The Importance of Documentation

A Health System recently agree to pay $6 million to settle allegations that a subsidiary submitted false claims to Medicare for unnecessary rehabilitation therapy services. The Health System was also required to enter into a 5-year corporate integrity agreement with the U.S. Department of Health and Human Services Office of Inspector General. The billed services were allegedly unreasonable, not medically necessary and unsupported by the medical records.


The case was originally filed by whistle blower employees. In its defense, the Health System argued that the not medically necessary findings were highly subjective conclusions and that the care was appropriate. The Health System settled the case for $6 million, however, to avoid “an unsustainable and ultimately unacceptable allocation of financial and personnel resources.”  Assuming that the care was appropriate, better documentation of medical necessity might have saved the Health System $6 million.