Missouri Psychiatrist Agrees to $360K Settlement in Medicare Fraud Case

Federal prosecutors announced Monday that Dr. Shazia Malik, a Missouri psychiatrist, has agreed to pay $360,000 to settle allegations that she fraudulently billed Medicare and Missouri Medicaid for services she did not personally provide.

The settlement, reached with the U.S. Attorney’s Office for the Eastern District of Missouri, resolves claims brought under the False Claims Act (FCA), according to U.S. Attorney Thomas C. Albus.

Investigators alleged that between January 2019 and May 2024, Malik falsely reported conducting face-to-face psychotherapy sessions with patients when she was actually out of town or when other practitioners performed the services. During this period, she worked for Behavioral Health Services LLC, which operated Psych Care Consultants in St. Louis.

Under the terms of the settlement, Malik must pay $155,000 in restitution to Medicare and $25,000 to Missouri Medicaid. As stipulated in the False Claims Act, these restitution amounts are doubled, bringing the total settlement to $360,000.

Federal officials emphasized that the civil settlement does not include an admission of liability. However, court records show that Malik pleaded guilty in December 2025 to two counts of making false statements related to health care matters.

Special Agent in Charge Linda T. Hanley of the U.S. Department of Health and Human Services Office of Inspector General underscored the significance of the case, stating that healthcare providers who knowingly submit false claims to federal health programs jeopardize the financial stability of these taxpayer-funded services.

“This settlement demonstrates our commitment to ensuring Medicare and Medicaid are billed only for legitimate services actually provided to patients,” Hanley said. “Our priority remains protecting both public funds and patient welfare.”

The investigation extends beyond Dr. Malik to include her brother, Modh Azfar Malik, who previously held a partial ownership stake in Behavioral Health Services. In July 2025, he reached a separate civil settlement addressing similar allegations and paid $501,556. Three months earlier, in April 2025, he pleaded guilty to making a false statement to a federal health care program.

The consequences for Modh Azfar Malik extended to his professional license as well. In January, the Missouri State Board of Registration for the Healing Arts revoked his medical license for four years as part of a settlement agreement.

This case highlights the ongoing efforts of federal and state authorities to combat healthcare fraud, particularly in government-funded programs like Medicare and Medicaid. Healthcare fraud costs taxpayers billions of dollars annually and diverts resources from patients who genuinely need care.

The healthcare fraud enforcement landscape has intensified in recent years, with federal authorities increasingly focusing on individual practitioners rather than just targeting large healthcare organizations. This shift reflects a recognition that fraud can occur at all levels of the healthcare system.

Psychiatric services have come under particular scrutiny due to the subjective nature of diagnosis and treatment, which can make verification of services more challenging. The Centers for Medicare and Medicaid Services has implemented more rigorous documentation requirements for mental health services to address these concerns.

The investigation was conducted through a coordinated effort involving the U.S. Attorney’s Office for the Eastern District of Missouri, the Department of Health and Human Services Office of Inspector General Office of Investigations, the Missouri Attorney General’s Medicaid Fraud Control Unit, and the Federal Bureau of Investigation.

This multi-agency approach demonstrates the government’s commitment to leveraging resources across departments to identify and prosecute healthcare fraud. Such collaborative efforts have become increasingly common in complex fraud cases that cross jurisdictional boundaries and involve multiple regulatory frameworks.

Healthcare providers across Missouri and nationwide should view this case as a reminder of the serious consequences of improper billing practices and the importance of maintaining accurate documentation for all services provided to government program beneficiaries.