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Report (OEI-04-11-00100)

Questionable Billing by Community Mental Health Centers

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During 2010, 206 community mental health centers (CMHC) received an estimated $218.6 million for providing partial hospitalization program (PHP) services to approximately 25,000 Medicare beneficiaries with mental disorders. Past OIG studies have found vulnerabilities in Medicare payments to CMHCs for PHPs. Additionally, in 2011, four CMHC owners and managers in Miami-Dade County, Florida, were convicted of fraudulently billing Medicare approximately $200 million for medically unnecessary PHP services from 2002 to 2010.


We developed nine questionable billing characteristics based on past OIG work and input from CMS staff. We used 2009 and 2010 Medicare claims from CMS's National Claims History File to identify CMHCs that had unusually high billing for at least one of nine OIG questionable billing characteristics in 2010 and the metropolitan areas where these CMHCs were located. We also determined whether the percentage of CMHCs with questionable billing varied according to whether States had licensure or certification requirements.


In 2010, approximately half of CMHCs met or exceeded thresholds that indicated unusually high billing for at least one of nine questionable billing characteristics. Approximately one-third of these CMHCs had at least two of the characteristics. Additionally, approximately two-thirds of CMHCs with questionable billing were located in eight metropolitan areas. Finally, 90 percent of CMHCs with questionable billing were located in States that do not require CMHCs to be licensed or certified.


We recommend that CMS (1) increase its monitoring of CMHCs' Medicare billing and fraud prevention controls, (2) enforce the requirement that certifying physicians be listed on the PHP claims submitted by CMHCs, (3) finalize and implement the proposed conditions of participation for CMHCs, and (4) review and take appropriate action against CMHCs with questionable billing that we identified. CMS concurred with all four recommendations.

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