Chesapeake Youth Center, Inc. Agrees to Pay $259,120 to Settle Allegations That it Provided No Care or Worthless Care to Residents

April 27, 2009

Baltimore, Maryland - Chesapeake Youth Center (“CYC”), a former residential treatment center located at 821 Fieldcrest Lane, Cambridge, Maryland, has paid the United States $259,120 to settle claims that it violated the False Claims Act by submitting false claims for care provided to CYC residents, announced United States Attorney for the District of Maryland Rod J. Rosenstein.

United States Attorney Rod J. Rosenstein said, “Children who live in residential treatment centers depend on professionals to provide them the care that they need. Providers that bill the government for care that they did not provide must be held accountable.”

From 1999-2006, CYC operated a residential treatment center that provided in-patient psychiatric and mental health services for adolescents under the age of 21. In order to be entitled to reimbursement from Medicaid, CYC needed to provide psychiatric services pursuant to a professionally developed and supervised individual plan of care that was medically necessary, provided under the direction of a physician and certified as necessary by the admissions team and the team developing the individual plan of care.

According to the settlement agreement, residents of the Blue Heron Unit at CYC failed to receive any psychiatric care or were provided substandard or worthless psychiatric care from January 2005 through July 2005. As a result of providing no care or substandard or worthless care to these residents, the United States contended that CYC submitted false claims when it sought and received payment from Medicaid for these services. CYC has denied these allegations.

Enacted during the Civil War, the False Claims Act is the government’s primary civil tool to combat fraud and abuse in federal programs and procurement. The Act allows the government to recover triple the amount of its actual damages, plus a civil penalty of $5,500 to $11,000 for each false claim.

United States Attorney Rod J. Rosenstein commended the investigative work performed by the Maryland Medicaid Fraud Control Unit, Department of Health and Human Services Office of the Inspector General and the Civil Division of the U.S. Department of Justice. Mr. Rosenstein also thanked Assistant U.S. Attorney Thomas F. Corcoran, who handled the case.



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