On September 10, a Houston psychiatrist became the thirteenth individual convicted in relation to partial hospitalization program (PHP) services fraudulently billed to Medicare. The psychiatrist was convicted by a federal jury and is scheduled to be sentenced in December. The government has charged numerous individuals with causing Houston’s Riverside General Hospital to submit approximately $158 million in false claims for PHP services. PHP services are outpatient treatments for severe mental illness. The government alleged that the Medicare beneficiaries who received the PHP service at Riverside did not receive the services and, in most cases, were not receiving significant treatment from any psychiatrist. Some of the patients had mental conditions, such as Alzheimer’s, which meant that the purported treatment would not benefit them. The government presented evidence that, instead of receiving treatment, patients were shown movies at Riverside facilities. Evidence at trial showed that the psychiatrist billed Medicare for services she did not provide, and also falsified Riverside medical records to show treatments she had not provided.
Earlier this summer, the former president of Riverside and his son (who operated a Riverside satellite facility) were sentenced to 45 and 20 years of imprisonment, respectively, for their part in the scheme. In addition to the fraudulent billing, the two were convicted of paying kickbacks to patient recruiters and the administrators of group homes for delivering patients to Riverside so the hospital could bill for PHP services. Their sentences were among the longest ever imposed for healthcare fraud, and both have appealed. Others convicted in relation to the scheme include the owner of a group home, a patient recruiter, a Riverside administrator (who received a 40-year sentence after cooperating with the government), and several individuals involved in the payment or receipt of kickbacks.
As a consequence of the investigations and prosecution, Medicare stopped all payment to Riverside in 2012, and in 2014 was still withholding funds for services the hospital had performed. Riverside has experienced significant financial distress and has had to close programs and locations. In 2014, a state court judge froze hospital accounts after two creditors claimed that Riverside owed them more than $7 million.
Although the scale of the fraud and the length of the prison sentences in the Riverside case are unusual, the case underscores the fact that kickbacks and improper Medicare billing pose immense risks to healthcare providers. Physicians and others in the healthcare field run the risk of criminal convictions and prison sentences for their part in such activities, particularly given that the Department of Justice recently reaffirmed its commitment to seek to prosecute individuals involved in corporate crimes.