Earlier this month, the US Dept. of Health and Human Services Office of inspector General (OIG) issued a report regarding suspicious billing practices by community mental health clinics (CMHCS).  OIG scrutiny of CMHCs, particularly with respect to partial hospitalization programs (PHPs), is probably not a surprise to those in the Texas mental health provider community given several significant enforcement actions in the past year.  However the OIG report provides significant insight into the OIG process of identifying targets for scrutiny and identifies several areas that CMHCs may focus on to reduce the risk of scrutiny.  Specifically, the OIG identifies nine billing characteristics that are suspicious: (1) beneficiaries only receive group therapy in a PHP program; (2) beneficiaries are not referred to the PHP program by other facilities; (3) beneficiaries are not evaluated by a physician during the PHP program; (4) beneficiaries had no mental health diagnosis in the year prior to PHP participation; (5) beneficiaries participating in a PHP program at a CMHC outside of their community; (6) beneficiaries participating in PHPs at more than one CMHC; (7) beneficiaries with cognitive disorders participating in a PHP; (8) beneficiaries participating in a PHP program for more than 147 days; and (9) beneficiaries are readmitted to inpatient treatment.

The OIG’s analysis find that CMHCs with unusually high billings had at least one of these characteristics.  Based on its findings the OIG recommends increased monitoring of CMHCs, including specific instructions to zone program integrity contractors (ZPICs), Medicare fraud investigators to focus on the 8 metropolitan areas with the most suspicious billing – which includes Houston and San Antonio.  Given this guidance, and the fact that the top three states with the most CMHCs with unusually high billings (Texas is 3rd) represent almost 90% of the suspicious billing by dollar value, it is likely that Texas CMHCs are, and will be, the subject of increased scrutiny.  Accordingly, all CMHCs, and especially those with at least one of the characteristics above, may want to review and monitor internal policies and treatment to identify and correct potential risk areas.  Importantly, entities using outside consultants to perform formal audits should consider engaging such consultants through legal counsel to maintain the confidentiality of audit results.  Please contact us if you have any questions about tis issue.