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BH Fraud Update: Four Michigan mental health providers face felony Medicaid fraud charges

October 17, 2013
by Dennis Grantham, Editor-in-Chief
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Personnel allegedly falsified additions to encounter records, hoping to avoid Medicaid repayments for incomplete documentation

Michigan Attorney General Bill Schuette recently announced felony charges against four licensed Southeast Michigan mental healthcare providers for alleged Medicaid fraud.

Schuette filed criminal charges against Dr. Sandra M. Schiff, PhD, 66, of West Bloomfield; William G. Vallier, 65, of Clawson; Marceia K. Lugo, 39, of Sterling Heights; and Laura Leca, 27, of Westland. All four defendants were employed in 2012 by Adult Well-Being Services (AWBS), a Wayne County mental health provider that serves mostly Medicaid beneficiaries. Lugo and Leca are no longer employed at AWBS.

The charges detail that in March 2011, a healthcare provider left her employment at AWBS without completing progress notes for hundreds of encounters with mental health patients. Although Medicaid paid AWBS for all of these encounters up-front, the failure to complete these patient records violated Medicaid program rules. This is a deficiency that would have been noted in a scheduled audit of AWBS and would have triggered a requirement that AWBS return Medicaid payments associated with these incomplete records.

The charges further allege that Schiff, Vallier, Lugo and Leca forged the electronic signature of the former employee more than ten months after her departure, without her knowledge or consent, to create and authenticate false progress notes. The four defendants allegedly falsified the incomplete progress notes in an attempt to satisfy Medicaid program rules and avoid paying money back to the Medicaid program. The former AWBS employee whose signature was forged by the four defendants does not face criminal charges at this time. The Attorney General’s investigation is ongoing.

All four face identical charges:

  • One count of Medicaid Fraud- False Record or Statement to Avoid Payment to the State; a felony punishable by 4-years in prison and/or a $50,000 fine; and
  • One count of Medical Records- Intentionally Placing False Information on Chart-Health Care Provider; a felony punishable by 4-years in prison and/or a $5,000 fine.