Nursing Home Psychological Services and Psychological Care Services: Hours of Testing Residents Did Not Need

Nursing Home Psychological Services and Psychological Care Services submitted more than $25.2 million in Medicare claims in a business that billed for unnecessary and unperformed psychological testing. The companies contracted to send clinical psychologists into nursing homes, then billed Medicare for hours of testing residents did not need or, in some instances, never received. A resident could generate hours of testing revenue without receiving a test.

The Department of Justice’s January 2017 account of the trial described an operation spanning four states.

The Companies Behind the Nursing-Home Contracts

NHPS and Psychological Care Services operated through eight companies in Alabama, Florida, Louisiana and Mississippi. NHPS was the Nursing Home Psychological Services business, owned by a licensed clinical psychologist. A separate owner controlled the Psychological Care Services businesses.

Their nursing-home contracts allowed the companies’ clinical psychologists to provide psychological services to residents. The arrangement connected a facility, an outside clinical business and Medicare. Residents received the encounters inside the nursing home, while the testing companies submitted the claims described at trial.

We put the facility’s account of the resident’s day together with the testing company’s billing, working with the person who knows where the accounts diverge.

Nursing-home assessments draw on observations, the resident and direct-care staff across shifts, giving us a perspective on the claimed testing hours beyond the visiting provider’s account.

Medicare Paid for the False Testing Claims

Medicare paid more than $13.5 million on fraudulent claims submitted by NHPS and Psychological Care Services. The companies submitted claims between 2009 and 2015. Taxpayers were paying for tests residents did not need and, in some instances, services they never received.

According to the Department of Justice, trial evidence showed that the owners caused the companies to bill for those services. A jury convicted both owners on January 24, 2017, of conspiring to commit health care fraud and conspiring to make false statements about health care matters.

The testing scheme had two distinct failures. Some claims represented services performed without clinical need. Others represented services that had not happened at all. Each demands a different comparison inside the business: the reason for the examination, or the encounter the bill says occurred.

What Evidence Is Needed to Prove Fraud?

Proof in a psychological-testing case runs across clinical, contract and billing records. We bring the clinical record and the bill together with your account of who directed the testing and how the business operated.

Orders, session notes and test reports can explain what the clinical staff understood they were doing. The billing record shows what the company represented for payment. When those accounts diverge, the person who saw the encounter or handled the bill can explain where the difference entered the process.

An employee may know who assigned the visit, recorded the hours or approved the claim. We follow those decisions back through the business, including the owners who controlled the testing companies.

When More Examinations Mean More Revenue

The California Research Bureau put the fee-for-service incentive plainly in its 1997 report:

The report explains that this arrangement can encourage more examinations than patients medically need. It separately identifies claims for services never provided as a form of billing fraud.

An insider who knows whether patient need or revenue drove the decision to test has something the claim alone cannot explain.

A Civil Parallel Where Every Admission Became an Evaluation

Vericare Management agreed to pay more than $1 million in a separate civil settlement over routine psychiatric evaluations and unsupported nursing-facility visit claims. The Department of Justice’s October 2015 announcement described allegations that new admissions at 128 facilities received routine evaluations without patient-specific medical-necessity orders.

The whistleblower’s complaint alleged a financial reason for making the evaluations automatic:

A standing psychiatric evaluation order for every nursing home admission allegedly turned admission itself into the reason for another encounter. The bonus allegation explains why a company’s compensation arrangements can matter alongside a clinical note: they can reveal who benefited from keeping the encounters coming.

The complaint also alleged that Vericare paid psychiatrists, psychologists, social workers and nurses cash bonuses based on service volume and the reimbursement they generated. That alleged incentive reached both the managers obtaining access to residents and the clinicians providing the services. For an insider, a compensation arrangement can explain why the same instruction keeps arriving from different parts of the company.

The complaint further alleged unnecessary psychotherapy and psychological services for residents who lacked the capacity to benefit because of severe dementia or cognitive disorders. The alleged billing decision ignored whether the patient could benefit at all.

The shared question is who decided that a resident would generate a bill, and what clinical reason supported that decision.

The Civil Whistleblower Opportunity

For a clinician, facility employee or biller with evidence of false Medicare claims, a civil whistleblower case connects that knowledge to the government’s recovery. A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

We assess the potential whistleblower case around the services billed and your knowledge of the decisions behind them. The civil opportunity turns on the false claims you can help us understand.

You Know What Happened During the Visit

If you know why residents were tested, what the clinicians actually did or who told billing staff to claim the hours, talk to our whistleblower experts about the testing operation. We turn that inside knowledge into a case with you and bring in healthcare fraud whistleblower lawyers who understand psychological-services billing. We stay beside you as the clinical account, the company’s decisions and the Medicare claims come together.