Department  of  Health  and  Human  Services 
OFFICE  OF 
INSPECTOR  GENERAL 
MENTAL  HEALTH  SERVICES  IN

NURSING  FACILITIES  IN  THE

OPERATION  RESTORE  TRUST  STATES

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OEI-02-91-00861  OFFICE  OF INSPECTOR  GENERAL 
The mission of the Office of Inspector General (OIG), as mandatedby Public Law 95-452, as 
amended, is to protect the integrity of the Department of Health and Human Services (HHS) 
programs as well as the health and welfare of beneficiaries served by those programs.  This 
statutory mission is carried out through a nationwide network of audits, investigations, and 
inspectionsconductedby three OIGoperatingcomponents: the Officeof AuditServices,the  -
Office of Investigations, and the Office of Evaluation and Inspections. The OIG also informs the 
Secretaryof HHSofprogram andmanagementproblemsandrecommendscoursesto 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 respectiveresponsibilitiesand are intendedto provide independentassessmentsof HHS 
programs and operations in order to reduce waste, abuse, and mismanagementand to promote 
economy and efficiency throughout the Department. 
OFFICE  OF INVESTIGATIONS 
The OIGSOfficeof Investigations(01) conductscriminal, civil, and administrativeinvestigations 
of allegations of wrongdoing in HHS programs or to HHS beneficiaries and of unjust enrichment 
by providers.  The investigative efforts of 01 lead to crimiml convictions, adniinistrative 
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 OIGSOfficeof Evaluationand Inspections(OEI)conductsshort-termmanagementand 
program evaluations(calledinspections)that focuson issuesof concernto the Department,the 
Congress, and the public.  The findings and recommendatio~ contained in these inspection reports 
generate rapid, accurate, and up-todate  information on the efficiency, 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)  Barbara R. Tedesco 
Lucille M. Cop, R.N. (Lead Analyst) 
Medical Review Contractor 
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  IN  THE

OPERATION  RESTORE  TRUST  STATES

@ SERVICE$ 
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GIBBS  BROWN 
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OEI-02-91-00861  EXECUTIVE  SUMMARY 
PURPOSE: 
To describe  possible  vulnerabi]ities  to the Medicare program  in the five Operation  Restore 
Trust States:  California,  Florida,- Illinois,  New York,  and Texas in the provision  of mental 
health  services  to nursing  facility  residents. 
BACKGROUND: 
Events  in the past few years have raised concerns  about the subject of mental health care 
for nursing  facility  residents:  the number  of nursing facility  residents  with mental 
disorders  has increased,  and the expansion  of Medicare  Part B coverage  of these services 
has tripled  payments.  ~eOfflce  of Impector  General hasreceived  allegation  of abusive 
practices  relating  to these services.  Because of these concerns,  we conducted  a study 
entitled  Mental Health  Services  in Nursing  Facilities  (OE1-02-91-O0860) to identifi 
vulnerabilities  in Medicare  payments  for mental health  services provided  to residents  of 
these facilities  across the country.  The study revealed  significant  amounts  of unnecessary 
and questionable  services  and problems  with coding of records. 
Since the original  study focuses on nursing  homes,  it falls within the purview  of a major 
new initiative  of the U.S.  Department  of Health  and Human  Services.  This effort, 
Operation  Restore  Trust  (Project  ORT) is an anti-fraud  initiative  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. 
Our original  study provided  data on a national  sample of these services.  In the present 
report  we analyze data from the five Operation  Restore Trust  States and compare  them 
with the original  findings  for the national  sample.  We report  the results of this analysis 
here. 
FINDINGS: 
The Project  ORT Stties  Were As Likely As The Nation As A  Whole To Have 
Unnecessary or Questionable  Services 
In 34 percent  of sample records  received  in the five Project  ORT States, Medicare  paid 
for medically  unnecessary  Services;  this projects  to $7 million  in Project  ORT States. 
Thus,  in all States,  about a third  of the records  in Project  ORT States were for medically 
unnecessary  services.  Of the 169 records  received,  57 contained  medically  unnecessary 
services.  In  19 records  all services  were unnecessary;  and in 38 some were unnecessary. 
In another  17 percent  of sample records  received  in Project  ORT States,  Medicare  paid 
for highly  questionable  services;  this projects  to $5 million  in these States.  The  17 
i  percent  of questionable  services (28 of 169 records)  in Project  ORT States was almost 
identical  to the  16 percent  in all States.  In another twenty-two  records  (13 percent)  in the 
Project  ORT States,  documentation  was so poor they could not be reviewed. 
New  York and Florida Appear  To Have Greater  Than The Average  Percentage  of 
Unnecessary Services For All States 
Forty-six  percent  of the services in New York and 38 percent  of the services in Florida 
were unnecessary.  These figures are somewhat and slightly higher,  respectively,  than the 
32 percent  of services in all States that were unnecessary.  If we add questiomble  cases to 
those unnecessary,  the results show that Florida  is as likely as New York to have either 
unnecessary  or questionable  services. 
Improper  Coding  Was Found in 30 Percent of Project  ORT States Records 
In 30 percent  of the 90 cases in the Project  ORT States,  where there was enough 
information  to determine  what the correct  procedure  code should be,  the code billed 
appeared  to have been incorrect.  This is exactly the same as the 30 percent  of incorrectly 
coded cases among the 225 cases in all the States. 
Psychological  Testing and Group l%erapy  Were More Likely  To Be Unnecessary and 
Questionable  in Most Project  ORT States,  Just As In All Sta%es 
Psychological  testing and group therapy  were the services most likely to be unnecessary  or 
questionable  in four of the five Project  ORT States,  as they were in all States.  Also,  as in 
all States,  residents  with a mental health diagnosis  of some type of dementia,  including 
Alzheimers  disease,  had higher percentages  of unnecessary  or questionable  services than 
those with other diagnoses  in three of the Project  ORT States.  Only New York,  however, 
follows the same pattern  as in all States where clinical psychologists  and clinical  social 
workers  were more likely than psychiatrists  to have unnecessary  services billed to 
Medicare.  In Florida,  psychiatrists  were slightly more likely than the psychologists  and 
social workers  to have unnecessary  or questionable  services;  and in Illinois  and California, 
psychiatrists  were about as likely as psychologists  and social workers  to have such 
services. 
Among Project  ORT States,  only in Florida  are the  old, old residents  more likely than 
the younger  ones,  as in all States,  to have unnecessary  and questionable  services.  The 
four remaining  Project  ORT States actually have less than the average percentage  of 
unnecessary  or questionable  services for those 85 and over than in all States. 
Factors Which Cause Vulnerabilities  In All States Exist in Project  ORT States 
We found a lack of carrier  policies  and screens specific to nursing  facilities  and

difficulty  identifying  patients  nursing facilities  in the Project  ORT States as vulnerabilities

which might jeopardize  Medicare  payment  integrity.

