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

T-OSI-00-9: Published: Apr 6, 2000. Publicly Released: Apr 6, 2000.

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Robert H. Hast
(202) 512-3000


Office of Public Affairs
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Pursuant to a congressional request, GAO discussed the results of its investigation of the Behavioral Medical Systems' (BMS) Medicare billing practices, focusing on: (1) BMS and how it conducted business; (2) its improper billing of Medicare; and (3) GAO's belief that BMS violated the U.S. Code.

GAO noted that: (1) although BMS represented itself to Medicare as a health-care provider, in fact it functioned as a broker of medical services and, according to its contracted psychiatrists, a third-party biller; (2) further, through the services of the third-party biller with which it had contracted, BMS consistently caused improper Medicare claims to be submitted for services by six psychiatrists contracted to it; (3) of the approximately 4,900 Medicare claims that BMS filed in the 20-month period GAO investigated, 87 percent--or almost 4,300 claims--were for services that reportedly were not provided; (4) those improper Medicare claims totalled $1.3 million; (5) as another matter, GAO believes that BMS violated the general statutory principle that Medicare payments should be made directly to the beneficiary or the assigned physician who provided the medical service; (6) neither of these situations pertained to BMS; and (7) on the basis of GAO's investigation, the Medicare carrier temporarily suspended BMS from Medicare program participation on July 9, 1999.

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