CPC Associates: Telephone Psychiatry Under Historical Medicare Rules

CPC Associates and its psychiatrist founder agreed to pay $36,704 in a telehealth settlement over allegations that they billed Medicare for telephone psychiatry that failed the program’s payment conditions. The government described patients receiving psychiatric care over the phone. Its objection concerned where those patients were and how the practice delivered the services it billed.

CPC Associates was a mental health practice with offices in Danbury, Connecticut. The Justice Department announced the civil settlement on July 27, 2016, covering conduct from January 1, 2009 through June 1, 2015. Those service dates put the claims under the historical Medicare telehealth rules, before the pandemic expansion of remote care.

The Medicare Telephone Psychiatry Allegations

The government alleged that CPC Associates and its founder submitted improper Medicare claims for psychiatric services delivered by telephone instead of treating the patients in person at the office. The allegations identified problems with both the patients’ locations and the communications used for treatment.

In describing the claims at issue, the Justice Department explained that Medicare permitted certain telehealth services when the patient was in a rural health professional shortage area and the provider used interactive audio and video for real-time communication. It alleged that the patients treated by phone were outside those areas and that the practice had not used interactive audio and video.

The government described phone treatment billed to Medicare despite failing its telehealth conditions. Medicare was being asked to pay for care delivered outside the terms of its coverage. Those alleged shortcuts put Medicare’s money at stake.

The Patient’s Location Was Part of the Payment Rule

For the visits at issue, Medicare tied payment to the patient’s location and to real-time audio and video. The October 2002 edition of Medicare’s telehealth regulation shows the framework that preceded the CPC claim period.

That edition included individual psychotherapy and medication management among the services payable through an interactive telecommunications system. It defined that system as equipment allowing two-way, real-time audio and video. Ordinary telephones fell outside that definition.

The regulation called the patient’s location the originating site and the practitioner’s location the distant site. Eligible patient sites included physician offices, rural health clinics and hospitals, with limits on where those sites could be located.

That distinction matters to the CPC allegations. The Justice Department identified the practice’s Danbury offices, but its geographic allegation concerned the patients treated over the phone. We match each encounter to where the patient was and how the call was made.

Why the Service Date Matters

Medicare expanded payment for telephone care after the services covered by the CPC settlement. The April 2020 emergency payment rule established separate payment for telephone evaluation and management services, applicable beginning March 1, 2020. The Medicare payment rule for 2022 then established a permanent route for audio-only mental health services furnished to patients at home.

In practice, audio-only care, a live video visit, a brief check-in and a patient portal exchange can follow different payment pathways. Medicare began recognizing separate virtual check-in and recorded-image review services in its payment changes for 2019. A practice’s broad label of telehealth can cover several kinds of communication.

A virtual check-in is a brief contact to assess a patient’s needs. A portal e-visit is a patient-initiated exchange with an established practice. A live video visit connects patient and practitioner in real time. Those distinctions matter when a practice’s billing groups different contacts under the same label. We examine the encounter behind that label, including the clinical work and the way the practice represented it to Medicare.

A Former Patient and a Billing Company Brought the Case

A former patient and a billing company brought a qui tam complaint against the psychiatrist and CPC Associates. The Justice Department identified both as whistleblowers.

The combination is relevant to anyone who sees only part of a practice’s billing. A patient can describe the encounter from the receiving end. Someone familiar with billing can examine what the practice asked Medicare to pay for. We bring those accounts together with the clinical documentation and the applicable payment conditions.

The announcement said the two whistleblowers would share in the settlement proceeds. A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

What Evidence Is Needed to Prove Fraud?

For a case about telephone psychiatry claims, we connect the encounter to the claim: when care occurred, where the patient was, how the patient and practitioner communicated, and what the practice billed. The CPC allegations make those details central to understanding the payment.

For a medical biller, the service code and place-of-service entry are concrete parts of that comparison. A telephone note describes the contact from the clinical side. The submitted claim describes the service for which the practice sought payment. We look at how the billing translated that contact into a claim, and who directed the choice. A code, a note and an insider’s explanation of the billing workflow can each reveal a different part of the same transaction. Internal billing instructions can explain why a telephone contact became the service described on the Medicare claim.

You Know How the Visit Happened

If you know that a psychiatric practice’s Medicare claims tell a different story from the care delivered, talk with our whistleblower experts. We build your strongest telehealth whistleblower case around the encounters and billing decisions you know, bring in healthcare fraud whistleblower lawyers with experience in Medicare payment disputes, and stay beside you through the case.