilities. 
Residents  Over 85 
The  old, old were most likely to have unnecessary  or questionable  services.  Sixty-two 
percent  of the residents  85 and older had such services compared  to 47 percent  of those 
under  85.  Only 29 percent  of those under  65 had unnecessary  or questionable  services. 
A sample case was that of a 100 year old with senile dementia  who was seen by a 
psychiatrist  in group therapy  for 6 months.  For service  on the sample date,  the resident 
did not attend because  of medical  reasons,  but the bill was submitted.  The reviewer  was 
umble  to determine  a clear  indication  of any mental  illness and because the resident  had 
severe dementia,  the reviewer  questioned  the benefit  of therapy. 
Dementia 
Those residents  with a mental health diagnosis  of some sort of dementia,  including 
Alzheirners  disease,  were more likely (58 percent)  to receive  questiomble  or unnecessary 
services than those with other diagnoses  (45 percent).  An example  is a 97 year old with 
Alzheimers  disease who was seen for individual  psychotherapy  weekly,  for  12 months. 
The reviewer  indicated  that this patient  did not need weekly therapy  sessions.  He felt 
social activities  at the facility  would have been helpfil  with occasioml  therapy  sessions 
once or twice a month. 
The South 
Nursing  facilities  in the South (61 percent)  were somewhat  more likely than the rest of the 
country  (49 percent)  to have umecessary  or questiomble  services.  However,  the 
Midwest  and the West each had more than half (56 percent)  of their services umecessary 
or questionable.  Only the Northeast  had less than the natioml  average  with 41 percent  of 
unnecessary  and questiomble  services.  Some States within each region had a majority  of 
their services  either unnecessary  or questiomble. 
A number  of providers  treated  multiple  patients  in the sample.  Half of these providers 
were from the South.  Eighty-one  percent  of these providers  had unnecessary  or 
13  questionable  services.  They were often members  of groups  that had different  disciplines 
treating  patients  in a number  of different  nursing  facilities  or treating  a number  of patients 
in the same facility. 
Many Factors Make Mental  Health Service Billings  Vulnerable  To Abuse 
Luck of Physician  Involvement 
The clinical  reviewers  noted that a common practice  in the records  was to see physician 
orders for psychiatric,  psychological,  or mental health  services  on an  as needed  or 
pm basis.  An example  is a 78 year old man with dementia  who had  10 units of 
psychological  testing.  The reviewer  saw no reason for the testing  and could not fmd who 
referred  the patient.  However,  there was a standing order  in the record  for  psych 
services as needed.   They also question the appropriateness  of these services.  The 
reviewers  recommend  that physician  orders for these services be based on each patients 
individual  needs,  and that routine  standing orders  for these services  be discouraged  or not 
allowed. 
Seventy-eight  percent  of the nursing  facility  respondents  said that a physicians  order was 
required  before  any mental health  services could be performed.  They  said that if someone 
else in the facility  or a family member  requested  mental  health  services,  the attending 
physician  had to be consulted and write the request.  We found that 58 percent  of the 
sample services had referrals  by the primary  care physician.  Even  in many of those cases 
there were standing orders which did not necessarily  address  the specific  needs of the 
individual  patient.  However,  in over a third of the records  the reviewers  could not 
determine  who referred  the patient 
Impediments  To Social Service Staff Involvement 
Most of the nursing  facilities  contacted  (85 percent)  have a social service  staff which 
varies in size.  The educational  background  of staffs also varies  fkom that of a high school 
graduate  with no mental health educational  background  to a Doctorate  in Social Work with 
many Bachelor  and Masters  level social workers  in between.  They usually provide 
supportive  services or counseling  (75 percent),  take part  in the psychosocial  assessment 
(47 percent)  and provide  other services as needed to help the residents  and families  adjust 
to the nursing  facility. 
The nursing  facility  respondents  say that the social service  staff are burdened  by 
paperwork.  They say that even when their social service  staff is qualified  to provide 
psychotherapy,  they do not have the time.  One nursing  facility  administrator  said, 
Mental Health  services could be provided  in house by most facilities  if the social worker 
were not so burdened  by paperwork.  The social worker  doesnt  have time and 
psychological  services are not in the Medicaid  rate.  
14
 Missing  Treatment Plans 
Twenty-eight  percent  of the records  for patients  receiving  psychotherapy  had no treatment 
plan,  while another 22 percent  of records  of those receiving  therapy  or testing did not 
show whether  the plan was carried  out,  In 43 percent  of the records  we could not 
determine  if any goals were met.  Only 15 percent  of the records  included  the PASARR. 
The lack of treatment  plan and goals make it difficult  to measure  a patients  progress 
and make appropriate  adjustments  during  a course of treatment.  It also makes it more 
likely for a provider  to provide  services without  need. 
