Case library / Money, billing and honesty
Twenty-two sessions billed for a patient seen twice
In short
License surrendered by stipulation after she had filed a notice of defense contesting an amended accusation. She may not
$32,956One payor’s audit found $35,329 in overcharges across 559 claims; she repaid it, then shredded the files.
It is the clearest example in the library of one course of billing conduct charged under five different subdivisions at once, with a records-destruction count that was entirely avoidable.
What happened
The respondent had held a marriage and family therapist license since 1975. Between 2016 and 2019 she billed insurers and a third-party claims administrator for sessions she had not provided. One patient saw her twice in January 2019; she billed for 22 sessions spread over eight weeks. Another patient saw her three times in August 2016; she billed for 31. A third saw her twice; she billed for 21. A fourth was seen once, in February 2017; she billed for 36, and submitted progress notes to the payor for sessions that had not taken place. For a fifth patient the payor found she had billed 33 sessions and overbilled for 32 of them.
A managed-care company audited her billing and determined she had overcharged it $35,329 across 559 claims found to be in error. She reimbursed the company in full. In August 2020, when a Department of Insurance investigator subpoenaed her records for four of those patients, she said the records had been shredded after she made the repayment. One patient was shown her own signed client-information sheet and noted that the date had been altered and that the handwriting was not hers; the same patient received a $350 bill from her health plan for sessions she had never attended and had to file an appeal to contest it.
The advertising cause concerned a weekend retreat program the respondent ran. Her advertisement said a participant would be more “emotionally healed and cleansed” and that “past participants and professional therapists have stated this weekend is equivalent to one or more years of individual and/or group therapy.” She used one new patient’s session to give a lengthy pitch for the program, telling him that any other counseling would be a waste of time, that his insurance was great, and that he had nothing to lose. Another patient attended after being told the $1,500 cost would be covered by insurance. The retreat did not help her, and when she contacted her plan to find a different therapist she was told her therapy allowance was gone.
In 2022 a married couple saw the respondent for a joint session. She obtained no information from them before starting, told them to stop talking, and said that their sharing their experiences was making “her brain hurt.” At an individual session five weeks later she again told the wife to stop talking and advised her to end her marriage. She then charged the couple for four dates on which she did not see them. In aggravation the Board pleaded a 1999 citation and $500 administrative penalty against her, then final, for submitting fraudulent billings to an employee assistance program and for disclosing a spouse’s diagnosis and treatment plan without a signed authorization.
What it was charged as
Gross negligence or incompetence in the performance of marriage and family therapy. Charged twice here on the same billing conduct — once as gross negligence, once as incompetence.
Intentionally or recklessly causing physical or emotional harm to a client.
Any dishonest, corrupt, or fraudulent act substantially related to the qualifications, functions, or duties of a licensee.
Advertising in a manner that is false, fraudulent, misleading, or deceptive, as defined in section 651.
Makes it unlawful to disseminate any public communication containing a false or misleading claim likely to induce someone to buy professional services, including claims of superior results that cannot be substantiated by objective evidence.
Requires an MFT to retain a client’s health service records for at least seven years from termination of therapy, or seven years past the client’s eighteenth birthday if the client is a minor.
Failure to keep records consistent with sound clinical judgment, the standards of the profession, and the nature of the services rendered.
Violating, attempting to violate, or conspiring to violate any provision of the MFT chapter or any regulation adopted by the Board.
The outcome
License surrendered by stipulation after she had filed a notice of defense contesting an amended accusation. She may not petition for reinstatement, and may reapply only after three years as a new applicant — current education, current experience, and every examination required of new applicants — with all charges deemed admitted against any future application.
