Massachusetts Medicaid Fraud Case Settled For $25M

BOSTON (AP) — A private equity firm and two former executives at a mental health provider have agreed to pay $25 million to settle a lawsuit that alleged they caused fraudulent claims to be submitted to the state's Medicaid program, the state attorney general's office said.

South Bay Mental Health Center, Inc., which operates facilities in more than a dozen communities around the state, provided services for thousands of patients through the state’s Medicaid program known as MassHealth by unlicensed, unqualified, and improperly supervised staff members, according to a statement from the office of Attorney General Maura Healey.

The attorney general’s office called the agreement is “the largest publicly disclosed government health care fraud settlement in the nation involving private equity oversight of health care providers.”

The settlement calls for H.I.G. Capital, a private equity firm that acquired South Bay, to pay $19.95 million, according to the statement. The two former executives, including South Bay's founder, will pay the remaining $5.05 million.

The deal includes no admission of wrongdoing.

A spokesperson for H.I.G. declined to comment. Messages were left with attorneys for the former executives.