tick  of  Utilization Guidelines 
Carriers  have difficulty  denying  services when they have no clear  guidelines  or utilization 
parameters.  It is not cost effective  to review  services on a case by case basis.  A quarter 
of the carriers  pointed to lack of either clear HCFA  guidelines  or clear definitions  of 
medically  necessary mental health  services and who may provide  them.  One carrier 
mentioned  that the same provider  is dealt with differently  by different  carriers.  This is 
supported  by the documents  we received  from the carriers  as well.  This is also supported 
by the medical  review,  where the variation  in coverage  of services  is reflected  in billings 
and inappropriate  payments. 
Luck of Carrier Policies and Screens Specific  To Nursing Facilities 
Almost all carriers  have policies  and procedures  about outpatient  mental health  services; 
however,  we found that only three have any policy  specific  to nursing  homes. 
Three-quarters  of the carriers  have screens or edits relating  to mental  health  services  in 
general,  but few have any that relate  specifically  to mental  health  services in a nursing 
facility.  Of those carriers  that have screens,  61 percent  have a screen which prevents 
evaluation  and management  services  and psychotherapy  on the same day and/or 
medication  management  on the same day as psychotherapy.  Two carriers  have a screen 
for certain  diagnoses  such as dementia  or Alzheimers  Disease.  The provider  must 
document  the medical  necessity  of the service. 
The majority  of carrier  respondents  report using screens and edits,  requiring  additioml 
documentation,  periodic  reviews  such as focused medical  reviews,  monetary  settlements, 
referrals  to investigative  agencies,  special reviews,  and education  and interagency 
coordination  to ensure appropriate  payment.  They are beginning  to give attention  to these 
services  in nursing facilities. 
The clinical  reviewers  often questioned  the need for the high frequency  of the services 
provided  in the records  reviewed.  They wondered  whether  there  should be screens for 
more than one evaluation  in a period  of time without a documented  change  in the patients 
status and they questioned  the large number  of individual  and group psychotherapy 
sessions provided  per week,  sometimes  more than one a day. 
15  All but three carriers  sent us educational  material,  but generally  not specific  to nursing 
facilities.  Eigh&-sk  percent  send bulletti  ornewsletiers  toclfical  psychologisG~d 
certified  social workers  which include information  about payment.  One carrier  has a 
manual  specific to mental  health  services.  Forty-three  percent  of the carriers  have 
seminars  or workshops  which include information  about mental  health  services.  one 
carrier  mentioned  that they meet with the psychological  association  quarterly  to discuss 
concerns  and issues. 
difficulty  Identifying  P~ents Nursing Facilities 
In 30 cases we were unable  to identify the nursing  facility  to request the records.  In 
many other cases we used a comprehensive  nursing  home computer  file to find the name 
of the facility  when only an address was available.  The mailing  address of the beneficiary 
on the top of the hard copy claim  form often does not include the name of the nursing 
facility,  nor is it listed on the bottom  of the form as the facility  where services  are 
rendered.  On electronic  claims  it is even more difficult  to identify  the nursing  facility 
where the beneficiary  resides.  Not being able to determine  the facility  where  the 
beneficiary  resides,  it is then impossible to retrieve  the records  to review  to determine 
unnecessary  or questionable  services in a nursing  facility. 
16
 RECOMMENDATION 
HCFA  needs to take steps to prevent  inappropriate  payments  for mental  health  services  in 
nursing  facilities.  The challenge  lies in ensuring  the integrity  of Medicare  payments  while 
promoting  the delivery  of needed care.  There  probably  is no one simple solution. 
Instead,  a battery  of carefi,llly applied remedies  is needed. 
Based on the nature of the problems  that we identified,  we suggest the following 
approaches  that HCFA,  in concert  with the carriers,  might  take: 
  Develop  guidelines  for carriers  with delineation  of exactly  what the psychiatric 
procedure  codes mean,  what can be billed  for,  who can bill,  and how often; 
  Develop  screens to implement  these guidelines; 
  Conduct  focused medical  reviews; 
  Provide  educational  activities  to providers  of mental  health  services; 
  Clari@ who can provide  services  incident  to physician  or clinical  psychologist 
services; 
  Assure that the nursing facility provider  number  and name  is on all claims for 
patients  in nursing facilities; 
  Clarify  the requirements  needed to become  an independent  mental  health provider; 
  Identify  and disseminate  information  about effective  ways to help residents  adjust 
quickly  to the nursing facility  to prevent  the need for later clinical  intervention; 
and 
	 Convene  a group of medical professionals  to develop  best practices  in documenting 
the nursing facility medical  record  and provide  guid-mce to nursing  facility  -
professionals. 
OPERATION  RESTORE  TRUST STRATEGIES 
This inspection  is a part of a Department  of Health  and Human  Services  anti-fraud 
