St. Luke’s-Roosevelt / SLR Psychiatric Associates: Physician Care in the Rate and on Another Bill

The St. Luke’s-Roosevelt / SLR Psychiatric Associates fraud case ended in a $2,325,000 civil settlement over nonreimbursable Medicare psychiatric costs and separate Medicaid claims for physician care covered by the hospital’s rate. St. Luke’s admitted the conduct. For someone inside hospital finance or outpatient billing, the revealing detail is where the same physician work appeared: inside the facility payment and on a separate claim.

The U.S. Attorney’s Office for the Southern District of New York announced the resolution on February 7, 2013, naming St. Luke’s-Roosevelt Hospital Center, Continuum Health Partners, Inc., and SLR Psychiatric Associates together. The case concerned outpatient services at the hospital’s mental health clinics. The hospital’s physicians provided psychiatric services at SLR, while the hospital and SLR submitted different claims for payment.

The earlier Medicaid overlap, the Medicare cost reimbursement and the later separate Medicaid claims each reveal a different part of how the money moved.

What St. Luke’s Admitted About Psychiatric Billing

St. Luke’s accepted responsibility for the specific Medicare and Medicaid practices described in the Justice Department’s announcement.

Medicaid Paid the Hospital and SLR for the Same Care

From about February 1998 through 2002, SLR submitted Medicaid claims and received reimbursement for costs already included in claims the hospital had submitted and been paid for. The hospital billed outpatient psychiatric services at a rate that included physician care and the other related costs. SLR also billed for the same physician care on a fee-for-service basis.

The hospital’s claim therefore reached beyond the space and support around an appointment. Its rate included the physician’s work. SLR’s separate claim asked Medicaid to pay for that work again, and the settlement admissions say Medicaid did pay it again.

We’d call that a neat trick: the physician’s care was part of the package when the hospital collected and an extra when SLR collected. The payment paths were separate. The care being paid for was the same.

Medicare Reimbursed Costs That Did Not Qualify

From 1999 through 2002, the hospital sought and received Medicare reimbursement for nonreimbursable costs associated with outpatient psychiatric visits conducted by SLR. St. Luke’s expressly admitted that conduct in the settlement.

Removing Costs From the Report Did Not Permit Separate Billing

From 2003 through 2010, the hospital separately billed Medicaid for physician services in its outpatient mental health clinic after removing physician costs from its institutional cost report. The payment rule described in the settlement announcement included routine physician services in the facility’s rate or fee and prohibited separate billing for them.

The hospital had changed the cost report. It still submitted separate physician-service claims and received reimbursement for them. St. Luke’s admitted this later practice as its own part of the settlement.

An accounting change did not rewrite the payment rule. For the reader who knows how the hospital prepared its institutional cost report, that is the connection worth understanding: what came out of the report, what continued to be billed, and what the facility payment covered.

How a Facility Rate and a Separate Claim Collide

A facility rate can pay for a package of care that includes a physician’s work. In the earlier St. Luke’s Medicaid period, the government paid the hospital for that package and paid SLR separately for the physician component. Seeing only the professional claim would leave the hospital’s already-paid claim out of the picture.

In behavioral health care, a payer may buy a professional service, a program day or a weekly treatment bundle. The clinical work appears in treatment records, while the payment arrangement determines which services the facility rate already covers. The employee who understands that arrangement can explain a claim in ways that its service description alone cannot.

We look at that whole relationship with an insider. A treatment record can identify the work. The facility’s payment terms explain what the government was buying. The separate claim shows what the provider asked it to buy again. The case becomes clearer when those records describe the same service and period.

The Settlement Divided Between Federal and State Governments

The agreement allocated $1,258,115 to the United States and $1,066,885 to New York. Those were the settlement payments due for damages and civil penalties, with New York’s allocation addressing its share of the Medicaid overpayment.

Other Behavioral Health Cases Followed the Included Service

The government alleged that New Era Rehabilitation Center billed Medicaid separately for psychotherapy when patients received only counseling already covered by its weekly methadone rate.

The government alleged that Connecticut Counseling Centers caused Medicaid to pay twice for urine testing by referring patients’ tests to an outside laboratory while receiving a weekly methadone payment that already covered on-site testing.

What Evidence Is Needed to Prove Fraud?

For a case about physician care included in a facility rate and billed separately, the useful evidence connects the services performed, the payer’s payment terms, the cost report, the submitted claims and the payments. We work with the insider to understand how those pieces fit the particular billing practice.

The St. Luke’s admissions show why that work crosses departmental boundaries. Someone handling professional billing may understand SLR’s separate claims. Someone preparing the institutional cost report may understand how physician expenses were treated. Someone familiar with the hospital rate may know which services it already paid for. Each perspective can explain a different part of the same payment.

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.

You Know What the Hospital Rate Included

If you saw physician costs moved out of a report while separate claims kept going out, speak with our whistleblower experts about how that physician care was billed. We work beside you to build the case and bring in healthcare fraud whistleblower lawyers who understand hospital cost reports and psychiatric billing. You bring the view from inside the operation; we bring the expertise and partnership to pursue it with you.