ii  NEXT STEPS: 
In our main  report,  entitled  Mental Health  Service in Nursing  Facilities  (OEI-02-91-
00860),  we make recommendations  to help ensure the integrity  of Medicare  payments 
while promoting  the delivery  of needed care.  We also discuss Operation  Restore  Trust 
strategies  to follow-up  on the issues raised in the report.  In this report  we provide 
detailed  information  about each of the five Project  ORT States in order  for the various 
players  in the States to target  audits and reviews. 
The above findings  for the Project  ORT States show that mental  health  services in nursing 
facilities  in each of these five States were as likely to be either umecessary  or 
questiomble  as in all States.  Each Project  ORT States profde  of problem  services, 
however,  is unique. 
These findings  point to a series of further  actions which appear  appropriate  for HCFA  and 
its carriers  and relevant  State agencies  to consider.  To assist auditors,  investigators, 
HCFA,  carriers  and State agencies  in targeting  the kinds of problem  services particular  to 
each of the five States,  we are providing  separate State Profdes  in Appendix  A. 
Each Profile  contains  a highlight  section followed by specific demographic  and record  data 
characteristics.  We believe  the profiles  can help States to target  for closer review and 
action,  those services  which appear most vulnerable  to inappropriate  reimbursement. 
... 
111  TABLE  OF  CONTENTS 
PAGE 
EXECUTIVE  SUMMARY 
INTRODUCTION  . . . . . . . . . . . . . . . . . .  1

...0..    ...**.    ******    ** 
FINDINGS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  8

  Unnecessary  or Questiomble  Services  . . . . . . . . . . . . . . . . . . . . . . . . . . .  8

  New York and Florida  Exceed The Average  . . . . . . . . . . . . . . . . . . . . . . .  9

  Improper  Procedure  Codes  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10

  Characteristics  of Questionable  Services  . . . . . . . . . . . . . . . . . . . . . . . . . .  10

Vulnerabilities  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  14

NEXT STEPS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  15

.

APPENDICES  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

A:  Profiles  of Project  ORT States  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  A-1

B:  Description  ofProcedure  Codes  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  B-1

