The settlement pertained specifically to H.I.G. Growth Partners and H.I.G. Capital.
In recent years there has been a proliferation of private equity firms taking oversight of healthcare entities. These firms have increased their exposure to False Claims Act (FCA) liability by playing active roles in the operation of the healthcare entities, and multiple high-profile settlements have been reached over the last two years.
There was the U.S. Department of Justice’s (DOJ’s) 2019 settlement with private equity firm Riordan, Lewis & Haden for its role managing compounding pharmacy Diabetic Care Rx and its kickback scheme to generate referrals of TRICARE patients. You may also remember DOJ’s 2020 settlement with Therakos and its private equity firm, The Gores Group, for promoting two drug-device systems for unapproved uses on pediatric patients.
Earlier this month, the Massachusetts Attorney General’s Office reached a historic $25 million settlement with private equity firms H.I.G. Growth Partners and H.I.G. Capital (collectively, HIG), and two executives of the healthcare facilities HIG had invested in: 1) former CEO of South Bay Mental Health Center (SBMHC) Peter Scanlon, and 2) CEO of Community Intervention Services (CIS) Kevin P. Sheehan. The settlement resolved allegations that SBMHC submitted fraudulent claims for mental health services to the Massachusetts Medicaid program known as MassHealth. SBMHC itself had already reached a settlement with the Massachusetts government for $4 million in February 2018.
The allegations centered on SBMHC having a significant issue in the licensure and supervision of therapists at its mental health clinics. An investigation by the Massachusetts Attorney General revealed that SBMHC routinely employed unlicensed, unqualified, and unsupervised staff at its various mental health clinics across the commonwealth. SBMHC then submitted Medicaid claims to MassHealth for services rendered by the staff.
The original case was brought by whistleblower Christine Martino-Fleming, the former Coordinator of Staff Development and Training at SBMHC. The Commonwealth of Massachusetts intervened in the whistleblower’s case in January 2018, and settled with SBMHC for $4 million shortly thereafter.
This month’s settlement pertained specifically to H.I.G. Growth Partners and H.I.G. Capital, the private equity entities behind SBMHC, and the former executives of SBMHC and related entities. The settlement resolved allegations that HIG, Scanlon, and Sheehan had knowledge of SBMHC providing services and making claims on MassHealth while using unlicensed, unqualified, and unsupervised employees, and failed to follow recommendations that could have brought SBMHC into compliance. HIG, Scanlon, and Sheehan all allegedly played roles in the operation of SBMHC that justified liability under the Massachusetts False Claims Act.
HIG agreed to pay $19.95 million, and Mr. Scanlon and Mr. Sheehan will collectively pay $5.05 million. This $25 million settlement is historic in that it is the largest government healthcare fraud settlement involving private equity firms’ oversight or operation of a healthcare provider – and also the largest Medicaid fraud settlement ever for the Massachusetts Attorney General’s Office.
This settlement demonstrates the importance of whistleblowers in not only exposing fraud by healthcare entities, but in holding private equity operators of those healthcare entities accountable.
The proliferation of private equity in healthcare can and should mean that private equity firms that operate healthcare entities must be responsible for the actions of the entities they operate. This includes ensuring that such entities are compliant with licensure, qualification, and supervision requirements – and if not, that the private equity entities take action to correct the problems.
However, the pressure in private equity to quickly increase the value of the healthcare facilities they operate and sell them at a profit often causes them to improperly cut corners or overreach, at the expense of taxpayer-funded health insurance programs like MassHealth, Medicare, and TRICARE.
The recent spate of enforcement actions by both state and federal entities against private equity firms, aided by vital whistleblower insiders bringing these matters to light, sends a cautionary signal to private equity firms in the mental health space – and in healthcare more generally.
Literature is ripe with classic phrases that seem timelessly apropos. For example, take the partial federal government shutdown. For days, the phrase repeated in the
In 2025, Category III codes 0913T and 0914T were introduced to streamline the reporting of percutaneous coronary interventions (PCI) by combining drug-coated balloon (DCB) angioplasty
Please log in to your account to comment on this article.
