Early Autism Project, Inc., South Carolina's Largest Provider of Behavioral Therapy for Children with Autism, Pays the United States $8.8 Million to Settle Allegations of Fraud
COLUMBIA, SC – The United States Attorney’s Office for the District of South Carolina announced today that Early Autism Project, Inc. (“EAP”) has paid the United States $8,833,615 to resolve a False Claims Act investigation that it submitted false claims to the TRICARE and the South Carolina Medicaid programs for therapy services for children with autism. EAP is South Carolina’s largest provider of intensive behavioral treatment to children with autism, known as Applied Behavioral Analysis (“ABA”) therapy. TRICARE is the federal health insurance program for active and retired military members and their families, while South Carolina Medicaid provides health benefits to qualifying low-income residents of South Carolina.
The settlement announced today resolves allegations that EAP billed TRICARE and South Carolina’s Medicaid program for ABA therapy services for children with autism that either misrepresented the services provided or where the services were not provided at all. As it relates to Medicaid’s PDD Waiver, EAP devised a program that required its therapists to reserve an allotment of billable time each week or month so that EAP could bill Medicaid for positions called Regional Lead and Regional Coordinator. The United States contends that these Regional Leads and Regional Coordinators were not actively working with the child from whom the hours were deducted, but rather, the EAP-devised program was designed to maximize profits by billing Medicaid for administrative and management functions of the company. Medicaid does not pay for therapy services by individuals who are not actively working with the child for whom the therapy is billed. The United States also contends that EAP allowed its therapists to regularly “pad” the hours it billed for therapy services to the TRICARE program and to South Carolina Medicaid, such that these programs regularly paid for therapy services that were not provided.
“Companies that commit to providing intensive behavioral treatment to children with autism, at a pivotal time of that child’s development, should be held accountable if they do not provide the services, but nevertheless request payment for those services,” said Barbara Bowens, Acting United States Attorney for this case and Civil Chief for the United States Attorney’s Office for the District of South Carolina. “The United States Attorney’s Office is committed to protecting the federally-funded programs that make it possible for children with special needs to receive these vital services.”
The civil investigation arose from a lawsuit filed by a former employee of EAP, Olivia Zeigler, under the whistleblower provisions of the False Claims Act. Under the act, private citizens can bring suit on behalf of the government for false claims and share in any recovery. Ms. Zeigler will receive $435,000.
As part of the settlement announced today, EAP, and its parent company, ChanceLight, Inc. have also entered into a Corporate Integrity Agreement with the Department of Health and Human Services, Office of Inspector General (HHS-OIG), which seeks to ensure future corporate compliance by requiring internal compliance reforms, including hiring an independent review organization to conduct annual claims reviews.
“That the State’s largest service provider for autistic children would defraud government health programs is compounded only by their billing at the expense of taxpayers for misrepresented or nonexistent services—as alleged here,” said Derrick L. Jackson, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “We will continue to work with our law enforcement partners to protect vulnerable patients and preserve government health programs.”
“This settlement demonstrates the commitment of the Defense Criminal Investigative Service (“DCIS”) and our law enforcement partners to ensuring that medical service providers are held accountable when they submit false bills and divert taxpayer funds. DCIS protects the integrity of Defense Department programs by rooting out fraud, waste, and abuse that negatively affects critical programs such as TRICARE,” said Special Agent in Charge Robert Craig, DCIS Mid-Atlantic Field Office.
This case was handled by Assistant United States Attorney Beth Warren, HHS-OIG, DCIS, and the Medicaid Fraud Control Unit of the South Carolina Attorney General’s Office.
The litigation and settlement of this matter illustrates the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services, at 800-HHS-TIPS (800-447-8477).
The claims resolved by this settlement are allegations only, and there has been no determination of liability. The case is captioned United States ex rel. Zeigler v. South Carolina Early Autism Project, Inc., No. 3:15-cv-2750-MBS (D.S.C., filed July 11, 2015).
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