Colorado whistleblower's complaint about double billing leads to $1.9 million settlement
A Colorado psychiatry practice recently agreed to pay $1.9 million to resolve allegations from federal prosecutors that it double billed Medicare and Medicaid for patient treatments over four years.
The case originated when an employee of the business reported her suspicions to authorities. That employee was a compliance manager in charge of auditing patient charts and billing codes.
In February 2021, three months after the compliance manager's 18-month employment ended, she and attorneys from the federal government and the states of Texas and Colorado filed a civil suit against Aurora-based Mile High Psychiatry and its owner, Michael Chism, a Centennial resident. Mile High Psychiatry provides mental health services throughout Colorado with nurse practitioners who use remote "telepsychiatry services," as noted in the complaint.
The compliance manager noticed billing codes submitted to Medicare and Medicaid appeared inappropriately upgraded. In particular, the coding deliberately failed to separate evaluation and management services from psychotherapy services, and sought payment for both during the same patient visit.
The compliance manager researched previous patient billing and found the same "fraudulent" and "inflated" billing had occurred since 2017, as described by prosecutors.
"Chism intentionally hired inexperienced and uneducated individuals to perform these coding and auditing functions," as stated in the complaint. "They simply followed Chism's firm instructions."
Prosecutors claimed approximately 80% of the business's billing on average is made to Medicaid.
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Additionally, the compliance manager learned that the business's nurse practitioners were allegedly forced by Chism to prescribe unnecessary medications, often stimulants and depressants together. The nurse practitioners complained to the compliance manager that they were required to see the patients on an unnecessarily frequent basis, yet the prescriptions were being maintained without sufficient testing and screening of the patients.
When a senior nurse practitioner approached Chism and complained about the combinations of drugs being prescribed, she was fired, according the complaint.
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Mile High Psychiatry and owner Chism agreed to resolve the allegations monetarily and the case was dismissed Sept. 8. As such, the claims against the business and its owner remain allegations and neither admit to any liability.
Meanwhile, the compliance manager, through the whistleblower provisions of the False Claims Act (which allow a private party to file an action on behalf of the United States and receive a portion of the recovery) received $325,000 of the settlement.
"This case shows the power of whistleblowers to identify and stop fraud," U.S. Attorney for the District of Colorado Cole Finegan stated in a press release. "The law permits generous rewards to whistleblowers who reveal wrongdoing by coming forward with valuable information."
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Texas was not included in the settlement due to the nurse practitioners in that office having direct supervision from an in-house physician.
CBS News Colorado reached out to Mile High Psychiatry for comment. There has been no reply. This story will be updated with any response that is received.