initiative  called  Operation  Restore Trust designed  to target  fraud,  waste,  and abuse related 
to home health  agencies,  nursing homes,  and durable  medical  equipment  suppliers.  This 
initiative  targets  California,  Florida,  Illinois,  New York,  and Texas,  the five States with 
the highest number  of Medicare  and Medicaid  beneficiaries. 
We will work with HCFA  and the Administration  on Aging  (AoA) to follow up on issues 
raised in this report  in a variety  of ways as they relate  to Operation  Restore  Trust.  For 
example,  we will refer possible cases of fraud  and abuse found  in this inspection  for 
additional  review by HCFA  and our own audit and investigations  units,  as appropriate. 
HCFAS protocol  for survey and certification  staff to look at mental  health services  in 
nursing  facilities  when on-site will be beneficial  not only in preventing  inappropriate 
payments,  but also in improving  the quality  of services.  We will also communicate  with 
the Administration  on Aging to make the State Ombudsmen  aware  of possible 
inappropriate  or inadequate  mental health services.  We intend to issue a follow-up  report 
providing  information  specific to the five project  ORT States. 
17  We received  comments  on the draft report  from HCFA  and the Assistant  Secretary  for 
Planning  and Evaluation  (ASPE).  They concur  with our recommendation.  They also 
provided  suggestions for changes  in wording,  clarifications  of the text and technical 
changes which we have for the most part incorporated  into the fiml  report.  The actual 
comments  received  are in Appendix  D. 
The HCFA  agreed with our suggestion  to clarify  who can provide  services  incident to 
physician  or clinical  psychologist  services.  However,  they believe  that they should ensure 
that only those individuals  who bill meet the required  qualifications,  fulfill  all the 
requirements  under the  incident to benefit,  and assume responsibility  for the services 
furnished  by their auxiliary  personnel.  WMe  we agree with that,  we also believe that 
clarification  of this requirement  should be expanded  to require  that the direct provider  of 
the service,  not only the biller,  meets certain  qualifications.  The performance  of mental 
health  services,  such as psychotherapy  and psychological  testing,  requires  a certain  skill 
level to be safe and effective. 
The HCFA  did not agree with the need to assure that the nursing  facility provider  number 
and name are on all claims  for patients  in nursing  facilities.  They do not see how 
requiring  this can help Medicare  contractors  make determinations  about appropriateness  of 
the services.  They also say that Medicare  already  requires  that providers  record  the 
address if the place of service  is other than  home or office.  They feel it would be a 
needless additioml  burden  on the provider  to obtain and record  provider  numbers  of the 
facility.  We understand  that contractors  do not need this information  to make medical 
necessity  determinations  on a case by case basis.  We believe,  however,  that the site of 
service,  that is the nursing  facility  name,  address and provider  number,  is important  for 
contractors  and others using Medicare  data to know.  During  the course of this inspection 
we found that providers  did not record  this information  on Medicare  claims  in a 
systematic  way.  However,  it is necessary  information  for any kind of proactive  trend 
analysis;  to detect whether  services  are part of the nursing  facility  inclusive  rate;  and/or  to 
do any site of service comparisons.  In this study it was necessary  to collect the nursing 
facility medical  record.  This was difficult  since the nursing  home name was ofien 
missing. 
The HCFA  also offered  several technical  comments.  They are concerned  about an over 
reliance  on medical  doctors  making  decisions  about the delivery  of mental  health services 
since they say that medical  doctors  may have no expertise  in the diagnosis  and treatment 
of mental  health problems.  The HCFA  also says that many geriatric  nurses and social 
workers  may have extensive  training  and experience  in providing  mental  health  services 
for this population;  and that as long as individuals  are practicing  within the scope of their 
State licensing  laws, claims  should not be denied on the basis of credentials  alone.  We 
agree with this in principle,  but this did not always appear  to be the case in the records 
we reviewed.  We did not,  however,  question  any claims  on the basis of credentials  alone. 
The peer review determinations  were done on the basis of necessity  of the services 
rendered. 
18
 The HCFA  was also concerned  that we did not address the possible  over utilization  of 
psychoactive  medications  in the nursing home population.  Although  we do have data 
about the psychoactive  medications  the residents  in our sample were taking,  decisions 
about the appropriateness  of these medications  was not within the scope of this inspection. 
Finally,  the HCFA  believes  that our recommendations  should be strengthened  in regard  to 
enforcement  since some of the practices  described  are clearly  fraudulent.  We agree with 
this need for strong enforcement.  We will be referring  all of the unnecessary  and 
questiomble  cases and those without enough information  to the appropriate  agency  for 
further  development  and to our Office of Investigations  when appropriate. 
19
 APPENDIX  A

