Press Release  AG Healey’s Medicaid Fraud Division Recovers More Than $71 Million in Federal Fiscal Year 2022

BOSTON — Attorney General Maura Healey announced today that her office’s Medicaid Fraud Division recovered more than $71 million during the most recent federal fiscal year, which ended on September 30.  The Division recovered approximately $11 for every dollar appropriated by the federal government and the Massachusetts legislature for its work.

The AG’s Medicaid Fraud Division investigates and prosecutes providers who defraud the state’s Medicaid program, MassHealth. The Division is also responsible for reviewing complaints of abuse, neglect, mistreatment, and financial exploitation of patients in long-term care facilities and MassHealth members in any health care setting.

“I’m proud of the important work our Medicaid Fraud Division does to ensure the integrity of our MassHealth system on behalf of taxpayers and MassHealth members,” said AG Healey. “The tens of millions of dollars recovered by the Division during this fiscal year send a strong message that we are committed to ensuring that our MassHealth dollars are going to our most vulnerable residents and we take seriously attempts to defraud our important safety net health care system.”

“Our administration has made program integrity a priority of the MassHealth program so that it can continue to successfully perform its primary purpose – providing crucial health care supports for Massachusetts’ most vulnerable,” said Secretary of Health and Human Services Marylou Sudders. “I am grateful for the Attorney General’s partnership in protecting the integrity of MassHealth’s billing system and ensuring the effective usage of taxpayer dollars.”

During the most recent federal fiscal year, the Division secured 35 civil settlements with various entities, including outpatient mental health providers, home health agencies, substance abuse treatment facilities, adult day health centers, skilled nursing facilities, and dental practices. The overwhelming majority of the Division’s recoveries were returned to MassHealth.  Funds were also returned to the Opioid Recovery and Remediation Fund – a fund established by the Legislature in 2020 with money from AG Healey’s opioid litigation and settlements, to mitigate the impacts of the opioid epidemic in Massachusetts; the Department of Public Health’s Long-Term Care Facility Quality Improvement Fund; former employees of MassHealth providers who were owed unpaid wages; and whistleblowers who brought lawsuits against providers alleging fraud.

The Division brought criminal charges against 24 providers and individuals for defrauding MassHealth and two individuals for abuse, neglect, or financial exploitation of elders. The Division also secured criminal indictments against a variety of providers and individuals, including physicians, clinical laboratories, mental health providers, personal care attendants, and home health aides.

Combatting fraud in behavioral health services

Safeguarding high-quality mental and behavioral health services for MassHealth members remained a priority for the Division over the last fiscal year. In October 2021, in the largest-ever settlement of its kind, a private equity firm and former executives of South Bay Mental Health Center, Inc. (SBMHC) agreed to pay $25 million for allegedly causing fraudulent claims to be submitted to MassHealth for mental health services provided to patients by unlicensed, unqualified, and improperly supervised staff at clinics across the state. This settlement was the largest publicly disclosed government health care fraud settlement in the nation involving private equity oversight of health care providers, as well as the largest amount a private equity company itself has agreed to pay to resolve fraud allegations involving health care portfolio companies. Similarly, in June 2022, Pathways of Massachusetts, a former Massachusetts outpatient behavioral health provider, and Molina Healthcare, Inc., its former corporate parent, agreed to pay $4.6 million to resolve allegations that Pathways and Molina caused fraudulent claims to be submitted to MassHealth for behavioral health care services provided to patients by unlicensed and improperly supervised staff members.

In November 2021, the Division worked with the Insurance Fraud Bureau to secure indictments against Nicole Kasimatis, the owner and operator of Fortitude Counseling and Recovery Center in Quincy, for billing MassHealth and private health insurers for substance use disorder and/or mental health services she did not perform either because she was incarcerated or out of the country; billing for services not rendered by licensed or supervised Fortitude employees; and billing for services under the name and number of providers who no longer worked for Fortitude and who did not provide the services. In July 2022, Kasimatis pleaded guilty and was sentenced to serve three to four years in state prison in connection with this scheme.

Protecting the physical and financial safety of elderly patients

The AG’s Medicaid Fraud Division continued to prioritize the physical and financial security of elderly patients during this federal fiscal year. In May 2022, the Division announced settlements with five Massachusetts nursing homes resolving allegations of patient neglect, insufficient staff training, and inadequate care for vulnerable nursing home residents. These cases involved preventable harm and, in some situations, the deaths of nursing home residents, and returned more than $250,000 to the state, including more than half to the Massachusetts Department of Public Health (DPH) Long Term Care Facility Quality Improvement Fund. In June 2022, the Division sued a Rowley nursing home and its owner for infection control failures at the start of the COVID-19 pandemic, including failing to cohort, isolate or test residents who were suspected, symptomatic, or known to have tested positive for COVID-19.

