Doctor takes on state over Medicaid payments: Psychiatrist claims he’s being forced out of business

A Franklin psychiatrist has accused the state agency that runs Medicaid of suffocating his practice in a reimbursement dispute that dates back more than a year.

Dr. John Lewis said the weekly Medicaid checks that keep his Harmony Center open dwindled to nothing for four straight weeks after he filed a lawsuit in April against the state Family and Social Services Administration over a payment review it imposed.

The psychiatrist believes his center may survive only another month, a closing others say could strain already scarce options for mental health care south of Indianapolis.

FSSA, in turn, contends the Harmony Center actually received nearly $100,000 more in reimbursement than it should have. The agency said it launched a prepayment review after an audit last year turned up overpayments.

But beyond this dispute lies a bigger, systemic question Lewis wants to challenge. He believes he never had a fair chance to argue his side of the case before FSSA imposed the review.

“It’s just not right; I’m not going to roll over,” said Lewis, who has been practicing psychiatry for 35 years. “I don’t care if I go bankrupt.”

Medicaid, the federal-state program that helps the needy and disabled, covers more than 60 percent of the Harmony Center’s 550 patients.

The center, which closed offices in Seymour and Bedford about a year ago, used to receive weekly Medicaid payments ranging from $14,000 to $25,000, Office Manager Vanessa Quick said.

That changed after an FSSA contractor conducted an audit in February 2005. The contractor concluded Medicaid had overpaid Harmony Center by $94,858, including interest.

FSSA demanded repayment and started the prepayment review, which eliminates faster electronic claims processing and requires an FSSA administrator to examine every claim.

Weekly payments dwindled to a few thousand dollars and dipped as low as $12.20 in April, Quick said.

Lewis, the center’s sole psychiatrist, filed his lawsuit that same month in Johnson County court, claiming state administrative law denied his center its constitutional right to due process on the prepayment-review decision.

In May, the center started its four-week stretch with no Medicaid money, according to Quick’s records. She said the decrease did not correspond to a business slowdown.

Lewis’ lawyer, Randall Fearnow, said such a payment dry spell was unusual.

“I don’t know that it’s retaliatory, but it certainly appears to be,” said Fearnow, an attorney with the Indianapolis law firm Krieg DeVault LLP.

FSSA declined to talk about the dispute, but spokesman Dennis Rosebrough provided a letter the agency sent to Lewis in June.

It states that FSSA started the review because the center claimed reimbursement “for services it could not demonstrate it provided.”

It also states that Indiana “appreciates providers who serve our most vulnerable citizens, yet we must protect their interests with appropriate safeguards employed at appropriate times.”

However, Lewis swears he provided every service for which he billed Medicaid. He and Fearnow said the problem lies with FSSA, which frustrates the center’s staff by giving no clear direction on what billing documentation it wants.

“It doesn’t seem that they’re really interested in telling us how they would like us to bill,” Fearnow said. “It’s like, ‘You just keep trying and maybe you’ll get it.'”

Lewis said he has gone at least six months without a salary and dipped into his savings and retirement money to keep the center open. He’s awaiting a court ruling on his request for an emergency payment order that would tide over the center until the legal case is resolved.

If the center closes, Lewis’ patients may have a hard time finding another care option in Johnson County, said Bob Dunbar, CEO of the Indianapolis-based Adult and Child Mental Health Center.

He said his not-for-profit center, the largest mental health provider in Johnson County, would struggle to handle an influx of patients. Poor reimbursement from government payers like Medicaid and from commercial insurance has helped make mental health services scarce across the state.

“The reality is we struggle getting people seen and doing what we need to be doing because the reimbursement is so inadequate,” he said.


Please enable JavaScript to view this content.

Story Continues Below

Editor's note: You can comment on IBJ stories by signing in to your IBJ account. If you have not registered, please sign up for a free account now. Please note our updated comment policy that will govern how comments are moderated.