DESCRIPTION  OF PROCEDURE  CODES 
90801 Psychiatric  diagnostic  interview,  examination  including  history,  mental 
status,  or disposition  (may include  family  or other  sources,  ordering  and 
medical  interpretation  of laboratory,  or other medical  diagnostic  studies in 
lieu of the patient). 
90830  Psychological  testing by physician,  with written  report,  per hour. 
90843 Individual  medical psychotherapy  by a physician  with continuing  medical 
diagnostic  evaluation,  and drug management  when indicated,  including 
insight oriented behavior  modifying  or supportive  psychotherapy, 
approximately  20 to 30 minutes. 
90844  Individual  psychotherapy  approximately  45 to 50 minutes. 
90853	 Group medical psychotherapy  (other than of multiple  family  group) by a 
physician,  with continuing  medical  diagnostic  evaluation  and drug 
mamgement  when indicated. 
A-1
 APPENDIX  B 
SAMPLING,  PROJECTIONS,  CHI-SQUARE  VALUES  AND PRECISION 
Sampling 
A simple random  sample was drawn  for this inspection.  The sample frame was the 
population  of Medicare  beneficiaries  who in 1993 had one of five mental health codes in 
the HCFA  Common  Procedure  Coding  System (90801,  90830,  90843,  90844,  and 90853) 
with the place of service being a nursing  facility  or skilled nursing  facility  .  We excluded 
any beneficiary  who had claims only for HCPCS  90801 billed by a psychiatrist.  This left 
a total of 1,332 beneficiaries.  We then randomly  sampled  540 of the  1,332 beneficiaries. 
We requested  the nursing facilities  to send us the medical  records  for these beneficiaries. 
We received  397 records,  a response  rate of about 75 percent.  Based on our analyses, 
these 397 fell into the following  three  groups: 
1) 109- Passed the initial  screening  of the first service  in 1993 by screeners 
from FMAS,  Inc.  (the contractor)  or by the inspection  team and 
were not referred  for fiu-ther review; 
2) 248- Were referred  to contractor  reviewers  to review  all 1993 services; 
and 
3)  40- Did not have enough documentation  to review. 
For the 248 records  reviewed  by the contractor  for all 1993 services,  the four outcomes 
were as follows: 
1)  59- All services were medically  necessary; 
2)  41- All services were medically  unnecessary; 
3) 85- Some of the services were medically  necessary  and some medically 
unnecessary;  and 
4) 63- AU services were highly  questiomble  with respect  to medical 
necessity. 
Projections 
Two projections  of cost savings to the universe  of 1,332 beneficiaries  from which the 
sample was drawn were calculated  based on the  189 records  identified  by the contractor  as 
containing  unnecessary  or questiomble  services among the 248 records  reviewed.  The 
frost projection  in Table B1 below was based on categories  2 and 3 above (including  the 
all or some medically  unnecessary  services)  and on a sample  size of 248.  The second 
projection  was based on the highly questionable,  and using the same sample size. 
B-1
 The table below presents  two projections. 
Table B1 
Projections  of Cost Savings For Five HCPC  Codes 
Basedon  Unnecessary or Highly  Questionable  Services 
Service  Outcomes  Sample  Weighted  Boundaries  for 95 
Size  Projections  % Coni3dence 
Interval 
1) All or some services medically  248  $16,674,667  +/- $4,447,227 
unnecessary  (n= 126) 
2) All services highly  248  $10,304,993  +/- $3,631,827 
questionable  (n=63) 
The dollar amount  is a conservative  estimate because there  were cases where we could not 
determine  the exact dollar  amount;  in which case we did not include  any amount. 
B-2
 Chi-Square  Values 
We computed  chi-square  values for differences  in unnecessary  and/or  questionable 
services for each of the five variables  on which  such differences  are reported  in our 
findings.  Chi-square  values show that differences  on all five variables  were significant  at 
the 95 percent  confidence  level. 
Table B2 
CHI-SQUARE  Values for  Testing Significance  of Differences 
in Unnecessary and/or  Questionable  Services for  Procedure, 
Provider,  Age,  Didgnosis,  and Re@on 
I  II 
VARIABLE  DF*  CHI-SQUARE 
