Attorney Clifford E. Barnes of Clifford E. Barnes, Esq. & Associates, LLC contributed to this article.
Behavioral health providers in the District of Columbia (“District” or “D.C.”) are operating in an environment of heightened government scrutiny.
In recent months, federal and District authorities have signaled an intensified focus on Medicaid fraud in the behavioral health space, combining criminal prosecutions by the U.S. Attorney’s Office with aggressive program integrity actions by the D.C. Department of Health Care Finance (“DHCF”). These efforts have included criminal and civil investigations into alleged billing irregularities and, at an increasing rate, the suspension of Medicaid payments to providers based on suspected fraud. Such suspensions are implemented in almost all cases, as permitted by regulations, before any final determination on the merits. These developments raise significant legal, financial, and operational risks for behavioral health providers in D.C.
Criminal Actions Against Behavioral Health Providers
Criminal enforcement in the District’s Medicaid behavioral health space is being driven primarily by the U.S. Attorney’s Office for the District of Columbia (“D.C. USAO”), often working in close coordination with the District’s Office of Inspector General, Medicaid Fraud Control Unit (“MFCU”). Investigations frequently involve both the Federal Bureau of Investigations and D.C.’s MFCU. This collaborative model allows the government to pursue cases using either federal or District law.
The D.C. USAO has filed criminal charges against at least nine individuals in the past three years, and conducted criminal investigations of countless more. These cases tend to involve similar allegations, primarily relating to billing by Community Support Workers (“CSW”). Specifically, the government has focused on CSWs who bill for services they did not provide or who overstate the time duration of their services. This includes CSWs who bill for services while consumers were unable to receive services because they were out of state, hospitalized, or incarcerated, and instances where the CSW bills for encounters with multiple consumers at the same time.
The penalty for these crimes is significant – including possible jail time and restitution that can be in the hundreds of thousands of dollars. Even if the government does not ultimately bring criminal charges, being the target of a criminal investigation is a time-consuming and expensive process that can cripple individuals and organizations.
Payment Suspensions by D.C. Medicaid
D.C.’s DHCF, through its Office of Program Integrity, is responsible for identifying suspected fraud in the Medicaid program. If DHCF investigates and determines that there is a “credible allegation of fraud,” then it is empowered to suspend all Medicaid payments to a provider. Whenever DHCF initiates a payment suspension, it is also required by federal statute to make a fraud referral to MFCU for investigation. If MFCU accepts the referral, which it generally does, the payment suspension continues until such time as its investigation is completed, even though no finding of wrongdoing may ever be reached. This process typically takes several months (in the best case scenario) or more commonly, years. A “credible allegation of fraud” is broadly defined and is a low standard, which can encompass nearly any allegation of fraudulent behavior – including issues identified through DHCF audits or data analysis, referrals from law enforcement, and reports from consumers, providers, or Medicaid Managed Care Organizations.
When providers submit claims, even those that are paid, the act of submitting a claim can form the basis of a credible allegation of fraud. Significantly, each time a behavioral health provider submits a claim on the CMS‑1500 form, it certifies that the information is true, accurate, and complete and acknowledges that false or misleading claims may be prosecuted under federal or state law, as required by 42 C.F.R. § 455.18. If a claim is submitted and paid for services that did not occur, or that were otherwise ineligible for payment, then that activity could be considered fraud that ultimately serves as the basis of a payment suspension.
Payment suspensions are devastating for providers, especially Mental Health and Rehabilitative Services providers who tend to be paid exclusively by Medicaid. Providers subject to suspension have two routes to challenge it. The first route is to request an administrative review by DHCF’s Department of Program Integrity, which, to be effective in terminating the suspension, requires extensive discovery and refutation of the specific facts that make the allegations credible. The second route is to appeal a suspension to an administrative law judge (“ALJ”). However, because the government has a very low burden of proof to show a “credible allegation of fraud,” ALJs typically do not overturn the underlying fraud allegations or compel DHCF to lift a suspension while a criminal or MFCU investigation remains open. As a result, a common scenario emerges in which suspensions continue for extended periods of time while criminal investigations are occurring, leaving providers without meaningful revenue or practical recourse. For many behavioral health organizations, the combination of prolonged payment suspension and the government’s relative ease in maintaining the suspension ultimately leads to company closure long before any final resolution on the merits.
Know Your Data, Know Your Personnel – Compliance Tips to Reduce Risk
A behavioral health provider’s best defense against accusations of fraud is a strong compliance program. Building an effective compliance program is more than just a “paper program” – it’s active and continuous engagement with the provider’s workforce and consumers to create a culture of compliance built around HHS OIG’s General Compliance Program Guidance.
At a minimum, behavioral health providers should implement the following compliance initiatives:
- Assess risk regularly: Providers should conduct risk assessments on a regular basis that identify high, medium, and low risks given current regulatory priorities and industry trends.
- Conduct self-audits: Perform self-audits on the risks identified in the risk assessment, paying special attention to any irregular billing patterns. Remember that an effective self-audit includes follow-up and corrective actions for any issues identified.
- Take complaints seriously: Listen to complaints from consumers and staff and investigate accordingly.
- Designate a compliance leader: Regardless of the size of the provider, someone in the organization should be tasked with ensuring that management knows the applicable rules/regulations and is monitoring clinical and administrative staff’s adherence to such rules and regulations.
- Create a compliance committee: Constitute a compliance committee of organization leaders to collaborate on how compliance with existing and new rules is being monitored, how adherence is incentivized, and how lack of adherence is penalized.
- Look beyond common red flags: Fraud is often subtle. Look at patterns of billing across time – for example, billing for an unreasonable number of days in a row, or consistently billing a high number of units without variation.
These compliance steps can help behavioral health providers not only proactively catch fraud, but also demonstrate to the government in the event of criminal action or a payment suspension that the organization is a good corporate actor.
Conclusion
Given current government scrutiny of behavioral health providers in D.C., it is critical for providers to invest in their compliance infrastructure. Simply because certain billing practices may be common in the industry does not mean a company is immune from government action. To ensure that your company will continue to operate, providers must take action to reduce their risk to avoid payment suspensions. An ounce of prevention can equal a pound of cure.
To discuss your company’s specific situation, please contact the authors.
Sarah M. Hall
Chloe Hillard
Clifford E. Barnes
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