False Claims Act Compliance: 16 Hospitals to Pay $15.69 Million to Resolve Allegations of Medically Unnecessary Psychotherapy Services

us-capitol-building-2-431642-mBy: Lee H. Little

Health Care providers evaluating billing compliance for psychotherapy services should take caution from a recent multi-million dollar settlement under the federal False Claims Act involving allegedly unnecessary intensive outpatient psychotherapy (IOP) services.

Georgia Healthcare Law Firm

According to the Department of Justice’s (DOJ) press release, the government’s allegations were that billing by these providers was improper because the patient conditions did not qualify for IOP; patient treatments were not provided pursuant to an individualized treatment plan designed to help patients address specific mental health needs and reach achievable goals; patient progress was not adequately tracked or documented; patients received an inappropriate level of treatment; and/or the therapy provided was primarily recreational or diversional in nature, and not therapeutic.

Combatting Fraud Under the False Claims Act

The False Claims Act is a federal law that holds individuals and businesses accountable for fraud in government programs. This law, enacted during the American Civil War to penalize unscrupulous contractors and recover losses, remains the government’s primary enforcement tool to recover money lost to this type of fraud. In fiscal year 2014, the U.S. government recovered $6 billion in civil litigation under the False Claims Act — $2.3 billion of that related to healthcare fraud in federal programs including Medicare, Medicaid and the military’s TRICARE program. According to the government, this marked a 5-year trend of federal recoveries over $2 billion per year against healthcare providers under this law.

Prohibited Conduct Under the False Claims Act

The False Claims Act prohibits the following:

  1. Knowingly presenting or causing to be presented, a false or fraudulent claim for payment or approval;
  2. Knowingly making, using, or causing to be made or used, a false record or statement material to a false or fraudulent claim;
  3. Conspiring to violate the False Claims Act;
  4. Possessing, having custody or control of property or money used, or to be used, by the federal government and knowingly delivering or causing to be delivered less than that due to the government;
  5. Certifying receipt of property by the government without knowing that is true;
  6. Knowingly buying or receiving government property from a federal officer or employee or U.S. Armed Forces member who is not authorized to sell that property; or
  7. Knowing making, using, or causing to be made or used, a false record or statement material to an obligation to pay the federal government, or knowingly concealing or knowing and improperly avoiding an obligation to pay the federal government. See 31 U.S. Code § 3729

Medically Necessary Services

A recent publication of the Centers for Medicare and Medicaid Services explains that Medicare-covered services generally are those considered medically reasonable and necessary to the overall diagnosis or treatment of the patient’s condition or to improve a malforming body function. Medically necessary services are those which meet standards of good medical practice and are: ™

  • Proper and needed for the diagnosis or treatment of the patient’s medical condition; ™
  • Furnished for the diagnosis, direct care, and treatment of the patient’s medical condition; and ™
  • Not mainly for the convenience of the patient, provider, or supplier.
  • Meeting specific medical necessity criteria


Disclaimer: Thoughts shared here do not constitute legal advice. Please consult with an attorney to discuss your legal issue.


Source: http://www.justice.gov/opa/pr/sixteen-hospitals-pay-1569-million-resolve-false-claims-act-allegations-involving-medically


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