Procedure  1  I  21.712  II 
Provider 
Age 
Diagnoses 
Region  1  3.958 
*Degrees of Freedom 
Precision 
Response rates on individual  items in the medical  record  screening  document  varied  from 
item to item.  Except where otherwise  specified,  the number  of items are equal to the 357 
records  reviewed.  We can conservatively  estimate  that the measured  precision  of the 
results for categorical  questions  is no more than 4.8 percent  at the 95 percent  conlldence 
level. 
Some items only applied to a portion  of the sample.  In those cases the precision  ranged 
from 5.2 percent  to 8.7 percent.  only  one case was out of the range  at 11.8 percent. 
The number  of responses  to individual  questions  in the nursing  home administrators 
questionnaire  varied from a low of 89 to a high of 102.  Taking  the low value of 89 as the 
sample size, we can conservatively  estimate  the measured  precision  of the survey results 
for the categorical  questions as 10 percent,  at the 95 percent  confidence  level. 
B-3
 APPENDIX  C 
ANALYSIS  OF RESPONDENTS  AND NON-RESPONDENTS 
An important  consideration  in surveys of t.his type is the bias that may be introduced  into the 
results if non-respondents  differ from respondents  to the survey  instrument.  For this 
inspection,  a beneficiary  whose medical  record  was not obtained  or was incomplete  is a non-
respondent.  To test for the presence  of any bias,  we f~st  obtained  information  from the 
Common  Working  File (CWF)  for all 540 beneficiaries  whose medical  records  were 
requested,  including  both respondents  and non-respondents.  There  were  183 non-
respondents,  including  143 beneficiaries  for whom we received  no records  and another  40 
with incomplete  records.  The remaining  357 beneficiaries  for whom complete  records  were 
received  are our respondents. 
We found the following  four variables  related  to unnecessary  or questionable  services  among 
respondents:  type of service  (psychological  testing and group therapy  vs, evaluation  and 
individual  therapy),  type of provider  (psychiatrist  vs. psychologist  and social worker),  age 
group (under  85 vs.  85 and older),  and region  ( the South vs all other regions.)  Differences 
between respondents  and nonrespondents  for each of these four variables  were tested for 
significance  using  Chi-square  with the appropriate  degrees  of freedom. 
The results  of this analysis are presented  in tables C 1-4.  The Chi-square  values given in the 
tables provide  a test of significance  for the differences  in the distribution  of respondents  and 
non-respondents  for each variable  of interest.  Also provided  in the tables are the response 
rates for the different  values of the variables. 
These tables  show a statistically  significant  difference  between  respondents  and non-
respondents  with respect  to age and region.  We therefore  estimated  the effect of these 
differences  on our original  findings.  Assuming  the non-respondents  85 and older would have 
had the same rate of unnecessary  and questiomble  services as respondents  85 and older,  the 
percent  of such services for the study universe  of beneficiaries  from whom the sample was 
selected would have decreased  only slightly  from 52.94  percent  to 52.41  percent.  This 
change is very minor  and well within the bounds of our conildence  interval. 
We also estimated  the effect of the difference  between  the percent  of respondents  and 
nonrespondents  by region.  Assuming  that the non-respondents  from each region  would have 
had the same rate of unnecessary  or questionable  services  as respondents  from the same 
regions,  the percent  of such services for the study universe  would have increased  very 
slightly from 52.94  percent  to 53.73  percent,  This change  is also minor  and well within  the 
bounds of our contldence  interval,  therefore  not differing  significantly  from-the  percent 
found among our respondents.  In summary,  our analysis of key characteristics  of non-
respondents  indicates  that our original  results are not biased due to their non-response. 
c-1  Table C (1 - 4)

