Acacia Mental Health Clinic: A Milwaukee Clinic, Psychiatrists Abroad

In the Acacia Mental Health Clinic fraud settlement, the clinic and its owner agreed to pay approximately $4.1 million in cash and other compensation to resolve allegations of false Medicaid claims for offshore telepsychiatry and urine drug testing. The case reaches the people who know what a clinic’s claim leaves out: where the psychiatrist was, what test the patient received and who chose the billing code.

Acacia operated a mental health and drug dependency clinic in Milwaukee, Wisconsin. The Justice Department’s March 29, 2019 settlement announcement described thousands of allegedly false claims and an agreement to compensate both the United States and Wisconsin. A whistleblower’s case came first. The government later brought its own lawsuit against the clinic and its owner.

What the Government Alleged Acacia Billed

The government alleged three schemes directed by Acacia’s owner: billing a simple urine test as a sophisticated laboratory test, adding medically unnecessary tests, and billing Medicaid for psychiatrists working abroad. The test allegations explain how the clinic allegedly made more money from the same patient. The telemedicine allegation follows the clinical work beyond the clinic’s address.

A Cup Test Billed as Laboratory Work

From January 1, 2011, through October 31, 2012, Acacia allegedly bought simple urine cup tests for approximately $5 each and billed Medicaid as though it had performed sophisticated laboratory testing. According to the Justice Department, the clinic received over $200 per test instead of the $20 to which it was entitled. The government alleged that Acacia did not possess the equipment needed for the work it billed.

The HHS Office of Inspector General’s account supplies the billing detail. At the time, Wisconsin Medicaid paid for the cup test under code 80104 regardless of the number of drug classes tested. Acacia allegedly billed code 80101 with a separate unit for each drug class, using a code intended for more sophisticated testing.

The alleged increase came from representing the cup test as another kind of work and multiplying the units billed. The contents of the testing room and the claim told different stories.

The Inspector General also alleged that Acacia falsely told Wisconsin regulators it possessed the necessary laboratory equipment to conceal its billing. That connects the test, the claim and management’s account of what the clinic could perform.

More Tests for Nearly Every Medicaid Patient

From November 1, 2012, through December 31, 2014, the government alleged a different testing practice. Acacia’s owner required nearly every Medicaid patient to receive a cup test and additional tests performed on multiple laboratory analyzers. The owner’s son, who worked in the clinic’s operations, was allegedly involved.

Here, the allegation concerned additional testing that the clinic actually performed. The government said Acacia and its owner knew the duplicate tests served no medical purpose and billed them solely to increase Medicaid reimbursement. Medicaid, and the taxpayers behind it, allegedly paid for tests that patients in treatment did not need.

Psychiatry Delivered From Outside the United States

From June 1, 2011, through December 31, 2014, Acacia allegedly submitted Medicaid claims for telemedicine services delivered to its patients by psychiatrists located outside the United States. The Justice Department said those claims violated Medicaid regulations.

The alleged location problem was at the psychiatrist’s end of the encounter: where the professional delivering the service actually worked.

Why the Clinic’s Address Was Only Part of the Story

A billing employee may know which entity submitted the Medicaid claim. Someone arranging psychiatric coverage may know where the psychiatrist was working. Acacia’s offshore allegation shows why those pieces belong together.

A platform can supply communications while a separate professional practice supplies the clinician. Management may handle scheduling, billing and collections. The business name a patient sees can cover work divided among several organizations.

For someone who schedules clinicians, maintains encounter records or submits claims, that division matters. In Acacia’s case, the government tied its allegation to the psychiatrists’ location and the Medicaid claims the clinic submitted. The useful question for an insider is concrete: what did the claim represent about the work, and what did the people delivering that work know?

The Whistleblower’s Coding Claim Survived Dismissal

The whistleblower’s original case revived on appeal because of a specific billing allegation: Acacia allegedly used code 90801 for encounters that did not qualify as the psychiatric diagnostic interview that code represented.

The whistleblower brought the case in 2013. In its September 1, 2016 opinion, the Seventh Circuit put the coding claim back in the case. The court found enough detail in the whistleblower’s knowledge of the services, billing practices and Medicaid patients to support the allegation that false claims had been submitted. The connection between the work and the billing mattered.

The Government Brought Its Own Case

The United States filed a separate lawsuit against Acacia and its owner in December 2016, and Wisconsin later joined it. That case included the offshore psychiatry allegations and continued toward the settlement. Part of the payment was to come from property sales under the agreement.

The clinic ceased operations after the government filed suit. As part of the civil resolution, Acacia and its owner agreed to exclusion from federal health care programs for 20 years. The owner’s son separately agreed to a five-year exclusion. The Justice Department said the whistleblower would receive a share of the settlement. A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

The Same Location Problem in Other Remote Services

BioTelemetry and CardioNet faced allegations that federal beneficiaries’ cardiac-monitoring data was reviewed in India.

In the Mori, Bean and Brooks teleradiology case, the government alleged billing for images interpreted abroad and domestic rereads represented as original domestic interpretations. A second read in the United States allegedly changed the billing story about where the original work occurred.

Those cases make the operational connection visible. A clinic’s address, a clinician’s assignment and the location of a completed service can be different pieces of the same claim. For an insider, the useful knowledge may sit in the scheduling or clinical workflow as well as in the billing department.

What Kind of Proof Is Needed to Be a Whistleblower?

For an Acacia-type case, we assess how your knowledge connects the service to the claim: who performed it, where they worked, what testing occurred and what the clinic billed. Someone familiar with the test equipment may recognize a mismatch the claim alone conceals. Someone arranging psychiatric coverage may know the location behind a domestic clinic’s name.

The whistleblower’s coding allegation shows the value of firsthand knowledge about care and billing together. The government’s later allegations add management’s testing requirements and representations about equipment. We work with you to identify which decisions your knowledge explains and how they fit into a potential civil case.

You Know Where the Work Happened

If you know the clinician assignments, testing practices or billing decisions behind a clinic’s Medicaid claims, speak to one of our whistleblower experts about where the work really happened. We build the case with you and bring in healthcare fraud whistleblower lawyers who understand remote clinical services and Medicaid billing. You have a partner from the first account of the work through the pursuit of a recovery.