New Life Lodge Agrees To Resolve TennCare Fraud Allegations For $9.25 Million

Wednesday, April 16, 2014

CRC Health Group has agreed to pay $9.25 million to settle allegations of TennCare fraud related to its New Life Lodge Facility in Burns, Tennessee, Attorney General Bob Cooper announced today.

The State alleged that between 2006 and 2012 CRC provided substandard services, repeatedly exceeded its state-licensed patient capacity, and caused third party pharmacies to bill the TennCare program for prescription drugs that New Life Lodge was obligated to provide to TennCare beneficiaries as part of their TennCare-paid per diem.

The settlement is the result of a joint investigation between the State of Tennessee and the United States. The recovery will be divided between the state and federal governments with the State of Tennessee slated to receive approximately $3.4 million.

“New Life Lodge accepted millions of dollars of TennCare funds with the understanding that it would provide necessary substance abuse treatment services to some of the State’s most vulnerable citizens,” Attorney General Cooper stated in response to the settlement. “Instead, far too often those operating the facility failed to meet their obligations by falling short of minimum necessary standards of care or using third-party pharmacies to double-bill the program.”

In addition to double-billing and licensure issues, the agreement identified several ways the facility allegedly failed to meet acceptable TennCare standards. Among the allegations were that New Life Lodge relied on personnel who were not appropriately licensed or supervised; billed for services that were not documented or provided; failed to conform to the facility’s own patient treatment  plans; failed to provide required access to a psychiatrist; and failed to meet legal “medical necessity” requirements that are prerequisites for payment under TennCare. The settlement agreement provides that it is neither an admission of liability by CRC nor a concession by the State that its claims are not well founded.

Attorney General Cooper emphasized the state’s focus on healthcare fraud in mental health: “Safeguarding TennCare's mental and behavioral health support system is a particular focus of this Office.” The allegations arose from a whistleblower suit filed by former New Life Lodge employee Angela Cederoth on behalf of the State of Tennessee and the United States.  Under the Tennessee Medicaid False Claims Act, a TennCare fraud whistleblower can file a qui tam suit on behalf of the State and receive a portion of the funds recovered. 

Southern Heritage Bank Continues Local Deposit Growth

For the sixth consecutive year, Southern Heritage Bank has grown its market share of deposits in Bradley County, according to the Federal Deposit Insurance Corporation annual summary of insured deposits. Retaining second place, Southern Heritage reported 15.6 percent ($233.7 million) in local deposit market share just behind First Tennessee Bank’s 15.7 percent ($235.1 million).  ... (click for more)

Chandler Lawson Joins Leitner, Williams, Dooley & Napolitan

Leitner, Williams, Dooley & Napolitan, PLLC announced that attorney Chandler A. Lawson has joined their Chattanooga office. Before joining the Firm, she received her J.D. with a concentration in advocacy from the University of Tennessee College of Law in 2016.  At Tennessee, she served as a member of the Student Bar Association, Law Women, and UT Law Ambassadors.  ... (click for more)

Howard Simmons, 47, Shot And Killed In St. Elmo Monday Morning; Police Interview Person Of Interest

Howard Simmons, 47, was shot and killed in St. Elmo Monday morning. Police said they had interviewed a person of interest in the slaying. Chattanooga Police at 8:30 a.m. responded to a person shot at the 5000 block of Florida Ave. Upon police arrival the victim, Simmons, had already succumbed to his injuries. Ms. Simmons suffered at least one gunshot wound. At this time ... (click for more)

Erlanger To Open Cancer Center On Gunbarrel Road At East Campus

Work is set to begin soon on construction of a new Cancer Center by Erlanger Health System at its Gunbarrel Road East Campus. Erlanger is joining with a development firm, Chatt East 3 LLC of Alabama, on the four-story project located just south of Women's East Hospital on a wooded five-acre tract. Erlanger will be leasing the bottom three floors at a rate of $16.05 per square ... (click for more)

October Is Breast Cancer Awareness Month

Picture a sold-out baseball game at Wrigley Field or Nationals Park packed with 40,000 fans. That image represents roughly the same number of women and men who die from breast cancer each year.  In Tennessee alone, an estimated 900 women will die from the disease in 2016. It is a sad statistic, but there is some good news: thanks to early detection and improved treatments, ... (click for more)

Roy Exum: The Testerman Forum

I badly misjudged how long it would take me to do my “early voting.” I was in-and-out in no time so I got to the Hamilton County School Board’s agenda meeting well enough beforehand to have an “educational forum” with board member David Testerman. If you haven’t noticed, forums and summits and “community enlightenment” groups are the new rage and, as my friend David laughed, “They ... (click for more)