Molina Healthcare Settles False Claims Act Charges

The Justice Department said Tuesday that Molina Healthcare and its former subsidiary Pathways of Massachusetts have agreed to pay out more than $4.6 million to eliminate false whistleblower claims and allegations.

The Massachusetts Attorney General’s Office said Pathways filed fraudulent claims with the state Medicaid MassHealth program regarding mental health services provided by unlicensed and loosely supervised personnel.

As part of the settlement, Molina and Pathways did not acknowledge the veracity of the allegations. They also agreed not to make any public statements refuting the allegations.

“This company has routinely allowed unlicensed and unsupervised mental health professionals to provide care to patients while charging MassHealth,” Attorney General Maura Healey said in a press release. “MassHealth patients deserve to be treated by qualified professionals, and my office will continue to hold providers accountable.”

Four whistleblowers who worked for Pathways from 2014 to 2018 also filed a lawsuit in state district court. They argued that Pathways did not have enough staff to qualify as eligible mental health centers under MassHealth and the state’s public health regulations.

Whistleblowers will receive $810,000 in compensation plus interest. They may also seek reimbursement of attorneys’ fees, as well as civil suits for retribution in employment.

Molina and Pathways did not respond to requests for comment.

Molina, a Long Beach, California-based managed care company, provides health care plans for state and federal programs such as MassHealth. Molina worked psychiatric clinics in Massachusetts through Pathways prior to the sale of a subsidiary to private equity firm Atar Capital in 2018.

The Justice Department said health care fraud resulted in settlements under the False Claims Act in fiscal year 2021. Of the $5.6 billion paid out in civil cases related to fraud and false claims, more than $5 billion is for the healthcare industry.

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