D.C. clinic accused of fraud in reimbursement bid

A mental health clinic in Southeast Washington stands accused of defrauding Medicaid and the D.C. Department of Health Care Finance (DHCF) by counseling patients without first doing proper diagnostic examinations, cutting corners when it conducts the exams and manipulating requests for reimbursement, according to documents obtained by The Washington Times and interviews with current and former employees.

Family Preservation Services (FPS), a subsidiary of the Providence Service Corp. in Tucson, Ariz., has pressured employees to engage in such practices to recoup $500,000 in mental health service reimbursements that otherwise would have been denied, according to a former billing specialist, Patrice Lancaster, who recently was fired.

Officials with the parent company said they did not learn of Ms. Lancaster’s allegations until after she was terminated, adding that when they pressed her for further details, she declined.

The allegations come at a challenging time for the D.C. Department of Mental Health (DMH), which less than two years ago complied with a mandate to cut staff and outsource services in the name of efficiency and better results, according to the office of D.C. Council member David A. Catania, at-large independent and chairman of the D.C. Council's Committee on Health.

On Tuesday, a spokesman for Mr. Catania acknowledged receipt of Ms. Lancaster’s complaints and the importance of investigating any example of fraud, waste and abuse. The spokesman, Brendan Williams-Kief, said Mr. Catania’s office directed Ms. Lancaster to contact senior officials at DMH, which has an office of accountability and oversight.

“In any contractor situation, there can be bad actors,” said Mr. Williams-Kief. “Whether that is a function of too many providers or some providers being undercapitalized, the office of accountability is specifically tasked with looking into these kinds of complaints.”

DMH spokeswoman Phyllis Jones said Tuesday that the department received an anonymous call to its ethics hotline in October that warned of a lack of valid treatment plans and failure to provide complete patient assessments at FPS. The call prompted an unannounced, focused audit of 52 client charts, she said, noting that the complaints could not be substantiated.

Seven additional complaints

Ms. Jones acknowledged the written complaint filed by Ms. Lancaster, which contains seven additional complaints, including failure to conduct 90-day follow-up visits with mental health patients and continuation of services billed to Medicaid where patients no longer needed services, but said they could not be substantiated. She declined to elaborate.

Officials at DHCF said the complaint does not fall under their jurisdiction.

Since 2004, FPS — one of many small mental health service providers that contract with the District — has received more than $17 million from the city, according to the Office of the Chief Financial Officer.

A performance oversight report reviewed by The Times also shows that DMH investigated complaints against the provider’s clinical practice in 2010 that were found to be unsubstantiated.

Ms. Lancaster told The Times that she made several calls to corporate headquarters in June to complain of hostile work conditions at FPS, which is run by clinical director Roeathea Butler and district manager Rick Smith.

In October, shortly after she was fired, Ms. Lancaster told the corporate office that while still employed, she had sent three reports to Mr. Smith “showing the fraud, waste and potential loss of revenue that would occur if the bad practices weren’t corrected.” Her letter states that Ms. Butler angrily denied the allegations and fired Ms. Lancaster that same week.

Ms. Butler and Mr. Smith referred calls to the parent company.

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