A mental health center that operates facilities across the state, including in Worcester, will pay $4 million to settle charges of fraudulently billing the state’s Medicaid program for services provided by unlicensed, unqualified and unsupervised staff members.
Attorney General Maura Healey announced the settlement with South Bay Mental Health Center Inc. on Thursday.
“Thousands of MassHealth patients were left with inadequate care at these mental health facilities, while we allege this company fraudulently billed the state,” Ms. Healey said in a written statement. “This settlement will bring critical funds back to our MassHealth program and ensure that members receive treatment from qualified individuals.”
SBMHC is also required to implement an internal program to ensure compliance with licensure, billing, supervision, and quality of care requirements for mental health center staff. The company must also contract with an independent compliance reviewer to conduct yearly on-site audits that will be reported to the attorney general’s office.
An employee’s whistleblower lawsuit in U.S. District Court in August 2015 led to the state investigation. The investigation revealed that all 17 clinics named in the complaint featured significant gaps in licensing and supervision of therapists during the relevant time period. Many of the employees who were performing mental health services did not have degrees in social work and therefore were not eligible for a license. They instead had degrees in areas such as expressive therapy, art therapy, creative art therapy, school counseling, somatic counseling and agency counseling.
Part of the settlement, $700,000, will go to the whistleblower. The remainder will be paid to MassHealth.
In addition to the company, defendants included Peter J. Scanlon, who founded and owned the company until April 2012. The complaint also named HIG Growth Partners, LLC and HIG Capital LLC, which created Community Intervention Services to acquire SBMHC from Mr. Scanlon. Kevin P. Sheehan, co-founder and CEO of CIS until November 2016, was also a defendant.
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