Minnesota terminates payments to large mental health agency accused of bilking Medicaid

In a highly unusual move, the Minnesota Department of Human Services has terminated payments to a large Twin Cities mental health provider accused of overbilling Medicaid by millions of dollars.

The move is part of a broader state effort to crack down on Medicaid fraud, but it is also prompting fears that dozens of people with psychiatric disorders could be stranded without necessary services.

The state agency, which oversees Medicaid, has notified 16 counties that it has stopped making payments to Complementary Support Services (CSS), a Richfield-based nonprofit that provides in-home mental health services to hundreds of children and adults across the state, according to a notice sent last month by state regulators and obtained by the Star Tribune.

The move comes in the wake of allegations by federal and state prosecutors that CSS failed to provide proper supervision of its unlicensed staff and that it padded claims to Medicaid with charges not allowed under state law.

The decision to terminate payments affects about half of the estimated 200 Minnesotans who still receive services from the firm through Medical Assistance, the state's version of Medicaid. Department of Human Services officials said they are working with counties and other health care plans to ensure that clients are not left stranded.

"Our focus now is to make sure that people get needed mental health care," the agency said in a statement.

Even so, some former and current employees at CSS said they are concerned that people with mental illnesses could be left without services. The agency had about 50 practitioners across the state who would visit patients in their homes and provide counseling and other services, such as reminding them to take their medications. Finding a new provider can be difficult, as waits for in-home mental health services can be several weeks or more, say practitioners.

"It's a huge concern," said Anne Horgan, who supervised a four-county region for CSS before resigning in April. "These are people who need eyes on them on a regular basis. … For some, their [mental health] worker is their only contact with the outside world and their only support."

Added Katy Gorman, a former clinical supervisor at CSS who now works as a director of behavioral health at an Indian reservation in Wisconsin: "We are dealing with people with severe and persistent mental illnesses who are going to suffer if they go without services."

Priscilla Lord, a Minneapolis attorney representing the nonprofit, said it continues to provide services to clients on Medicaid, even though it is no longer being reimbursed by the state. When asked how much longer it would continue providing services without getting paid for them, Lord responded, "indefinitely."

"We will make sure that the patients are taken on by someone else and are not abandoned," Lord said. "We actually care about people."

Prosecutors allege that CSS broke state law by failing to ensure that its practitioners were properly supervised by licensed professionals. To disguise the agency's lack of supervision, the agency's director, Teri Dimond, "batch signed" thousands of patient reports — even while she was on maternity leave, prosecutors said. In addition, the agency told employees to pad their bills to Medical Assistance with time spent on record-keeping, which is prohibited under state law, according to a lawsuit filed last month in federal court in Minneapolis.

"Instead of following the law, this company has cost taxpayers millions of dollars and jeopardized the well-being of vulnerable clients throughout Minnesota," said Assistant U.S. Attorney David Fuller in a statement last month.

Lord, the attorney for CSS, said that the agency denies these allegations and that it is working toward a possible settlement with prosecutors.

Chris Serres • 612-673-4308

Twitter: @chrisserres