Colorado Psychiatry Practice and Owner Agree to Pay $1.9 Million to Settle Allegations of Fraudulent Billing

DENVER—The United States Attorney’s Office for the District of Colorado announced that Mile High Psychiatry LLC and its owner, Michael K. Chism, II, have agreed to pay $1.9 million to resolve allegations that they violated the False Claims Act by knowingly double-billing time in order to unlawfully obtain increased payments from Medicare and Medicaid.

Mile High Psychiatry is a Colorado company located in Aurora that provides telepsychiatry services throughout Colorado. The United States alleged that from 2017 to 2021, Mile High Psychiatry and Chism submitted inflated bills to Medicare and Medicaid seeking payment both for evaluation and management services and for psychotherapy services, provided during the same patient visit.  The rules for Medicare and Medicaid are clear that these services must be separately identifiable, and time spent providing one service cannot be double counted in billing for time spent providing the other service.  The United States alleged that Mile High Psychiatry and Chism knowingly disregarded this rule and improperly double-counted time for these separate services to unlawfully obtain increased reimbursement for thousands of patient visits.               

The allegations were brought to the federal government’s attention by a whistleblower through a False Claims Act action.  The qui tam or whistleblower provisions of the False Claims Act allow a private party to file an action on behalf of the United States and receive a portion of the recovery.  The whistleblower will receive approximately $325,000 as her share of the settlement.

“We will forcefully go after providers who unlawfully bill Medicare and Medicaid.  These programs provide vital services for our community, and we will not allow providers to abuse the system or waste taxpayer dollars,” said U.S. Attorney Cole Finegan. “This case shows the power of whistleblowers to identify and stop fraud.  The law permits generous rewards to whistleblowers who reveal wrongdoing by coming forward with valuable information.”

“We expect health care providers who participate in federal health care programs to submit only appropriate claims. When providers do overbill Medicare and Medicaid, they threaten the integrity of these safety net programs,” said Special Agent in Charge Curt L. Muller with the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG).  “In coordination with fellow law enforcement agencies, HHS-OIG will continue to tirelessly investigate and address allegations involving inappropriate billing.”

The claims against Mile High Psychiatry and Chism are allegations, and in agreeing to settle this matter, they did not admit to any liability.

This investigation was the result of a coordinated effort by the U.S. Attorney’s Office for the District of Colorado; HHS-OIG; and the Colorado Attorney General’s Medicaid Fraud Control Unit.  The settlement was handled by Assistant United States Attorney David Moskowitz.

Case number:  21-cv-00393