You billed for a 60-minute therapy session. It actually ran 47 minutes. Your documentation says "medication management and brief psychotherapy." The CPT code you submitted was 90837 - prolonged individual psychotherapy. Normal practice. You've done it a thousand times. Everyone does it.
That's wire fraud.
The federal government has turned mental health billing into a prosecution pipeline. The HHS Office of Inspector General doesn't wait for complaints anymore. They use algorithms. Data analytics. Machine learning that identifies billing anomalies across millions of claims. By the time an investigator contacts you, your billing patterns have already been analyzed, compared to every other mental health provider in your region, and documented in a file that's been growing for months. The 2025 National Healthcare Fraud Takedown charged 324 defendants for schemes totaling $14.6 billion in intended losses. Mental health billing fraud was a significant portion.
Welcome to Spodek Law Group. We handle federal healthcare fraud defense for mental health providers - psychiatrists, psychologists, counselors, clinical social workers - facing investigation or charges related to Medicare, Medicaid, and private insurance billing. If you've received a subpoena, if federal agents have contacted you, if your billing company flagged an OIG audit request - this article explains what you're actually facing.
The Algorithm Already Flagged You
The HHS Office of Inspector General doesn't discover billing fraud through random audits. They use data analytics that continuously scan claims data looking for statistical impossibilities. Patterns that no legitimate provider could produce. Billing volumes that exceed physical possibility. Time entries that dont add up.
Gustavo Kinrys was a psychiatrist in Wellesley, Massachusetts. According to DOJ, he billed Medicare and private insurance for more then 24 hours of psychotherapy on 382 separate days. He submitted claims for treating 70 patients in a single day while he was on vacation abroad. The billing pattern itself proved the fraud. No witness testimony was needed. His claims data became the prosecution's primary exhibit. He got 99 months in federal prison for $19 million in fraudulent billing.
The billing pattern IS the evidence.
Most providers dont understand the timeline of these investigations. The algorithm flags your file. OIG analysts review your claims data. They request records from Medicare, from Medicaid, from private insurers. They build there case. Then - sometimes 6 months later, sometimes 18 months later - they refer the file to the FBI or IRS Criminal Investigation. Only then does someone knock on your door or send a subpoena. You learn about it at step four. There already on step eight.
Rachel Collins was a licensed professional counselor in North Haven, Connecticut. Solo practice. She billed Medicaid for more then 24 hours of services in single days. One week, she submitted 96 claims. The data pattern flagged her long before any investigator called. She got 3 years federal prison for $1.6 million in fraudulent billing. A solo counselor. Not some massive healthcare corporation. A therapist with a private practice who thought she was just maximizing her billing.
This is were it gets dangerous for mental health providers. You've been billing a certain way for years. Maybe decades. Your billing company handles the codes. You sign off on documentation. You assume if something was wrong, someone would of told you by now. But nobody tells you anything until the investigation is already complete.
One Billing Code, Five Federal Charges
Mental health billing fraud doesn't have its own criminal statute. The DOJ uses pre-existing fraud laws - the same ones they use for bank fraud, securities fraud, any financial crime. One overbilled therapy session can trigger multiple federal charges:
- Healthcare Fraud (18 U.S.C. § 1347) - up to 10 years per count
- Wire Fraud (18 U.S.C. § 1343) - up to 20 years per count
- False Statements (18 U.S.C. § 1001) - up to 5 years per count
- Money Laundering (18 U.S.C. § 1956) - up to 20 years per count
- Anti-Kickback Statute Violations - up to 10 years per count
- Aggravated Identity Theft (18 U.S.C. § 1028A) - mandatory +2 years consecutive
One therapy session. Six potential federal charges. Theoretical exposure exceeding 60 years.
But thats not the worst part.
Federal investigation of mental health billing creates three seperate tracks of destruction, and each one operates independently. Criminal prosecution - thats the prison time, the felony conviction, the headlines. Civil False Claims Act penalties - thats $27,894 per false claim as of 2024, plus treble damages, which means whatever Medicare paid you multiplied by three. Administrative exclusion from Medicare and Medicaid - thats the end of your career even if you avoid prison.
