New York Mental Health Association Alleged to Have Altered Records Prior to Medicaid Audit

According to the details of a recent settlement under the New York False Claims Act, the Mental Health Association is alleged to have made handwritten alterations to progress notes which were subsequently submitted to Medicaid officials pursuant to an official requested audit. The settlement, which amounted to $304,000, came about after two former MHA Rockland employees began to notice the alterations and reported the misconduct under New York’s state False Claims Act statute.

Similar to its federal counterpart, the New York State FCA allows for per-violation penalties of between $6,000 and $12,000, in addition to compensatory damages. While the value of the whistleblowers’ reward has not been disclosed, it is not uncommon for whistleblower plaintiffs to receive up to 30 percent of the total recovery.

Details of the alleged Medicaid audit fraud

The New York Mental Health Association’s Rockland facility, which is the only MHA center named in the lawsuit, offers a wide array of outpatient psychiatric and psychological services to both children and adults. For billing purposes, providers are required to keep accurate notes of the time spent with patients, which is recorded in “progress notes” that are then used to submit a claim for reimbursement. For low-income patients, claims for reimbursement are submitted to the Medicaid program, which is dually-funded by the federal and state governments.

In October 2009, the federal Office of Inspector General announced that it would be auditing the Rockland center in order to check for billing discrepancies or issues. Prior to the commencement of the audit, up to 40 MHA Rockland employees and staff allegedly changed the number of hours spent with certain patients, thereby increasing those records to reflect extra therapeutic hours that did not actually take place to justify previous billings. In addition, hours were added for certain patients on days in which the patient did not actually attend the clinic services. According to the New York Attorney General’s Office, records spanning from 2003 through 2008 were involved in the audit alterations.

New York Attorney General Eric Schneiderman said in a statement:

“Audits are an important tool in protecting Medicaid funds that should be used to provide healthcare to millions of New Yorkers….Any attempt to undermine those audits and our Medicaid program will be investigated aggressively by my office.”

Healthcare fraud costs taxpayers billions

Healthcare fraud can occur in a number of different ways and it is one of the most costly forms of taxpayer abuse occurring today. In many cases, healthcare providers submit claims for reimbursement based on services that were never rendered at all. In other cases, providers will actually cause a patient to undergo a completely unnecessary procedure in order to bill for the time, equipment, and medication involved. In other cases, providers may prescribe medications for uses that have not been approved by the FDA – a concept known as “off-label marketing.”

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