Scripps Health, based in San Diego, will pay a $1.5 million settlement to resolve allegations that it violated the False Claims Act by charging federal healthcare programs for unsupervised physical therapy services.

The physical therapists who performed the services did not have billing privileges and were not properly supervised as required by law, the Justice Department announces, in a news story from Healthcare Finance News.

Medicare and TRICARE require that billing privileges go to only enrolled providers. Services from unenrolled providers can be billed as “incident to” the services of an enrolled physician. However, an enrolled physician must directly supervise the services as they are rendered.

The United States alleges Scripps billed Medicare and TRICARE for physical therapy services provided by unenrolled therapists who did not have billing privileges and who were not appropriately supervised by a physician, according to the DOJ, the news story explains.

A former Scripps employee, Suzanne Forrest, filed the original lawsuit under the whistleblower provisions of the False Claims Act. The civil lawsuit was filed in the Southern District of California as United States ex rel. Forrest v. Scripps Health. As part of this settlement, Forrest will receive $225,000.

“Patients rightly expect qualified medical providers, or at least professionals working under the supervision of authorized providers,” says Christian Schrank, Special Agent in Charge for the Office of Inspector General of the US Department of Health and Human Services, in the news story. “As charged, these billing practices cheat patients, taxpayers, and the Medicare program.”

Scripps attributed the billing issue to “technical error in the processing of some Medicare bills for physical therapy treatments,” reiterating that they provided all the services they billed Medicare for and saying it was “high-quality care.” They said they agreed to the settlement to avoid legal costs and uncertainty.

They also contradicted the DOJ report, per the news story, saying the case was actually a civil investigation focused on technical billing issues and there were no allegations related to the quality or medical necessity of care given. They also said the billing issue did not benefit Scripps financially.

“Scripps became aware of the situation on our own and reported to the Medicare contractor, the party responsible for the handling of Medicare claims, that we had found the billing anomaly and we asked them for guidance on how to address it. The federal attorneys on the case and the relator were unaware of Scripps’ self-disclosure when they reached out to Scripps, and Scripps was not aware that the relator had filed a lawsuit against Scripps when Scripps made the self-disclosure. Therefore, Scripps diligently investigated the issue and attempted to resolve it through appropriate channels,” according to Scripps, in the news story.

“It is important to note that there were and always are physicians on site during the provision of physical therapy services and available to assist with any patient needs that arose. There is no evidence of any patients requiring physician intervention. Further, all physical therapists were licensed and provided medically necessary, appropriate care.”

[Source: Healthcare Finance News]