Fraud at large Twin Cities mental health agency went undetected for years, employees say

Naomi Davis does not consider herself a criminal. But for a brief period this fall, the single mother from Minneapolis said she had no choice but to break the law.

Days before Thanksgiving, Davis says, she was told by her former employer, Complementary Support Services, a large Twin Cities mental health agency, that she would not be paid unless she fabricated missing treatment records for a child with mental illness.

"It was blackmail," said Davis, 36, who reported the incident to Richfield police. "If I didn't do what I was told, my kids would go hungry. It made me sick to my stomach."

Now, weeks later, Complementary Support Services (CSS) faces allegations from federal and state prosecutors that it bilked the state's Medicaid program of millions of dollars and provided inadequate supervision of unlicensed practitioners. And current and former employees like Davis are stepping out of the shadows to describe practices that not only misled the government but put scores of patients in harm's way.

In interviews, these employees describe an agency whose directors put patients' mental health at risk by circumventing state rules on clinical supervision and recordkeeping, and then covered up the violations through fraudulent records.

"This was a train that ran off the rails years ago, but no one seemed to care," said Katy Gorman, a former clinical supervisor at CSS who left the agency in August. "There were absolutely no internal controls. None."

The state's failure to detect problems at CSS reflects a longstanding gap in Minnesota's oversight of mental health services. Like more than 200 other agencies that provide care in the home and community, CSS is unlicensed and is not subject to routine regulatory oversight to assure that billing matches the services provided. To detect fraud at such agencies, the state largely relies on reports or tips from concerned staff and clients.

The Minnesota Department of Human Services (DHS) said it has begun reviewing unlicensed providers to determine whether additional oversight is needed to protect the state Medicaid program from overbilling and fraud.

Teri Dimond, the president of CSS, declined to comment and referred a reporter's questions to the agency's attorney, who said CSS denies allegations of fraud and is working on a settlement with prosecutors.

At its peak, CSS employed up to 80 mental health practitioners across the state, from the Minneapolis suburbs to the Iron Range, who provided counseling and other services to several hundred clients in their homes. Many of the clients lived alone in rural areas and relied on CSS for help with their medications, independent life skills and other services.

At such agencies, supervision is vital because the practitioners making home visits are typically unlicensed and lack degrees in psychotherapy. To bill for services under the state Medicaid program, the agency must have clinical professionals, such as psychiatrists or licensed social workers, independently review patient files written up by front-line practitioners to ensure the care is necessary and therapeutic.

Because many of the front-line therapists have little training and experience, "it is absolutely unconscionable they not have clinical supervision,'' said Lloyd Wells, president of the Minnesota Psychiatric Society.

But prosecutors allege that CSS routinely violated the law's supervision requirements.

For instance, the practitioners at CSS were required to submit written "progress notes" describing the care provided after every visit with a patient. Former employees said practitioners would sometimes fill their notes with everyday activities — such as "people-watching at the mall" or "grocery shopping" — as if it were therapeutic. One visiting therapist even listed "pumpkin carving" as treatment, a current employee said.

The patient progress notes are significant because often they are typically the only record of a practitioner's visit to a patient's home — and they form the basis of a provider's billings to Medicaid.

However, instead of having clinical professionals review these notes, Dimond would "batch sign" thousands of progress notes electronically and then send them to Medicaid for payment, according to a lawsuit filed last month by the U.S. attorney for Minnesota and Minnesota Attorney General Lori Swanson.

"The whole goal of the organization is to make as much money off the government as possible," said Michael Robin, a consultant from St. Paul who said he was paid by CSS to assess patients for mental health services. "It was greed, plain and simple." Robin said CSS fired him last week after he tried to inform state regulators about the agency's absence of clinical supervision.

Josh Denton, a former program director at CSS, said he was asked by Dimond in late 2013 to review about 200 patient progress notes. He estimates that 10 to 20 percent of the notes had "egregious problems" and should never have been approved. In some cases, the notes contained a one-sentence description of the therapy, such as "Had coffee with client," without explaining how it would benefit the client.

Denton said he discovered multiple cases in which practitioners had "cut and paste" old progress notes into new ones; and he now questions whether some of these patients had ever even received treatment. He recalled one case in which a CSS practitioner used the same progress note again and again for a patient over a nine-month period.

"Anyone could look at these notes and see that they were complete nonsense," said Denton, who resigned from his position in November. "The deeper concern is: If these documents are not reviewed, then how do we know if the treatment is on the right course?"

Other employees at CSS described a chaotic culture lacking in accountability. Practitioners said they received little or no training; were allowed to work from home with their laptops, and routinely sent private patient information through their personal, unsecured Gmail accounts. The agency's main office in Richfield was often empty with no one answering the phone, employees said.

This spring, after federal prosecutors started investigating the firm, the agency scrambled to bring its records back into compliance.

Gorman, who ran her own mental health agency for 10 years, said she was hired by CSS to help clean up its recordkeeping. Gorman said that within two weeks after being hired she was asked to sign documents asserting that clinicians had reviewed patient progress notes, which she considered untrue. She urged CSS to hire more clinical professionals. It refused, so she resigned.

"We all wondered, all of us who worked there, how did they get away with this for so long?" Gorman said. "And why does the government keep paying them?"

Those questions still hang over CSS. According to state records, the agency collected more than $7 million from the state since improprieties were uncovered more than five years ago.

State records show that the Department of Human Services knew of problems with CSS' internal controls practices as far back as 2010, when the agency was licensed by DHS to provide home and community-based services to people with developmental disabilities. Yet CSS stopped billing for those licensed services in 2011, and DHS did not terminate payments to CSS under the state's Medicaid program until mid-November.

Davis, the counselor who accused CSS of blackmail, said she hopes the agency's top administrators "do jail time." Davis said she was told to backdate treatment plans that were missing or she wouldn't receive her final paycheck.

Speaking from her north Minneapolis home, in a room decorated with photos of her children, Davis said she will never forgive CSS. "I don't think anyone at that agency knows all the pain and the hurt they've caused," she said.

Chris Serres • 612-673-4308

Twitter: @chrisserres