In another multimillion-dollar behavioral health care case, Palomar Health in California agreed to pay $3.084 million in a civil monetary penalty (CMP) settlement about billing for outpatient therapy that allegedly wasn’t medically necessary.
The HHS Office of Inspector General (OIG) alleged that Palomar submitted claims to Medicare, Medicaid and TRICARE through its intensive outpatient psychiatric program for outpatient therapy services that weren’t medically necessary or supported by the medical records from May 1, 2013, through May 1, 2019. OIG contended that Palomar knew or should have known the claims were fraudulent, according to the settlement, which was obtained through the Freedom of Information Act.
The settlement stemmed from Palomar’s disclosure to OIG. It was accepted into OIG’s Self-Disclosure Protocol in December 2019. The hospital didn’t admit liability in the settlement, and a Palomar spokesman declined to comment on the settlement or provide additional details.
This is at least the second recent CMP behavioral health settlement with OIG. In separate settlements late last year, two Massachusetts hospitals in the same family agreed to pay a total of about $8.37 million to settle allegations that their inpatient psychiatric units didn’t comply with Medicare requirements for certifications and treatment plans. Steward Holy Family Hospital in Methuen agreed to pay $6.952 million and Nashoba Valley Medical Center, which is described in the settlement as “a Steward Family Hospital,” agreed to pay $1.424 million.
Intensive Outpatient Therapy ‘Is Misunderstood’
Intensive outpatient psychiatric services are a benefit usually provided by Medicaid and private payers, with patients typically attending group therapy three or four times a week in addition to individual therapy. Partial hospitalization is a similar outpatient service covered by Medicare Part B. Patients in partial hospitalization must receive 20 hours of services a week, which are often provided in hospital outpatient departments and community mental health centers.
“Intensive outpatient psychiatric services have been around a long time. It’s often misunderstood because it’s not outpatient therapy and it’s never meant to be outpatient therapy, but it’s billed as an outpatient encounter,” said Denise Hall-Gaulin, a principal with PYA. “It’s a bridge between inpatient and outpatient settings.” Intensive outpatient psychiatric services and partial hospitalization are designed to keep patients out of inpatient beds, but they’re intended to be “episodic,” Hall-Gaulin said. “One of the biggest problems I have seen with this is people set up the programs and never discharge them to an outpatient setting. There’s a misunderstanding about the purpose. It’s not supposed to be long term.”
MAC Reviewed Claims for Long-Time Patients
Hall-Gaulin has seen programs where patients stay indefinitely, however, with psychiatrists certifying the medical necessity of continued treatment in partial hospitalization. Recently, she worked with a facility that had a “significant review” by a Medicare administrative contractor (MAC) because some of the patients had been in the partial hospitalization program (PHP) for eight years. “It was in a small rural community that didn’t have true inpatient [psychiatric] services,” Hall-Gaulin explained. With few other options, patients were kept in the PHP, with the psychiatrist recertifying the need for services and the medical necessity well documented. “When patients didn’t show up for treatment, the reason was documented,” she said. An example of a legitimate reason for missing therapy is a hospital admission for a medical illness. “The MAC was OK” with the long-term treatment because the facility had clear documentation, Hall-Gaulin said.
Documentation that supports medical necessity should demonstrate the benefit of the partial hospitalization or intensive outpatient program, she said. That includes describing the improvement or stability of the patients and their participation in sessions and tying it back to the treatment plan goals or, if necessary, documenting changes to the goals of the treatment plan, Hall-Gaulin said. On the flip side, it’s a red flag for auditors when medical records have the “same note every session with no tie to any measurable benefit, such as ‘attended session and was generally attentive,’” Hall-Gaulin said. “The worst documentation we have seen is ‘patient slept through group session today.’”
Credentialing: Behavioral Health Is ‘Tangled Web’
Even when claims tick the medical necessity and documentation boxes, payment for behavioral health care is at risk unless clinicians who provide the services have credentials that meet Medicare, Medicaid or commercial payer requirements, depending on who is paying the bill.
“Behavioral health is such a tangled web,” said Christa Bernacchia, director of credentialing at BerryDunn. “It may be the most difficult of all medical types to go through the credentialing process because there are so many variables.” Some types of clinicians are ineligible to provide services to Medicare beneficiaries, for example, and “you have to make sure you have an understanding of contract language for the individual versus the facility as that impacts the enrollment process,” Bernacchia said.
Typically, psychologists and psychiatrists are easier to credential with insurers, although there is some variability by state, she said. The challenge is greater with master’s degree-level providers. Depending on the state, the highest level of licensure for a social worker is a licensed clinical social worker (LCSW), a licensed certified social worker, or a licensed independent clinical social worker (LICSW). Bernacchia said insurers in some states won’t credential social workers unless they’re LICSWs. It gets more convoluted with state requirements. In Connecticut, for example, LCSWs can hang their own shingle, but in Massachusetts, they must practice under the supervision of an LICSW, she explained. “Some things are driven by state licensure and scope of practice requirements and some by payer requirements.”
Medicare Versus Medicaid: Be Mindful Who Can Bill
Medicare turns away entire categories of behavioral health clinicians, Bernacchia said. For example, licensed professional counselors (LPCs) are unable to enroll in Medicare. “If an organization has a lot of mid-level behavioral health providers, it has to be mindful of their patient population and who can bill,” she said. Most state Medicaid programs are another story. They allow the enrollment of master’s degree-level provider types, including LPCs and marriage and family therapists as long as they’re licensed to practice in the state.
Complicating matters further, some behavioral health organizations enroll with payers as a facility, known as roster enrollment, which means the services provided by their clinicians (e.g., psychiatrists or social workers) are billed under the facility’s provider number. Other behavioral health organizations have their clinicians bill individually. And there are hybrids, with some services billed under the facility’s national provider identifier (NPI) and some services billed under the NPIs of the clinicians who provide services there. Either way, “the rendering provider will still be on the claim,” Bernacchia said.
For one organization she worked with, half the payer contracts require billing services under its NPI and half require billing under the NPI of its individual clinicians. “You have to really be able to understand what’s in the contract,” Bernacchia said. It affects how your billing system will be set up, “and the people managing coding, electronic health records and documentation have to make sure everything is aligned appropriately and documented appropriately.”
Behavioral health providers also may trip over logistics, Bernacchia said. Traditional, large commercial insurance carriers, such as Aetna, Cigna and Anthem, have their own internal behavioral health departments, but other payers, including UnitedHealthcare, outsource them. “If you want to enroll a provider with United, you have to go through Optum’s behavioral health carveout,” she said. The psychiatrist or social worker will be credentialed by Optum. “The life cycle of the claim is circular,” she noted. “You have to do your due diligence and understand who you have contracts with and what kind of contract it is and work with the payer.”