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. 




Barge Waggoner Sumner & Cannon, Inc. Names Chief Human Resources Officer

Michele Herlein has joined Barge, Waggoner, Sumner & Cannon, Inc., as Chief Human Resources Officer.   “Our focus on talent management, corporate culture, and employee engagement is an important component of the Barge Waggoner business strategy,” said Bob Higgins, chief executive officer. “So, I am thrilled to welcome Michele to our leadership team. Her experience, ... (click for more)

Supreme Court Dismisses Health Care Liability Lawsuit For Lack Of Proper Notice

The Tennessee Supreme Court has dismissed a health care liability lawsuit against six Knoxville medical providers because they were not provided with at least 60 days’ pre-suit notice of the action, as required under Tennessee law.  In 2011, Samuel and Mary Foster filed a health care liability lawsuit against Mr. Foster’s former medical providers. Before filing that action, ... (click for more)

6,533 Apply For Chattanooga Housing Authority Voucher Program

The Chattanooga Housing Authority closed its Housing Choice Voucher Program application process Monday at 11:59 p.m. There were 6,533 applicants. CHA will randomly select 1,000 of those names on Monday, for the voucher program waiting list. Anyone who is not selected will need to apply again in the future.  The Housing Choice Voucher program is a federal government program ... (click for more)

Times Free Press Pays Bonuses, Has Layoffs

The Chattanooga Times Free Press told employees on Monday that the newspaper had improved financial performance over the prior year quarters and employees were receiving two percent bonuses. Sources said at the same time, the newspaper announced some layoffs. Those include four people in the newsroom and an unspecified number in other departments. Bruce Hartmann, president, ... (click for more)

We Need The Chattanooga History Center

Having been on several of Dr. Daryl Black's walking tours, I can say that they weren't just informative, but a treat. The downtown, Fort Wood and Ninth Street of yesteryear were brought dramatically to life. We stood on the ground where Sherman had his headquarters (near the Ice Cream Show) and the corner where Bessie Smith sang as a young girl. And we also stood beneath the ... (click for more)

Roy Exum: He’s Exempt From Drunk

I love the old story about a popular Senator who, during the Cuban Missile Crisis, was asked late one evening, “Sir, what if we get bombed?” to which came the quick reply, “I’d be absolutely delighted … I can get one of my aides to drive us home afterwards.” You think of stuff like that when word comes from Kentucky that state legislator Brandon Smith was caught driving erratically ... (click for more)