Spokane Mental Health Counselor Agrees to Pay More Than $135,000 for Fraudulent Medicaid Billing

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FILE PHOTO: Signage is seen at the United States Department of Justice headquarters in Washington, D.C.

Spokane, Washington – Dr. Ray Smith, a mental health counselor practicing in Spokane, and his company, “A Brief Counseling Center,” also known as “Healthy Counseling Center” (“ABCC”) have agreed to pay $138,984 to resolve allegations that he and his company fraudulently billed Washington State Medicaid. Dr. Smith is a licensed mental health counselor in the State of Washington and is the sole owner of ABCC. During the relevant time period, ABCC employed a number of mental health treatment providers, and billed Washington State Medicaid for their services. Washington State Medicaid – also known as Apple Health – is funded by federal and state taxpayers and provides health insurance for needy and low-income residents of Washington. Medicaid provides reimbursement for mental health treatment services provided by qualified and licensed providers who are enrolled and contracted with the state Health Care Authority, which administers the Medicaid program in Washington.

According to court documents, this settlement resolves allegations under the False Claims Act that Dr. Smith and ABCC improperly billed Medicaid for unlicensed and unqualified therapists who did not meet qualification requirements, were not contracted with the state, and were not eligible for reimbursement through Medicaid. The settlement also resolves allegations that Dr. Smith and ABCC fraudulently billed Medicaid for the services by falsely misrepresenting that the services had been provided by licensed and qualified therapists.

“Mental health services are a vital component of a safe and strong community, and our public funding for those services is a precious and limited resource,” said United States Attorney Vanessa R. Waldref. “Fraudulently billing the public for unqualified and unlicensed therapy services provided to some of the most vulnerable members of our community is simply unconscionable, and will not be tolerated.”

The case began in November 2019 when two whistleblowers who had previously provided billing services for ABCC filed a qui tam complaint under seal. When a whistleblower, or “relator,” files a qui tam complaint, the False Claims Act requires the United States to investigate the allegations and elect whether to intervene and take over the action or to decline to intervene and allow the relator to go forward with the litigation on behalf of the United States. The relator is generally able to then share in any recovery. In this case, the United States intervened in February 2022 and obtained the settlement. Pursuant to the settlement agreement, the relator will receive $25,712 of the settlement amount, which includes both state and federal components.

Washington Attorney General Bob Ferguson said “the COVID-19 pandemic has underscored the need for high-quality mental health services. To pose as qualified mental health professionals in order to claim Medicaid dollars is unethical, dangerous, and unlawful. I am proud of our collaboration with our federal partners, and the hard work it took to bring this company to justice. I look forward to continuing our work together to protect Medicaid dollars for those who need them.”

“Beneficiaries of federal health care programs deserve legitimate services furnished by certified practitioners,” said Special Agent in Charge Steven J. Ryan with the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). “Medicaid patients should receive nothing but quality care at all times. HHS-OIG and partnering agencies resolutely pursue providers who deviate from this commitment.”

United States Attorney Waldref commended the whistleblowers for exposing this fraud: “It takes real courage to come forward, and I thank the whistleblowers for performing their civic duties. I am extremely proud of the top-notch investigative work performed by HHS-OIG, and of our close partnership with Washington’s Office of the Attorney General, Medicaid Fraud Control Division. Today’s result demonstrates that we will work hand-in-glove with our law enforcement partners to protect precious public funds from greed, and that we will continue to aggressively investigate and prosecute health care fraud in Eastern Washington.”

The settlement was the result of a joint investigation conducted by the U.S. Attorney’s Office for the Eastern District of Washington, HHS-OIG’s Seattle Field Office, and the State of Washington, Office of the Attorney General, Medicaid Fraud Control Division. The Executive Office for U.S. Attorney’s Forensic Investigations Group provided invaluable financial analytic support. Assistant United States Attorneys Dan Fruchter and Tyler H.L. Tornabene of the Eastern District of Washington handled this matter on behalf of the United States.

ABCC Final Settlement Agreement