OIG: Medicare Provided Improper Reimbursement for Some Telehealth Services

Earlier this month, the US Department of Health and Human Services (HHS) Office of Inspector General (OIG) announced errors in Medicare reimbursement for some psychotherapy services, including those provided via telehealth, that occurred in response to the COVID-19 public health emergency (PHE), prompting the OIG to make suggestions for further action.

In 2020, the Centers for Medicare and Medicaid Service (CMS) temporarily withdrew certain telehealth barriers to accommodate changes that resulted from the COVID-19 pandemic. Additionally, between March 2020 and February 2021, Medicare Part B provided a total of $1 billion for psychotherapy services. This reimbursement encompassed care delivered via telehealth and in-person services.

Given that previous audits indicated improper payment rates for psychotherapy services before the pandemic, the OIG conducted a new audit to determine whether this trend continued during the PHE. The agency examined the $1 billion in Part B payments for over 13.5 million psychotherapy services.

OIG selected two stratified random samples of psychotherapy services. One consisted of 111 enrollee days for telehealth services, and the other included 105 enrollee days for non-telehealth services.

The agency found that many providers did not comply with Medicare requirements when billing for psychotherapy services. Of the 216 sampled enrollee days, only 84 indicated that providers met Medicare requirements. Thus, providers failed to meet Medicare requirements in 128 of the enrollee days sampled.

The audit data led OIG to conclude that $580 million of the $1 billion that Medicare paid for psychotherapy was improper and did not coincide with Medicare requirements. Of this $580 million, $348 million was for telehealth-enabled psychotherapy services.

To address these errors, OIG released a set of six recommendations for further CMS actions. These include working with Medicare contractors to recover $35,560 in improper payments, changing system edits to lower the chance of further error, and improving provider education.

CMS agreed with four of the six recommendations, requested that one be removed, and noted that the other was covered.

This audit is the latest example of OIG's efforts to examine and prevent mistakes in telehealth billing practices.

In September 2022, the OIG found that although the population is small, some providers engaged in billing that posed a high risk to Medicare.

The OIG reached this conclusion following research on telehealth billing within the Medicare program, prompted by policy changes that took place during the COVID-19 pandemic. Upon reviewing 742,000 providers who billed for telehealth, about 1,714 performed high-risk billing practices.

The agency provided recommendations to limit billing risk, including increasing oversight, enhancing education, and exposing telehealth companies that bill Medicare.

The OIG also released a federal toolkit in May to assist healthcare stakeholders in analyzing telehealth claims data to determine program integrity risks.

This toolkit recommends five steps stakeholders should take when reviewing telehealth claims: review payment and coverage policies of the program, identify claims related to telehealth, perform quality assurance checks on data, use data analytics to determine integrity risks, and interpret analysis results and apply safeguards accordingly.