In September 2022, the Division secured indictments against a home health aide who is allegedly shown on home surveillance video abusing her elderly patient, including shaking the patient from a recliner and aggressively dragging her into the bathroom, causing noticeable bruising on the patient’s left arm and side.  In April 2022, the Division announced indictments against a Worcester nursing assistant in connection with his alleged unauthorized use of four nursing home residents’ debit cards and the theft of over $30,000 from their accounts. Additionally, the Division sought and obtained indictments against a Carlisle optometrist for allegedly falsely billing MassHealth during the COVID-19 pandemic for services that were not provided to nursing home residents.

Continuing to pursue fraud in home-based care

The Division continued its ongoing efforts to combat fraud among providers who deliver home-based services. After two trials in Middlesex Superior Court in June and September 2022, two individuals were found guilty in connection with their roles in a scheme to falsely submit timesheets for personal care attendant services that were not actually rendered; the two individuals were sentenced to a one-year term and a two-year term, respectively, in the House of Correction. In February 2022, the Division secured indictments against four individuals who are accused of defrauding MassHealth by knowingly submitting false personal care attendant timesheets claiming they were providing services while they were working at other jobs.

Since 2016, the AG’s Office has successfully prosecuted three home health agencies and their owners and settled civilly with 14 home health agencies, returning more than $50 million to MassHealth. That effort continued during this federal fiscal year. In March 2022, a Worcester home health company reached a $6.53 million settlement to resolve longstanding litigation with the AG’s Office concerning its noncompliance with MassHealth regulations. The settlement also returned $375,000 to employees to whom the home health company owed unpaid wages. In May 2022, a Tewksbury home health agency and its owners agreed to pay $550,000 to resolve allegations that the agency billed the state for services not appropriately authorized by a physician. In December 2021, a Chicopee-based home health agency and its owners reached a $630,000 settlement to resolve allegations that the agency had not complied with MassHealth regulations. In November 2021, a Brockton-based home health company and its owners agreed to pay $1.2 million to resolve similar allegations.

Preventing the illegal prescribing and dispensing of opioids

The Division pursues providers engaged in the illegal prescribing of opioids. In May 2022, the former medical director at Lawrence Medical Center was indicted for prescribing controlled substances to his patients including amphetamines, benzodiazepines, and morphine sulfate, even when he knew from repeated urine drug screens that the patients were not taking the drugs. In June 2022, a Newton physician agreed to pay $100,000 and to enter into an independent compliance monitoring program to resolve allegations that he prescribed controlled substances without first reviewing patient prescription histories to prevent drug diversion and misuse. And in September 2022, the Division announced criminal charges against a Marshfield pharmacy and its owner for allegedly accepting cash payments from MassHealth recipients for prescriptions for controlled substances, in many cases charging cash in an amount over and above what MassHealth would have reimbursed the pharmacy.

The AG’s Medicaid Fraud Division has maintained a national presence and leadership role within the National Association of Medicaid Fraud Control Units (NAMFCU). The Chief of the Division, Toby Unger, is currently serving as the President of NAMFCU. The Division is also a national leader in policy and training initiatives as well as in multistate false claims cases.

Medicaid is a multi-billion-dollar joint state and federal program that provides health care coverage for the economically disadvantaged. The Division works cooperatively with MassHealth and other state and federal agencies to prosecute provider fraud in the Massachusetts Medicaid program. Many of the cases handled by the Division were referred by MassHealth, as well as state and federal agencies and law enforcement partners.

The success of the Division is due to its dedicated team of investigators, attorneys, analysts, and administrative staff along with the leadership of the Division’s management team, including Chief Toby Unger; Deputy Chief Kevin Lownds; Managing Attorneys Jennifer Goldstein, Gregory Matthews, and Ian Marinoff; Senior Trial Counsel Elisha Willis; and Investigation Supervisors Joseph Shea, Dean Bates and Christopher Cecchini.

The Medicaid Fraud Division receives 75 percent of its funding from the U.S. Department of Health and Human Services under a grant award. The remaining 25 percent is funded by the Commonwealth of Massachusetts.

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