US Attorney Jacqueline C. Romero announced on April 8, 2024, that the United States had filed a civil complaint against a behavioral health provider and a psychiatrist, who was the provider’s owner and principal. The complaint alleges that they violated the False Claims Act and state common law by billing Medicaid for psychiatric medication management appointments (known as med checks) and other services that did not occur as billed.
In its complaint, the United States alleges that the company provided psychiatry and therapy services to economically disadvantaged adults and children at three locations in Philadelphia under the Medicaid program. Among the services that the company provided were med checks, appointments during which a psychiatrist is supposed to assess the efficacy and effects of a prescribed drug, including controlled substances, on patients within the doctor’s care. The United States alleges that between at least 2009 and 2017, the company fraudulently billed Medicaid for thousands of med checks as though the psychiatrist had met with each patient for at least 15 minutes—when in reality, he had spent well below the required time meeting with patients.
Among other things, the United States alleges that the defendants repeatedly billed Medicaid for days during which the psychiatrist allegedly performed more than 84 full-length med checks on the same day, which would amount to at least 21 hours of appointments. The defendants also repeatedly billed Medicaid for services that were never provided—because the relevant patients were receiving in-patient treatment at different hospitals at the alleged time of service.
The United States also alleges that the company failed to adhere to corporate formalities and was merely an alter ego for the psychiatrist, who personally pocketed millions of dollars in compensation through his control over the company and defendants’ fraudulent billing. He had an annual income as much as double the median compensation for child psychiatrists in Philadelphia. The United States’ civil lawsuit seeks damages for the false Medicaid claims submitted by defendants as well as the imposition of civil penalties.
The civil complaint details years of audits of the company by the managed care organization that contracts with healthcare providers who provide mental health services for Medicaid recipients in Philadelphia. Over the years, as outlined in the complaint, the managed care organization found repeated errors and significant problems in these audits. In 2017, the company was terminated from the Medicaid program.
Compliance Perspective
Issue
It is illegal to submit claims for payment to Medicare or Medicaid that you know or should know are false or fraudulent. Filing false claims may result in fines of up to three times the programs’ loss plus $11,000 per claim filed. Under the civil False Claims Act, each instance of an item or a service billed to Medicare or Medicaid counts as a claim, so fines can add up quickly. Nursing homes should have comprehensive procedures in place to ensure that services are of an appropriate quality and level and are in fact delivered to residents as ordered and as reported in claims for reimbursement. Moreover, accurate documentation at the time of service is critical to ensuring that billing is fully supported. Facility staff should be knowledgeable in how to report suspicious billing practices. A nonretaliatory environment for reporting suspicious billing practices is mandatory for all facilities.
Discussion Points
- Review policies and procedures for preventing and reporting false claims and suspicious billing practices. Update your policies and procedures as needed.
- Train staff upon hire and at least annually on your compliance and ethics policies and procedures and on what can be considered a false claim. Provide training to appropriate staff on the Triple Check Process for ensuring accuracy of all Medicare Part A billing and supporting documentation before claims are submitted. Document that these trainings occurred and file the signed document in each employee’s education file.
- Periodically perform audits to ensure all staff are aware of compliance and ethics concerns and understand their responsibility to report any potential compliance and ethics violations to their supervisor, the compliance and ethics officer, or via the anonymous hotline. Audit to ensure that the Triple Check Process is being followed each month before claims are submitted to Medicare, and that any identified irregularities are corrected.
*This news alert has been prepared by Med-Net Concepts, LLC for informational purposes only and is not intended to provide legal advice.*
