Molina to pay $4.6M to settle False… Leave a comment

Dive Brief:

  • Molina Healthcare and its previously owned subsidiary, Pathways of Massachusetts, agreed to pay over $4.6 million to settle claims that it violated the False Claims Act by submitting reimbursements to MassHealth, the state’s Medicaid Program, for services provided by inadequately licensed and unsupervised staff, the Department of Justice announced Tuesday.
  • The settlement comes after four former Pathways employees brought a suit against the company and an investigation was launched into the behavioral health clinics by the attorney general’s Medicaid fraud division.
  • “This company routinely allowed unlicensed and unsupervised mental health professionals to provide care to patients, all while billing MassHealth for it,” Massachusetts Attorney General Maura Healey said in a statement. “MassHealth patients deserve to receive treatment from qualified individuals, and my office will continue to hold providers accountable for violating these fundamental MassHealth requirements.”

Dive Insight:

The Long Beach, California-based managed care company is the latest to settle a False Claim Act violation with the DOJ, which settled over $5.6 billion in false claims and fraud under the act for the fiscal year ending September 30, 2021. 

The attorney general’s office and investigation found that Pathways “failed to meet the regulatory requirements for frequency and adequacy of supervision, the qualifications of its supervisors, and that Pathways billed for psychotherapy services rendered by unlicensed individuals who were not supervised by appropriately licensed professionals.”

Molina operated behavioral health centers in Springfield and Worcester, Massachusetts, from November 1, 2015, until the company ceased operations in early March 2018. Later that year, Molina sold Pathways, the clinic operator, to a private investment firm.

Because the centers were violating staffing regulation requirements, the mental health centers did not qualify as eligible care centers under Massachusetts regulations. The settlement further alleges that Pathways and Molina knew that “services rendered did not comply with licensure and supervision requirements” and that claims submitted by the entities implied false certifications that were material to payment decisions.

The former Pathways employees also brought employment retaliation claims against pathways and won a share of $810,000 with interest, according to the settlement.

The settlement is only the latest in a string of legal trouble that has plagued Molina over the past few years. In August 2021, the 7th U.S. Circuit Court of Appeals refreshed a lawsuit which was previously dismissed in district court, which stated that GenMed, a former Molina contractor, had violated the False Claims Act in Illinois’ nursing homes. The opinion alleged that, after GenMed terminated its contract with Molina, the company continued to collect money from the state but was not providing the services.

Now, Molina has brought a case against the whistleblower to the Supreme Court, raising issue with the 7th Circuit ruling.

Additionally, in June 2021, San Diego sued Molina, HealthNet and Kaiser Permanente alleging that the entities created “ghost networks” for consumers through a combination of false advertising and failing to maintain accurate provider directories, which is illegal under state and federal law.


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