Mental Health Fraud Exacts High Human and Financial Costs

The United States loses approximately $100 billion to healthcare fraud annually. Up to $20 billion dollars are due to fraudulent practices in the mental health sector. One of the largest healthcare fraud cases in US history occurred in behavioral health -- one of healthcare’s smallest sectors.

Mental Health Fraud Exacts High Human and Financial Costs

The United States loses approximately $100 billion each year to healthcare fraud. Up to $20 billion dollars are due to fraudulent practices in the mental health sector. One of the largest healthcare fraud cases in US history occurred in behavioral health--one of healthcare’s smallest sectors.

Like home care , this arena requires the utmost in integrity because crime in the mental health sector hurts healthcare’s most vulnerable, underserved and disenfranchised patient populations, while escalating costs.

The HHS Office of Inspector General and partners are making some progress cracking down, especially where patients suffer harm. Some of the worst cases, however, continue to occur in partial hospitalization programs (PHP), involving intense outpatient psychiatric care in ambulatory departments of hospitals or Community Mental Health Centers (CMHC). Some CMHCs bill for mental health services but instead provide at best recreational adult day care.

Consider a couple of illustrative cases. A CMHC operator in Louisiana and a CMHC patient recruiter in Texas were imprisoned for their roles in a multimillion-dollar Medicare fraud scheme. In Baton Rouge the recruiter invited beneficiaries to attend PHP programs knowing the patients didn’t need psychotherapy and kept them at facilities as long as possible without triggering Medicare audits. Staff also altered records to make it look as if patients received therapy when they didn’t.

In Houston the recruiter invited beneficiaries to attend a PHP in exchange for cash payments. The 2 fraudsters received prison sentences of 90 months and 60 months, respectively. Three companies involved in the case collectively filed more than $258 million in inappropriate Medicare claims. Seventeen people were convicted, including the psychiatrist co-owner of the Louisiana CMHC and the Houston facility, who was sent to prison.

In another case in Houston, 3 individuals earned 12, 20 and 45 years in prison and were made to pay more than $100 million in restitution for their roles in a $158-million PHP scam. Beneficiaries watched television all day, patients with dementia couldn’t understand or were not capable of participating in therapy they allegedly received, and others never were admitted to hospital. The scheme included kickbacks to recruiters and group home operators for bringing ineligible Medicare beneficiaries to the organization.

As mental health services expand in the wake of the Affordable Care Act, rooting out fraud, waste and abuse in this arena becomes even more critical. Even though we’ve improved coverage, the actual provision of services remains difficult to measure. Confidentiality issues and the social stigma and secrecy that surround mental health further discourage patients and families from speaking up and complaining.

As I said in my article on waiving co-pays and deductibles, there is no free lunch. It is important for organizations to employ a variety of techniques to stamp out fraud, including checking websites and social media for offers of “free” mental health services and to pay attention to any patient and family complaints and act promptly to resolve them. It is also vital to periodically visit facilities to make sure they meet quality standards and qualified staff are providing the therapeutic services they advertise.

In reimbursement, the main question to ask is: does the patient record reflect the patient’s level of care being billed? Billing for more claims per day than there are hours in the day should be a dead giveaway for fraud. But like everything, it takes paying attention and acting to keep on top of wrongdoing. After all, how many intense 90-minute therapy sessions can a psychotherapist reasonably administer in a work day?

Documentation is critical for behavioral health practitioners. To comply with federal and state laws, practitioners must maintain the records necessary to “fully disclose the extent of the services,” care and supplies furnished to beneficiaries, as well as support claims billed. Additionally, proper documentation can help protect a behavioral health practitioner from challenges to furnished treatment, and civil, criminal and administrative penalties and litigation. Services must meet specific requirements for reimbursement. That means services must meet your state’s program rules, reflect medical necessity, and match active treatment, including patient face-to-face time, and be coded correctly for billing purposes.

Behavioral health practitioners should never bill “chance, momentary social encounters between a therapist and a patient” as valid therapeutic sessions, never invoice undocumented services and never charge for services coded at a high level than those furnished.

I began this article sharing the financial costs of mental health fraud, but let us not forget fraud is anything but victimless. Not only does fraud in taxpayer-funded government programs affect all of us as US taxpayers, but it cruelly denies individuals basic human rights, especially those struggling with severe mental illness.

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