Palomar Health Settles CMP Case on Intensive Outpatient Psych Services

In another multimillion-dollar behavioral health care case, Palomar Health in California agreed to pay $3.084 million in a civil monetary penalty (CMP) settlement about billing for outpatient therapy that allegedly wasn’t medically necessary.

The HHS Office of Inspector General (OIG) alleged that Palomar submitted claims to Medicare, Medicaid and TRICARE through its intensive outpatient psychiatric program for outpatient therapy services that weren’t medically necessary or supported by the medical records from May 1, 2013, through May 1, 2019. OIG contended that Palomar knew or should have known the claims were fraudulent, according to the settlement, which was obtained through the Freedom of Information Act.

The settlement stemmed from Palomar’s disclosure to OIG. It was accepted into OIG’s Self-Disclosure Protocol in December 2019. The hospital didn’t admit liability in the settlement, and a Palomar spokesman declined to comment on the settlement or provide additional details.

This is at least the second recent CMP behavioral health settlement with OIG. In separate settlements late last year, two Massachusetts hospitals in the same family agreed to pay a total of about $8.37 million to settle allegations that their inpatient psychiatric units didn’t comply with Medicare requirements for certifications and treatment plans. Steward Holy Family Hospital in Methuen agreed to pay $6.952 million and Nashoba Valley Medical Center, which is described in the settlement as “a Steward Family Hospital,” agreed to pay $1.424 million.[1]

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