Department of Health and Human Services 

OFFICE OF 

INSPECTOR GENERAL 

MENTAL HEALTH SERVICES IN


NURSING FACILITIES IN THE


OPERATION RESTORE TRUST STATES


@ SERVICE$ 

& “Ga 

‘f 

e $ JUNE GIBBS BROWN

< Inspector General 5

% 

% <

@-­

%dga MAY 1996 

> 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 

inspections conductedby three OIG operating components: the Office of Audit Services, the -

Office of Investigations, and the Office of Evaluation and Inspections. The OIG also informs the 

Secretary of HHS of program and managementproblems and recommends coursesto correct them. 

OFFICE OF AUDIT SERVICES 

The OIG’SOffice of Audit Services (OAS)provides all auditing services for 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 respective responsibilities and are intended to 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 OIG’SOffice of Investigations(01) conducts criminal, 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 OIG’SOffice of Evaluation and Inspections(OEI) conductsshort-term managementand 

program evaluations(called inspections)that focus on issues of concern to 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 departmental programs. 

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$ 

J+ “0$ 

$ v 

JUNE GIBBS BROWN 

$

# 

Inspector General s

% 

% $

++%’d~~ MAY 1996 

> 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 

Alzheimer’s 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 State’s 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 . . . . . . . . . . . . . . . . . . ...0.. � ...**. � ****** � ** 1


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. 

OperaLt”onRestore 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,

entitled “Mental Health Services in Nursing Fwili&S” (OEI-C)2-91-00860. ) In this report 

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 resident’s 

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 resident’s 17.mctioml 

capacity... ” within 14 days of admission, if the patient’s 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 resident’s 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 resident’s 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 beneficiary’s 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. I’his 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 patient’s 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 psychiatrist’s 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 4non 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 Medicare’s 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 Medicare’s 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 patient’s entire stay; and for 1993, 

all nurse’s 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 patient’s 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 patient’s 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 contractor’s 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 

President’s 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 Alzheimer’s 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 

SERVICE** 

testing & group 2* 

therapy 100% 

evaluation 29 

& psychotherapy 48% 

FLOltlDA ILLINOIS NEw YORK TEXAs ALL 

STATES 

7 10 8 ()* 66 

71% 70% 75% o% 79% 

42 24 18 6* 291 

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 psychologist’s intervention was not appropriate. 

11

Diagnosis 

Residents with a mental health diagnosis of some type of dementia, including Alzheirner’s 

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 

Patients with 14 23 20 12 1* 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 Illinoi

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 

Clinical 16 23 11 14 3* 

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. 

AGE** 

Residents 

85 & over 

Residents 

under 85 

Unnecessary 

CALIFORNIA 

8 

50% 

23 

52% 

TABLE V 

or Questionable Services bv Ape 

FLORIDA ILLINOIS NEw YORK TEM 

19 10 11 2* 

79% 30% 45% 50% 

31 24 15 4* 

55% 58% 73% 75% 

ALLSTATES 

138 

62% 

219 

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 Cam”er 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.tz”ents’Nursing 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 State’s 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 State’s 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


RECORDS


SERVICES 

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. 

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. 

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 didn’t. 

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 

RECORDS


SERVICES 

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. 

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. 

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 

RECORDS 

SERVICES 

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 State’s population reside in nursing homes. 

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. 

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 

RESIDENTS 

Six of the 11 services were provided bypsychiatristsj four by psychologists 

and one by a social worker. 

Four psychiatrists served more than one patient. 

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

� 

� 

� 

CARRIERS 

* 

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. 

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