Biscayne Milieu: Bought Referrals, Invented Treatment

The Biscayne Milieu Health Center, Inc. fraud case involved more than $50 million in false Medicare billings for partial hospitalization services, according to the Justice Department’s account of the criminal trial. The criminal indictment alleged that Medicare paid Biscayne approximately $10.9 million on false claims submitted from January 2007 through June 2011.

The Miami mental health clinic paid recruiters to bring ineligible patients through the door, then created medical records to make the claims look legitimate. For someone who worked in intake, therapy or billing, the revealing part is how the clinic connected those jobs: buying the referral, manufacturing the treatment history and submitting the bill.

Biscayne was a family-run business. The trial evidence described a father and son who owned the clinic and a daughter who served as an executive. Their responsibilities reached from the bank accounts to daily operations and Medicare billing.

What Biscayne’s Partial Hospitalization Claims Represented

Partial hospitalization is intensive psychiatric treatment outside a full inpatient stay. The criminal indictment’s account of Medicare’s requirements explains why eligibility mattered: the program had to provide active treatment under a physician’s supervision and an established treatment plan, with a reasonable expectation of improving or maintaining the patient’s condition and preventing relapse or hospitalization.

The indictment described a structured program resembling short-term inpatient treatment, with patients typically referred after hospitalization or by a doctor trying to prevent hospitalization. It included individual and group therapy and other therapeutic services. Medicare excluded programs built primarily around social or recreational activities. For a clinician, those distinctions reach into the treatment plan, the work done during a session and the patient’s ability to benefit from it.

The Justice Department’s account of the Biscayne trial described patients who did not qualify for the services billed. Some had chronic substance abuse problems. Others had dementia and could not benefit from group therapy. Still others were not mentally ill and sought false diagnoses to obtain exemptions from the civics portion of the citizenship application.

The clinic billed for services that were never provided or were not reimbursable. A patient could be present at Biscayne while the intensive psychiatric treatment represented by the claim existed only in the file.

The Referral Money Bought the Patient Pipeline

The indictment alleged that the owners gave patient brokers case-manager titles to disguise their real work. It also alleged that the owners directed brokers to fabricate invoices for supposed case-management services. The trial account subsequently described phony contracts used to conceal the kickbacks. The clinical-sounding job title and the business invoice were part of the cover.

Housing extended that control beyond the clinic. According to the indictment, brokers recruited patients outside Florida, and the owners and a case-management supervisor helped pay to transport them into the state. The clinic’s manager paid some brokers additional money to buy or lease boarding houses for recruited patients. The owners and executive bought vans to bring those residents to the program each day.

The indictment further alleged that the case-management supervisor and others threatened patients with eviction if they stopped attending. We see the cruelty in that arrangement: housing became a way to compel attendance at a program the clinic could bill. The patient’s need for a place to live served the provider’s need for another claim.

How the Clinic Made the Claims Look Legitimate

Biscayne’s records concealed both ineligible admissions and treatment that never happened. The indictment alleged that attending physicians signed charts authorizing treatment or continued treatment for ineligible patients, often without examining either the patients or their charts. Those physicians also authorized use of their Medicare identifiers for billing.

The indictment described claims submitted before a qualified clinician or psychiatrist had evaluated whether the patients belonged in partial hospitalization. It also alleged billing for individual and group sessions patients had not attended, with altered files and fabricated therapist notes making it appear that they had. The paper record supplied both the eligibility and the attendance that the clinic needed to bill.

The Justice Department’s trial account showed how management supported that process. One owner initiated the scheme and controlled the bank accounts used to receive Medicare money and pay kickbacks. The other managed daily operations and deflected complaints from patients and staff. The executive oversaw both recruiter payments and Medicare billings, created fraudulent medical files, and enlisted employees to create more.

The people controlling the money also controlled the records intended to persuade Medicare to pay. An employee seeing a false note, a referral payment or an instruction to change a file could be seeing a different part of the same operation.

Management Fees and Rent as Disguises

The indictment alleged that Quality Care Network purported to provide management services to Biscayne, but supplied none and shared its leadership. It charged that the owners used Global Management Network to conceal transfers of fraud proceeds.

North Biscayne Investment appeared in Medicare documents as the clinic’s landlord, although the indictment alleged that it owned neither property where the clinic operated.

Management without services. A landlord without the property.

The trial evidence later described the principals using ostensibly legitimate corporations to conceal and launder Biscayne’s fraudulent profits. The labels on the transfers made the money look like ordinary business expenses. That gave an accounting employee another view of the conduct behind the clinical claims.

Patient Brokers and the Clinical Director

Recruitment and clinical record-making met at the same patients. The indictment described a patient broker who received kickbacks for referrals and additional money for boarding houses. It also alleged that he and other brokers bought, leased or managed houses and collected rent from the patients they recruited. His role connected referral payments, accommodation and attendance.

The clinical director’s conduct appears in a separate Justice Department account of the criminal trial. The evidence showed that he treated ineligible patients, falsified patient files and wrote fraudulent group-therapy notes. He also instructed others to do the same, making the notes reflect legitimate partial hospitalization treatment that had never been provided.

The broker helped supply the patients. The clinical director helped supply the treatment story. That connection is why a referral arrangement and a therapy note can belong in the same fraud inquiry.

What the Criminal Case Established

The Justice Department reported that Biscayne and the principals running it were convicted of healthcare fraud and kickback offenses on August 24, 2012. The owners and executive were also convicted of money laundering offenses.

The FBI investigated, with assistance from the Department of Health and Human Services Office of Inspector General. The U.S. Attorney’s Office for the Southern District of Florida brought the case in coordination with the Medicare Fraud Strike Force.

The Same Pattern in Other Partial Hospitalization Cases

Biscayne’s combination of bought referrals and false eligibility appeared in other partial hospitalization fraud cases. Two owners of American Therapeutic Corporation pleaded guilty to Medicare fraud. The criminal case described payments to assisted-living operators, halfway houses and patient brokers, along with altered diagnoses, medication information and therapist notes to make patients appear eligible.

In the Health Care Solutions Network criminal case, the owner pleaded guilty in a scheme involving ineligible patients, fabricated records, absent patients and recreational activities billed as treatment. Across these cases, the referral supplied a covered patient and the record supplied an apparent reason to pay for intensive care.

The HHS inspector general’s 2012 billing review flagged unusual billing at 102 of the 195 community mental health centers it analyzed using 2010 claims. Its measures included group-only care, treatment duration and cognitive disorders: the fit between the patient and the treatment billed drew scrutiny beyond Biscayne.

What Evidence Is Needed to Prove Fraud?

For the kind of partial hospitalization fraud shown at Biscayne, the evidence connects patient eligibility, actual treatment, referral compensation and Medicare claims. The case puts specific records behind those connections: treatment authorizations, therapy notes, case-management invoices, contracts, bank accounts and corporate payment arrangements.

An intake worker may know how patients reached the program. A therapist may know whether the notes describe the sessions that happened. A billing or accounting employee may know which claims and payments followed. We work with those different views to understand who directed the conduct and how the government paid for it.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

Your View Inside the Clinic Matters

If the referrals, patient files and bills at your clinic tell different stories, talk with our whistleblower experts about what you have seen. We build the case with you and bring in behavioral health fraud whistleblower lawyers who understand Medicare treatment and referral schemes. You have a partner from the first conversation through the pursuit of a recovery.