Health Tech, Payers

Medicare Improperly Paid Providers $348M for Telehealth Psychotherapy Services

Out of the $1 billion in Medicare payments to providers for psychotherapy services in the first year of Covid-19, $580 million were improper payments, an audit by the Office of Inspector General found. This includes $348 million for telehealth services.

In the first year of Covid-19, Medicare paid providers $1 billion for psychotherapy services, and $580 million were improper payments, including $348 million that were for telehealth services, a recent audit by the Office of Inspector General (OIG) found.

The OIG audit, published Tuesday, analyzed $1 billion in Part B payments for more than 13.5 million psychotherapy services from March 2020 through February 2021. Its analysis consisted of two random samples of psychotherapy services: a sample of 111 enrollee days for telehealth services and a sample of 105 enrollee days for non-telehealth services. An enrollee day includes “all claim lines for Medicare Part B psychotherapy services with the same service start date for a specific enrollee,” the OIG said.

Audits from before the pandemic showed improper payments for psychotherapy services, leading the agency to examine payments during the pandemic when telehealth access was greatly expanded.

“Because of the significant increase in psychotherapy services billed as telehealth services during the [public health emergency] and the high improper payment rates we identified in our prior audits, we conducted this nationwide audit of psychotherapy services to determine whether the compliance issues identified in the prior audits occurred during our audit period,” the OIG said.

The audit showed that for 128 of the 216 sampled enrollee days, providers did not meet the requirements for billing psychotherapy services, such as not documenting the psychotherapy time or having incomplete or missing treatment plans. For these 128 sampled enrollee days, Medicare paid $35,560. Based on this sample, the OIG estimates that $580 million of the $1 billion Medicare paid providers for psychotherapy services were improper payments. 

For another 54 of the sampled enrollee days, providers did not meet Medicare guidance, such as not providing their signature or not stating whether the services were done via telehealth or in person.

“These findings did not have associated improper payments because they did not reflect noncompliance with Medicare requirements,” the OIG stated. “However, this information may be beneficial to CMS when considering future oversight mechanisms or policy changes related to providers’ signatures and billing for telehealth services.”

Based on the findings of the audit, the OIG made several recommendations to the Centers for Medicare and Medicaid Services, including working with Medicare contractors to recover $35,560 in improper payments found through the sampled enrollee days. It also recommended creating system edits for psychotherapy services to stop incorrect payments and educating providers on how to meet requirements and guidance. 

Photo credit: Bohdan Skrypnyk, Getty Images