CHI-SQUARE  Values for  Testing Significance  of Differences

Between  Respondents  and Non-Respondents  For

(1) ~pe  of Service,  (2) ~pe  of Provider,

(3) Age and (4) Region 
(1) TYPE OF SERVICE 
Respondents  Non-respondents  Total  Percent 
Psych Testing  & Group  66 (18%)  37 (20%)  103  64% 
Therapy 
Evaluation  & Individual  291 (82%)  146 (80%)  437  67% 
Therapy 
All Services  357  183  540  66% 
CHI-SQ=.235

Degrees  of Freedom  =  1

(2) TYPE OF PROVIDER

Respondents
 Non-respondents  Total  Percent 
Psychiatrist
 160 (48%)
 74 (45%)  234  68% 
Clinical  Psychologist
 133 (40%)
 71 (43%)  204  65% 
Clinical  Social Worker
 34 (lo%)
 16 (10%)  50  68% 
Nurse Practitioner
 8 (2%)
 3 (2%)  11  73% 
All Providers  *
 335
 164  499  67% 
CHI-SQ=  .684

Degrees  of Freedom  =  3

* The above totals are less than the previous  totals due to the elimination  of some categories 
that were very small (such as nurse specialist)  and some that could not be determined. 
c-2  Table  C (Continued) 
(3) AGE 
Respondents  Non-respondents  Total  Percent 
85 or older  138 (39%)  52 (28%)  190  73% 
<  85  219 (61%)  131 (72%)  350  63% 
All Ages  357  183  540  66% 
CHI-SQ=5,56*

Degrees  of Freedom  =  1

*Significant  at the .982 level

(4) REGION 
, 
Respondents  Non-respondents  Total  Percent 
Northeast  107 (30%)  26 (15%)  133  80% 
Midwest  95 (27%)  52 (29%)  147  65% 
south  112 (31%)  63 (35%)  175  64% 
West  43 (12%)  38 (21%)  81  53% 
I

All Regions  357  I  179  I  536  I  66% 
CHI-SQ=18.911*

Degrees  of Freedom  =  3

*Significant  at the .999 level

c-3  APPENDIX  D 
COMMENTS  ON THE DRAFI REPORT 
In this appendix,  we present  in full the comments  from the Health  Care Financing 
Administration  and the Assistant Secretary  for Planning  and Evaluation. 
D-1
 *S* wcl,,o
+F  G 
*4 
:*  .  DEPARTMENTOF HEALTH& HUMAN SERVICES  Health  Care Financing  Administration 
; 
8  -g 
+ 
+~>8 ,,w The Administrator 
Washington,  D.C.  20201 
lt4R2219$J5 
DATE: 
TO:  June Gibbs Brown 
Inspector General 
W 
FROM:  Bruce C. Wade  . 
Administrator  %  \ 
SUBJECT:	 Office  of Inspector  General  Draft  Report:  Mental  Health  Services  In 
Nursing  Facilities,  (OEI-02-91-O0860) 
We reviewed the subject draft report  which discusses possible vulnerabilities  to the

Medicare program in the provision of mental health services to nursing facility residents.

