Improper Third-Party Billing of Medicare by Behavioral Medical Systems, Inc.

OSI-00-5R: Published: Mar 30, 2000. Publicly Released: Apr 11, 2000.

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Robert H. Hast
(202) 512-3000


Office of Public Affairs
(202) 512-4800

Pursuant to a congressional request, GAO reviewed the operations of Behavioral Medical Systems, Inc.

GAO noted that: (1) while BMS represented itself to the Medicare Program as a provider, in fact it functioned as a broker and a third-party biller; (2) GAO found a consistent pattern by which BMS caused improper Medicare claims to be submitted for services not provided by six psychiatrists; (3) of the Medicare claims filed by BMS during a 20-month period, 87 percent were for provider services that reportedly were not rendered; (4) these Medicare claims totaled $1.3 million, of which BMS received over $362,000; (5) GAO referred the matter to the Office of the Inspector General, Department of Health and Human Services, for its consideration; and (6) in functioning as a broker and a third-party biller, BMS violated 42 U.S.C. 1395u(b)(6), which establishes the general principle that Medicare program payments should be made directly to the beneficiary or, under an assignment, to the physician who provides the medical service.

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