Federal prosecutors have accused a Colorado psychiatry practice of double billing Medicare and Medicaid for patient treatments over a period of four years. As a result of these allegations, the practice has agreed to pay a settlement of $1.9 million.
According to sources, the case began with the disclosure of a compliance manager’s suspicions to the authorities. The said compliance manager was responsible for reviewing patient charts and billing codes.
In 2021, during the month of February, a compliance manager, along with lawyers from the federal government and the states of Texas and Colorado, filed a lawsuit against Mile High Psychiatry and its owner, Michael Chism, who resides in Centennial. Mile High Psychiatry is an Aurora-based mental health service provider that operates in Colorado. The complaint highlights that the company offers remote “telepsychiatry services” through nurse practitioners.
Upon review, the compliance manager observed that the billing codes submitted to Medicare and Medicaid were improperly altered. Specifically, the coding intentionally neglected to distinguish between evaluation and management services and psychotherapy services, resulting in a request for payment for both services during a single patient visit.
Upon conducting research into previous patient billing records, the compliance manager discovered that similar instances of “fraudulent” and “inflated” billing had been occurring since 2017, which is consistent with the accounts provided by prosecutors.
According to the complaint, Chism made a deliberate decision to employ individuals with little to no experience or formal education to carry out coding and auditing tasks. The employees followed Chism’s directions without question, relying solely on the firm’s guidelines.
According to the prosecutors, Medicaid comprises around 80% of the business’s billing on average.
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Furthermore, it came to the attention of the compliance manager that the nurse practitioners working for the company were reportedly coerced by Chism into prescribing medications that were not required. These medications often included a combination of stimulants and depressants. The nurse practitioners expressed their grievances to the compliance manager, stating that they were compelled to see patients more frequently than necessary. Despite this, the prescriptions were being maintained without adequate testing and screening of the patients.
According to the complaint, a senior nurse practitioner raised concerns to Chism regarding the prescribed combinations of drugs, but was later terminated from her position.
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Mile High Psychiatry and its owner, Chism, have come to a resolution regarding the allegations made against them. The case was officially dismissed on September 8th after an agreement was made to resolve the matter monetarily. It is important to note that while these claims were made, neither the business nor its owner have admitted to any liability. Therefore, the claims remain allegations at this time.
At the same time, the compliance manager utilized the whistleblower provisions of the False Claims Act, allowing a private individual to file an action on behalf of the United States and receive a portion of the recovery. As a result, they were awarded $325,000 from the settlement.
According to a press release by the U.S. Attorney for the District of Colorado Cole Finegan, this case highlights the remarkable ability of whistleblowers in detecting and preventing fraud. “Whistleblowers who disclose important information about misconduct are entitled to receive significant rewards under the law,” Finegan emphasized. The press release also stated that the Colorado psychiatry practice and its owner have agreed to pay $1.9 million to settle allegations of wrongdoing.
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According to reports, the state of Texas was excluded from the settlement agreement. This was due to the fact that the nurse practitioners in that particular state are under the direct supervision of an in-house physician.
Mile High Psychiatry was contacted by CBS News Colorado for comment, but as of now, no response has been received. We will update this story promptly if any response is received.
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