Oldest Trick in the Medicaid Fraud Book

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Man giving bribe to a doctor

Fraudulent medical billing is one of the oldest tricks in the Medicaid fraud book. Dr. Ray Smith, a Spokane, Wash., mental health counselor, resolved allegations that he and his company, “A Brief Counseling Center,” also known as “Healthy Counseling Center” (“ABCC”) fraudulently billed the Washington State Medicaid program by paying $138,984. (There was nothing brief or healthy about the allegations against Dr. Smith’s company.)

Court records show that the licensed mental health counselor employed mental health treatment providers that were unlicensed and unqualified therapists who didn’t meet qualification requirements, were not contracted with the state, and were not eligible for reimbursement through Medicaid. (That did not stop him from authorizing the submission of improper bills to Washington State Medicaid, otherwise known as Apple Health.) 

The case began back in 2019 when two whistleblowers, who had previously provided billing services for ABCC, filed a qui tam complaint under seal. (A qui tam allows a private person to prosecute a lawsuit for the government and receive a reward.) The U.S. intervened in the case and obtained the settlement. The whistleblowers get $25,812 of the settlement amount. (That’s a great reward for telling the truth.) 

What’s egregious about this case is that Dr. Smith misrepresented his employees as being licensed and qualified therapists. The already vulnerable victims were taken advantage of the health care provider, whom they trusted to provide counseling for the difficult situations they were already experiencing. (Who can you trust, really?)

Medicaid beneficiaries deserve legitimate services provided by certified practitioners. Congratulations to the whistleblowers and the Department of Health and Human Services Office of Inspector General for identifying and resolving this threat to vulnerable Americans and for bringing this case to a close.

Today’s Fraud of the Day comes from a Department of Justice press release, “Spokane Mental Health Counselor Agrees to Pay More Than $135,000 for Fraudulent Medicaid Billing,” dated February 25, 2022.

Spokane, Washington – Dr. Ray Smith, a mental health counselor practicing in Spokane, and his company, “A Brief Counseling Center,” also known as “Healthy Counseling Center” (“ABCC”) have agreed to pay $138,984 to resolve allegations that he and his company fraudulently billed Washington State Medicaid. Dr. Smith is a licensed mental health counselor in the State of Washington and is the sole owner of ABCC. During the relevant time period, ABCC employed a number of mental health treatment providers, and billed Washington State Medicaid for their services. Washington State Medicaid – also known as Apple Health – is funded by federal and state taxpayers and provides health insurance for needy and low-income residents of Washington. Medicaid provides reimbursement for mental health treatment services provided by qualified and licensed providers who are enrolled and contracted with the state Health Care Authority, which administers the Medicaid program in Washington.

According to court documents, this settlement resolves allegations under the False Claims Act that Dr. Smith and ABCC improperly billed Medicaid for unlicensed and unqualified therapists who did not meet qualification requirements, were not contracted with the state, and were not eligible for reimbursement through Medicaid. The settlement also resolves allegations that Dr. Smith and ABCC fraudulently billed Medicaid for the services by falsely misrepresenting that the services had been provided by licensed and qualified therapists.

 

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Larry Benson, Senior Director of Strategic Alliances, LexisNexis Risk Solutions - Government

Larry Benson is responsible for developing strategic partnerships and solutions for the government vertical. His expertise focuses on how government programs are defrauded by criminal groups, and the approaches necessary to prevent them from succeeding.

Mr. Benson has 30 years of experience in sales and business development. Before joining LexisNexis® Risk Solutions, he spent 12 years founding and managing two software technology startups. During the 1990s he spent 10 years as a Regional Director helping to grow a New England-based technology company from 300 employees to 7,000. He started his career with Martin Marietta Aerospace working on laser guided weapons and day/night vision systems.

A sought-after speaker and accomplished writer, Mr. Benson is the principal author of “Fraud of the Day,” a website dedicated to educating government officials about how criminals are defrauding government programs. He has co-authored WTF? Where’s the Fraud? How to Unmask and Stop Identity Fraud’s Drain on Our Government, and Data Personified, How Fraud is Changing the Meaning of Identity.

Benson holds a Bachelor of Science in Physics from Albright College, and earned two graduate degrees – a Master of Business Administration from Florida Institute of Technology, and a Master of Science in Engineering from Lehigh University.