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Behavioral health provider to pay $15.3M over false claims

Federal prosecutors have reached consent judgments with a company accused of fraud while providing mental health and substance abuse treatment services at community clinics throughout Delaware, authorities said Thursday.

Connections Community Support Programs, which also is the former medical and behavioral healthcare contractor for the Department of Correction, has agreed to the entry of consent judgments totaling more than $15.3 million, U.S. Attorney David Weiss said in a news release.

The judgments resolve two lawsuits brought by the federal government alleging healthcare fraud under the federal False Claims Act and violations of the Controlled Substances Act.

The company, which sought bankruptcy protection in April shortly after the lawsuits were filed, agreed to the entry of a judgment for $13.7 million, plus interest, to resolve claims that it violated the False Claims Act. Those claims involved allegations that providers working for the company billed Medicare or Medicaid for mental health services even though the providers didn’t qualify professionally to do so.

Connections was also accused of billing Medicaid for mental health services using incorrect procedure codes for the person performing the service, resulting in higher payments than were permitted.

The company also has agreed to the entry of a judgment for $1.6 million, plus interest, to resolve claims that it violated the federal Controlled Substances Act. Those claims allege that Connections negligently failed to keep proper records of its use of controlled substances, including methadone and buprenorphine, in its treatment of patients with substance use disorders, and that it transferred controlled substances between locations without proper documentation.

The company completed a bankruptcy sale of its assets and operations in June to Conexio Care, Inc. and Coras Wellness and Behavioral Health. The settlement agreements and consent judgments between Connections and the United States must be approved by the bankruptcy court, and the final amount of any recovery will be limited by the availability of funds in the bankruptcy estate.

The False Claims Act settlement partially resolves a whistleblower lawsuit filed by two former Connections employees, who are continuing to pursue additional claims against the company and former CEO Catherine Devaney McKay.

Federal authorities are also continuing to pursue claims for violations of the Controlled Substances Act against McKay and two other Connections executives, William Northey and Steven Davis. Davis has denied the allegations against him and sought to have them dismissed. A judge has yet to rule a motion by McKay arguing that some of the allegations are barred by the passage of time, and that the government should be forced to provide a more definite statement providing specific details regarding the basis for other allegations. Prosecutors filed a motion last week seeking a default judgment against Northey for failing to respond to the complaint.

Delaware Department of Correction officials announced abruptly in March 2020 that they were ending their contracts with Connections, three months before their scheduled expiration. Connections has been the DOC’s medical care provider since 2014 and its behavioral health services provider since 2012.

An independent review of Delaware’s prison healthcare system in 2019 found that it was plagued by poor communications, little accountability and a lack of data collection and analysis, and that organizational changes were needed.

That same year, Delaware lawmakers unanimously approved a bill to reform a committee charged with monitoring prison healthcare. The bill was introduced after the attorney general’s office confirmed it was investigating allegations that Connections had ordered staffers to forge documents to falsely state inmates were getting mental health treatment they never received.

In January 2020, Bayhealth Medical Center in Dover filed a lawsuit claiming that it was owed more than $6 million by Connections for medical care the hospital had provided to prison inmates.


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