iv  INTRODUCTION 
PURPOSE: 
To describe possible  vulnerabilities  to the Medicare  program  in the five Operation  Restore 
Trust States:  California,  Florida,  Illinois,  New York,  and Texas in the provision  of mental 
health  services  to nursing  facility  residents. 
BACKGROUND: 
A number  of events in the past few years have brought  attention  to,  and raised concerns 
about,  the subject of mental  health care for nursing facility residents.  For example,  the 
number  of nursing  facility  residents  with mental disorders  has increased;  Medicare  Part B 
coverage  of these services has expanded,  resulting  in a tripling  of payments  in the past 
two years;  the Nursing  Home Reform  Act was implemented  to assure that the mental 
health needs of nursing  facility residents  are properly  met;  and the Office of Investigations 
(01) has had a number  of investigations  concerning  abusive practices  relating  to these 
services. 
The number  of individuals  with psychiatric  disorders  residing  in nursing  facilities  now 
surpasses the number  in psychiatric  hospitals,  according  to the American  Psychiatric 
Association  (APA).  The reasons for this change are the transfer  of many elderly  residents 
of State and county mental  hospitals  to nursing facilities,  the aging of the population,  and 
earlier  discharges  from acute care hospitals.  Recent studies have also shown that 
psychiatric  disorders  and emotional,  behavioral  and cognitive  problems  are present  in a 
majority  of nursing  facility  residents.  It is difficult  to 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. 
OperaLtonRestore  i!hst 
This inspection  was conducted  as part of the Department  of Health  and Human Services 
anti-fraud  initiative  called  Operation  Restore Trust  ( Project  ORT.)  Operation  Restore 
Trust is a joint  effort  by the Office of Inspector  General,  the Health  Care Financing 
Administration,  and the Administration  on Aging designed to coordinate  Federal  and State 
Resources  to combat  fraud,  waste,  and abuse related  to home health  agencies,  nursing 
homes,  and durable  medical  equipment  suppliers.  This Operation  Restore  Trust initiative 
targets  California,  Florida,  Illinois,  New York,  and Texas,  the five States with the highest 
number  of Medicare  and Medicaid  beneficiaries. 
The general  findings  of our study of national  data are contained  in a separate report,
NursiFnwg ili&S
entitled  Mental Health  Services in  (OEI-C)2-91-00860. )  In  report 
this 
we have amlyzed  data specific to the five Project  ORT States.  The Nursing Home Reform Act 
As a part  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 reasomble 
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) 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  17.mctioml 
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  (RAI) which is a multidimensional,  clinically  focused evaluation 
tool.  It provides  a basis for identi~ing  problems  and developing  a residents  plan of care. 
The RAI has two parts:  the Minimum  Data  Set (MDS) which is the basis of the resident 
assessment process  and the Resident  Assessment  Protocols  (lWPS)  which identify  the 
residents  unique  problems.  This information  is used by the interdisciplinary  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 
2
 that are for prevention,  palliation,  research  or experimentation.  In the absence of national 
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. 
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.  Additiomlly,  independent  clinical  social workers  may not bill Medicare  Part 
B for services  furnished  to an inpatient  of a skilled nursing  facility  that the facility  is 
required  to provide  as a Medicare  condition  of participation, 
From  1966 until  1988, Section  1833 (c) 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 
mental,  psychoneurotic  or personality  disorders.  Ihis  was based  on 62.5 percent  of a 
maximum  of $500 in reasomble  charges  and subject to a further  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. 
Psychiatrists  were the primary  providers,  either directly  providing  services  or supervising 
the provision  of services by non-physicians,  including  clinical  psychologists  and social 
workers,  and billing  them as incident to the psychiatrists  service. 
Medicare  Expansion  of Mental Health  Benefits 
The Omnibus  Budget Reconciliation  Act (OBRA) of 1987 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 reasonable  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  furnished  by clinical  psychologists,  effective  July  1988, but 
covered  services  were restricted  to those furnished  in certain  settings such as community 
mental  health  centers  (CMHCS). 
The OBRA of 1989 further  expanded  the Part B Medicare  psychiatric  benefit.  It 
eliminated  the dollar  cap on outpatient  psychiatric  reimbursement,  effective  January  1, 
1990, although  the reasomble  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
4
non  T- ..JA;+;mm  ~FF~rtiv-hllv  1990. direct payment  to clinical  psychologists  can be 
.. 
psychologists  were covered  for the fwst time but only on an assignment  basis,  which 
means they agree  to accept Medicares  approved  amount. 
Zrends in  Ma;...- m .  - psychologists  were covered  for the f~st  time but only on an assignment  basis,  which 
means they agree to accept Medicares  approved  amount. 
lYends 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,  ffom $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  B. 
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 
review  of the nature  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 (FMR)  of these 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.  This case resulted  in an Office of 
Investigations  (01) Management  Implication  Report  (MIR). 
A HCFA-fi.mded 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 additioml  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/01  Atlanta 
4  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 repo~  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. 
Policymakers  and researchers  who contributed  to the report  agreed  that many mentally  ill 
nursing  home residents  would benefit  from  increased  attention  horn  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;  limits 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. 
METHODOLOGY: 
The methodology  described  here applies to both the separate  natioml  data study and the 
present  Project  ORT data study.  The results  of the applications  to the present  study are 
bolded below. 
First,  we selected  a simple random  sample of 540 beneficiary  claims  from the  1993 
HCFA  Common  Working  File which meet certain  conditions.  These 540 claims  were k 
37 States.  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  B.  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.  Forty  three  percent  or 247 
records were in the five Project  ORT States. 
5  Beneficiary  claims in the five Project  ORT States were handled by seven Medicare 
carriers which 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 received  397 (74 percent)  of the 540 records  requested  natiomlly.  We received  169 
or a slightly  smaller  percent  (68 percent)  of the 247 records in the five Project  ORT 
States.  We contracted  with FMAS,  Inc.,  a medical  review contractor  to review  the 
medical  records  which did not pass initial  screens.  The screening  was done by either the 
inspection  team or FMAS,  Inc.  screeners.  The case screening  instrument  used for 
screening  all the records  was developed  by the contractor  using 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 afier treatment. 
The f~st  listed service  in 1993 which was one of the five sampled procedure  codes was 
screened  against the clinical  guidelines  in the case screening  instrument.  We call this the 
sample service.  Cases failing  the clinical  screens for this f~st  service  (107 records  in all 
Project  ORT States)  were referred  to the contractors  clinical  reviewer  of the same 
provider  type as that on the claim  for further  review  of all 1993 mental  health  services. 
Those passing the screens  (40 records  in all Project  ORT States) were not reviewed  any 
further.  The remaining  22 records  from all the Project  ORT States did not have 
enough information  for the screeners  to make a determination.  Of the 107 sent for 
further  review the medical  reviewers  determined  which services were medically 
necessary,  which services  were medically  unnecessary,  which services were 
questionable. 
From  the sample of 540 claims  nationally,  we also selected a random  subsample  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 Part B providers.  We interviewed  41 
nursing  facility  administrators  in the Project  ORT States. 
We asked all 42 carriers  nationally,  including  eight in the five Project  ORT States,  for 
their policies,  procedures  and guidelines  for mental  health services,  as well as any related 
6  bulletins  or provider  education  materials.  We also asked about any cases they were 
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,  sixteen carriers  were selected purposively  from the universe  of 42 to include  at 
least  one carrier  .from  each  of the. five project  C)RT.States  (one State had two carriers 
for a total  of 6).  The other  10 carriers  were selected 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. 
The methodology  for the larger  study included  a simple random  sample of claims  across 
the nation.  This resulted  in relatively  small numbers of claims from most of the five 
Project  ORT States.  Numbers  of records received  out of the total sample in each 
Project  ORT State ranged  from 56 out of 80 in Florida to only 11 out of 17 in Texas. 
Numbers  received  in the other three States ranged  from 38 to 27.  For this reason, 
findings  regarding  records  from individual  Project  ORT States are reported  as 
suggestive  of possible trends needing further  study based on larger  samples.  All 
results  from Texas are too small to be suggestive,  as are results from other States 
when cell sizes are five or less.  However,  the dollar projections  for the unnecessary 
and questionable  services in all the Project  ORT States are statistically  significant. 
The unnecessary  services have a confidence  interval  of  +/- $2.7 million  and the 
questionable  services have a confidence  interval  of  +/- $2.6 million. 
Appendix  A profiles  each of the Project  ORT States individually  showing highlights  of 
each State with its individual  data.  We use the term  problematic  services  in Appendix 
A and in the text to include both umecessary  and questiomble  services. 
We conducted  our review  in accordance  with the Standardsfor Inspection  issued by the 
Presidents  Council  on Integrity  and Efficiency. 
7
 An example is the case of a 69 year old male from Illinois  with a diagnosis  of dementia. 
A social worker billed  for 69 group therapy  sessions from January to July  1993, and a 
psychologist  billed  for 3 testing sessions in March  1993; the patient  died in September 
1993.  The reviewer  noted the need for services was not documented  in the record  and 
were questionable  since the patient  was demented  and hard of hearing. 
In another twenty-two  records  (13 percent)  in the Project  ORT States,  documentation  was 
so poor they could not be reviewed.  These twenty-two  records  did not contain enough 
information  for the screeners  to even refer the records  to the clinical  reviewers.  This is 
similar to the  10 percent  of the records  in all States which did not have enough 
information. 
New York  and Florida  Appear TO Have Greater  Than The Average  Percentage  of 
Unnecessary  Services For All States 
Forty-six  percent  of the services  in New York and 38 percent  of the services  in Florida 
were unnecessary,  as shown in TABLE I.  These figures are somewhat  and slightly 
higher,  respectively,  then the 32 percent  of services in all States which were unnecessary. 
TABLE I shows the total number  of records  in our sample in each Project  ORT State,  the 
percent  of cases that had some or all of their  services unnecessary  and the percent  that had 