Our detailed comments are attached for your consideration.  Thank you for the

to review and comment on this report.  Please contact us if you would like to

opportunity 
discuss our comments tier.

Attachment  / 
.. 
. 
- ....-
~._.---.  .- Health Care Financing Administration  (HCFA) Comments 
On Office of Inspector General Drafl Report: 
Mental Health Services in Nursi.ruzFacilities. 
0EI-02-91-O0860 
OIG Recommendation 
HCFA needs to take steps to prevent inappropriate  payments  for mental health services in 
nursing facilities.  There probably is no one simple solution.  Instea~  a battery of 
carefidly applied remedies are offered. 
HCFA Response 
We basically  agree with this premise  and offer the following  comments on each 
approach. 
Apuroach  1 
Develop guidelines for camiers with delineation  of exactly what the psychiatric  procedure 
codes meq  what can be billed for, who can b~  and how often. 
HCFA Res~onse 
We agree that there is a need for a clear delineation  of the psychiatric  procedure  codes, 
and in fac$ such a system exists under the Physicians  Current Procedural  Terminology 
coding system.  Accordingly,  HCFA does not believe there is any need for fhrther 
definition  of these procedure codes or duplication  of the American Medical Associations 
efforts.  We also agree that clear distinctions  are needed when it comes to the what  who, 
and intend to discuss these issues in detail in the final rule, Medicare  Coverage and 
Payment of Clinical Psychologists,  other  Psychologis~  and Clinical Social Worker 
Services.  Regarding the frequency  of coverage we understand  that the 
Psychiatry/Psychology  Carrier Medical Directors  workgroup is developing model 
medical review policies that would establish medical review guidelines to help determine 
whether the frequency of services rendered to patients is reasonable  and necessary  based 
on their diagnosis and/or treatment plan.  Page 2 
Amxoach  2 
Develop screens to implement these guidelines. 
HCFA Response 
We will develop the proper screens for Medicare contractors to implement the final 
guidelines. 
Approach 3 
Conduct focused medical reviews. 
HCFA Response 
We agree that focused medical reviews will limit payments for inappropriate  services, 
and Medicare  contractors  are now conducting these on mental health services. 
Amxoach  4 
Provide educational  activities to providers of mental health services. 
HCFA Res~onse 
We concur.  Once model policy  becomes  available  to all contractors  (or HCFA  revises  its 
own policyhstructions),  contractors  will no@  providers  of the new policy and its 
requirements. 
Approach 5 
Clari& who can provide services incident to physician or clinical psychologist  services. 
HCFA Response 
We concur.  Since the statutory benefit allOWSonly certain qualified individuals to bill for 
the services of their employees as if they had fbrnished the services themselves, HCFA 
believes that it should ensure that these individuals who bill meet the required 
qtications,  fu.Mll all the requirements under the incident to benefig and assume 
responsibility  for the services fhrnished by their auxilky  personnel.  Page 3 
Approach  6 
Assure that the nursing facility certification number and name is on all claims for patients 
in nursing facilities. 
HCFA ResDonse 
We disagree.  We do not see how requiring a provider to record on the claims form the 
certification  number of the nursing facihty in which the beneficiary  resides  can help 
Medicare  contractors  make determinations  about the appropriateness  of the services. 
Medicare  already requires that providers record the address if the place of service is other 
than home or office.  It would be a needless additional burden on the provider to 
obtain and record certification  numbers. 
Approach  7 
Clari@ the requirements  needed to become an independent mental health provider. 
HCFA Response 
We agree that there is some confbsion about who can quali&  as a clinical psychologist 
(Cp) while the statute  is quite clear about the requirements  for clinical social workers 
(CSW). A final rule which is currently under development will refine the CP 
qualifications  that are in place under manual instructions  and those proposed in the notice 
of proposed rulemaking  on the CP benefit.  The qualifications  in the final rule will take 
into account the extensive  public comments as well as numerous inquiries that HCFA has 
received  about the CP definition  and establish a precise definition. 
