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Published June 14, 2021

Behavioral and Mental Health – Recent OIG Enforcement and How to Stay Compliant

The opioid crisis and COVID-19 pandemic have exacerbated the pressure on hospitals and healthcare systems to expand and improve upon the delivery of behavioral and mental health services. Providing compliant and quality behavioral and mental health services takes a collaborative approach from multiple disciplines within an organization. As recent enforcement actions from the Health and Human Services Office of Inspector General (OIG) for the Department of Justice have shown, failing to comply with federal regulations on billing for behavioral and mental health services can be costly to an organization. In this article, we discuss recent enforcement actions by the federal government on organizations that have allegedly violated the False Claims Act. Additionally, we provide controls to focus organizational activities on implementing and monitoring patient care, documentation, correct coding and billing, and staff and patient safety.

Recent Enforcement Actions

In the past year, the OIG has released enforcement actions associated with behavioral and mental health organizations allegedly violating the False Claims Act.

In 2020, the OIG alleged that a large organization admitted patients to residential treatment whose conditions did not require that level of care. The organization allegedly also billed for services not rendered; billed for improper and/or excessive lengths of stay; failed to provide adequate staffing, training, and/or supervision of staff; and improperly used physical and chemical restraints and seclusion. The organization failed to develop and/or update individual assessments and treatment plans for patients, failed to provide adequate discharge planning, and failed to provide required individual and group therapy services in accordance with federal and state regulations.

Then, in early 2021, the OIG alleged that a different organization with two inpatient psychiatric hospitals submitted false claims to Medicare for medically unnecessary inpatient psychiatric admissions and associated services.

Both of these organizations had to pay back millions of dollars and enter into five-year Corporate Integrity Agreements (CIAs) with the OIG. As part of the CIA requirements, these organizations had to engage a third-party Independent Review Organization (IRO) to conduct claims review activities over the five-year period.

Organizational Policies and Controls

Both of the enforcement actions outlined above demonstrate the need for organizations to implement strong internal controls and monitoring activities to mitigate potential financial, reputational, and compliance risks.

Below are some key behavioral and mental health policies and controls to implement and monitor within your organization:

  1. Policies should specify that necessary clinical information is transferred to the behavioral and mental health unit when a hospital inpatient is transferred to the unit.
  2. The behavioral and mental health unit should have written admission criteria for both Medicare and non-Medicare patients.
  3. The clinical assessment and planning process should be continuous, not an isolated event.
  4. The behavioral and mental health unit director should monitor and evaluate the quality and appropriateness of services and treatment provided by the medical staff.
  5. For inpatient psychiatric facility stays that result in outlier payments, the documentation, coverage, and coding should comply with Medicare requirements.

In addition, robust policies and controls are necessary to ensure comprehensive staff training, as well as staff and patient safety while providing behavioral and mental health services:

  1. The organization should regularly assess the staff competence needed to care for behavioral and mental health patients. 
  2. Staff should be adequately protected from potential harm at the hands of patients.
  3. An assessment of “near miss” and actual events should be performed regularly.
  4. There should be a consistently enforced policy and procedure to use the least restrictive restraints for the shortest period of time.

As the demand for behavioral and mental health services continues to increase, organizations must ensure that solid policies and procedures are in place to mitigate risk and ensure compliance with government rules and regulations. It is imperative to conduct regular organizational risk assessments and auditing and monitoring activities to ensure processes are being performed in accordance with policies and procedures. Deviations from internal policies and procedures may indicate the need for additional staff training or revisions to existing policies and procedures. Auditing activities, including billing and coding compliance, can be conducted internally by the compliance department or externally by an independent third party.

PYA assists all types of healthcare organizations with creating, evaluating, and expanding compliance infrastructure. Additionally, PYA often serves as an IRO for entities subject to a CIA, and/or helps entities prepare to meet the requirements of a CIA. If you have questions about behavioral and mental health services compliance, contact a PYA executive below at (800) 270-9629.

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