Feds file fraud suit against EastRidge

January 09, 2003|by CANDICE BOSELY

MARTINSBURG, W.Va. - The U.S. government has filed a lawsuit against EastRidge Health Systems, alleging the nonprofit company in Martinsburg fraudulently obtained more than $800,000 from Medicare and Medicaid from 1995 to 1999.

An attorney for EastRidge, William Wilmoth of Wheeling, W.Va., said EastRidge made some mistakes, but that an internal audit revealed a "substantially lower" dollar figure than what the government claims. Many of the mistakes were clerical errors, he said.

The government's case is connected to a lawsuit filed by Valerie Stacy under the "whistle blower" provisions of the False Claims Act, a federal law that allows private individuals to sue as "relators" on behalf of the United States, according to a press release.


Stacy's case remains under seal.

  • The suit alleges that:

  • From May 1995 to October 1998, 17 claims were submitted to Medicare for services that require a physician, but during which no physician was present;

  • from July 1995 to December 1996, 235 claims were submitted to Medicare for services that were supposed to be performed by a doctor, but instead were performed by clinical social workers or clinical psychologists;

  • from January 1996 to December 1997, 251 claims were submitted to Medicare for time-based work, but the time provided to patients was less than noted;

  • from January 1996 to December 1996, 530 claims were submitted to Medicare at a higher reimbursement rate than permitted.

The 16-page civil complaint alleges that under Medicaid, from January 1995 to December 1997, 4,090 false claims were filed.

The government also claims in the complaint that EastRidge submitted invoices to the Department of Health and Human Resources for revenue or expenses that were not covered under a block grant.

The government is asking that EastRidge pay back three times the amount owed, and be fined $10,000 for each false claim.

A mental health care facility, EastRidge serves clients in Berkeley, Jefferson and Morgan counties. Eastern Panhandle Mental Health Center Inc. does business under the name EastRidge.

Wilmoth said EastRidge has cooperated with the U.S. Attorney's Office and its auditors, opening up cabinets of records.

He said he believes the case will be settled out of court. "I'm almost positive it won't go to trial," he said.

Jim Moore, the interim executive director of Eastern Panhandle Mental Health Center Inc., gave a written statement in the press release.

"After giving the government complete access to our records as far back as at least 1995, we have found what may be billing and coding errors, and we are in talks with the government about how best to make those mistakes right without endangering the level of care provided to the community by EastRidge's professionals," he said.

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