You can win the criminal case and still face millions in civil penalties. You can settle the civil case and still get excluded from federal healthcare programs permanantly. Each track has its own prosecutors, its own timeline, its own resolution process.
Real sentences from mental health billing fraud cases:
- Earnest Gibson III: 45 years federal prison ($158 million partial hospitalization program fraud in Houston)
- Lawrence Duran: 50 years federal prison ($205 million Medicare fraud through American Therapeutic Corporation in Miami)
- Marianelle Valera: 35 years federal prison (same $205 million scheme - she was a mental health counselor)
- Linda Radeker: 6 years federal prison ($6.1 million Medicaid fraud - mental health counselor in North Carolina)
- Rachel Collins: 3 years federal prison ($1.6 million Medicaid fraud - solo counselor in Connecticut)
The American Therapeutic Corporation case in Miami produced the longest healthcare fraud sentences in U.S. history. The defendants were running partial hospitalization programs. They recruited patients who couldnt benefit from intensive psychiatric treatment - people with dementia, Alzheimers, intellectual disabilities - and billed Medicare for services that were medically unnecessary or never actually provided. The scheme lasted years. The sentences were decades.
The paradox that mental health providers need to understand: A psychiatrist was fined $400,000 and permanantly excluded from Medicare for overbilling therapy sessions - billing for 60-minute psychotherapy when he provided 15-minute medication checks. Not $158 million. $400,000. Still career-ending. The amount doesnt determine the punishment. The pattern does.
What To Do If Your Under Investigation
The single most important rule:
Never discuss your billing with federal investigators without an attorney present.
This sounds obvious. But mental health providers make this mistake constantly. You're a helping professional. You explain things for a living. When an investigator calls, your instinct is to clarify, to provide context, to help them understand what really happened. Thats exactly what they want you to do.
Every word you say without counsel becomes evidence. Every document you voluntarily provide. Every "clarification" that contradicts your billing records. There have been multiple cases were providers who cooperated without attorneys ended up charged with additional false statement counts - not for the billing fraud, but for what they said during interviews.
What you should NOT do:
- Don't destroy any records. Document destruction is obstruction of justice - a seperate federal crime.
- Don't "clean up" your billing with backdated documentation or restructured contracts. That's additional fraud.
- Don't discuss the investigation with staff members. They may already be cooperating with the government. Only attorney-client communications are protected.
- Don't make voluntary payments to Medicare or your insurer without counsel. This can be used as evidence of consciousness of guilt.
The painful irony: Your own records prosecute you. The session notes you wrote. The treatment plans you signed. The time logs your billing company maintained. In a fraud investigation, the discrepancy between your clinical documentation ("15-minute medication check with brief supportive counseling") and your billing code (90837 - 60-minute psychotherapy) doesn't need interpretation. It prosecutes itself.
Todd Spodek has handled healthcare fraud cases in federal court. He understands the difference between an OIG audit - where civil resolution may still be possible - and an FBI investigation, where criminal defense becomes the priority. The strategy depends entirely on which phase you're in. Most providers dont know which phase they're in until its too late to change course.
When Your Ready
If you're a mental health provider facing investigation - whether its an OIG audit request, a subpoena for records, or actual contact from federal agents - Spodek Law Group can help you understand where you stand and what options exist.
The consultation is free. There's no obligation.
What you'll get is an honest assessment. Is this still at the audit stage where civil resolution might be possible? Has it been referred to criminal investigators? What do your billing patterns look like compared to the cases that get prosecuted? What are realistic outcomes - not best-case fantasies, but actual possibilities based on how these cases are handled?
Call us at 212-300-5196. The earlier you have counsel involved, the more options exist. Many cases can be resolved during the investigation phase, before charges are ever filed. But that window closes. And once its closed, you're facing the full weight of federal prosecution.
The algorithm may have already flagged you. The investigation may already be underway. But your next move still matters.
