Tidewater Behavioral Health: How a Virginia Mental Health Provider Billed Medicaid for Video Sessions That Were Phone Calls

Tidewater Behavioral Health LLC, a Virginia-based outpatient mental health and substance use disorder treatment provider, agreed to repay Medicaid for billing code violations arising from a systematic pattern of submitting claims using billing codes that require an interactive audio-video telehealth connection for therapy sessions that the provider's own records and patient interviews showed were conducted as audio-only telephone calls — a category that Medicaid reimburses at a materially lower rate than the codes Tidewater submitted.DOCUMENTED

The distinction between audio-video telehealth and audio-only telephone services is codified in Medicare and Medicaid billing rules and carries a real financial difference in reimbursement rates. During and after the COVID-19 public health emergency, many states temporarily waived the audio-video requirement for telehealth billing, but those waivers had expiration terms that varied by state. After the applicable waiver in Virginia expired, providers were required to ensure that telehealth sessions for which they submitted the higher audio-video billing codes were in fact conducted with an interactive video connection — a requirement Tidewater's billing practices did not consistently reflect.REVIEWED

The Billing Code Distinction

Medicaid telehealth billing uses CPT and HCPCS codes that specify the mode of delivery — certain codes require an interactive audio-video connection as a technical prerequisite for billing at the associated rate, while others cover audio-only telephone consultations at a lower reimbursement level. The distinction exists because audio-video telehealth is considered more clinically equivalent to in-person care than audio-only telephone consultation, particularly for behavioral health services where the clinician's ability to observe the patient's affect, environment, and non-verbal communication is part of the clinical assessment.REVIEWED

Tidewater's billing department submitted the higher audio-video codes across its telehealth billing after the waiver period ended. The investigation found that the technology adoption at the provider level had not kept pace with the billing practices — therapists continued to use telephone calls for convenience or because patients had connectivity limitations, while the billing team continued using the audio-video codes that had been standard during the waiver period when the distinction did not matter for reimbursement purposes.DOCUMENTED

The Investigation

The billing mismatch was identified through a state Medicaid program integrity audit that compared Tidewater's billing code submissions against telehealth platform log data. Legitimate audio-video sessions generate server-side log entries in the telehealth platform recording the connection type, duration, and both participants' connection data. The audit found that for a large share of sessions Tidewater billed using audio-video codes, no corresponding video session entry existed in the telehealth platform logs for the claimed session dates and times.DOCUMENTED

The audit findings were corroborated by patient interviews. A random sample of Medicaid beneficiaries whose sessions had been billed using audio-video codes were contacted and asked to describe how their therapy sessions with Tidewater were conducted during the period at issue. A substantial majority described speaking with their therapist by telephone — many describing arrangements in which the therapist or the patient's own connectivity made video technically impractical or in which the therapist had explicitly told them that telephone was acceptable. None of the sampled patients described being informed that there was a billing code difference associated with the session modality.DOCUMENTED

Platform audit logs for sessions billed as interactive audio-video showed no video connection data — only in those cases where patients' phone numbers corresponded to the session records was any connection record present at all.

Compliance Failure vs. Intentional Fraud

The investigation did not result in a finding of intentional fraud — regulators characterized the violation as a compliance failure in which the billing department continued using codes that had been correct during the waiver period after the waiver ended, without implementing a transition process to ensure that session modality was verified before code selection. The distinction between a compliance failure and intentional fraud affects the available remedies: a compliance failure typically results in repayment and prospective corrective action, while a finding of intentional fraud triggers False Claims Act liability with treble damages and civil penalties that can be much larger than the original overpayment amount.REVIEWED

The compliance failure framing does not reduce the obligation to repay the excess Medicaid amounts, and the repayment obligation in this case covered the full difference between what Tidewater was paid for the audio-video coded sessions and what it would have been paid had those sessions been coded as audio-only telephone consultations — a significant sum across the number of affected sessions.DOCUMENTED

Implications for Telehealth Billing Compliance

The Tidewater case illustrates a compliance issue that affected multiple behavioral health providers as COVID-era telehealth waivers expired at varying timelines across different states and payers. Providers who did not implement clear internal processes for verifying and documenting the modality of each session before billing risk similar audit findings. Best practice after waiver expiration requires a session-level documentation workflow that records the actual connection type — audio-video or audio-only — in the patient's medical record contemporaneously with the session, and conditions billing code selection on that documentation rather than on a blanket assumption about how sessions are conducted.REVIEWED

Virginia Medicaid beneficiaries who received telehealth mental health services from Tidewater Behavioral Health and have questions about their billing records may contact the Virginia Department of Medical Assistance Services. Behavioral health providers in other states with questions about current telehealth billing requirements after waiver expirations should consult their state Medicaid agency or a healthcare compliance specialist familiar with applicable billing code requirements in their jurisdiction.

For patients currently receiving telehealth behavioral health services, understanding the modality distinction matters for their own billing awareness. Patients can request an explanation of benefits from their Medicaid managed care plan showing what billing codes were submitted for their sessions and can verify those codes against the actual modality of the session as they experienced it.

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