Sixteen hospitals settle allegations of unnecessary outpatient psychotherapy for $15.7M

Sixteen hospitals across seven states have agreed to a $15.7 million settlement with the federal government to resolve claims that the providers improperly billed Medicare for Intensive Outpatient Psychotherapy (IOP), according to a Department of Justice (DOJ) statement.

The majority of the settlement will be paid by Health Management Associates Inc. (HMA), which owns and operates 14 of the hospitals named in the lawsuit. The false billing allegations revolve around Medicare claims for IOP services.

From 2005 to 2013, the defendants allegedly billed for IOP services even though patients did not qualify for IOP treatment, treatment did not follow individualized patient plans, the patient's progress was not tracked, or the patient received an inappropriate amount of treatment. The DOJ notes that Medicare pays for IOP services as long as it is "reasonable for the diagnosis and treatment of the patient's condition."

The case mirrored a similar settlement in October 2013, when LifePoint Hospitals Inc. paid $4.6 million to settle allegations that it improperly billed for IOP services. Psychotherapy services came under fire last year during the government's release of Medicare provider payment data when an analysis showed that obstetricians were among the top billers for psychotherapy services. In some cases, elderly nursing home residents traveled to group psychotherapy sessions run by providers with no training in psychiatry.

Former Department of Health and Human Services Inspector General Richard P. Kusserow has previously described Medicare fraud involving mental health services as "a special enforcement problem that stretches back decades." These scams frequently involve community-based treatment centers that bill for unnecessary services. In an exclusive interview with FierceHealthPayer: AntiFraud, Assistant U.S. Attorney for the District of Columbia, Ted Radway, named mental health services among the leading areas of community-based fraud.

For more:
- read the DOJ announcement