Suit alleges fraud in clinic's billing

May 13, 1999|By DAVE McMILLION, Charles Town

CHARLES TOWN, W.Va. - EastRidge Health Systems was sued by a former billing clerk Thursday who alleges the mental health clinic used billing practices she believed were fraudulent.

Valerie Stacy's allegations revolve around how EastRidge bills Medicare and Medicaid for services.

Stacy's suit filed in Jefferson County Circuit Court alleges that EastRidge was billing Medicare for services provided by social workers and psychologists using a higher physician rate.

Stacy alleged in the suit that she also noticed that EastRidge routinely billed Medicare, Medicaid and private insurance companies for counseling sessions that were based on a longer session than the one conducted with the patient.

The clinic also changed diagnosis and procedure codes to ensure Medicare and Medicaid payments, the suit alleged.

Stacy said in the suit that she informed Becky Silver, the billing supervisor at EastRidge, about her findings. Frederick W. Donovan, executive director of EastRidge and John Spickler, director of finance, were told about some of the findings, according to the suit.


Donovan, Spickler and Silver also are named as defendants in the suit.

Despite Stacy's complaints about the alleged practices, EastRidge did not change the operations and insisted that Stacy submit the bills to Medicare, Medicaid and insurance companies for reimbursement, the suit claims.

Stacy refused to submit the bills, and she was demoted and later fired, the suit alleges.

Stacy is not seeking a specific amount of money but is asking that she be awarded reasonable compensatory and punitive damages.

Lauren Clingan, Stacy's attorney, declined to comment in detail about the case.

Donovan declined to comment because he and the other defendants had not seen the suit.

EastRidge is a nonprofit corporation which operates mental health clinics in Martinsburg, Charles Town and Morgan County, W.Va.

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