OIG Finds $580 Million In Improper Psychotherapy Medicare Payments

The popularity and utility of telehealth has made it a more common form of healthcare delivery since the start of the COVID-19 pandemic, and telepsychiatry is one of the most used applications for the remote care technology.

But the Department of Health and Human Services’ Office of the Inspector General has found that an estimated $580 million in psychotherapy Medicare payments were noncompliant, $348 million of which were for telehealth-based psychotherapy services.

Responding to the COVID-19 pandemic, the Centers for Medicare and Medicaid Services temporarily expanded access to telehealth services, and from March 2020 through February 2021 Medicare Part B paid $1 billion for psychotherapy services, including telehealth services provided to Medicare enrollees nationwide, OIG found.

Prior OIG audits of four psychotherapy providers uncovered high improper payment rates for psychotherapy services furnished before the public health emergency. The question was whether these compliance issues persisted for the duration of the PHE.

Often, providers did not meet Medicare requirements and guidance when billing for some psychotherapy services, including services provided via telehealth. For 84 of the 216 sampled enrollee days, providers met Medicare requirements, but for 128 sampled enrollee days, providers didn’t meet them – for instance, psychotherapy time may not have been documented.

And for 54 sampled enrollee days, providers did not meet Medicare guidance – providers’ signatures were missing, for example.

The $580 million in improper payments and $348 million in improper telehealth payments were out of roughly $1 billion that Medicare paid for psychotherapy services during the audit period, according to OIG.


The OIG made a number of recommendations to CMS. It suggested the agency work with Medicare contractors to recover $35,560 in improper payments for the sampled enrollee days, and implement system edits for psychotherapy services to prevent payments for incorrectly billed services.

OIG also recommended CMS strengthen educational efforts to make providers aware of educational materials on meeting requirements and guidance for psychotherapy services.

CMS concurred with four of six recommendations and described its corrective actions to address those recommendations.


The ability to treat, and prescribe, via telehealth is a flexibility that some lawmakers would like to make permanent. Six U.S. senators wrote to the Drug Enforcement Agency last week to advocate for that very thing.

With the COVID-19 Public Health Emergency set to expire on May 11, the U.S. Drug Enforcement Agency said it would temporarily extend telemedicine flexibilities around prescription of certain controlled medications as it sifts through comments on its proposed plans for post-PHE remote prescribing guardrails.

According to the Centers for Disease Control and Prevention, telehealth has increased access to care in medically underserved areas and is often seen as a more efficient way to provide care in rural areas where medical services are limited.


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