CityMD: The 2018 Settlement Over Inflated Visits and Borrowed NPIs

In the CityMD 2018 upcoding settlement, CityMD agreed to pay $6,606,251 to the United States and admitted inflating Medicare bills and using other doctors’ identities to bill for uncredentialed physicians’ work. For someone inside a healthcare billing operation, the case turns on a familiar comparison: what the visit note says happened and what the claim says Medicare should pay for.

The Justice Department’s May 4, 2018 announcement described approximately 88 CityMD urgent-care centers, primarily in the New York City metropolitan area. The U.S. Attorney’s Office for the Southern District of New York joined a private whistleblower’s False Claims Act case. The whistleblower had worked in accounts receivable, processing payments, reviewing denied claims and checking insurance coverage: work that put the care, the bill and the payer’s response together.

What CityMD Admitted

CityMD admitted billing Medicare for longer or more complex services than it actually provided or documented. The company also acknowledged the financial consequence: billing for the services actually furnished or supported by the medical records would have produced a lower Medicare payment.

The practitioner-identity admission was just as specific. CityMD employed physicians who were not credentialed with Medicare when it billed for their services, then used the identification numbers of credentialed physicians who had not performed the work. The announcement explained that credentialing involved both enrollment with Medicare and reassignment of the physician’s Medicare benefits to the billing provider.

The people writing visit notes and handling bills were in a position to see the mismatch between the care and the claim. The complaint shows what that view looked like inside the operation.

How the Alleged Upcoding Worked

The whistleblower’s first amended complaint alleged several ways that evaluation and management billing outran the visit. Its examples connected particular encounters with visit reports, bills and, in some instances, evidence of payment.

A Flu Shot Became an Evaluation

The complaint alleged that a patient came to CityMD solely for a routine flu vaccination, but CityMD billed Medicare Part B for a higher-level evaluation and management service. We see the absurdity in the whistleblower’s account of the same shot becoming a more elaborate service when the government was paying:

Another example concerned StatMD, a practice named in the same complaint. The whistleblower alleged that a patient returned only to have a tuberculosis skin-test result read, yet the practice billed that follow-up under code 99214, the same code used for the initial visit. The complaint identified visit reports, bills and proof of payment for that example.

An Insurance Change Became a New Patient

The complaint also alleged that established patients were billed as new patients after changing insurance carriers. It explained the incentive: government health programs paid more for new-patient services because of the additional work ordinarily involved.

According to the whistleblower, the new carriers lacked records of the patients’ earlier visits and were therefore less able to detect the coding. When the whistleblower raised the issue, a billing-company office manager allegedly said the instruction came from management. A new insurance card had become a reason to sell the payer a new-patient visit.

Higher Codes Without the Recorded History

For other encounters, the complaint alleged that higher-level claims lacked the patient-history documentation required by the coding rules used at the time. It described missing past, family or social histories and linked the examples to visit notes and bills. In those examples, the whistleblower pointed to what the chart lacked to explain why the bill was too high.

Whose Work Was Under the NPI?

Billing under another physician’s National Provider Identifier was the other central CityMD admission. The complaint supplied examples of alleged identity substitution. In one, a physician provided an outpatient evaluation and a vaccine, but CityMD billed Medicare under another physician’s number. In another, wound care, a blood-clotting test and an evaluation appeared under a different physician’s NPI on the Medicare claim. The whistleblower identified the visit reports, claims and payment evidence for both.

More revealing than the individual examples were the alleged instructions. The complaint described Billing Sheets listing, payer by payer, which physicians must appear as rendering or referring practitioners in place of the people who actually did the work. A billing supervisor allegedly emailed a revised sheet to staff, who were ordered to follow it. The whistleblower also alleged that the practice continued after the identity problem was raised internally.

For claims attributed to a supervising physician, schedules and treatment records help show who did the work and who supervised it. The connection appeared in another New York practice case: Dermatology Associates of Central New York admitted billing under physicians’ identities when the physicians were outside New York, and billing Medicaid in physicians’ names for services by uncredentialed nonphysician practitioners. Knowing who was actually there can explain what the name on a claim conceals.

The Billing Operation Behind the Claims

The CityMD complaint alleged that the billing practices continued when the work moved from an outside billing company to an internal management operation. Physicians Practice Management Associates had handled billing for CityMD and StatMD. City Practice Group of New York later took over the billing function and hired former billing-company personnel, including the whistleblower.

According to the complaint, the person who had overseen the outside billing operation continued overseeing the work after the transition. The whistleblower alleged that the earlier coding and billing practices continued too. That makes who controlled the billing instructions as relevant as the practice name on the door.

The complaint also alleged improperly separated visit charges using modifier 25, after-hours charges during posted hours, urgent-care facility fees and government claims for services already paid by workers’ compensation. It alleged copayment and deductible waivers as well. CityMD’s federal admissions addressed upcoding and uncredentialed physicians’ work, while the complaint alleged this wider pattern at the same billing desk.

What Evidence Does a Whistleblower Need?

For this kind of health care billing case, the useful evidence connects the visit, the submitted claim, the practitioner and the instruction that produced the bill. The CityMD complaint made those connections through visit reports, payment records, Billing Sheets, emails and the accounts-receivable employee’s account of concerns raised inside the business. We help whistleblowers connect evidence of physician billing fraud to the decisions and government payments that make the case.

The Journal of AHIMA’s 2017 article Busting Bad Medicine: A Call to Action Addressing Healthcare, Fraud, Waste, and Abuse describes why documentation and an insider’s account belong together. It names treatment dates, the treatment itself and clinician signatures as useful checks, then makes the point that a file alone cannot make:

A claim shows what the payer was told. A person who received the Billing Sheet can explain how that claim came to say it, who required the substitution and what happened when someone questioned it. That is the value of knowing the billing operation from inside.

How Much of a Settlement Does a Whistleblower Get?

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. In the CityMD case, the federal share orders provided an initial 15% and a later additional 5% of the federal settlement.

The Justice Department also credited CityMD’s full cooperation with the investigation. The result joined a corporate payment, detailed admissions and a whistleblower award to a case that began with someone who understood the billing workflow.

You Know How the Bill Was Made

If you saw visit codes rise beyond the notes or physicians’ names substituted before claims went out, talk with our whistleblower experts about the billing you know. We build the case with you and bring in physician billing fraud whistleblower lawyers who understand coding, credentialing and the decisions behind the claims. From the first call, we stay beside you to turn that knowledge into your strongest physician billing whistleblower case.