Providers billed S.C. Medicaid millions for fraudulent services

S.C. Medicaid Director Christian Soura says the agency will likely send more cases of suspected provider fraud to the Attorney General’s Office for investigation.

A handful of companies have allegedly cheated South Carolina Medicaid out of millions of taxpayer dollars this year.

This fraud is partly to blame for the fact that the state will likely spend $54 million more than it originally budgeted on low-income patients with behavioral health problems, including thousands of children with attention deficit disorder.

The state Department of Health and Human Services said some providers billed the agency for eight hours of therapy when patients were seen for only an hour. Others failed to indicate why their patients even qualified for treatment. One provider forced a beneficiary to park cars at a football game and charged Medicaid for behavioral health services.

“I don’t know what the diagnosis was, but somebody literally was using kids to park cars and billing Medicaid for it,” said Gwynne Goodlett, an agency project director. “That’s not rehabilitating. That may be a really good activity that may give the kid a sense of ‘I’m earning money.’ That may help the kid, you know, have responsibility, but parking cars at a football game is not what we’re after.”

Five cases have been referred to the Attorney General’s Medicaid Fraud Control Unit for investigation. A spokesman for the Attorney General’s Office said he cannot comment on ongoing investigations or disclose the names of providers under investigation.

“It’s pretty likely that more cases are going to get to that point,” said Medicaid Director Christian Soura.

The Medicaid agency originally budgeted $24.2 million for rehabilitative behavioral health services this fiscal year. Through April 3, the department had already paid $60.1 million in claims for these services and anticipates it will spend $78.1 million before the fiscal year ends in June.

But the shortfall isn’t entirely related to fraud.

Last summer, the agency lifted “prior authorization” for rehabilitative behavioral health services, which previously required special approval before Medicaid patients could be treated. Suddenly, it became much easier for Medicaid patients, most of them children, to access the behavioral health care that they needed. New providers flooded the market to accommodate more customers.

“My guess is that the thinking was that the provider community would be fairly stable over time,” said Soura, who was named the new Medicaid director late last year after former Director Tony Keck resigned. “Instead, there was a huge influx.”

The agency’s $24.2 million budget for these services was just a best guess, Soura said. Medicaid in South Carolina, which covers more than 1 million adults and children, costs $7 billion a year to administer. The draft budget is usually set more than a year in advance and it’s simply a forecast, he said.

“You’ve always got this margin of error in every single one of these appropriation lines,” he said.

Still, it became clear almost immediately that projected expenses and actual expenses were out of whack.

Typically, the agency spent about $300,000 a week on rehabilitative behavioral health services. In January, those expenses had jumped to $2 million every week.

The federal government, which covers about 70 percent of the agency’s Medicaid expenses, allowed the department to bring back prior authorization on March 1. It will save the agency an estimated $14 million in four months.

Since March 1, Soura estimates 50 providers have left the market.

Some of the money tied to fraud will be recovered, he said. The difference will be paid for with state and federal funds.

“He was left this mess by Tony (Keck). There’s no doubt,” said Sue Berkowitz, director of the S.C. Appleseed Legal Justice Center. Her group represents low-income clients.

Keck, who now works for a Tennessee hospital system, declined to answer questions for this article.

To make matters worse, Berkowitz said, the Medicaid agency never told beneficiaries that some of their behavioral health providers had abruptly left.

“When you lose a service, you’re supposed to notify someone. They knew people were losing their services,” she said. “It was a major dropping of the ball.”

Stephanie Trevitz, who lives in Columbia with four children with behavioral health needs, said their specialist simply stopped showing up in January.

“We had a woman — we thought we had died and gone to heaven — who would come in the morning and sit and referee so we could get dressed for work,” Trevitz said.

The specialist even showed up for work once when her house flooded. “The day that she didn’t show up, we’re thinking she died or something.”

Trevitz later found out that the Blythewood-based company their specialist worked for lost its Medicaid contract. The Medicaid agency contends it was the company’s responsibility to inform patients that their services would be terminated.

“Nobody told us,” she said. “I have since heard it was fraud.”

Three of Trevitz’s children qualified for 30 hours of services a week. “I suspect we were not getting 30 hours,” she said.

It’s taken Trevitz, a special education teacher, months to find a new behavioral health provider for her children.

“There’s hoop after hoop after hoop,” she said. “I spent seven hours last week ... to get all of the stuff done so we could get some services. And we still don’t have any.”

Reach Lauren Sausser at 937-5598.