Danville Provider to Pay $1.8M Over Uncredentialed Medicaid Billing

A Danville mental health provider has agreed to pay $1,817,910.60 over five years to resolve allegations that it billed Virginia Medicaid for services delivered by a company with no Medicaid enrollment, no state credential and no provider number of its own, federal prosecutors in the Western District of Virginia announced this week.

The settlement with Negril Incorporated and its owners resolves claims under the False Claims Act and the Virginia Fraud Against Taxpayers Act. The government's civil complaint, filed June 12 in U.S. District Court in Roanoke, alleged conduct stretching from January 2021 through May 2022.

The arrangement, as the government describes it

According to the U.S. Attorney's Office, Negril billed Virginia Medicaid for mental health skill-building services under its own National Provider Identifier. The company that actually provided those services to Medicaid beneficiaries, prosecutors said, did not have its own NPI, was not credentialed through the Virginia Department of Behavioral Health and Developmental Services, and was not enrolled as a Medicaid provider.

Negril then remitted 75 percent of the Medicaid reimbursement to that other company and kept the remaining 25 percent, the government alleged. In its summary of the settlement agreement, the HHS Office of Inspector General describes the origin of the case somewhat differently in emphasis: Negril proposed an arrangement under which another person formed a separate company, and that company improperly billed Virginia Medicaid using Negril's NPI number.

Either way, the billing records told Medicaid that Negril's enrolled, credentialed entity was delivering the care. The company that actually delivered it had never been screened or approved by the program.

Four agencies, one settlement

The investigation was a coordinated effort among the U.S. Attorney's Office for the Western District of Virginia, the Department of Health and Human Services Office of Inspector General and its Office of Counsel, and the Medicaid Fraud Control Unit in the Virginia Attorney General's Office.

First Assistant U.S. Attorney Robert N. Tracci and Maureen Dixon, special agent in charge for HHS-OIG, announced the resolution. Assistant U.S. Attorney Matthew G. Howells and Kimberly M. Bolton, an assistant attorney general in the state Medicaid Fraud Control Unit, handled the matter. HHS-OIG lists the agreement among the corporate integrity agreements it administers.

The case is captioned United States et al. v. Negril Incorporated et al., No. 6:26-cv-00066 (W.D. Va.). The claims resolved by the settlement are allegations only; Negril did not admit wrongdoing, and there was no determination of liability.

Why the provider number matters

Federal health programs pay for services rendered by practitioners who have been screened, credentialed and enrolled, and a claim submitted under one entity's identifier for work performed by an unenrolled one misstates both who treated the patient and who answers for the quality of that care. Virginia routes mental health providers through the Department of Behavioral Health and Developmental Services for credentialing before Medicaid enrollment, which is the step prosecutors say was skipped here.

The practical question for patients is narrower. A licensed facility's own paperwork does not always establish that the individual clinician in the room is credentialed and enrolled. People arranging mental health or addiction treatment can ask directly whether the specific practitioner treating them is licensed in Virginia and enrolled with Medicaid, and can check a facility's standing through state-licensed outpatient programs and residential treatment providers before intake. For medication-based addiction treatment, the same enrollment rules govern prescribers of buprenorphine and opioid treatment programs dispensing methadone.

What the settlement does not say

Federal and state officials have not said whether any individual clinician faces separate action, and the settlement closes only the civil side of the matter. It also does not resolve what happened to the patients whose care was billed under an arrangement the government calls improper — records from the period covered by the complaint remain with the providers, not with the prosecutors.

Virginia's Medicaid Fraud Control Unit, which handled this matter with federal prosecutors, has authority to pursue both criminal and civil cases against providers accused of defrauding the state's Medicaid program. The dollar figure here is small next to hospital-system fraud cases, but a finding that an unenrolled entity delivered and billed care carries consequences beyond the check: HHS-OIG can seek to exclude a provider from federal health programs, and a corporate integrity agreement puts the company under outside review for the term of the deal.