all of their  services questionable.  The percents  of unnecessary  and questionable  services 
are based on the total number  of records received,  including  those with not enough 
information.  If we add the questionable  cases to those unnecessary,  the above results 
change only in that Florida  becomes  as likely as New York to have either unnecessary  or 
questionable  services. 
California  with  16 percent  had a somewhat higher percentage  of cases with not enough 
information  than three other Project  ORT States had.  While Texas only had eleven cases, 
almost half of their cases did not have enough information. 
TABLE I 
Percent  of Services Which Are Unnecessary  or Questionable  Bv State 
CALIFORNIA FLORIDA  ILLINOIS  NEw YORK  TEXAS  ALLSTATES 
% Unnecessary  32%  38%  27%  46%  9%  32% 
services 
% Questionable  11%  20%  19%  11%  27%  16% 
services 
Total records  37  56  37  28  11*  397 
received 
* 
Numbers  are too small for percentages  to be suggestive. 
9
 Examples of unnecessary servicesfrom Project ORT States include:  An 83 year old 
woman  from Florida  with a diagnosis  of Alzheimers  disease had billings  by a 
psychologist  for the longer  therapy  sessions beginning  in November  1993 and was still 
being treated  by the psychologist  in 1995.  The reviewer  indicates  that the patient  did not 
have to be seen for such a long time and that the patient  is lonely and could have 
participated  more  in social activities  to meet her needs.  A 73 year old woman from  New 
York with a diagnosis of  dementia  and expressive  aphasia had group therapy  billed by a 
psychiatrist  at least once a week in 1993.  The medical  reviewer  questioned  the need for 
this group therapy  for a woman with dementia  and expressive  aphasia. 
Improper  Coding Was Found in 30 Percent of Project  ORT States Records 
According  to the medical  reviewers,  in 30 percent  of the 90 cases in the Project  ORT 
States,  where they had enough  information  to determine  what the correct  procedure  code 
should be,  the code billed  appeared  to have been incorrect.  This is the same as the 30 
percent  of rniscoded  cases among the 225 cases in all the States.  Among the four Project 
ORT States with sufficient  numbers  of cases,  Illinois  was least likely  (16 percent)  to have 
improper  codes. 
In over half (56 percent)  of these incorrectly  coded cases in the Project  ORT States,  the 
services  appeared  to be medication  management  without  any documentation  of 
psychotherapy,  but psychotherapy  was billed.  New York and Florida  were more likely 
than the other three  States to include miscoded  cases of this type. 
In 16 percent  of those with a questionable  psychotherapy  code,  a longer 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 benefh  from a longer  session.  The 
clinical  reviewers  found  it difficult  to determine  whether  brief psychotherapy  or longer 
psychotherapy  was the appropriate  code in many of these cases,  since the length of the 
psychotherapy  session was rarely  documented.  The percent  of improper  coding of longer 
psychotherapy  sessions in Project  ORT States is exactly  the same as the percent  in all 
States. 
An example of billing  for psychotherapy  when the reviewers  thought  it should be 
medication  management  is that of an 87 year old man in Florida.  He was confused  and 
disoriented  with a diagnosis  of anxiety disorder  and being treated  with both sedatives  and 
major  tranquilizers.  The medical  reviewers  indicated  that the visits by the psychiatrist 
were appropriate  as medication  management,  given the mental  state of the patient,  and 
that psychotherapy  was questionable. 
Psychological  Testing  and Group Therapy Were More Likely To Be Unnecessary  and 
Questionable  in Project  ORT States,  Just As In All States 
Psychological  testing  and group therapy  were the services most likely to be unnecessary  or 
questionable  in four of the five Project  ORT States,  as they were in all States (see TABLE 
II) . 
10  In each of the three Project  ORT States with more than a handfid  of cases,  testing and 
group therapy  services were more  likely to be unnecessary  or questionable  than were 
evaluation  and psychotherapy  services.  The percent  of unnecessary  or questiomble  testing 
and group therapy  services  in these three  states  (Florida,  Illinois  and New York) ranged 
from 70 to 75 percent,  not substantially  different  from the 79 percent  in all States. 
Conversely,  most Project  ORT states  with enough cases,  did not differ  greatly  from all 
States in which 47 percent  of evaluation  and psychotherapy  services were problematic. 
Only in Florida,  among Project  ORT States with enough cases to be suggestive,  were 
evaluation  and individual  psychotherapy  services relatively  close (62 percent  to 71 
percent)  to the percent  unnecessary  or questionable  for testing  and group therapy  services. 
As noted in the larger  study of all States, percents  of questiomble  and umecessary 
services as high as 40 percent  (or even less) are still highly unacceptable. 
TABLE II 
Unnecessary  and  questionable  Services 
by Tvue  of Service 
TYPEOF  CALIFORNIA  FLOltlDA  ILLINOIS  NEw YORK  TEXAs  ALL 
SERVICE**  STATES 
testing  & group  2*  7  10  8  ()*  66 
therapy  100%  71%  70%  75%  o%  79% 
evaluation  29  42  24  18  6*  291 
& psychotherapy  48%  62%  42%  56%  67%  47% 
* Numbers  are too small for percentages  to be suggestive. 
**  Numbers  in each cell are the number  of records  which serves as the 
denominator  for calculating  the percentage  of problematic  services.  Records 
without enough  information  are excluded, 
An example of unnecessary  testing  is illustrated  in the case of an 82 year old female from 
New York with a diagnosis  of dementia  who is unable  to converse:  a psychologist  billed 
for testing on two separate  occasions.  The medical  reviewer  indicated  that the provider 
wrote  no formal evaluation  was possible  today but will attempt  one in a week,  and that 
no tests were performed  and that a mini mental  status exam was done in 1992 when the 
patient  was unable to be assessed because  of her dementia.  The reviewer  concluded  that 
the psychologists  intervention  was not appropriate. 
11
 Diagnosis 
Residents  with a mental  health diagnosis  of some type of dementia,  including  Alzheirners 
disease,  had higher  percentages  of umecessary  or questiomble  services than those with 
other diagnoses  in all but one (_Illinois)of the Project  ORT States with adequate  numbers 
(see TABLE  III below.)  These differences  parallel  the finding  for all States combined  that 
residents  with dementia  were more likely than those with other diagnoses  (58 % to 45%)  to 
have unnecessary  or questiomble  services. 
Florida  and California,  in particular,  with 74 percent  and 69 percent  respectively,  were 
more  likely to have such dementia  cases than were all States. 
TABLE III 
Unnecessary  or (Xxxtionable  Services 
by Diamosis 
DIAGNOSIS** I CALIFORNIA!  FLORIDA 
Patients  with  16  27 
some form  of  69%  74% 
dementia 
1* 
Patients  with  14  23  20  12  155 
other diagnoses  29%  52%  55%  58%  100%  45% 
* Numbers  are too small for percentages  to be suggestive. 
**  Nwbers  ~  each  cell  are  he  n~ber  of records  w~ch  serves as the denominator  fOr 
calculating  the percentage  of problematic  services.  Records  without  enough  information  are 
excluded. 
Only in Illinois  among Project  ORT States with sufficient  numbers,  did residents  with other 
diagnoses  appear to be somewhat more  likely than those with dementia  (55 percent  to 46 percent)  to 
have unnecessary  or questiomble  services.  Illinois was also the only Project  ORT State to include 
more non-dementia  cases (61 percent)  than dementia  cases (39 percent).  Again,  Texas had too few 
cases to be suggestive. 
Providers 
In all States,  as shown in TABLE IV below,  clinical psychologists  and clinical  social workers  (61 
percent)  were more  likely than psychiatrists  (46 percent)  to have unnecessary  services billed  to 
Medicare.  Looking  at the Project  ORT targeted  States individually,  only New York follows  this 
same pattern.  In Florida,  psychiatrists  were slightly more likely  (69 to 61 percent)  than the 
12  psychologists  and social workers  to have umecessary  or questiomble  services;  and in Illinois 
California,  psychiatrists  were about as likely as psychologists  and social workers to have suc 
services. 
TABLE IV 
Unnecessary  or Chmstionable Services 
by TyDe of Provider 
PROVIDERS**I CALIPORNL4!  FLORIDA  I  ILLINOIS  I  NEWYORK I TEXASI ALL 
3* 
Clinical  16  23  11  14 
psychologists  50%  61%  55%  57%  67%  6 
and clinical 
social workers 
Psychiatrists  15  26  21  7  3* 
53%  69%  52%  43%  67%  4 
* Numbers  are too small for percentages  to be suggestive. 
**  Numbers  in each cell are the number  of records  which  serves as the 
denominator  for calculating  the percentage  of problematic  services.  Records 
without  enough information  are excluded. 
We did not include some categories  such as nurse practitioners  or nurse specialists 
because the numbers  were very small. 
Residents  85 and Older 
The  old, old residents  (85 and older)  were more likely than younger  residents to have 
unnecessary  or questionable  services  in all States combined.  (See TABLE V) below. 
Sixty-two percent  of these residents  85 and older had such services  compared  to 47 
percent  of those under  85.  Among Project  ORT States,  only in Florida  are the old,  old 
residents  more  likely than the younger  ones (79 percent  to 55 percent)  to have 
umecessary  and questionable  services.  The remaining  Project  ORT States actually have 
less than the average  percentage  of unnecessary  or questiomble  services  for 85 and over 
residents  than in all States.  New York,  with 73 percent  of the services  of those under  85 
and only 45 percent  of those 85 and over unnecessary  or questiomble,  differs most from 
other Project  ORT States and from all States.  Illinois  also differs  from all States in 
having more problematic  services  in residents  under  85 than in those  85 and over. 
An example of a case of unnecessary  services  in New York is that of a 75 year old man 
with no mental  health  diagnosis  who had psychological  testing billed  in May and 
13
 October.  There  was no documentation  as to why the tests were administered  and the 
reviewer  questioned  whether they were standard psychological  tests. 
TABLE V 
Unnecessary  or  Questionable  Services  bv Ape 
AGE**  CALIFORNIA  FLORIDA  ILLINOIS  NEw YORK  TEM  ALLSTATES 
2* 
Residents  8  19 10  11  138 
85 & over  50%  79%  30%  45%  50%  62% 
Residents  23  31 24  15  4*  219 
under  85  52%  55%  58%  73%  75%  47% 
* Numbers  are too small for percentages  to be suggestive. 
**  Numbers  in each cell are the number  of records  which serves as the 
denominator  for calculating  the percentage  of problematic  services.  Records 
without  enough  information  are excluded, 
Factors  Which  Cause  Vulnerabilities  In All States  Exist  in Project  ORT  States 
Luck of Camer Policies  and Screens Specific  to Nursing Facilities 
The five  Project  ORT States are serviced  by 8 carriers,  7 of which are in our sample. 
All of the carriers  have policies  and procedures  about outpatient  mental  health  services 
but only one has a comprehensive  Mental  Health Part B manual. 
All seven Project  ORT carriers  have screens or edits relating  to Mental  Health  services 
in general,  but none have any that relate  specifically  to Mental  Health  services in a 
nursing  facility.  At the time of our review,  four of the seven carriers  had recently 
instituted  restrictive  time frames  for testing,  evaluation  and/or  psychotherapy  codes.  One 
carrier  in California  has an approved  listing of tests and the provider  must document  the 
test actually  performed  on the claim.  Three of the carriers  are dealing  with aberrant 
providers  by instituting  pre or post payment  reviews  and one has referred  two providers 
to OIG. 
Difficulty  Identifying  Pa.tzentsN ursing Facilities 
In the original  sample,  there were 30 cases where we were umble  to identi~  the nursing

