Penn State Agrees to Pay Nearly $900K for Violation of Medicare Rules by Psychological Clinic

Penn State has agreed to pay $899,824 to resolve civil liability allegations for claims submitted by its Psychological Clinic to three government health insurance programs that violated Medicare rules and regulations, according to a statement on Thursday by the U.S. Attorney’s Office for the Middle District of Pennsylvania.

The university voluntarily self-reported the claims, which were made to Medicare, TRICARE and Medicaid between Feb. 1, 2015 and July 31, 2020 for behavioral health and evaluation and management services.

“After discovering the problems, Penn State took prompt corrective action and disclosed the matter to the United States Attorney’s Office,” according to the statement from U.S. Attorney John C. Gurganus’s office.

The clinic allegedly submitted improper claims related to the supervision of doctoral students, “incident-to” billing requirements, and/or the credentialing of licensed practitioners for Medicare participation, Gurganus said. Incident-to billing is an exception that allows for 100% reimbursement from Medicare for services provided by non-physician practitioners if certain requirements are met.

Penn State’s Psychological Clinic is one of the oldest university-based clinics of its kind and is separate from the university’s Counseling and Psychological Services, which serves the student population. Part of Penn State’s College of the Liberal Arts, the Psychological Clinic serves the general population of the region “by providing psychological services and training for the next generation of professional psychologists,” according to a statement provided by the university.

The university disclosed the billing issues to the U.S. Attorney’s Office in September 2021 after an internal assessment of the clinic.

“The university worked cooperatively with the government to address these complex healthcare billing issues, with Penn State’s Psychological Clinic committed to enhancing its healthcare compliance program,” the university’s statement said. ”We are pleased to have resolved this matter. ”

Restitution is $599,883.03 of the total settlement amount. 

The case was handled by the Department of Health and Human Services, Office of Counsel to the Inspector General, the Defense Health Agency, acting on behalf of the TRICARE program, and Assistant U.S. Attorney Tamara Haken of the Affirmative Civil Enforcement Unit of the U.S. Attorney’s Office for the Middle District of Pennsylvania.