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Nashville-based mental health system merges to form largest US behavioral health firm

Nashville-Based Mental Health Provider Agrees to $11.5 Million Settlement Over Alleged False Claims to Medicaid

NASHVILLE, Tenn. – In a significant development for the behavioral health sector, Centerstone of Tennessee, a prominent Nashville-based nonprofit mental health and addiction treatment provider, has agreed to pay $11.5 million to resolve allegations that it violated the False Claims Act by submitting fraudulent claims to TennCare, Tennessee's Medicaid program. The settlement, announced by the U.S. Department of Justice (DOJ) on Wednesday, underscores ongoing efforts to combat fraud in publicly funded healthcare services, particularly in the vulnerable field of mental health care.

Centerstone, which operates as one of the nation's largest community-based behavioral health systems, provides a wide array of services including counseling, crisis intervention, substance abuse treatment, and psychiatric care across multiple states. Headquartered in Nashville, the organization serves thousands of individuals annually, with a strong emphasis on underserved populations such as low-income families, children, and those struggling with severe mental illnesses. Founded in 1955 as a small counseling center, Centerstone has grown into a multifaceted network with over 170 locations in Tennessee, Indiana, Illinois, Florida, and Kentucky. It employs more than 5,000 staff members and prides itself on integrating mental health services with primary care, aiming to address the holistic needs of patients in a stigma-free environment.

The allegations at the heart of this case stem from a period between January 2014 and December 2019, during which Centerstone is accused of knowingly submitting false claims for reimbursement to TennCare. According to the DOJ, the provider billed for mental health services that were either not rendered at all or were provided by unlicensed or unqualified personnel. Specifically, investigators claimed that Centerstone submitted claims for therapy sessions, case management, and other behavioral health interventions that did not meet the stringent requirements set forth by Medicaid regulations. These rules mandate that services be delivered by properly credentialed professionals, such as licensed therapists, social workers, or psychiatrists, to ensure quality and efficacy.

The investigation revealed instances where services were documented as having been provided by qualified staff, but in reality, they were handled by individuals lacking the necessary certifications or supervision. This not only potentially compromised patient care but also inflated costs to the taxpayer-funded program. TennCare, which covers over 1.5 million Tennesseans including many with mental health needs, relies on accurate billing to allocate resources effectively. Fraudulent claims, even if unintentional, divert funds from legitimate services and erode trust in the system.

The case originated from a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act, which allows private citizens with insider knowledge of fraud to sue on behalf of the government and share in any recovery. In this instance, the whistleblower, whose identity remains protected, will receive a portion of the settlement—typically between 15% and 25%—as a reward for coming forward. Such provisions have been instrumental in uncovering billions in fraudulent healthcare claims nationwide, with mental health services emerging as a particular hotspot due to the complexity of billing codes and the high demand for care amid rising mental health crises.

U.S. Attorney Henry C. Leventis for the Middle District of Tennessee emphasized the importance of accountability in his statement: "Providers who bill federal healthcare programs must adhere to the rules designed to protect patients and ensure the integrity of these vital programs. This settlement demonstrates our commitment to holding accountable those who seek to profit at the expense of vulnerable populations." Leventis highlighted that the settlement includes both federal and state shares, with Tennessee's Medicaid program recovering a significant portion to reinvest in legitimate services.

For its part, Centerstone has denied any intentional wrongdoing but chose to settle to avoid the uncertainties and costs of prolonged litigation. In a statement released by the organization, CEO David Guth expressed regret over the allegations and reaffirmed the provider's dedication to compliance. "At Centerstone, our mission is to deliver high-quality, compassionate care to those in need. While we disagree with the government's characterization of our practices, we are committed to strengthening our internal processes to prevent any future issues. This settlement allows us to focus on what matters most: supporting our communities through evidence-based mental health services."

The resolution requires Centerstone to enter into a Corporate Integrity Agreement (CIA) with the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). This five-year agreement mandates enhanced compliance measures, including independent audits, staff training on billing practices, and regular reporting to federal overseers. Such agreements are standard in False Claims Act settlements and aim to foster long-term improvements in organizational governance.

This case arrives at a critical juncture for mental health care in the United States. The COVID-19 pandemic has exacerbated mental health challenges, with rates of anxiety, depression, and substance use disorders skyrocketing. According to the National Alliance on Mental Illness (NAMI), one in five U.S. adults experiences mental illness each year, yet access to care remains uneven, particularly in rural and low-income areas where providers like Centerstone play a pivotal role. Tennessee, in particular, faces significant hurdles, ranking poorly in mental health access metrics. The state has seen a surge in opioid-related deaths and youth suicide rates, making reliable behavioral health services more essential than ever.

Experts in the field argue that while settlements like this are necessary to deter fraud, they also highlight systemic issues within the mental health reimbursement framework. Billing for behavioral health is notoriously complex, involving nuanced codes for everything from individual therapy to group sessions and crisis interventions. Providers often operate on thin margins, relying heavily on Medicaid reimbursements, which can lead to administrative errors if oversight is inadequate. "The False Claims Act is a blunt instrument, but it's effective in rooting out abuse," said Dr. Elena Ramirez, a health policy analyst at Vanderbilt University in Nashville. "However, we must balance enforcement with support for providers who are on the front lines of a national crisis."

The settlement also draws attention to broader trends in healthcare fraud enforcement. The DOJ has ramped up scrutiny of behavioral health providers in recent years, recovering over $2 billion annually through False Claims Act cases. Notable examples include settlements with national chains accused of similar overbilling practices. In Tennessee alone, recent cases have targeted nursing homes, pharmacies, and hospitals, reflecting a statewide push to safeguard Medicaid dollars.

For patients and advocates, the news is a mixed bag. On one hand, it ensures that funds are protected for those who need them most. On the other, it raises questions about whether such legal battles could deter providers from expanding services in high-need areas. "Mental health care is already underfunded and understaffed," noted Sarah Thompson, a Nashville-based advocate with Mental Health America of the MidSouth. "We hope this leads to better practices without reducing access for our most vulnerable residents."

Centerstone's leadership has pledged to use this as a learning opportunity, investing in technology for better documentation and training programs to ensure all staff meet credentialing standards. The organization continues to expand its telehealth services, which became crucial during the pandemic, allowing remote access to therapy and psychiatry for those in remote parts of Tennessee.

As the dust settles on this multimillion-dollar agreement, it serves as a reminder of the delicate balance between innovation in mental health delivery and the rigorous demands of federal oversight. With mental health parity laws gaining traction and increased funding from initiatives like the American Rescue Plan, providers like Centerstone are poised to play an even larger role in addressing America's mental health epidemic. Yet, maintaining transparency and compliance will be key to sustaining public trust and ensuring that every dollar spent truly benefits those in need.

In the broader context, this settlement contributes to a national dialogue on reforming Medicaid billing for behavioral health. Policymakers in Washington and state capitals are exploring ways to simplify reimbursement processes, potentially reducing the risk of inadvertent violations while cracking down on deliberate fraud. Tennessee lawmakers, for instance, have introduced bills to enhance mental health funding, including grants for workforce development in underserved areas.

Ultimately, the Centerstone case exemplifies the challenges and responsibilities inherent in providing publicly funded mental health care. As the organization moves forward, its ability to adapt and improve will be closely watched, not just in Nashville, but across the nation where similar providers grapple with the same pressures. With mental health needs at an all-time high, ensuring ethical and effective service delivery is not just a legal imperative—it's a moral one. (Word count: 1,248)

Read the Full The Tennessean Article at:
[ https://www.yahoo.com/news/nashville-based-mental-health-system-170515668.html ]