facility  to request  records.  Half of these cases were in three Project  ORT States.  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

14
 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 makes  it is impossible  to retrieve  the records  for review to identi~ 
unnecessary  or questionable  services  in a nursing facility. 
NEXT  STEPS: 
In our main report,  entitled  Mental Health  Service  in Nursing  Facilities  (OEI-02-91-
00860),  we make recommendations  to help ensure the integrity  of Medicare  payments 
while promoting  the delivery  of needed care.  We also discuss Operation  Restore  Trust 
strategies  to follow-up  on the issues raised  in the report.  In this report  we provide 
detailed  information  about each of the five Project  ORT States in order for the various 
players  in the States to target  audits and reviews. 
The above findings for the Project  ORT States show that mental  health  services in 
nursing  facilities  in each of these five States were as likely to be either unnecessary  or 
questionable  as in all States.  Each Project  ORT States profile  of problem  services, 
however,  is unique. 
These findings point to a series of further  actions which appear  appropriate  for HCFA 
and its carriers  and relevant  State agencies to consider.  To assist auditors,  investigators, 
HCFA,  carriers  and State agencies  in targeting  the kinds of problem  services particular  to 
each of the five States,  we are providing  separate  State Profiles  in Appendix A. 
Each Profile  contains  a highlight  section followed by specific demographic  and record 
data characteristics.  We believe  the profiles  can help States to target  for closer review 
and action,  those services which appear most vulnerable  to inappropriate  reimbursement. 
15
 APPENDIX  A 
PROFILES  OF PROJECT  ORT STATES 
Introduction:  A profile  of each of the five Project  ORT States is presented  below which 
includes  a highlights  section featuring  the ways in which the State stands out from  other 
Project  ORT States and/or  from all States in the original  sample.  Separate  sections follow 
which report  the States demographics  and the characteristics  of its sample cases in terms 
of numbers  and types of records,  services,  providers,  residents,  and unnecessary  and 
questiomble  services  found,  When we refer to problematic  cases,  these incIude both 
unnecessary  and questiomble  services. 
Since the numbers  of records  from most of these States are relatively  small,  they should 
be seen as suggestive  rather  than indicative  of what the characteristics  would be if based 
on larger  samples,  In the case of Texas,  with only  11 records  received,  the numbers  are 
too small to be viewed as suggestive.  The latter are reported  here  with those of the other 
States for informatioml  purposes  only. 
The profiles  are provided  to help HCFA,  carriers  and appropriate  State agencies  to target 
further  actions to address specific types of vulnerabilities  suggested by the data. 
1
 CALIFORNIA

HIGHLIGHTS

California  has the largest population  of all States,  including  the Project  ORT States.

