North Carolina’s largest behavioral health practice with offices statewide, along with three former officers, has paid $1,900,000 to the United States to resolve allegations that it submitted false Medicare claims for psychotherapy and related services.
The settlement arose from whistleblower allegations that the company billed Medicare for psychotherapy and medication management sessions without meeting required billing and documentation standards. The United States filed a complaint alleging that the defendants “systematically billed for fraudulent psychotherapy treatments, without required documentation of the separate time and psychotherapy treatments of patients to maximize their profits, all in blatant disregard of Medicare billing requirements.”
The Government further alleged that, from 2018 to 2020, the company billed Medicare without documenting “separate and distinct psychotherapy treatments,” failed to correct issues repeatedly identified by employees, and exhibited a pattern of reckless disregard or deliberate ignorance toward concerns about billing fraud while remaining focused on generating income. Without admitting liability, the company agreed to pay $1.9 million to resolve the False Claims Act allegations.
The False Claims Act requires the Government to recover triple the money falsely obtained, in addition to substantial penalties for each false claim submitted, and attorneys’ fees and costs payable to the whistleblower.
“Healthcare professionals are expected to submit true and accurate billing, which is critical to protecting the integrity of the Medicare program,” stated Special Agent in Charge Kelly J. Blackmon with the US Department of Health and Human Services Office of Inspector General (HHS-OIG). “This settlement reflects the ongoing commitment of HHS-OIG and the US Attorney’s Office to addressing allegations involving improper billing practices and the potential exploitation of enrollees in our nation’s federal healthcare programs.”
Compliance Perspective
Issue
Healthcare providers are responsible for ensuring that claims submitted to federal healthcare programs accurately reflect the services delivered and are supported by documentation that meets applicable requirements. When organizations fail to maintain clear documentation standards, implement adequate oversight, or respond to identified concerns, they increase the risk that unsupported or inaccurate claims may be submitted. Such failures can result in significant liability under the False Claims Act.
Discussion Points
- Review policies and procedures to ensure they clearly define documentation requirements for all billable services, including expectations for recording service time, clinical components, and provider involvement. Policies should describe how staff concerns about documentation or billing practices are to be reported and addressed. Facilities may find value in periodically evaluating their procedures with internal compliance staff or in collaboration with an external consultant who can help identify gaps, assess risk areas, and recommend updates aligned with current regulatory expectations.
- Provide regular training for staff involved in documentation, billing, and service delivery. Training should reinforce the importance of maintaining accurate and complete records, following program requirements, and recognizing documentation or workflow inconsistencies that may require further review. Med-Net Academy offers the course Understanding and Using the Medicare Triple Check Process, which reviews the importance of ensuring the accuracy of billing for skilled services, preventing the submission of false claims, reducing adjusted or denied claims, confirming that residents receive the benefits to which they are entitled, and ensuring that clinical documentation appropriately correlates with financial data.
- Conduct regular audits of documentation and billing practices to confirm that claims accurately reflect the services provided and meet all regulatory and policy requirements. Audits should assess whether documentation supports the billed service, whether the type and duration of the service meet billing requirements, and whether previously identified issues have been corrected. Organizations may choose to engage a consultant for focused reviews, mock surveys, or assessments of high-risk service areas to obtain an objective evaluation of compliance and to support proactive corrective action.
*This news alert has been prepared by Med-Net Concepts, Inc. for informational purposes only and is not intended to provide legal advice.*