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Case Number: 1:19-cv-475-CFC
Judge: Colm F. Connolly
Court: United States District Court for the District of Delaware (New Castle County)
Plaintiff's Attorney: United States Attorney’s Office
Description: Wilmington, DE: False Claims Act Qui Tam lawyers represented the United States claiming that Connections Community Support Programs, Inc. alleging health care fraud arising under the federal False Claims Act and violations of the Controlled Substances Act. Prior to the sale of its assets in bankruptcy, CCSP provided a variety of mental health and addiction treatment services at numerous locations throughout Delaware.
CCSP has agreed to the entry of a judgment in the amount of $13,757,520.60, plus interest, to resolve claims that CCSP violated the False Claims Act by billing for mental health services performed by individuals whose professional qualifications did not allow them to bill Medicare or Medicaid for reimbursement and by billing Medicaid for mental health services using incorrect procedure codes for the person performing the service, resulting in higher payments than were permitted. CCSP has also agreed to the entry of a judgment in the amount of $1,621,571, plus interest, to resolve claims that it violated the federal Controlled Substances Act by negligently failing to keep proper records of its use of controlled substances, including methadone and buprenorphine, in its treatment of patients with substance use disorders and by transferring controlled substances between locations without proper documentation.
On April 19, 2021, shortly after the filing of these two lawsuits by the United States, CCSP filed for bankruptcy. On June 15, 2021, CCSP completed a sale, overseen by the Bankruptcy Court, of its assets and operations to Conexio Care, Inc. and Coras Wellness and Behavioral Health, which are now providing the mental health and addition treatments services formerly provided by CCSP. The settlement agreements and consent judgments agreed to by CCSP and the United States must still be approved by the Bankruptcy Court and the final amount of any recovery by the United States will be limited by the availability of funds in the bankruptcy estate to pay the United States and other creditors of CCSP.
“For many years, Connections was improperly billing government programs for mental health services and failing to properly monitor and document its controlled substances inventory,” said U.S. Attorney Weiss. “These settlements, together with the transfer of all of Connections’ services and operations to providers, finally resolve Connections’ long history of poor legal and regulatory compliance which jeopardized the provision of important mental health and substance abuse treatment to the residents of the State of Delaware.”
“These allegations depict CCSP as a health care provider that truly disserved patients and their Federal health care programs,” said Maureen Dixon, Special Agent in Charge with the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). “Falsely billing Medicare and Medicaid demonstrates a lacking regard for the stability of these programs and the beneficiaries who depend on their services. With our law enforcement partners, HHS-OIG continuously strives to swiftly combat such fraud.”
“Narcotics treatments programs such as Connections were entrusted with dispensing drugs such as methadone and buprenorphine to assist people with substance use disorder. However, with that responsibility comes the obligation to properly document the use and transfer of these same drugs,” said Thomas Hodnett, Acting Special Agent in Charge of the Drug Enforcement Administration’s (DEA) Philadelphia Field Division. “This civil judgement serves as notice to ensure compliance with the Controlled Substances Act and the requirements to safeguard drugs used for medication assisted treatment.”
The False Claims Act settlement announced today partially resolves a lawsuit filed under the whistleblower provision of the False Claims Act. The government’s claims are based on a whistleblower suit filed by two former CCSP employees. A whistleblower suit, or qui tam action under the False Claims Act, is commenced by an individual, known as a “relator,” filing a complaint under seal in the U.S. District Court, and providing a copy of the complaint and other evidence to the local U.S. Attorney. The United States then has an opportunity to investigate the claims. The False Claims Act provides the whistleblower with a share of the government’s recovery. Separate from the settlement announced today, the qui tam relators are continuing to pursue additional claims against CCSP and its former CEO Catherine Devaney McKay.
The United States is also continuing to pursue its claims for violations of the Controlled Substances Act against McKay as well as two other corporate executives, William Northey and Steven Davis, which are not part of the settlement announced today.
Assistant U.S. Attorneys Jesse S. Wenger and Laura D. Hatcher represented the United States in the False Claims Act matter. Assistant U.S. Attorneys Dylan J. Steinberg and Laura D. Hatcher represented the United States in the Controlled Substances Act matter.
Outcome: Defendant agreed to pay $15 million to settle the claims made against it.