Molina Healthcare Pays $4.6M to Settle False Claims Act Violations

Molina Healthcare (Molina) has reached a $4.6 million settlement to resolve allegations that it violated the False Claims Act after submitting improper claims for Medicaid reimbursement.

In October 2016, four former Molina employees filed a civil action lawsuit in the US District Court for the District of Massachusetts. The lawsuit alleged that Molina and its previously owned subsidiary, Pathways of Massachusetts (Pathways), improperly submitted claims to the Commonwealth’s Medicaid program, MassHealth.

Molina, a managed care company, owned and operated Pathways, a group of mental health centers in Springfield and Worcester, between November 2015 and March 2018.

According to the lawsuit, Molina and Pathways submitted reimbursement claims for services provided between January 14, 2016, and March 2018.

During this time, the organizations were in violation of staff qualification and staff supervision regulatory requirements, the government maintained. For example, Molina did not properly license and supervise mental health center staff and failed to provide adequate clinical supervision to providers requiring supervision.

In addition, the relators alleged that the claims submitted by Molina and Pathways consisted of false certifications of compliance that were needed to receive reimbursement from MassHealth.

The US and the Commonwealth of Massachusetts also brought separate legal claims against Molina and Pathways.

Similar to the civil action lawsuit, the legal claims alleged that the organizations violated licensure and supervision requirements for mental health center staff and submitted claims to MassHealth despite knowing that the services rendered did not comply with licensure and supervision requirements.

The legal claims also stated that the organizations received overpayments for these claims from MassHealth and MassHealth managed care entities.

Molina and Pathways did not admit to any liability in the civil action case and agreed not to make any public statements denying the allegations from the government’s legal claims.

The healthcare organizations agreed to pay the US and the Commonwealth $4.625 million, plus interest at a 1.25 percent annual rate. The relators will also receive a share of the settlement amount, as stated in the whistleblower provision of the False Claims Act.

The case was handled by Assistant US Attorney Steven Sharobem of Rollins’ Affirmative Civil Enforcement Unity and Assistant Attorneys General Ian Marinoff and Matthew Jones of the Massachusetts Attorney General’s Office’s Medicaid Fraud Division.