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Settlement agreements related to psychiatric services

Compliance Monitor, January 10, 2000

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Two separate cases in which there were Medicaid fraud allegations related to psychiatric services-one involving a hospital, the other, a psychologist-were recently settled in Massachusetts. Jewish Memorial Hospital and Rehabilitation Center of Boston agreed to pay $285,000, perform community service, and follow "tough" compliance initiatives to resolve past billing problems, said Tom Reilly, Attorney General for the Commonwealth of Massachusetts. According to Reilly, Jewish Memorial Hospital reportedly discovered, through an internal audit, that previous billing employees had "whited out" certain diagnostic codes on billing forms and improperly replaced them with reimbursement codes before submitting the bills to Medicaid, Reilly said. Allegedly, the employees acted on orders from previous hospital managers, Reilly reported. Jewish Memorial was not eligible to bill Medicaid for psychiatric hospitalizations because the hospital was not part of the statewide network overseen by the Massachusetts Behavioral Health partnership, a managed care company that coordinates treatment for members with mental health and substance abuse diagnoses, Reilly said. Reilly reported that the investigation involving the billings is still ongoing.

The second case related to charges of improper psychiatric claims allegedly involving psychologist Lionel Lyon of Newton, MA, who recently settled allegations of Medicaid fraud involving special education testing, Reilly said. According to Reilly, Lyon agreed to pay $275,000 in restitution and damages to settle charges that he and his company, The Adult and Child Consultation Center, double billed for the special education testing of Medicaid-eligible public school children. In addition, Reilly charged Lyon with an excessive battery of tests that were conducted per day. Lyon admitted to no wrongdoing in the settlement agreement, Reilly said.

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