MFD conducted this audit to determine whether Archway billed for partial-care services in accordance with applicable state and federal laws, regulations, and guidance. MFD statistically selected a sample of 192 partial-care claims totaling $13,932 from a universe of 106,942 claims totaling $7,913,488 billed under New Jersey local procedure code Z0170. MFD found that 108 of the 192 claims (56.3 percent) totaling $2,291 in Medicaid funds paid to Archway failed to comply with one or more of the following: N.J.A.C. 10:66-2.7, and the Department of Human Services, Division of Medical Assistance and Health Services (DMAHS) Newsletter, Vol. 14 No. 42 (June 2004). Specifically, MFD found that Archway’s documentation for these 108 claims did not fully support the number of units (hours) billed for partial-care services. To ascertain the amount that Archway overbilled for partial-care claims billed under New Jersey local procedure code Z0170, MFD extrapolated the $2,276 net adjusted dollars in error for the claims that failed to comply with applicable regulations to the universe of claims from which the sample claims was drawn, which in this case was 106,942 claims with a total Medicaid reimbursement amount of $7,913,488. By extrapolating the net adjusted dollars in error to this universe of claims/reimbursed amount, MFD calculated that Archway received an overpayment totaling $1,311,001 for partial care services billed under code Z0170.

Archway, located in Atco, NJ, is a private not-for-profit mental health and substance abuse facility. Archway offers three partial-care programs, Adult Counseling and Therapy (ACT), Hope, and Discover. The ACT program offers partial-care services Monday through Thursday from 8:30 am to 3:00 pm to adults 18 years of age and older; the Hope and Discover programs offer partial-care services to children and adolescents between the ages of 5 and 18. The Hope and Discover programs are offered Monday through Friday after school from 3:00 pm to 8:30 pm, except during the summer, when both programs run from 12:30 pm to 6:30 pm. Archway’s partial-care programs are all subject to Title 10, Chapter 66. See N.J.A.C. 10:66-1.1 et seq.[1]

Partial-care programs are administered primarily by the Division of Mental Health and Addiction Services (DMHAS), within the New Jersey Department of Human Services. These programs provide individualized outpatient clinical services (e.g., group and individual therapy, prevocational services, and medication management) to beneficiaries ages five and older with a primary diagnosis of psychiatric disorder accompanied by an impaired ability to perform activities of daily living, learning, working, or social roles. Pursuant to regulation, among other requirements, partial-care service providers are required to: (1) provide mental health services by, or under the direction of, a psychiatrist; (2) perform a comprehensive intake evaluation; (3) develop and periodically review a written, individualized plan of care for each Medicaid beneficiary; (4) maintain written documentation to support each medical/remedial therapy service, activity, or session for which billing is made; (5) document individual services on a daily basis; and (6) write progress notes documenting the services provided at least once per week. See N.J.A.C.  10:66-2.7. To support partial-care services, documentation must include the specific services rendered, date and time of each service, service duration, signature of the practitioner who rendered the service, the setting in which services were rendered, as well as notation of unusual occurrences or significant deviations from the treatment described in the plan of care. See N.J.A.C. 10:66-2.7(l)(1)(i)-(vi).  In addition, partial-care providers must document on a daily basis the individual services provided to beneficiaries. See N.J.A.C. 10:66-2.7(l) and DMAHS Newsletter, Vol. 14 No. 42.

Objective

The objective of this audit was to determine whether Archway appropriately billed for services, under New Jersey local procedure code Z0170, in accordance with state and federal laws and regulations, and state guidance, including whether Archway maintained adequate documentation to support the services it billed and for which it was paid.

Scope

The audit scope entailed a review of Archway’s Medicaid claims for partial-care services from August 1, 2014 through March 31, 2019. This audit was conducted pursuant to OSC’s authority as set forth in N.J.S.A. 52:15C-23 and the Medicaid Program Integrity and Protection Act, N.J.S.A. 30:4D-53 et seq.

