Feds: Fox Rehab received $30 million in improper Medicare payments

A federal auditor said Tuesday that Fox Rehabilitation, based in Cherry Hill, received at least $29.9 million from Medicare for services that did not meet Medicare requirements.

The services were provided to 15,287 Medicare beneficiaries in New Jersey between July 2013 and June 2015.

The Office of Inspector General of the U.S. Department of Health and Human Services found that 85 of 100 claims in its sample contained services that were not medically necessary. Overall, privately owned Fox submitted 400,221 claims during the audit period, with $39.7 million in total reimbursement.

"For nearly all of these claims, the amount, frequency, and duration of services were not reasonable and consistent with acceptable standards of practice," the OIG report said. Specifically, the OIG said: "Services need to be provided only when there is an expectation of improvement within a reasonable and predictable period of time."

Fox, described in the report as one of the nation's largest providers of outpatient occupational, physical, and speech therapy, disagreed with the findings and the recommendation that it repay $29.9 million to the federal government, according to the report.

"Fox vehemently disagrees with the OIG's conclusions and believes that the OIG misapplied the law and misunderstood the nature of the treatment that was being applied as ordered by the patients' treating physicians," said the company's lawyer, Nicholas C. Harbist of Blank Rome LLP.

Fox said the OIG's use of an "improvement standard" violated a settlement in a 2011 class-action lawsuit on whether Medicare beneficiaries are entitled to skilled care in a nursing home, at home, or on an outpatient basis that maintains a patient's function or prevents decline.

Last week, the Centers for Medicare and Medicaid Services posted an FAQ clarifying that "Medicare coverage for skilled nursing and therapy services in these settings does not 'turn on' the presence or absence of a beneficiary's potential for improvement."