Join Beth Wolf, MD, CPC, CCDS, for an in-depth webcast on the FY2025 spinal fusion MS-DRG updates. Discover key changes in DRG classification, understand impacts on documentation and CMI, and learn strategies to ensure compliance.
Join Angela Comfort, DBA, MBA, RHIA, CDIP, CCS, CCS-P, as she presents effective strategies to strengthen collaboration between CDI, coding, and quality departments in acute care hospitals. Angela will also share guidance on implementing cross-departmental meetings, using shared KPIs, and engaging leadership to foster a culture of collaboration. Attendees will gain actionable tools to optimize documentation accuracy, elevate quality metrics, and drive a unified approach to healthcare goals, ultimately enhancing both patient outcomes and organizational performance.
Optimize your outpatient clinical documentation and gain comprehensive knowledge from foundational practices to advanced technologies, ensuring improved patient care and organizational and financial success. This webcast bundle provides a holistic approach to outpatient CDI, empowering you to implement best practices from the ground up and leverage advanced strategies for superior results. You will gain actionable insights to improve documentation quality, patient care, compliance, and financial outcomes.
Enhancing outpatient clinical documentation is crucial for maintaining accuracy, compliance, and proper reimbursement in today’s complex healthcare environment. This webcast, presented by industry expert Angela Comfort, DBA, RHIA, CDIP, CCS, CCS-P, will provide you with actionable strategies to tackle complex challenges in outpatient documentation. You’ll learn how to craft detailed clinical narratives, utilize advanced EHR features, and implement accurate risk adjustment and HCC coding. The session also covers essential regulatory updates to keep your documentation practices compliant. Join us to gain the tools you need to improve documentation quality, support better patient care, and ensure financial integrity.
Dr. Ronald Hirsch provides critical details on the new Medicare Appeal Process for Status Changes for patients whose status changes during their hospital stay. He also delves into other scenarios of hospital patients receiving custodial care or medically unnecessary services where patient notifications may be needed along with the processes necessary to ensure compliance with state and federal guidance.
Healthcare organizations face complex regulatory requirements under the No Surprises Act and Price Transparency rules. These policies mandate extensive fee disclosures across settings, and confusion is widespread—many hospitals remain unaware they must post every contracted rate. Non-compliance could lead to costly penalties, financial loss, and legal risks. Join David M. Glaser Esq. as he shows you how to navigate these regulations effectively.
Protect your facility from unwanted audits! Join Becky Jacobsen, BSN, RN, MBS, CCS-P, CPC, CPEDC, CBCS, CEMC, and take a deep dive into both the CMS and AMA guidelines for reporting post operative pain blocks. You’ll learn how to determine if the nerve block is separately codable with real life examples for better understanding. Becky will also cover how to evaluate whether documentation supports medical necessity, offer recommendations for stronger documentation practices, and provide guidance on educating providers about documentation requirements. She’ll include a discussion of appropriate modifier and diagnosis coding assignment so that you can be confident that your billing of post operative pain blocks is fully supported and compliant.
During this RACmonitor webcast Dr. Ronald Hirsch spotlights the areas of the OIG’s Work Plan and the findings of their most recent audits that impact utilization review, case management, and audit staff. He also provides his common-sense interpretation of the prevailing regulations related to those target issues. You’ll walk away better equipped with strategies to put in place immediately to reduce your risk of paybacks, increased scrutiny, and criminal penalties.
Copyright © 2024 RACmonitor. Powered by MedLearn Media.
Happy National Doctor’s Day! Learn how to get a complimentary webcast on ‘Decoding Social Admissions’ as a token of our heartfelt appreciation! Click here to learn more →
CYBER WEEK IS HERE! Don’t miss your chance to get 20% off now until Dec. 2 with code CYBER24
