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Department of Justice
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FOR IMMEDIATE RELEASE
Monday, August 6, 2018

Grenada Lake Medical Center to Pay More Than $1.1 Million to Resolve False Claims Act Allegations Involving Medically Unnecessary Psychotherapy Services

The Justice Department announced today that Grenada Lakes Medical Center (GLMC), a publicly-owned hospital which at various times has been operated by the University of Mississippi Medical Center and by the Grenada Lake Medical Center Board of Trustees, has agreed to pay more than $1.1 million to resolve False Claims Act allegations that the hospital sought and received reimbursement from Medicare for services that were not medically reasonable or necessary.  

The settlement resolves allegations that, beginning in January 2005 and continuing until April 2013, the hospital submitted claims for Intensive Outpatient Psychotherapy (IOP) services that did not qualify for Medicare reimbursement.  The IOP services in question were performed on GLMC’s behalf by Allegiance Health Management (Allegiance), a post-acute healthcare management company based in Shreveport, Louisiana, but billed to Medicare by GLMC directly.

“Hospitals that participate in the Medicare program are responsible for ensuring that the services performed at their facilities or on their behalf reflect the medical needs of patients rather than the desire to maximize profit,” said Acting Assistant Attorney General Chad A. Readler for the Civil Division.  “The Department of Justice will continue to hold accountable those who misspend taxpayer funds by providing medically inappropriate services.”

Today’s settlement with GLMC follows a recent settlement with Allegiance, as well as previous settlements with more than twenty other hospitals where Allegiance provided IOP services.

“We will not tolerate hospitals that place profit over legitimate patient care by billing for medically unnecessary services,” said C.J. Porter, Special Agent in Charge for the U.S. Department of Health and Human Services Office of Inspector General. “In coordination with our partners, we will continue to investigate these cases and ensure taxpayer funds are used as intended.”

The settlement with GLMC resolves certain allegations in a lawsuit filed in the Eastern District of Arkansas under the whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery.  The lawsuit was filed by Ryan Ladner, who formerly worked for Allegiance as a Program Manager at the Inspirations Outpatient Counseling Center located at Wesley Medical Center in Hattiesburg, Mississippi.  Mr. Ladner will receive approximately $195,000 as his share of the GLMC settlement. 

This, and prior settlements in this matter, were the result of a coordinated effort by the Civil Division of the Department of Justice, the United States Attorney’s Office for the Eastern District of Arkansas, and the Department of Health and Human Services, Office of Audit Services and Office of Inspector General.

The claims settled by the current agreement are allegations only, and there has been no determination of liability.  The lawsuit is captioned U.S. ex rel Ladner v. Allegiance Health Management, Inc., et al, No. 4:10-CV-170 (E.D. Ark.).

Topic(s): 
False Claims Act
Press Release Number: 
18-1018
Updated August 6, 2018