Watonga Psychiatrist to Pay Over $170,000 to Settle False Claims Act Allegations

Oklahoma psychiatrist Dr. Richard Zielinski has agreed to pay $173,143 to settle allegations of submitting false claims to the state’s Medicaid program, according to an announcement from the Oklahoma Attorney General’s Office on Tuesday.

The settlement resolves accusations that Zielinski, who operates a psychiatric practice in Watonga, knowingly “upcoded” claims for patient evaluation and management services submitted to SoonerCare, Oklahoma’s Medicaid program, between January 2019 and June 2021.

Upcoding is a fraudulent billing practice where healthcare providers assign inaccurate billing codes to medical procedures or services to increase reimbursement rates, effectively charging for more expensive services than were actually provided.

The investigation further revealed that Zielinski allegedly instructed his employees to create fabricated records to support these false claims after the Oklahoma Health Care Authority notified him of an impending audit of his patient records. This alleged attempt to cover up the billing discrepancies prompted the authority to refer the case to Attorney General Gentner Drummond’s Medicaid Fraud Control Unit.

“I appreciate the thorough investigation completed by my team to recover funds that were wrongly taken from the State and, as a result, the taxpayers of Oklahoma,” Drummond said in a statement. “I take very seriously all allegations of false claims and will always work to hold fraudsters accountable to the law.”

The case highlights ongoing efforts to combat Medicaid fraud in Oklahoma, where authorities have intensified scrutiny of healthcare providers in recent years. Medicaid fraud schemes cost taxpayers billions nationwide annually, with upcoding remaining one of the most common forms of healthcare billing fraud.

Healthcare fraud experts note that psychiatric services are particularly vulnerable to billing abuse due to the subjective nature of mental health evaluations and the limited documentation sometimes associated with these services.

“Mental health services can be more difficult to audit because there’s often no physical procedure or test to verify,” said Emily Johnson, a healthcare compliance consultant not affiliated with this case. “This makes documentation integrity especially important in psychiatric practices.”

The settlement stipulates no determination of liability, meaning Zielinski has not admitted wrongdoing as part of the agreement. Such resolutions are common in healthcare fraud cases, allowing providers to settle allegations without formal admissions that could affect their licenses or future ability to participate in government healthcare programs.

The investigation was handled by Assistant Attorney General Jamie Bloyd, Agent Rachel Hayward, and Nurse Analyst Laurie Hudson from the state’s Medicaid Fraud Control Unit, which operates with significant federal funding. The unit receives 75 percent of its $6 million annual budget from the U.S. Department of Health and Human Services, with the remaining 25 percent coming from state funds.

The Medicaid Fraud Control Unit has jurisdiction over fraud committed by healthcare providers as well as abuse and neglect of residents in nursing homes and other healthcare facilities. These specialized units exist in all 50 states and are considered crucial to protecting the integrity of the Medicaid program, which serves millions of low-income Americans.

While this settlement resolves the civil claims against Zielinski, it remains unclear whether his billing practices will trigger additional professional consequences through the Oklahoma Medical Board or affect his future participation in state and federal healthcare programs.