MFD’s methodology consisted of the following:

• Selected a statistically valid random sample of 192 claims (123 Medicaid beneficiaries associated with these claims) billed by Archway under code Z0170 totaling $13,932 paid to Archway.

• Reviewed Archway’s records supporting the 192 claims to determine whether the documentation provided complied with the requirements of N.J.A.C. 10:49-9.8, N.J.A.C. 10:66-2.7, and DMAHS Newsletter, Vol. 14 No. 42.

A. Identified Deficiencies Regarding New Jersey Local Procedure Code Z0170 for Partial Care, Per Hour

MFD reviewed a statistically selected sample of 192 claims for local procedure Code Z0170 that Archway billed and for which Archway was paid by Medicaid.[2] MFD found that Archway billed incorrectly for 109 out of 192 sample claims. For 108 out of the 109 incorrectly billed sample claims, totaling $2,291, MFD determined that Archway billed and was paid for a greater number of service units than were supported by Archway’s documentation. For the one remaining claim, MFD determined that Archway underbilled a total of $15. To accurately reflect this under payment, MFD adjusted the $2,291 overpayment amount by $15, resulting in a net overpayment amount of $2,276. By doing so, this underbilled amount was carried through extrapolation. For the 108 incorrectly billed claims, 92 claims were associated with the ACT program, while 16 were associated with the Hope and Discover programs (See Exhibit A1 and Exhibit A2). See Table I below for a breakdown by claim type exception and a calculation of the net adjusted dollars in error of these claims.

Table I - Archway Claims Billed in Error

For ACT program participants, Archway required program participants to sign their name and check off their arrival time on the Facility Sign In/Out Sheet when they arrived. Archway’s staff signed out for these participants on the Facility Sign In/Out Sheet when participants departed from the facility.[3] In addition, Archway’s staff recorded attendance for ACT program participants at the first group session, which is referred to as a Community Meeting, on a Program Attendance Sheet. For subsequent ACT program group sessions, Archway’s counselors recorded participants’ attendance on Group Sign In-Sheets.

For Hope and Discover program participants, Archway’s staff recorded their entrance and exit to and from the facility on the Facility Sign In/Out Sheet. To track active program attendance for Hope and Discover program participants, Archway utilized a weekly pre-printed Daily Progress Note, with room for entries for each day of the week, on which counselors recorded daily session attendance and each participant’s level of participation.

In summary, to document arrivals to and departures from Archway for all participants (ACT, Hope and Discover), Archway utilized the Facility Sign In/Out Sheets. To document attendance at programming for ACT participants, Archway recorded attendance at the initial session (Community Meeting) on a Program Attendance Sheet and at subsequent sessions using the Group Sign-In Sheets. To document attendance at programming for Hope and Discover participants, Archway recorded attendance on the Daily Progress Note sheets. Accordingly, the daily documentation for each participant’s active programming consisted of a Facility Sign In/Out Sheet and, depending on the program participation, either a Program Attendance Sheet along with Group Sign-In Sheet for ACT participants, or a Daily Progress Note for Hope and Discover participants. MFD reviewed these documents to calculate the amount of time each participant was present during active programming.

MFD determined that in 86 out of the 108 deficient claims, Archway billed for active programming during meal time, which is not permitted. According to N.J.A.C. 10:66-2.7(d), Archway is only permitted to bill for the time each participant spent in active programming, exclusive of meals. In total, after adjusting the billable units, MFD found that Archway overbilled 86 claims totaling $1,412.

In addition, MFD found that in 22 of the 108 claims, Archway billed and was paid for more units than its documentation supported. In some of these instances, Archway’s documentation showed that participants attended some but not all of the sessions for which Archway billed and was paid. Specifically, in four claims Archway failed to provide active programming documentation to MFD. In another two claims, Archway provided documentation that supported fewer than the minimum of two service units permitted for billing purposes. Further, Archway’s documentation for the remaining 16 claims did not fully support the number of units billed. In instances when the number of units of active programming was fractional, as required by the state guidance discussed below, MFD rounded down the units to the lower whole number in order to determine the proper number of units that Archway should have billed Medicaid. In total, MFD denied 6 claims, totaling $428, and adjusted the remaining 16 claims, totaling $451, to reflect the proper number of units to be billed in accordance with N.J.A.C. 10:66-2.7(d); N.J.A.C. 10:66-2.7(l); and DMAHS Newsletter, Vol. 14 No.42.

