Cherry Hill Based Rehab Facility Owes Feds Almost $30 Million, Authorities Claim

CHERRY HILL, NJ — A rehabilitation facility based in Cherry Hill improperly claimed nearly $30 million for outpatient therapy services it provided under Medicare Part B between July of 2013 and June of 2015, the U.S. Department of Health and Human Services Office of the Inspector General (OIG) found.

OIG said it opened an investigation of Fox Rehabilitation after previous reports found claims for reimbursement from the company for procedures that weren’t reasonable, medically necessary, or properly documented. It found that 85 out of 100 claims for services including occupational, physical, and speech therapy weren’t medically necessary.

“For nearly all of these claims, the amount, frequency, and duration of services were not reasonable and consistent with acceptable standards of practice,” OIG said in a statement. “Further, some services did not require the skills of a licensed therapist or were not an effective treatment for the Medicare beneficiary's condition.”

OIG claims Fox, which also has locations in Voorhees and Toms River, didn’t follow its own policies and procedures, and has ruled that the company must repay $29.9 million to the federal government, and “ ensure that outpatient therapy services are provided and documented in accordance with Medicare requirements.”

Fox disagreed with various aspects of the investigation, including the findings and recommendations, use of statistical sampling, and sampling methodology, the office said.

“Fox stated that its internal compliance program ensures that outpatient therapy services are provided and documented in accordance with Medicare requirements,” OIG said. “After reviewing Fox's comments, we maintain that our findings and recommendations are valid. We obtained independent medical review of the claims for medical necessity, documentation, and coding errors. Additionally, federal courts have consistently upheld statistical sampling and estimation as a valid means to determine overpayment amounts in Medicare.”

"We vehemently disagree with the OIG’s report and will appeal all of the claims that were denied by the Office of Inspector General," Fox said in a statement provided to Patch on Wednesday. "We look forward to continuing to provide clinically excellent care and remain dedicated to using appropriate therapy to restore and rehabilitate lives."

In its comments, included in OIG's full report, Fox claims the office doesn’t specify which policies and procedures it failed to follow, says it does follow policies and procedures and says this is enforced by its own compliance office.

“OIG has presented no evidence of any shortcomings within Fox's Compliance Department,” Fox said in its statement. “Accordingly, Fox does not concur with the OIG's recommendation that Fox ensure that outpatient therapy services are provided and documented in accordance with Medicare requirements.”

The case has been referred to the Center for Medicare and Medicaid Services, which will review OIG’s audit and any additional information provided by Fox, according to OIG Senior Public Affairs Specialist Don White.

In its review, the office said it covered 400,221 outpatient therapy service claims for services that Fox provided in New Jersey with paid amounts of $20 or more, totaling $39,738,889, during the two-year audit period.

The 85 alleged improper claims were found as part of a random sample of 100 claims. Additionally, there was one documentation and one coding violation. Some claims contained multiple violations, the office said. Fox countered each of the 85 claims in the full report, including claims that OIG’s illegal use of an “Improvement Standard” taints its findings.

“Moreover, in the OIG's draft report, it claimed that in 84 of the 85 cases, ‘the amount, frequency, and duration of the outpatient therapy services . . . were excessive given the beneficiaries ' minimal gains,’” Fox stated. “OIG's focus on patients' ‘minimal gains’ in denying coverage is nothing more than an improper reliance on the ‘ Improvement Standard.’ In other words, the OIG is claiming that the patients had insufficient gains in improving their conditions to justify further therapy, which is not only arbitrary, but expressly violates the law.

“The use of this illegal ‘Improvement Standard’ especially impacts Fox's patients, who suffer from multiple co-morbidities and/or chronic conditions. As their health deteriorates, their need for physical, occupational, and speech therapies increases. Skilled care is critical to slow their disease process and to maintain their functional ability, yet these are precisely the patients for whom OIG has denied coverage under the ‘Improvement Standard.’"

To read the report, click here.

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