Allegiance Health Pays $1.7M in False Claims Settlement

Federal prosecutors say the Shreveport, LA-based, post-acute care hospital chain billed Medicare for providing 'inappropriate or worthless services.' 

Allegiance Health Management, Inc. will pay the federal government more than $1.7 million to settle False Claims Act allegations involving billing for providing unnecessary care, the Department of Justice said.

Federal prosecutors said that, beginning in 2005, Allegiance cut deals with hospitals to provide Intensive Outpatient Psychotherapy services to patients on the hospitals' behalf.

At each of these hospitals, Allegiance established an Inspirations Outpatient Counseling Center, where Allegiance employees identify potential patients, created patient treatment plans, and performed IOP services.

The settlement resolves claims that Allegiance provided IOP services to Medicare patients that did not qualify reimbursement because:

• The patients' medical conditions did not require IOP treatment;
   
• The patients' treatments were not consistent with an individualized treatment plan designed to address specific mental health needs and achievable goals;
   
• The patients' progress was not being tracked or documented;
   
• The patients received inappropriate levels of treatment;
   
• The therapy provided was primarily recreational or diversional, not therapeutic.  

"The Department of Justice recognizes the value of accessible mental healthcare, but will not tolerate companies that seek to exploit our most vulnerable populations by delivering inappropriate or worthless services," Acting Assistant Attorney General Chad D. Readler for the Civil Division, said in a media release.  

Allegiance did not respond to inquiries from HealthLeaders Media on Wednesday.