With only 6 percent,  it had the lowest percent  (except  for Texas) of services for testing or

group therapy,  the. two most problematic  services  in all States.

California  was somewhat  less likely than all States (50 percent  to 61 percent)  to have

problematic  cases come from psychologists  and social workers.  The State is more likely

than all States (69 percent  to 58 percent)  and than all Project  ORT States,  except Florida,

to have problematic  services  associated  with residents  with dementia.  The State was less

likely than all States (29 percent  to 45 percent)  as well as less likely than the other four

Project  ORT States to have problematic  cases among residents  with diagnoses  other than

dementia.

DEMOGRAPHICS

  The  1990 population  was 29,760,021  or  12 percent  of the total US 
population. 
  Eleven percent  were 65 or over and  1 percent  were 85 or over;  one-half  of 
one percent  of the population  resided  in nursing homes. 
RECORDS

  Of 63 records  from California  in the sample,  37 were received  and 26 were 
not.  Twenty  two facilities  did not send a record  and 4 facilities  were not 
located. 
  Of 37 records  screened,  31 contained  adequate  information  and 6 did not. 
SERVICES 
  Eleven  of 37 services were for evaluation.

  Two services were for testing.

  Thirteen  services were for brief psychotherapy.

  Ten services were for longer psychotherapy.

  One service was for group therapy.

A-2
 CALIFORNIA

PROVIDERS 
	 Seventeen  services were provided  bypsycfiatisfi,  16 bypsychologisfi,  3 
bysocial  workers  and lby  another  provider. 
  ,Six providers  served more than one patient. 
RESIDENTS 
  Nine of the 37 residents  were 85 or older and 28 were under  85. 
  Sixteen residents  had a diagnosis  of dementia;  14 did not. 
UNNECESSARY  OR C)UESTIONABLE SERVICES 
  Overall 
Sixteen  (43 percent)  of 37 records  received  had some medically  unnecessary 
or questiomble  services. 
  Type of Service 
Three of 8 evaluations  were problematic  and 5 were appropriate.  (3 had 
inadequate  information.) 
One of 2 testings was problematic  and  1 was appropriate.  (1 had inadequate 
information.) 
Five of 12 brief psychotherapy  were problematic  and 7 were appropriate.  (1 
had inadequate  information.) 
Six of 9 longer psychotherapy  were problematic  and 3 were appropriate. 
(1 had inadequate  information.) 
One group therapy  service was problematic. 
  Providers 
Eight of 15 services by psychiatrists  were problematic  and 7 were 
necessary.  (2 had imdequate  information.) 
Seven of 14 services by psychologists  were problematic  and 7 were 
necessary.  (2 had inadequate  information.) 
A-3
 CALIFORNIA 
One of 2 services by social workers  was problematic  and the other was 
necessary.  (1 had inadequate  information.) 
The  1 semiceby  an''otier''  provider  didnothave  adequate  ~omation. 
.  Residents 
Four of residents  85 or older had problematic  services and 4 had necessary 
services.  (1 had inadequate  information.) 
Eleven  residents  with dementia  had unnecessary  or questionable  services;  4 
residents  with other diagnoses  had problematic  services. 
CARRIERS 
	 California  is serviced by two carriers;  one in the north  and the other in the 
south. 
  Both carriers  are in sample;  northern  (19 claims) and southern  (44 claims.) 
	 Of 19 records,  13 were received  from the northern  carrier;  of 44 records, 
24 were received  from the southern  carrier. 
	 Northern  carrier  has: 
meetings  with Psychological  Association  quarterly; 
edits for 90801,  43/44  and 53-one  service per day per provider; 
assures that test(s) performed  must be on claim,  extensive  listing of 
approved  tests;  and 
conducted  focused medical  reviews  on 12 providers  in 93/94. 
	 Southern  carrier  has an: 
edit for testing,  no more  than 6 hours; 
edit for 90841-62,  36 per 90 days;  and 
edit for 90844,  64 per 365 days. 
A-4
 FLORIDA

HIGHLIGHTS

Florida,  with  15 percent  of the total population  of the five Project  ORT States,  accounted

for 32 percent  (N= 80) of all Project  ORT records  in the sample.  Among Project  ORT

States (not counting  Texas),  Florida  had the lowest percent  of records  for the problematic

testing  and group therapy  services  (14 percent),  which was also lower than the average  for

all States.  The State was more likely than all States combined  and other  Project  ORT

States (again excepting  Texas) to have providers  (25 percent)  who served more  than one

patient  in the sample.

Florida  was more likely than all States (58 percent  to 48 percent)  to have unnecessary  (38

percent)  or questionable  services  (20 percent).  Together  with New York,  Florida  was also

more  likely than other Project  ORT States to have such problematic  services.  A major

reason  for the relatively  high percent  of problematic  services  in Florida  is the

concentration,  as noted above,  of providers  who served more than one sample patient.

While  only 29 percent  of providers  in the State who served only one patient  had

problematic  services,  86 percent  of multiple-patient  providers  had problematic  services.

Florida,  along with New York,  were more  likely than the other three  Project  ORT States

to have cases of medication  management  which appeared  to be miscoded  as

psychotherapy.

The State was also more likely than all States (62 percent  to 47 percent)  than other Project

ORT States,  except Texas,  to have problematic  records  for evaluation  and individual

therapy  services.  Florida  was much more  likely than all States (69 percent  to 46 percent)

to have problematic  records  for psychiatrists.  The State was also more  likely than all

States to have problematic  records  for residents  with dementia  (74 percent  to 58 percent)

and for residents  85 and older  (79 percent  to 62 percent).

