Mental health agency paying $7M to settle fraud claims

December 16, 2017

JACKSON, Miss. (AP) — One of Mississippi’s regional mental health boards is paying nearly $7 million over claims that it bilked Medicaid for services to preschoolers that were either substandard or not provided at all.

U.S. Attorney Mike Hurst announced the settlement of the whistleblower lawsuit Thursday.

Region 8 Mental Health Services will pay the money after a former employee, Julie Farmer, filed the False Claims Act lawsuit on behalf of the government in 2009. She’ll get $1.25 million of the $6.93 million. Some of the money will also go to the Mississippi state government to repay the state’s share of the state-federal Medicaid program. The bulk of the settlement money will go to the federal government.

Hurst said an investigation by federal officials found fraud in billings from 2004 to 2010. He said it’s the largest False Claims Act health care settlement ever made in Mississippi.

In her lawsuit, Farmer says she discovered that when she went to work for the Brandon-based mental health agency in its Simpson County branch, she was instructed to bill Medicaid as if she were spending time with children even when she was not, in order to meet a daily quota. That would mean agency personnel would bill Medicaid for riding a school bus with children, or even for time spent driving between homes, time doing paperwork, or appointments that clients didn’t show up for.

“Region 8 routinely billed Medicaid for ‘therapy’ services when all the employees had in fact done was watch television, shop, travel to and from service locations, ride the Region 8 buses, exercise, or study,” said lawyer Brad Pigott, who represented Farmer.

Farmer alleged that Region 8 was billing Medicaid for providing “day treatment,” for young children, intended to help preschoolers with serious emotional disturbances. However, she said that in at least some cases, the agency was providing substandard day care. Farmer said the agency put her in charge of an overflow class in a rat-infested offsite storage building, and billed Medicaid as if she had a master’s degree, when she did not. Farmer said she also observed agency personnel purge records before auditors came.

Region 8 Executive Director David Van referred comment to lawyer Amanda Barbour, who noted that the agency hadn’t admitted wrongdoing in its settlement.

“Region 8 officials realized that prolonged litigation with the government was not in the best interests of either Region 8 or the people they serve,” Barbour wrote in an email. “As a result, Region 8 agreed to settle this matter and dedicate resources to serving the community.”

Barbour said the settlement would not force Region 8 to cut services, and would use current resources to pay the judgment without borrowing. A Sept. 30, 2016, financial statement showed that the agency had $20 million in revenue in the previous 12 months, with $15 million in cash reserves.

“It is imperative that these children receive the behavioral intervention services they need,” said Derrick Jackson, an investigator with the office of inspector general for the U.S. Department of Health and Human Services. “We will continue to monitor Region 8 Mental Health Services to ensure the organization is providing intervention services by qualified staff and properly billing Medicaid.”


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