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Indictment cites clinic for fraud
Grand jury indicts leaders of defunct Roanoke mental health agency on federal fraud charges
Roanoke Times - 6/29/2018
The U.S. attorney's office has obtained a grand jury indictment charging the owner of a defunct mental health agency in Roanoke and three former members of management with conspiring to defraud Virginia's Medicaid program out of $45 million.
The 73-count criminal indictment charged Christopher Dean East, the owner of East Mental Health Services, and others with bilking the government through false billing and falsification of records to conceal the activity, between 2007 and 2017.
East and two other defendants pleaded not guilty Wednesday, while two others who did not yet have an attorney had not yet responded.
"We will vigorously defend against the indictment," Robert Hagan, East's defense attorney, said.
East Mental Health opened in 2007 and became one of the highest-paid providers of mental health support services in Virginia, with 50 to 60 clinicians and several hundred clients at its peak, according to an official at the Office of Inspector General at the U.S. Department of Health and Human Services. The $45 million in allegedly fraudulent billings equals about 90 percent of the total that Medicaid paid to the private company during 2007 to 2017, according to Maureen Dixon, the special agent in charge at the Philadelphia office.
"It appears East Mental Health took advantage of clients to maximize the revenue in a variety of ways," she said.
The indictment describes a pattern of activity in which clinicians billed for individual and group treatment services provided at the same time in violation of Medicaid rules, or charged for time spent in recreational activities. In several instances, "the employees allegedly hosted social group gatherings such as Halloween parties for ... patients and then billed Medicaid as if the events were individual, therapy services," said Todd Silver, a spokesman for the Office of Inspector General at Health and Human Services.
The billing clinicians in some cases spent as little as a few minutes face-to-face with clients, an investigator alleged in previously unsealed court papers, but claimed the higher compensation rate of $91 for a one-on-one care encounter. The rate is $24 for group counseling.
The government's investigation dates back to at least 2013, when East Mental Health employees who were upset by what they witnessed at work filed suit and contacted police, court filings show. Investigators searched its headquarters on Brandon Avenue and its Rocky Mount office in 2015.
State Medicaid officials cut off funding for the private company last year, after which East Mental Health announced plans to close in October 2017. Health and Human Services officials said as far as they knew, its clients have since connected with other providers in the area. A judge later struck down portions of a whistleblower lawsuit against East Mental Health, but the case is pending. Plaintiff Julia Switzer, a clinician who left East Mental Health in 2015, has said she has been unable to contract with an attorney to litigate the case.
The defendants charged criminally are East, 48; Joann Kathleen Patterson, 61, the former executive director; Alfred Lloyd Robrecht, 46, the former clinical director; and William Barclay Allison, 52, the former administrative director. Also charged was Ryan Thomas Greene, 44, who was a "team leader," court papers said. All five live in the Roanoke Valley, according to the U.S. attorney's office.
East, Robrecht and Greene pleaded not guilty, while Allison and Patterson told the court they would like court-appointed counsel before being arraigned, court records said. The judge released the defendants on their promise to return to court. Allison was scheduled for arraignment July 13.
Attorney General Jeff Sessions on Thursday said that the five are among 600 people across the nation recently charged with responsibility for more than $2 billion in fraud-related losses.