According to N.J.A.C. 10:66-2.7(d):

For purposes of partial care, full day means five or more hours of participation in active programing exclusive of meals, breaks and transportation; half day means at least three hours but less than five hours of participation in active programming exclusive of meals, breaks and transportation. The smallest unit of partial care that may be prior authorized by NJ Medicaid/FamilyCare is one hour, with a minimum of two hours per day and a maximum of five hours per day.

According to N.J.A.C. 10:66-2.7(l):

The mental health clinic shall develop and maintain legibly written documentation to support each medical/remedial therapy service, activity, or session for which billing is made.

1. This documentation, at a minimum, shall consist of:
   1. The specific services rendered, such as individual psychotherapy, group psychotherapy, family therapy, etc., and a description of the encounter itself. The description shall include, but is not limited to, a statement of patient progress noted, significant observations noted, etc.;
   2. The date and time that services were rendered;
   3. The duration of services provided;
   4. The signature of the practitioner or provider who rendered the services;
   5. The setting in which services were rendered; and
   6. A notation of unusual occurrences or significant deviations from the treatment described in the plan of care.

Lastly, in accordance with DMAHS Newsletter, Vol. 14 No. 42:

Units of service of partial care services must be provided for a minimum of two hours and a maximum of five hours per day. If a claim is submitted for less than two hours or more than five hours, the claim will be denied by Error Code 374, ‘Reported Service Units must be greater than 1 and less than 6.’ In those instances, which the number of hours of services provided is fractional (for example, 2.5 hours), the provider must ‘round-down’ the units reported to the lower whole number (2 hours).

B. Additional Findings of Non-Compliance

MFD attempted to review all of the Group Sign In/Out Sheets associated with the 93 sample ACT program claims, and all of the Daily Progress Notes associated with the 99 Hope and Discover program claims, to determine whether these forms contained the date, duration of the service and practitioner’s signature. MFD identified the following exceptions relating to these documents:

• Archway did not provide three Daily Progress Notes to support billing for three Hope and Discover claims. Therefore, MFD could not confirm whether these documents existed and, if so, whether they contained the date, duration of the service, and practitioner’s signature, which are required by J.A.C. 10:66-2.7(l). MFD is not seeking a recovery for these claims as they are already included for recovery in the Identified Deficiencies Regarding New Jersey Local Procedure Code Z0170 for Partial Care, Per Hour section of this report; however, Archway should maintain this documentation in accordance with N.J.A.C. 10:49-9.8(b). (See Exhibit B).
• 372 Group Sign-In Sheets for all 93 (100 percent) ACT claims did not contain the counselor’s signature as required by J.A.C. 10:66-2.7(l). MFD is not seeking a monetary recovery for these 93 exceptions because MFD was reasonably assured based on its review of the other documentation that Archway provided the partial-care services; however, Archway should maintain this documentation in accordance with N.J.A.C. 10:49-9.8(b). (See Exhibit C).
• MFD’s review of Daily Progress Notes for Hope and Discover claims, revealed that for 13 of the 99 claims, participants were marked as attending group sessions before their recorded arrival time. In addition, for 6 of the 99 claims, participants were marked attending group sessions, after their recorded departure time. MFD is not seeking a recovery for these claims as they are already included in the Identified Deficiencies Regarding New Jersey Local Procedure Code Z0170 for Partial Care, Per Hour section of this report; however, Archway should maintain accurate documentation in accordance with J.A.C. 10:49-9.8(b). (See Exhibit D).
• MFD’s review of Group Sign In/Out Sheets for ACT program revealed that participants were signed in to multiple groups sessions offered during the same time. To account for the possibility of excessive number of units billed, MFD made the appropriate adjustment within its analysis and, thus, is not seeking any additional recovery for these claims. Archway should ensure that it accurately records attendance at group sessions in accordance with J.A.C. 10:66-2.7(l). (See Exhibit E).

