AG HEALEY SUES MENTAL HEALTH CENTER FOR ILLEGALLY BILLING MASSHEALTH FOR UNLICENSED AND UNSUPERVISED PATIENT CARE
Allegations Concern 17 Mental Health Facilities Across Massachusetts
BOSTON – Attorney General Maura Healey has sued South Bay Mental Health Center, Inc. (SBMHC) for fraudulently billing 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.
“This company provided substandard care to many vulnerable patients and fraudulently billed the state for its inadequate services,” said AG Healey. “MassHealth members deserve competent treatment from qualified individuals, and our office will continue to take action in order to remove these significant barriers to accessing critical mental health care in our state.”
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 investigation into these allegations began 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. The complaint alleges that 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 alleges 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 possibly provided the necessary supervision to all of the other unlicensed clinicians.
From August 2009 to the present, MassHealth and its contracted managed care entities paid SBMHC more than $123 million for outpatient services including mental health counseling, such as psychiatric diagnostic evaluations and psychotherapy. The AG’s Office estimates that a significant portion of that $123 million was based on fraudulent claims for services rendered by unlicensed, unqualified, and unsupervised staff to more than 30,000 MassHealth members.
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, Kevin P. Sheehan.
The AG’s Office alleges that HIG, CIS, Scanlon, and Sheehan knew that SBMHC was providing services in violation of regulatory requirements and did not bring SMBHC operations into compliance or make any attempts to repay the money owed to MassHealth, as required by law. HIG allegedly cited the large profit margins as a reason to acquire the company.
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.
Through this lawsuit, the AG’s Office is seeking treble damages, civil penalties, and prejudgment interest.
This case is being 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 Special Agent Joseph Losavio of the Office of the Inspector General.