OAH No. 2022080424
$32,956ordered in cost recovery under B&P §125.3What the rule actually says
A claim has to describe a service that actually happened, on the date it happened, to the person named on it. The progress note is the proof, which is why writing notes for sessions that did not occur is a separate wrong from billing for them. Records must be kept for at least seven years from the end of therapy — seven years past the eighteenth birthday for a minor — and repaying a payor does not shorten that clock or release the file for destruction; if anything, an audit is the moment the file becomes evidence. And anything you publish that is meant to induce someone to buy your services, a retreat brochure included, is a public communication under §651: an outcome claim you cannot substantiate is disciplinable whether or not a client complains about it.
Discussion
Analysis, not part of the decision
The headline is fraud, but the charging is what repays study. The Board pleaded the same billing conduct four ways — gross negligence, incompetence, dishonesty, and a catch-all chapter violation — because the subdivisions do different work. Gross negligence and incompetence under §4982(d) do not require proof of intent. Dishonesty under §4982(j) does. Pleading both means the case stands even if intent is contested at hearing, and it is why a therapist who thinks “my billing was sloppy, not dishonest” is describing a defense to one count and not to the others.
The records count is the one most likely to catch a therapist who has done nothing else wrong. She repaid the payor in full and then destroyed the files — which reads, if you squint, like closing out a settled matter. It is not. Section 4980.49 runs seven years from termination regardless of what happens with an insurer, and the shredding removed the only documents that could have supported her account of what care was delivered. Destroying records after an audit converts a billing dispute into a records case you cannot win.
The emotional-harm count under §4982(i) is worth sitting with, because the harm is financial in form and clinical in effect: a patient’s annual benefit was consumed by sessions she never attended, so when the retreat did not help and she went looking for a different therapist, there was no coverage left to pay one. And the advertising count shows that an outcome claim — a weekend “equivalent to one or more years” of therapy — is independently chargeable under §651 even where the person quoting it believed it.
Finally, the aggravation. A 1999 citation carrying a $500 penalty for fraudulent billing to an employee assistance program was pleaded twenty-three years later, because it established that she had been told once already. Surrender is not the soft landing it sounds like: she cannot petition for reinstatement, must reapply from scratch after three years, must pay $32,956 before any new license issues, and every allegation is deemed admitted in any proceeding to deny that application.
Where insurance reaches, and where it does not
None of this was insurable. Every professional liability policy excludes intentional acts, criminal acts, and fraud, so the overbilling, the restitution, and the destroyed records all sat outside coverage, and cost recovery under §125.3 is not a defense cost — no sublimit pays it. What a policy does usually pay for is the defense of the licensing-board action itself: the attorney who answers the accusation, the hours spent responding to a subpoena, the negotiation of a stipulation. That benefit is capped, it is generally the smallest number on the declarations page, and it usually requires that you report the matter as soon as you learn of it — which in a case like this means the day the payor opens an audit, not the day the accusation arrives.
What would have changed it
- Reconcile every claim against your appointment calendar and your notes before it is submitted, and keep the reconciliation as its own record.
- Never destroy a client record because a payor dispute closed — the seven-year clock runs from termination of therapy, not from settlement.
- Cut outcome comparisons from any workshop, retreat, or intensive marketing unless you can produce the evidence behind them on request.
Questions
For a law and ethics seminar, or for yourself
- The respondent repaid the payor in full before the Board filed. What work does restitution do, and not do, in a disciplinary analysis — and how should a board weigh full repayment against a prior citation for the same kind of billing?
- Her advertisement claimed the weekend was equivalent to one or more years of therapy, and attributed the claim to past participants and to other professionals. What would a therapist need in hand before a claim like that stops being false advertising under §651, and does attributing it to clients change the analysis?
- One patient’s insurance allowance was exhausted by sessions she never attended, so she could not afford another therapist. Where does that consequence belong — as financial harm, as clinical harm, or as both — and what would you have to show to prove it?
Source. This write-up is drawn from the signed public decision in the case number above. Names, cities and employers have been removed — why. To pull the original, open the Board's quarterly newsletter archive, find the issue covering May 18, 2023, and match the case number in the Formal Disciplinary Actions section. Not legal advice.
