Absent Billing Undermines Trust

A $501,556 civil settlement between federal prosecutors and Missouri psychiatrist Dr. Mohd Azfar Malik places a spotlight on a recurring vulnerability in behavioral-health reimbursement: the ease with which face-to-face psychotherapy codes can be misused when clinicians are not physically, or even virtually, present. Prosecutors from the U.S. Attorney’s Office for the Eastern District of Missouri allege that from January 2019 through May 2024, Dr. Malik submitted thousands of claims to Medicare and Missouri Medicaid for sessions he did not personally deliver, including billings recorded while he was out of state or overseas. The settlement, which doubles $250,778 in restitution under the False Claims Act, follows Dr. Malik’s April 2025 felony plea for making false statements in health-care matters; sentencing is set for August 11.

Telepsychiatry Expansion Outpaces Guardrails

Telehealth’s rapid adoption during the COVID-19 public health emergency (PHE) rewrote access rules for behavioral care. By mid-2022, all 50 states had permanently expanded at least one Medicaid telehealth policy, ranging from payment parity to broader originating-site rules, after temporary pandemic flexibilities proved popular with patients and providers alike, according to KFF’s 2023 fifty-state Medicaid budget survey (KFF). While these changes improved appointment availability, they also widened the compliance perimeter that program-integrity teams must patrol.

Psychiatry and psychotherapy saw some of the steepest telehealth volume spikes during the PHE. That surge, coupled with the high relative reimbursement for psychotherapy codes, has made the specialty an attractive target for bad actors who gamble that payers will struggle to verify whether billed services were truly delivered by the credentialed clinician.

Fraud’s Financial Drag on Federal Insurance

Improper billing is not confined to one provider. The U.S. Government Accountability Office estimates that Medicare and Medicaid together paid more than $100 billion in improper claims during fiscal 2023, underscoring the scale of the problem (GAO). Behavioral-health services, particularly psychotherapy, constitute a notable slice of that total. A May 2023 Office of Inspector General audit of Medicare psychotherapy found $580 million in payments that failed to meet documentation or face-to-face requirements in just the first year of the pandemic (oig.hhs.gov).

False claims erode already constrained behavioral-health budgets by diverting resources from legitimate care. They also generate downstream costs when patients who expect continuity with a trusted psychiatrist are left with lapses in medication management, higher emergency-department use, or worsening comorbidities that ripple across the delivery system.

Face-to-Face Rules Versus Virtual Realities

Regulators have attempted to reconcile telehealth flexibility with fraud deterrence by layering waivers and billing modifiers onto legacy evaluation-and-management (E/M) and psychotherapy codes. Yet documentation requirements remain fragmented: Medicare requires attestation that video connections were live and synchronous, while many state Medicaid programs accept audio-only visits for certain behavioral-health encounters. Such variation complicates payer audits, allowing clinicians who blend telehealth and in-person workflows to mask location data with manual overrides or cloned progress notes.

Dr. Malik’s alleged scheme exploited precisely that gap. Behavioral Health Services LLC, part-owner of Psych Care Consultants in St. Louis, reportedly billed for psychotherapy sessions even when the psychiatrist was abroad. Under current claim-submission processes, there is no systematic verification that the National Provider Identifier (NPI) on a psychotherapy claim matches the geolocation of the device used for the encounter—because encounter-level geolocation is rarely captured.

Program-Integrity Signals Intensify

Federal and state enforcement agencies are sharpening their toolkits. The Department of Health and Human Services Office of Inspector General continues to prioritize behavioral-health billing audits; meanwhile, the Centers for Medicare & Medicaid Services has invested in artificial-intelligence models that flag improbable utilization clusters in near real time. State partners, including the Missouri Attorney General’s Medicaid Fraud Control Unit and the Federal Bureau of Investigation, now routinely pool prescribing, travel, and payroll data to corroborate time-and-place discrepancies.

Location-based analytics are also moving closer to the point of service. Several electronic health-record vendors have introduced passive geotagging for telehealth clicks, allowing payers to match clinician IP addresses or device IDs against claim timestamps. Though not yet universally adopted, such verification could have curtailed Dr. Malik’s out-of-country billings before they reached the claims-adjudication queue.

Compliance Lessons for Behavioral-Health Networks

Health-system leaders and private-practice owners can draw three practical lessons from the Malik settlement:

• Automate presence validation. Embedding geolocation or single-sign-on server logs inside encounter notes can generate an immutable record that the billing provider was online, or onsite, during the visit.
• Run peer-panel audits. Monthly reviews of provider-level utilization against specialty benchmarks help surface anomalies, such as clinicians whose daily psychotherapy units far exceed reasonable capacity.
• Educate on modifier accuracy. Front-desk and billing staff should receive recurring training on place-of-service codes, telehealth modifiers, and state-specific parity rules to prevent accidental miscoding that can escalate into systemic exposure.

Rebuilding Confidence in Behavioral-Health Access

The Malik case illustrates how a single practitioner can manipulate both clinical records and payment systems, undermining vulnerable patients and draining public resources. Yet it also demonstrates that coordinated enforcement, linking federal prosecutors, the HHS-OIG, state Medicaid fraud units, and the FBI, can close long-ignored gaps.

Behavioral-health demand remains at historic highs, and telepsychiatry is essential to meeting it, especially in rural and underserved markets. Preserving that access depends on fortifying billing transparency without stifling legitimate virtual care. Integrating real-time location metadata, expanding predictive audit algorithms, and harmonizing documentation standards across Medicare and Medicaid would shorten the runway for schemes like Dr. Malik’s and recapture funds for evidence-based treatment.

Vigilant oversight sends a clear signal: presence, whether in person or via secure video, is not optional when billing for the therapeutic alliance that lies at the heart of mental-health care.