A recent academic research study found organizational productivity goals for clinical physical therapy employees is directly linked to unethical and illegal behavior in the provision of physical therapy.   The research, based on a survey of over 3,400 physical therapists and physical therapy assistants across the State of Texas, found that 89% of the survey respondents said they observed unethical behavior of some kind in their practice.  Further, clinicians in Skilled Nursing Facility (SNF) settings were over four times more likely to observe unethical behavior than all other settings.

Productivity Goals Improperly Influence Clinical Decision Making

The academic study was conducted by lead researcher Justin E. Tammany, PT, DPT, SCD, MBA, an assistant professor of therapy at the Holland School of Mathematics and Sciences at Hardin-Simmons University and shed light on the pervasive issue of improper productivity goals imposed on physical therapists and other clinical employees.  Some key findings showing the problematic influence of productivity standards include 1) as productivity expectations increased, the rate of observed unethical behavior increased; 2) 53.3% of surveyed clinicians felt their organization’s productivity goals were difficult or very difficult to meet; 3) 60.2% of surveyed clinicians felt their productivity standards were high or much too high and 4) 83.4% of clinicians reported productivity standards influenced their clinical decision making.  Yet, over half of the clinicians stated they never participated in determining their own productivity goal.

Examples of “Inappropriate” Behavior Commonly Witnessed by Therapists

The researchers’ questions in the survey used terms such as “inappropriate” which were used to describe each behavior and sample behaviors that are explicitly illegal or fraudulent based on government regulations.  Specifically, clinicians were asked if they observed the following illegal or fraudulent behaviors:

• Placing patients on caseload who do no meet skilled criteria (86.3% of SNF clinicians observed this illegal behavior; 76.9% of Home Health clinicians observed this illegal behavior)
• Discharging patients inappropriately (witnessed by 88.3% of SNF clinicians)
• Inappropriate frequency, intensity or duration of services (witnessed by 86.5% of SNF clinicians)
• Counting treatment time that is not permitted by payer sources (witnessed by 75.6% of SNF clinicians)
• Falsifying or changing documentation (witnessed by 51.4% of SNF clinicians)
• Allowing an employee to perform task outside scope of practice (witnessed by 33.7% of SNF clinicians)

Enforcement of Therapy and Skilled Nursing Fraud

These reports of unethical behavior in SNFs corroborates reports by the Department of Health and Human Services Office of Inspector General (HHS-OIG), the government agency that monitors the Medicare program. HHS-OIG that found that Medicare paid over $1.5 billion of inappropriate payments to SNFs in 2009 alone.  Of these inappropriate payments, the majority were up-coded and related to misreported therapy which largely determines the SNF’s total payment from Medicare.

Further, these precise fraudulent schemes — implemented through manipulative productivity goals — are in fact illegal and have been prosecuted by the Department of Justice through the False Claims Act.  Most therapy fraud schemes prosecuted through the False Claims Act are brought to the government’s attention by whistleblowers — known as relators — who are often employees or former employees of defendant companies who witness fraud and have their clinical judgment undermined by company policy and mandated productivity goals.

The False Claims Act qui tam provisions encourage whistleblowers with knowledge of fraud against the government, including SNF and physical therapy fraud, to inform the government of such fraud and the whistleblowers are then entitled to an award of money recovered based on their allegations.

Results of Enforcement

One such case, against a nursing home (SNF) therapy provider RehabCare and its parent company Kindred resulted in a $125 Million settlement.  The case was originally brought by two whistleblowers, one was employed by RehabCare as a physical therapist and rehabilitation manager and the other whistleblower was an occupational therapist who worked for RehabCare.  The whistleblowers in that case received nearly $24 million for informing the government of RehabCare’s fraud.  The allegations of fraud perpetrated by RehabCare included many of the same frauds addressed in the recent academic survey and identified as causing billions of fraud and waste to the cash-strapped Medicare program such as:

• Presumptively placing patients in the highest therapy reimbursement level, rather than relying on individualized evaluations to determine the level of care most suitable for each patient’s clinical needs;
• Boosting the amount of reported therapy during “assessment reference periods,” thereby causing and enabling SNFs to bill for the care of their Medicare patients at the highest therapy reimbursement level, while providing materially less therapy to those same patients outside the assessment reference periods, when the SNFs were not required to report to Medicare the amount of therapy RehabCare was providing to their patients (a practice known as “ramping”);
• Scheduling and reporting the provision of therapy to patients even after the patients’ treating therapists had recommended that they be discharged from therapy;
• Arbitrarily shifting the number of minutes of planned therapy among different therapy disciplines (i.e., physical, occupational and speech therapy) to ensure targeted therapy reimbursement levels were achieved, regardless of the clinical need for the therapy;
• Providing significantly higher amounts of therapy at the very end of a therapy measurement period not due to medical necessity but rather to reach the minimum time threshold for the highest therapy reimbursement level, to enable SNFs to bill for the care of their Medicare patients accordingly, even though the patients were receiving materially less therapy on preceding days;
• Inflating initial reimbursement levels by reporting time spent on initial evaluations as therapy time rather than evaluation time;
• Reporting that skilled therapy had been provided to patients when in fact the patients were asleep or otherwise unable to undergo or benefit from skilled therapy (e.g., when a patient had been transitioned to palliative end-of-life care); and
• Reporting estimated or rounded minutes instead of reporting the actual minutes of therapy provided.

If you have knowledge of improper productivity goals mandated to clinical employees or therapy or SNF fraud, contact Frohsin Barger & Walthall.

To read the full academic study highlighting the problematic influence of productivity standards for clinicians, click here.

To read HHS-OIG’s report on SNF fraud, click here.

To read the full Department of Justice press release related to the RehabCare settlement, click here.