Psychiatric center agrees to repay $2.8 million for Medicare overbilling

June 08, 1999|By Thomas W. Waldron | Thomas W. Waldron,SUN STAFF

A Montgomery County psychiatric treatment center has agreed to pay the state about $2.8 million for inappropriately billing the Medicaid program for patients who had temporarily left the facility, Maryland Attorney General J. Joseph Curran Jr. said yesterday.

Charter Behavioral Health Systems at Potomac Ridge will refund $1.9 million to the Medicaid program and pay damages of almost $830,000 -- the largest civil fraud settlement in the 18-year history of the state's Medicaid-fraud enforcement effort, Curran said.

The repayments and fines settled a complaint stemming from the company's practice of billing Medicaid for the care of adolescent patients who had gone home on weekends and holidays to be with their families, Curran said.

"This should send out a strong message to providers that they must follow the rules or else pay the price," he said. "There is simply no place for providers who insist on cutting corners in dealing with the Medicaid program."

A statement issued by Atlanta-based Charter Behavioral denied any "intentional misconduct" and said officials at the Potomac facility had cooperated with Medicaid officials to resolve billing issues.

"We are pleased to have concluded this matter in a cooperative way, and look forward to continuing to provide the care that can help troubled young people turn their lives around," Craig Juengling, chief executive officer of the Potomac Ridge facility, said in the statement.

The inappropriate billings took place between 1994 and 1997 at Fairbridge, the company's long-term residential treatment center for adolescents in Potomac, Curran said. Charter Behavioral also operates Potomac Ridge, an acute-care psychiatric hospital, at the same location.

Fairbridge billed the state for payments covering 8,289 days of treatment, at about $240 a day, though the patients were not at the facility, Curran said.

Billings covering 1,731 of those days occurred after top company officials were informed in 1996 by an employee at Fairbridge that coverage for patients on "therapeutic leave" was prohibited by state regulation, according to Carolyn McElroy, director of the attorney general's Medicaid Fraud Control Unit.

Those billings, which state officials considered a willful violation of state law, prompted the assessment of $830,000 in damages.

The fraud investigation was triggered by an audit conducted in 1997 by the state Department of Health and Mental Hygiene. The audit was prompted by a complaint from an employee of the facility, McElroy said.

Pub Date: 6/08/99

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