In 2016 a respected member of the Louisiana psychology community and past member of the state psychology board, Dr. Beverly Stubblefield, entered a plea agreement of guilty in a Medicare fraud case. Dr. John Teal, a Louisiana medical psychologist, was also charged. Both Stubblefield and Teal pleaded guilty to one count of Conspiracy to Commit Health Care Fraud, surrounding the high profile case against Mississippi psychologist Dr. Rodney Hesson and his business partner, Gertrude Parker, an occupational therapist and Hesson’s mother.
Hesson and Parker owned and operated regional companies, Nursing Home Psychological Service and Psychological Care Services. They marketed to nursing homes in Louisiana, Mississippi, Alabama and Florida, and built on requirements in federal regulations, 42 CFR 483.20, a law requiring nursing home residents be evaluated every three months in a “…comprehensive, accurate, standardized, reproducible,” manner.
At the trial, Hesson said that his company served up to 72 nursing homes and that the company was “…inundated with referrals.” He said that at times the company had to cap how many people could be seen.
Physicians ordered the assessments and nursing homes needed them. According to the regulation, evaluations were to include information about “cognitive patterns,” “mood and behavior patterns,” “communication,” and “psychosocial well-being.”
Hesson designed a service that paired each contract psychologist with an assistant, called a “clinical coordinator.” The total units/hours billed was a sum of both the psychologist’s and the assistant’s procedures. The companies billed Medicare between three and eight hours of CPT code 96101, psychological testing, for which Medicare reimbursed an average of $80 per unit/hour.
Hesson testified he typically employed between 23 and 26 psychologists and between 18 and 20 clinical coordinators. One of the prosecutors stated that the firm has assessed 9,000 individuals and was one of the top billers for psychological testing in the country.
Contract psychologists were paid a flat fee of between $90 and $100 per case. Psychologists would go to a nursing home and see as many as 10 residents in a day, or more, along with the assistant.
In an interview with Dr. Stubblefield, she explained that the evaluation process was standard and set by the company. The evaluation included six components with tests, behavioral observations, review of chart information, and meeting with staff. She explained that the goals were often to “… get them off meds or increase functioning.”
In his testimony, Dr. Teal said the coordinator would complete information for the psychologist’s review and then prepare the “formalized report”
which the psychologist would review and edit.
The prosecution argued that the service was fraudulent because it was a screening, because it was not medically necessary, and because the time the psychologist provided in face-toface client contact was exaggerated and inflated.
At trial Hesson testified that Medicare had audited the design of the service in 2011 and the approach passed. He said, “When I was audited, we were billing 96101 and — 36 claims is a lot of claims, to my knowledge, to get in an audit,” he said. “Within those claims, we were billing 96101. Within those specific records, it was evident that there was an assistant…,” he said. “Under the diagnostic tests provision, all diagnostic tests are assigned a certain level of supervision,” he said, reading from the Medicare rules.
The defense attorney asked, “Did you rely on that in making your decision whether you could bill 96101?”
“Yes,” Hesson said, referring to Federal Code 42 CFR 410.32 for diagnostic tests. Under this regulation psychological testing is payable if “… personally furnished by a clinical psychologist, or “Furnished under the general supervision of a physician or a clinical psychologist.” And under Louisiana law, a psychologist may utilize assistants but billing must “… not be in the name of an assistant.”
Despite the fact that the evaluations were ordered by medical doctors, the Government prosecutors said that the defendants’ actions were fraudulent, “… by scheduling repeat tests for the same nursing home residents at three- to fourmonth intervals, notwithstanding Medicare’s stipulation that re-testing is not medically necessary unless it is required for a diagnosis or continued treatment.”
“The prosecution insisted that we were doing screening instead of testing,” Dr. Stubblefield explained to the Times, “and therefore we committed fraud and everyone who was compliant with the procedure was a conspirator. That is the gist of things.”
The Government presented other issues at trial, producing several individual cases where it was clear that cognitive testing had to be discontinued because the resident was too disabled to participate.
One attorney asked Dr. Teal, “Looking back on it, sir, was there a benefit to these patients for the tests you were performing on them?”
Teal said, “In general, that kind of testing could be helpful once perhaps, but the benefit of continuing to do that repeatedly over time the way we did it is limited and certainly questionable as far as how clinically useful it could be.”
The prosecution also presented charts where, based on Medicare data, large numbers of hours had been billed for a single psychologist. According to Hesson’s testimony this was due to locum tenens, where one doctor bills under another.
Also presented by the prosecution at trial was the Medicaid fraud case against Hesson from Mississippi that occurred in 2012. He had pleaded guilty to billing patients on one day when the services had been delivered on another day.
Dr. Stubblefield said that Hesson had described this as a bookkeeping error, but “Now, I’m not so sure,” she said.
Charges against all four defendants were elevated to “conspiracy,” which carries some of the harshest legal treatment that Government prosecutors can bring to bear on defendants, through laws that allow pre-trial and pre-conviction seizing of assets and property.
“Conspiracy” laws originate from prosecution of individuals in organized crime and terrorists. “Federal prosecutors can, and should, use civil forfeiture to enhance criminal cases and further the Department of Justice’s (Department) goal of effective law enforcement,” writes Craig Gaumer in the U.S. Attorney’s Bulletin, “A Prosecutor’s Secret Weapon: Federal Civil Forfeiture Law.”
