Troubled Minnesota provider of disability services accused of Medicaid fraud

State investigators searched the offices of a troubled organization that serves Minnesotans with disabilities, after finding evidence it had bilked the state's publicly funded health insurance program by more than $4 million.

A search warrant application alleges that Bridges MN, which at one point had about 400 clients and 90 group homes statewide, violated state and federal laws by billing the state Medicaid program for services designed to help people live in their own homes, when in fact the services were provided by entities owned or operated by Bridges MN or its affiliates.

The provider also billed for services that were not provided, often because the client was at a hospital or other facility, the search warrant application alleges.

No one has been charged in the case, and a lawyer for Bridges MN has denied the allegations. But the organization has been the subject of regulatory sanctions after state inspectors documented serious violations of patient safety and care standards.

Investigators with the Minnesota Department of Human Services (DHS) and the state Attorney General's Office have found at least $4 million in overpayments from the Medicaid program. A Hennepin County District judge on Thursday approved a warrant to search the St. Louis Park office of Bridges MN, and to seize items such as computers, smart phones and other storage devices.

According to the search warrant application, DHS had repeatedly warned Bridges MN that its billing practices could be considered fraudulent, because clients who received its home and community-based services (HCBS) were not actually living in their own homes, as required under Medicaid guidelines. Instead, they were living in settings that Bridges or its affiliates either owned, managed or had a financial interest in. Investigators found that Bridges MN billed for home-based services at more than 20 properties across the state that were owned or affiliated with the provider, according to the search warrant application.

State investigators also found wide discrepancies between what Bridges MN billed the state-federal Medicaid program and the services actually provided. A DHS investigator found dozens of occasions when the provider billed for up to 24 hours in a single day for clients, including time when they were sleeping and Bridges MN was not providing services, the search warrant application states. Investigators also found 109 occasions in which Bridges billed Medicaid for services on days when the recipient was in a hospital or other facility — a practice not allowed under Medicaid.

The fraud investigative unit at DHS conducted an investigation into "various aspects of Bridges' service delivery" and found "numerous issues with Bridges billing that are consistent with fraud," according to the search warrant application, which was filed by an investigator with the state Attorney General's Office.

"Bridges was continually informed by DHS that billing for non-compliant services was not permissible," the search warrant application states.

Blake Elliott, president and co-founder of Bridges MN, did not respond to requests for comment on Monday. An attorney representing the provider issued a statement denying any wrongdoing.

"We are cooperating with law enforcement and the Attorney General's office to bring about an expeditious conclusion to this investigation. No one affiliated with Bridges MN has been charged with any crime, " said the statement from Surya Saxena, a former federal prosecutor and attorney representing Bridges MN. "While we proactively address these allegations, we will continue to focus our complete attention on the clients and caregivers who look to us for support."

The allegations in the search warrant follow a history of regulatory problems at Bridges MN, which announced in November that it was being acquired by Fort Worth, Texas-based Caregiver Inc. Reached by email on Monday, Gary Nettis Jr., chief development officer at Caregiver, declined to comment on the implications of the fraud allegations and whether the acquisition would go forward as planned.

Founded in 2015, Bridges MN has operated under a conditional license for the past two years and has been sanctioned more than 50 times over that period for a host of alleged infractions. Those include reports of unsanitary conditions, failure to provide basic care, failure to complete background checks on new hires and failure to report maltreatment. In June, DHS moved to revoke its license, citing numerous health and safety violations. That action is under appeal.

In a case early this year, a sick client who received in-home care from Bridges MN was found "lying in feces and vomit," according to a June 27 license revocation order. The person was taken away in an ambulance and died soon after. The staff members who visited the client said they "sometimes" helped clean the apartment and "sometimes did not," the licensing order said.

At a Bridges MN facility in Forest Lake, state inspectors followed up on a report that a staff person had a sexual relationship with a resident. During the investigation, regulators received information that the staff person had choked the resident and had used cocaine while driving and providing services to the client, the licensing order says.

On site visits, state inspectors also found that staff members appeared to be asleep on couches for hours at a time when they were supposed to be providing care, according to the licensing action.

DHS said in a statement Monday that Bridges MN still has an active license and the agency continues to monitor its services while the licensing revocation order is under appeal. "DHS continues to take every step necessary to ensure that regardless of the timing and outcome of the planned acquisition, continuity of care for clients is preserved," the agency said.

Staff writer Paul Walsh contributed to this report.