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.
Please log in to your account to comment on this article.
ICD10monitor has teamed up with renowned CDI expert Dr. Erica Remer to bring you an exclusive webcast on how to recognize sepsis, how to get providers to give documentation that will support sepsis, and how to educate to avert sepsis denials. Register now and become a crucial piece of the solution to standardizing sepsis clinical practice, documentation, and coding at your facility.
Optimize your inpatient 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 CDI, empowering you to implement best practices from the ground up and leverage advanced strategies for superior results. Participants will gain actionable insights to improve documentation quality, patient care, compliance, and financial outcomes.
Join expert Angela Comfort, MBA, RHIA, CDIP, CCS, CCS-P., as she helps you navigate advanced inpatient CDI technologies, regulatory changes, and system interoperability. Angela will provide actionable strategies for integrating AI and predictive analytics into CDI practices, ensuring seamless system interoperability, and maintaining compliance with evolving regulations. Attendees will learn to select and implement advanced EHR systems and CDI software, leverage data analytics to enhance documentation accuracy, and stay audit-ready with the latest compliance updates. Real-world case studies and practical tools will empower you to drive continuous improvement in CDI, improve patient outcomes, and enhance organizational efficiency. Don’t miss this opportunity to advance your CDI practices and stay ahead in this dynamic field.
Join expert Angela Comfort, MBA, RHIA, CDIP, CCS, CCS-P, for an insightful webcast on improving inpatient clinical documentation integrity (CDI). Inaccurate documentation can lead to misdiagnosis, improper treatment, and compromised patient safety. High workloads, lack of standardized practices, and outdated EHR systems contribute to these issues, affecting care quality and financial outcomes. Angela will offer practical strategies and tools to enhance accuracy, consistency, and timeliness in documentation. Attendees will learn to use standardized templates, checklists, and advanced EHR systems, while staying compliant with regulations. Improve patient care, ensure accurate billing, and reduce audit risks with actionable insights from this essential webcast.
This webcast, presented by Tiffany Ferguson, LMSW, CMAC, ACM, addresses the critical gap in Social Determinants of Health (SDoH) reporting for pediatric populations. While SDoH efforts often focus on adults, this session emphasizes the unique needs of children. Attendees will gain insights into the current state of SDoH, new pediatric Z-codes, and the importance of interdisciplinary collaboration. By understanding and applying pediatric-specific SDoH factors, healthcare professionals can improve data capture, compliance, and care outcomes. This webcast is essential for those looking to enhance their approach to pediatric SDoH reporting and coding.
Join Becky Jacobsen, BSN, RN, MBS, CCS-P, CPC, CPEDC, CBCS, CEMC, VP of CDM, for a webcast addressing oncology service coding challenges. Learn to navigate coding for infusions and injections alongside Evaluation and Management (E/M) services, ensuring compliance and accurate reimbursement. Gain insights into documenting E/M services for oncology patients and determining medical necessity. This webcast is essential to optimize coding practices, maintain compliance, and maximize revenue in oncology care.
During this webcast Dr. Ronald Hirsch delves into the inpatient admission order process including when to get it, when it becomes effective, its impact on billing and payment, who can write it, how to cancel it, the effects on the beneficiary, and more. You’ll leave with a clear understanding of inpatient orders and guidelines for handling improper orders that you can implement immediately.
Michelle Wieczorek explores challenges, strategies, and best practices to AI implementation and ongoing monitoring in the middle revenue cycle through real-world use cases. She addresses critical issues such as the validation of AI algorithms, the importance of human validation in machine learning, and the delineation of responsibilities between buyers and vendors.
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 →
