Lumberton-based Behavioral Health Provider Agrees to Pay over $2.5 Million to Settle Medicaid Fraud Allegations

RALEIGH, N.C. - United States Attorney Michael F. Easley, Jr. announced today that Southeastern Behavioral Healthcare Services, LLC ("Southeastern"), a behavioral health business in Lumberton and Maxton, and its owners Bertha Hutchinson and Virgil Hutchinson ("the Hutchinsons"), have agreed to pay $2,505,000.00 to settle civil allegations that they falsely billed North Carolina Medicaid for services that were not rendered. Southeastern has also agreed to enter an Integrity Agreement with the Office of Inspector General - United States Department of Health and Human Services as part of the settlement.

Specifically, the United States and the State of North Carolina allege that Southeastern and the Hutchinsons improperly submitted claims to North Carolina Medicaid for services that were not in fact rendered, evidenced by recipient interviews establishing that services were not necessary at all, were systematically not rendered as billed, that services were billed for patients who were incarcerated or deceased on the billed date of services, and by a pervasive lack of medical records supporting either the provision of or necessity for the billed services, during the period from March 1, 2016, through July 14, 2020. The Governments allege that Southeastern's and the Hutchinsons' conduct violated the Federal and North Carolina False Claims Acts.

"This is yet another example of the U.S. Attorney's Office and the North Carolina Attorney General's Office working together to proactively pursue fraud in our publicly-funded healthcare programs," said U.S. Attorney Michael F. Easley, Jr. "Billing taxpayer-funded healthcare programs for services that are not rendered will not be tolerated. Our office will continue to work with the North Carolina Attorney General's Office to root out healthcare fraud within our public healthcare programs and hold providers accountable for engaging in fraud, waste, and abuse."

"Medical providers are required to strictly adhere to the law when billing Medicaid for services," said Special Agent in Charge Kelly Blackmon of the Department of Health and Human Services Office of Inspector General (HHS-OIG). "HHS-OIG, in collaboration with our law enforcement partners, remains committed to investigating improper billings submitted to federally funded health care programs."

"Medicaid dollars are taxpayer dollars, and health care providers need to be responsible stewards of this money," said Attorney General Josh Stein. "I'm grateful for U.S. Attorney Easley's partnership to protect the Medicaid program and fight health care fraud."

The Federal and North Carolina False Claims Acts authorize the Governments to recover triple the money falsely obtained, plus substantial civil penalties for each false claim submitted.

It should be noted that the civil claims resolved by settlement here are allegations only, that there has been no judicial determination or admission of liability.

This matter was investigated by the U.S. Attorney's Office for the Eastern District of North Carolina, the Office of Inspector General - United States Department of Health and Human Services (OIG-HHS), and the Medicaid Investigations Division of the North Carolina Attorney General's Office (MID). Special Deputy Attorney General Matthew R. Petracca, who also serves as a Special Assistant United States Attorney, represented the Government and the State of North Carolina.

The U.S. Attorney's Office for the Eastern District of North Carolina, in partnership with law enforcement agencies and state entities, investigates and prosecutes healthcare providers that defraud government programs, including Medicare and Medicaid, and abuse their patients. The Medicaid Investigations Division investigates and prosecutes healthcare providers that defraud the Medicaid program, patient abuse of Medicaid recipients, patient abuse of any patient in facilities that receive Medicaid funding, and misappropriation of any patients' private funds in nursing homes that receive Medicaid funding. To report Medicare fraud or patient abuse in North Carolina, please visit the United States Department of Health and Human Services' website at https://oig.hhs.gov/fraud/. To report Medicaid fraud or patient abuse in North Carolina, please call the MID at 919-881-2320.