A recent Medicaid fraud claim says a Chicago youth center defrauded the federal government out of millions of dollars in false Medicaid claims.

According to the Medicaid fraud claim, the facility had billed Medicare for services and activities not actually provided. The qui tam lawsuit was filed on behalf of the United States government, stating Medicaid was cheated out of millions.

The qui tam lawsuit is being filed by both the United States Government and the state of Illinois, alleging the youth facility had received approximately $6.3 million through faulty Medicaid claims. The defendants named in the Medicaid fraud claim is Laynie Foundation Inc. and owners Summer Matheson and Terrance Ewing, who allegedly ran the Medicaid billing scheme for four years.

The qui tam lawsuit alleges Matheson and Ewing were submitting false Medicaid claims stating they were providing mental health services to children, many of which qualified for an Illinois Medical Assistance program.

This state program is often funded through Medicaid and is designed to help kids with psychiatric problems and are at risk for psychiatric hospital treatment. These alleged false claims to Medicaid sought reimbursement for non-reimbursable expenses, or were asking coverage for services that were not needed nor provided.

According to the complaint, Matheson and Ewing also allegedly pressured employees to help them file their faulty Medicaid claims, even though employees expressed concern several times previously.

In addition to facing the Medicaid fraud claim, the youth center reportedly did not have any licensed health professionals to confirm whether or not the service were provided, whether or not the services were necessary, or if the services even met proper mental health care standards.

The plaintiffs allege these false claims create liability under Illinois state law, in addition to the federal False Claims Act.

“Defendants have defrauded the United States and the state of Illinois by engaging in illegal billing practices for these mental health services,” the Medicaid fraud claim states.

Overview of Qui Tam Lawsuit and Medicaid Fraud Claim

According to the qui tam lawsuit, Matheson and Ewing had established Laynie Foundation Inc. in 2010 and had allegedly began submitting false claims to Medicaid soon after. Whistleblower Teena P. filed the Medicaid fraud claims under seal pursuant to the government’s False Claims Act provisions.

Teena is a mental health professional, who had worked for Laynie for six months and had witnessed the alleged fraud. Even though Teena and other employees expressed concern over the alleged Medicaid fraud, Matheson stated Laynie would lose its funding eligibility if they did not submit claims to Medicaid as instructed.

Teena and other employees were allegedly pushed into writing claims for services that were not needed and were non-reimbursable. She alleged they were writing more claims than treating patients.

At all times relevant, the Medicaid fraud claim alleges the Laynie Foundation had submitted $8.2 million in claims from January 2012 to February 2016 for mental health services and had received approximately $6.3 million in result.

The Medicaid fraud claim is seeking damages and civil penalties for at least $5,500 but not over $11,000 per violation.

The Medicaid Fraud Whistleblower Lawsuit is United States of America, et al. v. Laynie Foundation Inc., et al., Case No. 1:14-cv-08511, in the U.S. District Court for the Northern District of Illinois.