Based on documents, prosecutors seized all assets from Hesson’s company, personal bank accounts, cash and real estate, including the family home, immediately once charges were formal.
According to Stubblefield, her home and accounts, including her retirement accounts, were seized. She said her elderly father placed a second mortgage on his home and that money allowed her to hire an attorney.
“I didn’t have the money to fight it,” she told the Times. “I never had the chance to defend myself against the conspiracy charge. Federal courts cost two or three times as much as other courts. It takes $100,000 just as a start. I only had $75,000.”
The “conspiracy” charge may also relate to areas of harsh treatment. “I never had my Miranda rights read to me,” she said. “I didn’t even know I’d been indicted until a client saw it on the news and contacted me.”
The FBI came to her office and she didn’t know why. In an email to this reporter, she wrote, “The FBI interviewed me without stating why they were there and I was under the assumption that they were there regarding a high profile rape case who was a former patient because my office administrator said that someone was coming in regard to that case.”
It appears that Stubblefield and Teal may have been included in the indictment because of their friendships with Hesson and Parker, and because both accepted company titles for a time.
Teal accepted the title of “clinical education coordinator.” Stubblefield accepted the title of “Clinical Director,” when Hesson asked her to in 2012. This was after Hesson pleaded guilty to Medicaid fraud in Mississippi and was not allowed to work with Medicaid/Medicare. She resigned from that role after five months but she said, “It was too late.”
“I was flattered,” she wrote, “but the position was just a ‘figurehead’ title. I really didn’t get to direct anything but was set up to be the ‘bad guy’ and ‘fall guy’ if things didn’t bode well. Emails to that effect were interpreted by the prosecution as conspiring to commit fraud by encouraging a psychologist to bill as they have done for NHPS…”
Overall, Stubblefield worked contract for the Hesson companies, part-time for about five years. She was paid $448,000 total or $89,000 per year. Her restitution is over $2M.
Teal worked full-time, for four and ½ years. He testified that he made approximately “… $200,000 a year, some of the years–– one year as much as $300,000.” His restitution is over $3M.
According to testimony neither had information regarding the billing procedures. Both testified that they relied on Hesson and Parker to understand the laws regarding the CPT codes. Stubblefield told the Times, “I never saw the billing. I didn’t want anything to do with that part of the service. I was preparing to retire. I wanted everything simple.” “When I went to work for in NHPS I was an employee because I didn’t want to file any claims or do any ‘business’ paperwork. I just wanted to be a psychologist.”
In their plea agreements, Stubblefield and Teal agreed that they: 1) documented services that had been “… in fact, provided by unqualified persons working with them; 2) administered tests to residents who were non-responsive; 3) billed for time when they were not present.
Dr. Stubblefield was sentenced to serve 30 months for 1 count. Two counts were dismissed. Her sentence began April 25, 2017. She must pay restitution of $2,181,378 and upon release at least $200 per month. Payee is Medicare.
Dr. Teal was sentenced to serve 24 months for 1 count. Two counts were dismissed. His sentence also began April 25, 2017. He must pay restitution of $3,505,137 and upon release at least $200 per month. Payee is Medicare.
Gertrude Parker was found guilty of three counts and sentenced to 84 months for Count 1 and 60 months for Count 2, to be served concurrently. She began serving September 2017. Ms. Parker is to make restitution of $7,313,379 and $200 per month. Payee is Medicare.
Dr. Hesson was found guilty of three counts and sentenced to 120 months for Count 1 and 60 months as to Count 2, to be served concurrently. He began serving September 2017. He is to make restitution of $13,800,553 and $200 per month. Payee is Medicare.
Beverly was sentenced to 30 months incarceration at the Federal Prison Camp in Aliceville, Alabama. This, she explained to the Times, was not the hardest part of what has happened to her.
“The worse part is losing my psychology license,” she said. “This…the time, this is just something to be dealt with, something I had to do.”
In February Dr. Stubblefield wrote a letter to past-president of the American Psychological Association (APA), asking that APA take a stand for sentencing reform in regard to white collar, first offenders.
“In regard to white collar crime,” she wrote, “there are many innocent professional women her who have been charged with the ill-defined ‘castnet’ of conspiracy, when the only thing they’ve done was to comply with company procedures or file data given to them. If they went to trial, the sentence was automatically doubled,” she wrote. “Losing one’s license and livelihood is punishment enough, but the Department of Justice seizes or places a lien on everything owned including your home and retirement accounts because judges set unrealistically high restitution of millions of dollars never received by the people charged. The people charged are primarily MDs, PhDs, CPAs and NPs who have licenses, Medicare/Medicaid numbers, and ethical standards or responsibilities, not office managers or company owners who may be the ones submitting faulty claims.”
Dr. Teal said at trial, “I had concerns. I look back on all that time with tremendous regret because of exactly what you just said. I should have. I should have done due diligence and called the Medicare hotline or hired a lawyer and asked him. I should have done those things. Lord knows, I wish I had.”
At trial Dr. Stubblefield, after she was surprised to hear the number of hours billed under her name, was asked how she felt to testify against Ms. Parker.
“Dismayed, disgusted, betrayed, still in shock about everything, remorseful about the whole situation, regretful that I ever went to work for another agency.”
How does she cope? “I use my cognitivebehavioral skills,” she said, “and prayer. I couldn’t get through this without my faith.”
Were you naïve? “Absolutely,” she said.