Hampton mental health provider defrauded Medicaid for unnecessary services to children; state reclaims $1.5 million in fraudulent payments

NEWPORT NEWS (October 3, 2013) - A Hampton mental health service provider pled guilty earlier this week to a charge of health care fraud for falsely claiming that 66 Medicaid-eligible children she provided mental health treatment to actually needed it. She exaggerated or wholly invented their need for treatment to deceive Medicaid into approving payment for her services.

Attorney General Ken Cuccinelli, whose Medicaid Fraud Control Unit led the investigation, announced today that Delores F. Thomas, 54, owner of New Season Clinical Services in Hampton, pled guilty Monday to one count of health care fraud after a hearing before United States Magistrate Judge Tommy E. Miller.

"Delores Thomas not only stole $1.5 million from a program that serves the poor, but most disturbingly, she also used children as unwitting pawns in her scheme," said Cuccinelli.

Thomas faces a maximum penalty of 10 years of imprisonment when she is sentenced on January 17. She also agreed to pay $1,505,173 in restitution to the Virginia Department of Medical Assistance Services (DMAS), the state agency charged with overseeing the Medicaid program in Virginia. Thomas presented a check to the government for the full amount of restitution as part of a forfeiture proceeding in conjunction with the criminal charge.

Thomas owned and operated New Season Clinical Services, a Hampton-based Medicaid-contracted provider of intensive in-home services for children and mental health support services for adolescents and adults. Intensive in-home services are targeted and time-limited interventions for children who are at-risk of being removed from their homes due to significant behavioral or mental health issues. Mental health support services are designed to enable individuals with significant psychiatric functional limitations to achieve stability and independence in the most appropriate, least restrictive environment.

Thomas submitted false and fraudulent prior-authorizations for 66 Medicaid recipients, misrepresenting that 58 recipients required intensive in-home services and eight required mental health support services. As a result, Thomas received health care benefit payments from Medicaid in the amount of $1,505,173. Medicaid relies on the prior-authorization system to validate that the requested service is necessary and meets Medicaid criteria for reimbursement.

The Virginia attorney general's Medicaid Fraud Control Unit, the Federal Bureau of Investigation, and the U.S. Department of Health and Human Services - Office of the Inspector General investigated the case. Virginia Assistant Attorney General and Special Assistant United States Attorney Joseph E.H. "Eric" Atkinson and Assistant United States Attorney Robert E. Bradenham, II prosecuted the case.