The A.I.M. Center, Inc. (“AIM”), which operates a community mental health facility located in Chattanooga, Tenn., has agreed to pay $800,000 to settle allegations that it violated the federal False Claims Act (“FCA”) and the Tennessee Medicaid False Claims Act.  The agreement resolves an investigation into AIMS’s billing practices which began with the filing of an action by a former member of the facility on behalf of the United States and the State of Tennessee under the qui tam (or whistle-blower) provisions of both the FCA and the TNMFCA. The United States and the State of Tennessee subsequently filed a joint intervention complaint.

As a result of a joint federal and state investigation, the government alleged in the joint complaint that, from 2009 through 2012, AIM knowingly submitted numerous false claims to the TennCare/Medicaid program by overcharging for psychosocial rehabilitation (“PSR”) services provided to TennCare/Medicaid facility members.

Specifically, the government alleged that AIM engaged in a practice commonly known as “upcoding” by submitting claims for services that were more lengthy and more expensive than the services actually provided. For example, the AIM Center submitted claims for a full day (i.e., “per diem” billing) of PSR services for TennCare/Medicaid members even when the members spent as little as 5 minutes to an hour at the facility.

In addition, the government alleged that AIM knowingly concealed its obligation to return funds to the TennCare/Medicaid program that were improperly paid and retained as a result of “double billing” (submitting distinct and separate claims for services that were already included in the scope of the per diem services).

The payment made by AIM in connection with this settlement is intended to compensate the TennCare/Medicaid program for monies paid out of that program that AIM improperly received.

As part of the settlement, AIM has also entered into a comprehensive 5-year Corporate Integrity Agreement with the U.S. Department of Health and Human Services, Office of Inspector General to ensure its future compliance with federal health care benefit program requirements.