We trust medical professionals to take care of us when we are sick or suffering; this is true especially for those suffering from anxiety, depression and other mental health challenges. What happens when those we trust become the problem themselves?
This article examines several case studies of psychiatrists, psychologists and other behavioral health providers who have crossed the line into non-compliance and outright fraud. By identifying fraud risk factors detailed in these situations, fraud examiners, auditors and healthcare leaders can better oversee behavioral healthcare providers and staff, leverage stronger internal controls and ensure effective risk mitigation.
A Stimulating Fraud
In October 2023, Gustavo Kinrys, a psychiatrist from Natick, Massachusetts, was convicted of fraudulently billing Medicare and private insurers more than $11 million for treatments he never provided. A
jury convicted him of seven counts of wire fraud, six counts of false statements relating to healthcare matters and one count of obstructing a criminal health care investigation.
Kinrys had previously held positions at Mass General Hospital and Harvard Medical School before moving to private practice, where he owned Advanced TMS Associates. His practice focused on transcranial magnetic stimulation (TMS) therapy and psychotherapy; TMS is a non-invasive magnetic brain stimulation to treat patients diagnosed with major depressive disorder.
Kinrys billed insurers more than $10 million for thousands of TMS sessions that never occurred, as well as non-existent face-to-face psychotherapy sessions. The therapy sessions with the TMS machines were the key to this case, as they include a limited number of sessions paid for on a subscription basis. With the machines tracking all the sessions, it proved Kinrys provided 5,587 sessions while billing for more than 26,000. In addition, he billed for sessions with patients when either they or he was out of the country.
Out of Office
Theresa A. Kelly, a 57-year-old psychologist for the Department of Veterans Affairs (VA) from Herrin, Illinois, was
sentenced to 10 months of imprisonment for submitting false medical documents, obstructing justice and committing Medicare fraud. She was engaged in a scheme to defraud Medicare and obtain payment for psychiatric services that she did not provide to residents of a Southern Illinois nursing home between May 2016 and January 2018.
In addition to her full-time job at the VA, Kelly owned TS Onsite Mental Health, a company through which she claimed to provide psychotherapy sessions to patients at Shawnee Christian Nursing Center in Herrin. She billed Medicare for more than 400 claims — worth more than $54,000 — for services that she did not provide. Kelly also obstructed justice by submitting fraudulent medical documentation in a federal civil lawsuit to seek a continuance of the judicial proceedings.
If You First Don’t Succeed at Fraud, Try Again
Ramon Apellaniz (who also used the name Kristopher Rockefeller) operated The Gemini Project, LLC (“Gemini”), a Newington, Connecticut-based counseling practice to patients with mental, behavioral and emotional disorders. However, Apellaniz is not a licensed healthcare provider.
In 2020,
Apellaniz was charged by the state with larceny, health care fraud and identity theft offenses after it was initially discovered that he was providing treatment and services to state Medicaid beneficiaries without a license. In many instances, Gemini billed the state Medicaid and received more than $900,000 for mental health services that were never provided. On April 17, 2024, he was sentenced to eight years in prison, execution suspended after 15 months and five years of parole. He was ultimately released eight months later.
Apellaniz conspired with Suhail Aponte, who was the manager and registered agent of Minds Cornerstone LLC, dba Minds Cornerstone Behavior Therapy Services. Minds Cornerstone was an Autism Specialist Group registered with the State of Connecticut in June 2021. Apellaniz is listed nowhere on Minds Cornerstone’s Medicaid enrollment forms and had no ownership interest or signatory authority to any of its bank accounts — but was the driving force behind the company and its fraudulent billing practices.
In November 2021, Apellaniz and Aponte used Minds Cornerstone to defraud the Connecticut Medicaid Program by submitting fraudulent claims for applied behavior analysis (ABA) services to children diagnosed with Autism Spectrum Disorder (ASD). The four-year scheme cost taxpayers $1,876,617.
Additional Examples of Behavioral Health Provider Fraud
Telehealth and Mental Health
The explosive growth of telehealth services, especially for mental health, raises serious fraud concerns. While people are increasingly relying on telehealth to provide behavioral health services, it can also be problematic.
A
report from the U.S. Department of Health and Human Services, Office of Inspector General, outlined many of these concerns. It found that despite high risks for fraud, waste and abuse, many states lack specific monitoring and oversight for telehealth in the behavioral health area. There are further concerns about quality, costs and oversight of these issues that need to be addressed. For example, the issues of telehealth could facilitate
“impossible day” billing schemes.
Mental health services play a vital role in ensuring the well-being of individuals and communities, but the increasing reliance has led to potential vulnerabilities. The accessibility of mental health care through the rapid expansion of telehealth platforms is essential for addressing the widespread need for behavioral health support. However, gaps in monitoring and oversight have created opportunities for unethical practices that can lead to fraud, which undermines the integrity of these services. Improved oversight, robust detection systems and better deterrence will not only protect financial resources but also ensure that individuals receive the quality care they deserve.
