By: James W. Kraus
The proliferation of sleep medicine specialty services in recent years has not gone unnoticed by the federal government. As sleep specialists pursue innovation in both diagnoses and therapies, the likelihood of challenges in submitting charges for those services has increased. Data published by the government illustrates the magnitude of the charges being submitted in the sleep medicine practice area in recent years. One study found that from January 1, 2011 through September 30, 2012, Medicare administrative contractors (MACs) nationwide paid approximately $680 million for a type of sleep study known as polysomnography.
Polysomnography is used to diagnose a variety of sleep disorders, most commonly obstructive sleep apnea, and to evaluate a patient’s response to therapy. Polysomnography employs numerous techniques and technologies to record a sleeping patient’s brain waves, blood oxygen level, heart rate and breathing, as well as eye and leg movements. The services are typically provided at sleep disorder clinics, which may be either free standing independent diagnostic testing facilities (IDTF) or facilities affiliated with a hospital.
While the use of polysomnography for treatment of sleep disorders has gained wide acceptance, periodic government reviews and audits of polysomnography services have found that Medicare has paid for services not meeting Medicare requirements. The issues noted in those reviews included inappropriate diagnosis codes, providers that exhibited patterns of questionable billing, and payments for services without the required supporting documents. Of particular note, in January of 2013, a provider agreed to pay $15.3 million to settle allegations of false sleep study claims billed to Medicare and other federal payors.
As a result of these mounting concerns, HHS/OIG has continued to audit providers of polysomnography. One recent example is the review by OIG’s Office of Audit Services (OAS) of Total Sleep Management, Inc. (Total Sleep), which operates as an IDTF in Orlando, Florida. In the audit, OAS reviewed Total Sleep’s claims for polysomnography for the period of January 1, 2010 through December 31, 2012.
The OAS review of Total Sleep covered a period in which Medicare paid Total Sleep approximately $1.7 million for 2,317 beneficiaries with 3,699 corresponding lines of service for polysomnography. OAS randomly selected 100 of those beneficiaries, and found that the claims for only 21 of the 100 selected beneficiaries met billing requirements. For the remaining 79 beneficiaries, it found that Total Sleep billed for 111 corresponding lines of services that did not meet Medicare requirements, resulting in overpayments totaling $50,700.
The primary deficiencies noted by OAS included (1) failure to have required supporting documentation; (2) lack of certification for the attending technician or interpreting physician; and (3) billing for a service that it did not provide (on one occasion). By far, the most significant problem (74/100 of the selected beneficiaries) was the lack of required supporting documentation. OAS concluded that the errors occurred primarily because Total Sleep did not have adequate controls to ensure that it properly documented the services billed to Medicare. Using statistical sampling techniques, OAS estimated that Total Sleep received overpayments of at least $1,030,077 for the audit period.
Based on the audit, OAS has recommended substantial repayment and additional actions to be taken by Total Sleep. Specifically, OAS recommended that Total Sleep refund $423,008 to Medicare program for estimated overpayment, and to return the amount related to overpayments outside the three-year recovery period estimated to be as much as $607,069; and finally to strengthen controls to insure full compliance.
The Total Sleep audit provides an important reminder of the critical importance of supporting documentation in billing for medical care. Of course, this is a challenge that is long-standing across the full spectrum of healthcare services. Nonetheless, this case provides a tangible illustration of how the failure to have robust processes in place for preparing documentation of medical services can result in the substantial losses in revenue to healthcare providers.
A complete copy of the OAS report of the Total Sleep review can be found here.