The U.S. and the State of Illinois recently filed a Medicaid whistleblower lawsuit against the owners of a youth counseling center.

According to the Medicaid whistleblower lawsuit, a civil lawsuit was filed against the owners of the youth counseling center located in Chicago. The State of Illinois along with the U.S. government have jointly accused the counseling center of essentially defrauding Medicaid of millions of dollars.

According to the Medicaid whistleblower lawsuit and the DOJ, those allegedly at fault in the fraudulent billing scheme are owners, Summer M., and Terrance E., of Laynie Foundation Inc. The defendants allegedly violated the federal False Claims Act.

The Medicaid whistleblower lawsuit and the DOJ further allege that the owners sought payment from Medicaid “for non-reimbursable activities such as internal case reviews, staff training, clinical supervision, and recordkeeping.” The lawsuit also alleges that the owners “fraudulently inflated the mental health services they provided to youths.”

Additionally, the counseling center is charged with failing to have a licensed mental health professional certify that the services they provided each patient were medically necessary and that the services that were provided met professional care standards. This is a violation of state clinical supervision requirements.

The Medicaid whistleblower lawsuit alleges that the owners took advantage of the fact that their employees were social workers and counselors who were new to their profession. For many of the workers, working for the Laynie Foundation was their first job. The Medicaid whistleblower lawsuit asserts that when employees questioned the owners about the counseling center’s billing practices, the workers were told that the center would “lose its eligibility and funding from Medicaid if the employees did not bill as instructed.”

Over the course of several years, the foundation billed Medicaid approximately $8.2 million in potentially inflated mental health services. The company received approximately $6.3 million dollars from the claims that they submitted.

The purpose of the False Claims Act is to allow individuals with evidence of false Medicaid claims or other kinds of fraud against the government to initiate lawsuits against their employers.  The False Claims Act offers whistleblower employees protections from retaliation, and it allows successful plaintiffs to receive a portion of the money recovered from the lawsuit.

Once a Medicaid whistleblower lawsuit is filed, the U.S. government has the authority to take over a case, as it has done in this Medicaid whistleblower lawsuit.  The act allows the government to recover treble damages plus civil penalties against defendants found liable for Medicaid fraud.  Penalties accrue for each false claim that the defendant submitted.

Medicaid is a health insurance program for low-income people.  It is jointly funded by the federal government and the state government where the recipient resides. It often covers children, elderly, and disabled people.