According to N.J.A.C. 10:66-2.7 (l), “[t]he mental health clinic shall develop and maintain legibly written documentation to support each medical/remedial therapy service, activity, or session for which billing is made.” As set forth fully above, this regulation requires documentation to support claims including, but not limited to, the type of service rendered, a description of the encounter, the date and time services were rendered, the duration of the services, and the signature of the practitioner or provider who rendered the services.

Providers are required to keep records in accordance with N.J.A.C. 10:49-9.8(b), which provides, in part:

(b) Providers shall agree to the following:

1. 1. To keep such records as are necessary to disclose fully the extent of services provided, and, as required by N.J.S.A. 30:4D-12(d), to retain individual patient records for a minimum period of five years from the date the service was rendered;
   2. To furnish information for such services as the program may request;
   3. That where such records do not document the extent of services billed, payment adjustments shall be necessary . . . .

Based on its review, MFD determined that Archway improperly billed and received payment for 108 out of 192 sample claims for New Jersey local procedure code Z0170 for the period August 1, 2014 through March 31, 2019. Archway received a net overpayment of $2,276 for these claims. For purposes of ascertaining a final recovery amount, MFD extrapolated the dollars in error for deficient claims (including credit for the underbilled claim) to the total population from which the sample claims were drawn. In this case, the universe consisted of 106,942 claims with a total payment to Archway of $7,913,488. By extrapolating the sample of deficient claims to this universe of claims/reimbursed amount, MFD calculated that Archway received an overpayment for partial-care services billed under New Jersey local procedure code Z0170 that totaled $1,311,001 that it must repay to the Medicaid program.[4] 

Archway shall:

1. Reimburse the Medicaid Program the overpayment amount of $1,311,001.
2. Develop and institute procedures to ensure that mealtime is not included in Archway’s calculation of billable hours for active programming.
3. Maintain documentation that fully supports the number of units billed for partial-care services under code Zo170. Specifically, Archway’s documentation should contain, among other elements, the specific services rendered, the date and time the services were rendered, the duration of services provided, and the signature of the practitioner who rendered the services.
4. Develop and institute procedures to ensure accurate attendance records so that participants are not marked as attending group sessions prior to their recorded arrival time or after their recorded departure time.
5. Develop and institute procedures to ensure accurate documentation so that participants are not shown as signed into multiple group sessions simultaneously, unless it is documented that a participant moved from one session to another during the same time period for a legitimate reason.
6. Provide MFD with a Corrective Action Plan (CAP) indicating the steps Archway will take to implement procedures to correct the deficiencies identified in this report.

After receipt of MFD’s Draft Audit Report, Archway, through counsel, submitted a written response and Corrective Action Plan (See Appendix A). In this response, Archway objected to MFD’s audit findings, sampling methodology, and extrapolation process. MFD addresses each argument raised by Archway in Appendix B, entitled “Archway’s Comments and MFD’s Response.”

After carefully reviewing each of Archway’s arguments and its supplemental documentation, MFD gave credit in those circumstances where Archway provided reliable support for active programming claims. For the majority of the claims at issue, however, MFD did not modify its findings. Archway’s Corrective Action Plan addresses some of MFD’s recommendations, but fails to ensure that mealtime is not included in Archway’s calculation of billable hours for active programming. Accordingly, Archway must immediately discontinue including mealtime in billable hours for active programming and provide MFD with the corrective actions it will take to comply with this requirement.

Thank you for your attention to this matter.

Sincerely,

KEVIN D. WALSH
ACTING STATE COMPTROLLER

By: /s/Josh Lichtblau
Director, Medicaid Fraud Division

c: John W. Leardi, Esq., Buttaci Leardi & Werner