Chattanooga mental health center pays $800K to settle billing fraud charges

March 3, 2014

The A.I.M. Center, Inc. (AIM), which operates a community mental health facility located in Chattanooga, Tenn., has agreed to pay $800,000 to settle allegations that it violated the federal False Claims Act (FCA) and the Tennessee Medicaid False Claims Act (TNMFCA). This settlement resolves an investigation into AIM's billing practices which began with the filing of an action by a former member of the facility on behalf of the United States and the State of Tennessee under the qui tam, also known as whistle-blower, provisions of both the FCA and the TNMFCA. The United States and the State of Tennessee subsequently filed a joint intervention complaint.

As a result of a joint federal and state investigation, the government alleged in the joint complaint that, from 2009 through 2012, the AIM Center knowingly submitted numerous false claims to the TennCare/Medicaid program by overcharging for psychosocial rehabilitation (PSR) services provided to TennCare/Medicaid facility members. Specifically, the government alleged that the AIM Center engaged in a practice commonly known as "upcoding" by submitting claims for services that were more lengthy and more expensive than the services actually provided. For example, the AIM Center submitted claims for a full day (per diem) of PSR services for TennCare/Medicaid members even when the members spent as little as 5 minutes to an hour at the facility.

In addition, the government alleged that the AIM Center knowingly concealed its obligation to return funds to the TennCare/Medicaid program that were improperly paid and retained as a result of "double billing" (submitting distinct and separate claims for services that were already included in the scope of the per diem services).

The payment made by the AIM Center in connection with this settlement is intended to compensate the TennCare/Medicaid program for monies paid out of that program which the AIM Center improperly received. As part of the overall settlement, the AIM Center has also entered into a comprehensive 5-year Corporate Integrity Agreement (CIA) with the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG) to ensure its future compliance with federal health care benefit program requirements.

"Mental and behavioral health services are a vital component of the care provided to TennCare recipients," Tennessee Attorney General Bob Cooper said. "This Office will continue to pursue providers that improperly bill for these needed services."

"In terms of dollars spent, Medicaid is the federal government's second largest health care program, and it is the single largest payer for mental health services in the United States," said U.S. Attorney Bill Killian. "Funding for mental health services is an area of significant need for our community. It is critical to the continued viability of our system that providers bill public healthcare programs only as authorized by law. We will continue to aggressively pursue the recovery of funds improperly paid due to fraud, waste or abuse."

The investigative team whose diligent efforts resulted in this settlement was comprised of representatives from the Tennessee Bureau of Investigation (TBI), the Tennessee Attorney General's Office, the U.S. Department of Health and Human Services Office of Inspector General, and the U.S. Attorney's Office. Tennessee Attorney General Bob Cooper commended the cooperative efforts of the agencies who participated in the investigation.

Source: "Mental Health Facility Settles Billing Practices Case with the State," press release of the Tennessee Attorney General, February 18, 2014.