DEMOGRAPHICS

	 The  1990 population  was 12,937,926  or 5 percent  of the total US 
population. 
  18 percent  are 65 years or older and 2 percent  are 85 or older. 
  0.6 percent  reside  in nursing homes. 
RECORDS

	 Of 80 records  from Florida,  56 records  were received  and 24 were not. 
Seventeen  facilities  did not send record  and 7 facilities  were not located. 
A-5
 	 Of 56 records  screened,  50 had adequate  information  for a determination  to 
be made and 6 did not. 
SERVICES 
  Twenty  three of 56 services  were screened for evaluation. 
  Four  services  were for testing. 
  Twelve  services were brief psychotherapy. 
  Ten services  were for longer  psychotherapy. 
  Seven services  were for group therapy. 
PROVIDERS 
	 Twenty  eight of 56 services  were provided  by psychiatrists,  19 by 
psychologists,  8bysocial  workers  andlby  anurse  practitioner. 
  Fourteen  providers  served more than one patient. 
RESIDENTS 
  Twenty  one of the 56 residents  were 85 or older and 35 were under  85. 
  Twenty  seven residents  had a diagnosis  of dementia,  twenty  three didnt. 
UNNECESSARY  OR QUESTIONABLE  SERVICES 
  Overall 
Thirty  two (57 percent)  of 56 records  received  had some medically 
unnecessary  or questionable  services. 
  Tv~e of Service 
Twelve  of 21 evaluations  were problematic  and 9 were appropriate.  (2 had 
inadequate  information.) 
Four  of 4 testings  were problematic.  (1 had inadequate  information.) 
Six of 11 brief psychotherapy  were problematic  and 5 were appropriate. 
A-6
 Eight of 10 longer psychotherapy  were problematic  and 2 were appropriate. 
Two of 4grouptherapy  were problematic.  (3 did not have adequate 
information.) 
  Providers 
Eighteen  of 26 services by psychiatrists  were problematic  and 8 were 
appropriate.  (2 had inadequate  information.) 
Twelve  of 17 services by psychologists  were problematic  and 5 were 
appropriate.  (2 had inadequate  information.) 
Two of 6 services by social workers  were questiomble  and 4 were 
appropriate.  (2 had inadequate  information.) 
The one service by nurse practitioner  was appropriate. 
Twelve  of 14 providers  seeing more than one patient  had problematic 
services. 
  Residents 
Fifteen  of 19 residents  85 or over had problematic  services  and 4 had 
appropriate  services.  (2 had inadequate  information.) 
Twenty  residents  with dementia  had problematic  services;  twelve with other 
diagnoses  had problematic  services. 
CARRIER 
	 Florida  is serviced  by one Medicare  Carrier  which:  has a Comprehensive 
Mental  Health  Part B Mental  Health  Manual;  screens for 90830,  allowing 
up to 4 hours  in a 12 month period;  screens for 90801,  suspending  for more 
than  1 in 12 month period;  and conducts  post pay reviews  for testing which 
exceeded  acceptable  standards. 
A-7
 ILLINOIS

HIGHLIGHTS 
Illinois  represents  13percent  oftiepopulation  titie  Project  ORTSWtes  butaccounti  for 
22 percent  (N  =  55) of the records  in the total Project  ORT State sample.  The State, 
just behind  New York,  had the highest percent  (29 percent)  of its records  for testing  and 
group therapy  services,  thetwomost  problematic  in all States.  Butitalso  had the lowest 
percent  (34percent)  ofproviders  whowere  psychologis@ orswial  workers,  and the 
lowest percent  (35 percent)  of residents  with dementia,  the most problematic  types of 
providers  and diagnoses  in all States. 
Illinois  not only had the lowest percent  of residents  with dementia,  but it also had the 
lowest percent  (46 percent)  of dementia  cases which were found to be problematic  both 
among Project  ORT States and among all States.  Similarly,  Illinois had the lowest percent 
(30 percent)  of problematic  cases which were 85 and older of all Project  ORT States and 
of all States (62 percent).  As a result,  it differed  along with New York,  from all States 
and other Project  ORT States in having  a higher percent  of problematic  cases among those 
under  85 than among those 85 and over.  Illinois was least likely of the five States to have 
cases with improper  codes. 
DEMOGRAPHICS 
  The  1990 population  was 11,430,602  or 4.5 percent  of the total US 
population. 
  13 percent  are over 65 years of age and 0.8 percent  are 85 or older. 
  0.8 percent  reside  in nursing homes. 
RECORDS

  Of the 55 records  from Illinois  in the sample,  37 were received  and 18 
were not.  Fourteen  facilities  did not send record  and 4 facilities  were not 
located. 
  Of 37 records  screened,  34 contained  adequate  information  for a 
determination  to be made and 3 did not. 
SERVICES 
  Nine of 37 services were for evaluation. 
A-8
 ILLINOIS

  Nine services were testing. 
  Ten services were for brief psychotherapy. 
  Seven services were for longer psychotherapy. 
  Two services were for group therapy. 
PROVIDERS 
	 Twenty three  services  were provided  bypsyctiatisti,  llbypsychologish, 
1 by a social worker  and 2 by other providers. 
  Four providers  served more than one patient. 
RESIDENTS 
  Ten of 37 residents  were  85 or older and 27 were under  85. 
  Thirteen  residents  have adiagnosis  of dementia,  20 do not. 
UNNECESSARY  OR QUESTIONABLE  SERVICES 
  Overall 
Seventeen  (46 percent)  of 37 records  reviewed  had some medically 
problematic  services. 
  Tv~e of Service 
All 8 evaluations  were appropriate.  (1 had inadequate  information.) 
Five of 7 testing  were problematic  and 2 were  appropriate.  (1 had 
inadequate  information.) 
Six of 9 brief psychotherapy  were problematic  and 3 were appropriate.  (1 
had inadequate  information.) 
Four of 7 longer psychotherapy  were problematic  and 3 were appropriate. 
Two of 2 group therapy  were problematic. 
A-9
 ILLINOIS

  Provider 
Eleven  of 21. services.by  psychiatrists  were problematic  and 10 were 
appropriate. 
Five of 10 services  by psychologists  were unnecessary  or questiomble  and 
5 were appropriate. 
One service by social worker  was problematic. 
Two services by other providers  were appropriate. 
Five of 8 providers  serving  more than one patient  had problematic  services. 
  Residents 
Three  residents  85 or older had problematic  services and 7 had appropriate 
services. 
Six residents  with dementia  had unnecessary  or questionable  services;  11 
with other diagnoses  had problematic  services. 
CARRIERS 
  Illinois  is serviced  by one carrier. 
	 It referred  12 providers  to fraud unit,  overpayments  were obtained  from  10 
and 2 were referred  to IG. 
	 Effective  9/93,  it established  a maximum  of 10 hours per year allowed for 
testing. 
A-10
 NEw YORK

