- Office of Attorney General Maura Healey
Media Contact for Mental Health Center to Pay $4 Million under AG Settlement for Illegally Billing MassHealth for Unlicensed Patient Care
Boston — Attorney General Maura Healey announced today that South Bay Mental Health Center, Inc. (SBMHC) has agreed to pay $4 million based on allegations that it fraudulently billed the state’s Medicaid Program, known as MassHealth, for mental health care services provided to patients by unlicensed, unqualified, and unsupervised staff members at clinics across the state.
“Thousands of MassHealth patients were left with inadequate care at these mental health facilities, while we allege this company fraudulently billed the state,” said AG Healey. “This settlement will bring critical funds back to our MassHealth program and ensure that members receive treatment from qualified individuals. Companies that receive payments from taxpayer-funded programs must be held accountable when they abuse this system.”
The settlement agreement also requires SBMHC to implement an internal program to ensure compliance with all licensure, supervision, billing, and quality of care requirements for mental health center staff, and to contract with an independent compliance reviewer to conduct yearly on-site audits that will be reported to the AG’s Office.
SBMHC operates mental health facilities across the state including in Attleboro, Brockton, Cape Cod, Chelsea, Dorchester, Fall River, Lawrence, Leominster, Lowell, Lynn, Malden, Pittsfield, Plymouth, Salem, Springfield, Weymouth, and Worcester. The AG’s Office launched an investigation into these allegations after a whistleblower lawsuit was filed by a former SBMHC employee in August 2015 in the U.S. District Court for the District of Massachusetts.
The AG’s investigation revealed that SBMHC had a widespread pattern of employing unlicensed, unqualified, and unsupervised staff at its mental health facilities in violation of MassHealth regulations. According to the AG’s complaint in intervention filed last month, by submitting claims to MassHealth for mental health services provided by unlicensed and unsupervised personnel, the company submitted fraudulent claims in violation of the Massachusetts False Claims Act.
The AG’s Office alleged that all of the 17 clinics named in the complaint featured significant gaps in licensing and supervision of therapists during the relevant time period. Many of the employees at SBMHC clinics who were performing mental health services did not have degrees in social work (and therefore were not even license-eligible) and instead had degrees in such areas as expressive therapy, art therapy, creative arts therapy, school counseling, somatic counseling, and agency counseling. For example, the Attleboro Clinic, which had 125 employees, had only two licensed supervisors who could not have provided the necessary supervision to all of the other unlicensed clinicians.
Under the terms of the settlement, SBMHC will pay a total of $4 million, with $700,000 going to the relator in the whistleblower case, and the remaining amount to be paid to MassHealth.
The complaint was filed in U.S. District Court against SBMHC and Peter J. Scanlon, who founded and owned the company until April 2012. The complaint also names H.I.G. Growth Partners, LLC and H.I.G. Capital, LLC (collectively, HIG), which created Community Intervention Services (CIS) to acquire SBMHC from Scanlon, as well as co-founder and CEO of CIS until November 2016, Kevin P. Sheehan. Litigation against the remaining four defendants remains ongoing.
MassHealth pays for mental health services provided to MassHealth members by qualified clinicians and counselors who are subject to certain licensure and supervision requirements. Mental health centers that employ those rendering mental health services must comply with certain core staffing and supervision requirements set out in applicable regulations.
This case was handled by Assistant Attorneys General Robyn Dollar, Gregory Matthews, and Kevin Lownds, along with Investigations Supervisors Denise Long and Lisa Bailey and Auditor Kaleigh Ross, all of the AG’s Medicaid Fraud Division, with substantial assistance from the Office of the Inspector General and MassHealth.