AuProach 8 
Identi&  and disseminate  information  about effective ways to help residents  adjust quickly 
to the nursing facility to prevent the need for later clinical intervention. 
HCFA Response 
We agree.  Page 4 
Amxoach  9 
Convene a group of medical professionals  to develop best practices  in documenting  the 
nursing facility medical record and provide guidance to nursing facility professionals. 
HCFA Response 
Components of HCFA have recently worked with various medical  societies to develop 
documentation  guidelines for evaluation and management  codes.  We will continue our 
work in this effort. 
Technical/General  Comments 
1.  There is an inaccurate  statement contained in the second fidl paragraph  on page 3 
of this report.  The statement reads, In additio~  effective July 1990, direct 
payment to clinical psychologists  and clinical social workers can be made in all 
settings. While direct payment may be made to CPS in all settings, the law 
excludes the provision  of direct payment to CSWS for services fhrnished  to 
inpatients  of a hospital or those services fhrn.ished to inpatients  of a skilled nursing 
facility that the facility is required to furnish in order to participate  in Medicare. 
Accordingly,  the correct wording is that direct payment to CPS can be made in all 
settings and to CSWS inmost  settings. 
2. We are concerned about what maybe  an over reliance  on medical  doctors in 
making decisions  about the delivery of mental health services (e.g., Lesser Skilled 
Persons Providing Services, pg. 11 and  Lack of Physician  Involvement?, 
pg. 14.)  Medical doctors may or may not have expertise in the diagnosis  and 
treatment  of mental health problems, particularly  relating to the geriatric 
population.  Many geriatric nurses and social workers, for example, may have 
extensive training and experience in providing mental health services for this 
population.  As long  as individuals are practicing within the scope of their state 
licensing laws, claims should not be denied  on the basis  of credentials  alone. 
3.  While we concur that depression is probably under diagnosed in the nursing home 
population  an~  therefore, under treate~  we are concerned that the report makes 
no mention  of over utilization  of psychoactive medications.  (See Some 
Beneficiaries  Are Not Getting Needed Care, pg. 10.)  It is our experience  that 
these medications  are often used inappropriately  for residents  who are bothersome  . 
Page 5 
to staff or other residents,  rather than attempting less intrusive treatments which 
have proven effective for many individuals.  Ag@  this relates to approach 2 
above, since general practitioners  may not have the expertise  dealing with mental 
health problems in tl& population  an-~ therefore,  reso~  to psychoactive 
medications  as the first response to people with behavioral  difficulties. 
4. Finally, while we agree with the educational approach taken in the 
recommendations,  we believe the recommendations  could be strengthened in 
regard to enforcement.  Some of the practices  described  in the report are clearly 
fraudulent.  We, therefore,  would like to see some specific recommendations  as to 
how those cases might be more aggressively pursued. 
  ,*A +,* %JS**l-* 1,,, g DEPARTMENTOFHEALTH& HUMAN  SERVICES  office of the  Secretary 
2 
;
% 
*+%>z tiam  Washington,  D.C.  20201 
. .  s
.:-,
J.# 
:j,,  s  .+~

>
 ;.-l

(3  ~ 
TO:  June Gibbs Brown  r~ll c-.(;  - 9,,? 
Inspector General 1: z:.  u  .:
/. 
;..:-, q-j  ;-j 
1-,,: 
FROM:  Assistant Secretary for  ,../.,  @ 
:
Planning and Evaluation  ~ a 
-.,- - m
SUBJECT:  OIG Draft Report, Mental Health Services in Nursing Facilities 
L&oz+  @UO 
This office has reviewed and concurs with the OIG draft report entitled Mental Health Services 
in Nursing Facilities.  Staff had the following minor comments and recommendations  which 
were shared with OIG staff on March 4, 1996. 
1). Clari@ that the scope of the report applies to both Medicare and Medicaid,  skilled 
nursing facilities  and nursing facilities. 
2). Include in the Background  Section of the report information on payment methodologies 
for mental health professionals. 
3). Clarify (perhaps through a footnote) the rationale for the 62.5% limit on Medicare 
payments  for mental health services. 
4). Ensure that appropriate  staff at the Substance Abuse Mental Health Services 
Administration  were consulted for input into this report. 
/q(+.; 
,f/J$J_up_ 
d 
Peter B.&delma.n