HIGHLIGHTS 
New York with 20 percent  of the population  of the Project  ORT States had only  13 
percent  (N  =  32) of all of the sample records  from all Project  ORT States.  Only Texas 
was lower with only 7 percent  of all sample cases.  The State was more likely than all 
States (31 percent  to  18 percent)  to have testing and group  therapy  services.  It also had 
the highest percent  of such services  among Project  ORT States,  though closely followed 
by Illinois.  The State was most likely of all States and of Project  ORT States to have 
services provided  by psychologists  (67 percent)  and to have providers  characterized  as 
other (18 percent),  which means that the exact provider,  possibly  a group or other kind 
of specialist,  is not identifiable.  New York had no services provided  by a social worker. 
New York was more likely than all States (46 percent  to 32 percent)  to have unnecessary 
services  and more likely than the other  four Project  ORT states to have them.  When 
questionable  services are included,  New York was also more  likely than all States (57 
percent  to 48 percent)  to have records  with problematic  services.  It is the only Project 
ORT State to parallel  the findings  for all States that psychologists  and social workers  were 
more likely  than psychiatrists  to have problematic  services.  It also appeared more  likely 
than other Project  ORT States and than all States to have problematic  services for 
residents  under  85, and for those with a diagnosis  of other than dementia.  New York, 
along with Florida,  were more  likely than the other three Project  ORT States to have 
cases of medication  management  which appeared  to be miscoded  as psychotherapy. 
DEMOGRAPHICS 
	 The  1990 population  was  17,990,455  or 7 percent  of the total US 
population. 
	 13 percent  are over 65 and  1.3 percent  are 85 or older;  0.7 percent  of the 
States population  reside  in nursing homes. 
RECORDS

  Of the 32 records  from New York,  28 were received  and 4 were not. 
  Of the 28 records  screened,  26 contained  adequate  information  and 2 did 
not. 
SERVICES 
o  Nine of 28 services were for evaluation 
A-n  NEW YORK 
  Seven services  were for testing. 
  Seven services  were for brief psychotherapy. 
  Four  services  were for longer psychotherapy. 
  One service  was for group therapy. 
PROVIDERS 
Seven services  were provided  bypsyctiatisfi,  16 bypsychologisb  and5by 
other providers. 
Three providers  served more than one patient. 
RESIDENTS 
Eleven  of 28 residents  were 85 or older and 17 were under  85. 
Fourteen  residents  had a diagnosis of dementia;  12 did not. 
UNNECESSARY  OR QUESTIONABLE  SERVICES 
  Overall 
Sixteen (57 percent)  of 28 records received  had some medically  unnecessary 
or questiomble  services. 
  Tme  of Service 
Six of 8 evaluations  were problematic  and 2 were necessary.  (1 had 
inadequate  information). 
Five of 7 testings  were problematic  and 2 were necessary. 
Two of 6 brief  psychotherapy  were problematic  and 4 were necessary. 
( 1 had inadequate  information.) 
Two of 4 of the longer psychotherapy  were problematic  and two were 
necessary. 
One group therapy  service  was problematic. 
A-12
 NEW YORK

  Provider 
Three of 7 services by psychiatrists  were problematic  and 4 were necessary. 
Eight of 14 services by psychologists  were problematic  and 6 were 
necessary.  (2 had inadequate  information.) 
Five of 5 services by other providers  were problematic. 
There  were no social workers  in the sample. 
All of the providers  seeing more than one patient  had problematic  services. 
Residents 
Five of residents  85 or older had problematic  services and 6 had necessary 
services.  (2 had inadequate  information,) 
Nine residents  with dementia  had unnecessary  or questiomble  services;  7 
residents  with other diagnoses  had problematic  services. 
CARRIERS 
  New York is serviced  by three  Carriers;  1 Upstate  and 2 Downstate, 
	 Two carriers  are in the sample,  1 Upstate  (4 claims)  and  1 Downstate  (28 
claims.)  All four records  not received  were from Downstate. 
  Each Carrier  had one record  with inadequate  documentation. 
  One Carrier  was drafting  a new policy  for testing code. 
  One Carrier  had additional  educatioml  efforts  in 1995, 
  One Carrier  has a provider  on prepayment  review  for testing code. 
A-13
 TEXAS2

HIGHLIGHTS 
Texas with  19 percent  of the population  of Project  ORT States had only 7 percent  (N  = 
17) of Project  ORT sample records.  Eleven of these records  were received,  of which 
only 6 had enough  information  to review.  There were no testing or group therapy 
services  in the  11 records  received,  Four psychiatrists  saw more  than one patient,  thus 
placing  Texas highest  among the Project  ORT States in percent  of providers  (37 percent) 
serving multiple  patients.  Texas has the lowest percentage  of residents  65 or older of all 
Project  ORT States. 
DEMOGRAPHICS 
  The  1990 population  was 16,986,510  or 7 percent  of the total US 
population. 
  10 percent  are over 65 years of age and 0.9 percent  are over 85; 0.6 
percent  of the States population  reside in nursing homes. 
RECORDS 
  Of 17 records  from Texas in the sample,  11 were received  and 6 were not. 
  Of 11 records  screened,  6 contained  adequate  information  for a 
determination  and 5 did not. 
SERVICES 
  Five of 11 services  screened  were for evaluation.

  Two were for brief psychotherapy.

  Four  services  were for longer psychotherapy.

  There were no testing or group therapy  services  in the sample.

2	 Since only  11 records  were received  from Texas,  the numbers  are reported  here 
for information  only and should not be taken as even suggestive  of what a larger 
sample would have revealed  about the State. 
A-14  TEXAS

PROVIDERS 
  Six of the 11 services were provided  bypsychiatristsj  four by psychologists 
and one by a social worker. 
  Four psychiatrists  served more than one patient. 
RESIDENTS 
Five of 11 residents  were  85 or older and 6 were under  85, 
Five residents  had a diagnosis  of dementia  and one did not. 
UNNECESSARY  OR C)UESTIONABLE SERVICES 
  Overall 
Four  (36 percent)  of 11 records  received  had some medically  unnecessary 
or questionable  services. 
  TYDeof Service 
Two of 5 evaluations  were problematic,  2 lacked information  and 1 was 
necessary. 
One of the brief psychotherapy  services was necessaly  and the other lacked 
information. 
Two of 4 longer psychotherapy  services were unnecessary  or questionable 
and two had inadequate  information. 
  Provider 
Two of 3 services by psychiatrists  were unnecessary  or questionable  and 1 
was appropriate. 
One of 4 services by psychologists  was problematic,  one was medically 
necessary  and the other two had inadequate  information. 
The one social worker  service  was problematic. 
A-15
 TEXAS 
Two of the psychiatrists  seeing more than one patient  had unnecessary  or 
questionable  services. 
  Residents 
One of 5 residen~  over 85 had problematic  services,  one was medically 
necessary  and three had inadequate  information. 
Three  residents  with dementia  had unnecessary  or questionable  services; 
one resident  with other diagnoses  had a problematic  service. 
CARRIERS 
*  Texas  is serviced by one Medicare  Carrier. 
  Concern  was expressed  about  incident to issue: a medical  record  is 
needed to ascertain  who actually provided  the service. 
  Carrier  has held many educational  seminars  for the three disciplines  and 
provided  them with handouts. 
A-16 
  APPENDIX  B 
DESCRIFITON  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. 
B-1