Two recent actions announced by the U.S. Department of Justice (DOJ), one civil and one criminal, along with a recent speech by Assistant Attorney General Leslie R. Caldwell, illustrate the current climate of government enforcement related to mental health services (i.e., intensive outpatient psychotherapy (IOP) and partial hospitalization program (PHP) services). In her speech, Caldwell specifically mentioned mental health as one of the areas the DOJ has targeted through its increasing use of data analytics to identify suspicious billing patterns.
On May 7, 2015, the DOJ announced that 16 hospitals agreed to pay a combined $15.69 million to resolve a qui tam lawsuit filed under the False Claims Act (FCA), with the relator receiving approximately $2.67 million. According to the DOJ, Health Management Associates (HMA) and 14 hospitals formerly owned and operated by HMA, Community Health Systems and its subsidiary Wesley Medical Center, and North Texas Medical Center allegedly knowingly submitted claims for IOP, typically provided on the hospitals’ behalf by contractor Allegiance Health Management (Allegiance), that did not qualify for Medicare reimbursement for a variety of reasons. The claims settled by these agreements are allegations only, and there has been no determination of liability.
IOP is a collection of ambulatory psychiatric services, which, according to the DOJ’s announcement, provide active treatment to individuals with mental disorders using a variety of treatment methods. The present case included allegations that the hospitals submitted claims that did not qualify for Medicare reimbursement because: the patient’s condition did not qualify for the treatment; the treatments were not provided pursuant to an individualized treatment plan as required; the patient’s progress was not adequately tracked or documented; the patient received an inappropriate level of treatment; and/or the therapy provided was primarily recreational or diversional in nature, and not therapeutic. The DOJ noted that in October 2013, it resolved similar allegations for $4.67 million with LifePoint Hospitals, Inc. and two of its subsidiaries, which, according to the settlement agreement, also contracted with Allegiance to provide IOP services to their patients.
On May 6, 2015, one day before the announcement described above, the DOJ announced the indictment of Walid H. Hamoudi, a Houston physician, and Geraldine J. Caroline, the owner of a group home, for their alleged participation in a scheme related to the submission of $5.2 million in false claims to Medicare and $380,000 in false claims to Medicaid for PHP services. Hamoudi and Caroline were both charged with conspiracy to commit health care fraud, conspiracy to pay and receive kickbacks, and multiple counts of paying and receiving kickbacks in relation to the scheme, in which Hamoudi allegedly paid Caroline to send her group home residents to Riverside General Hospital to receive PHP services that were either not provided or for which the patients did not qualify. Hamoudi was also charged with money laundering under the scheme.