Crime and Justice

Vermont Attorney General says Maple Leaf Treatment Center overbilled Medicaid $860,000

[B]URLINGTON -- The attorney general’s office says that the now defunct drug treatment provider Maple Leaf Treatment Associates Inc. overbilled Vermont’s Medicaid program by $860,000.

Maple Leaf in Underhill operated one of the oldest and best respected inpatient addiction treatment programs until it closed abruptly in February, leaving state officials scrambling to fill a treatment vacuum in the midst of an opiate crisis. The nonprofit company also operated a separate outpatient program from a facility in Colchester that was shuttered at the same time.

Catey Iacuzzi

Catey Iacuzzi, executive director of Maple Leaf Farm at the time, testifies in the Senate Health and Welfare Committee. File photo by Elizabeth Hewitt/VTDigger

Maple Leaf initially closed its inpatient facility in January under pressure from state regulators, because it lacked sufficient licensed alcohol and drug abuse counselors following a wave of resignations in December.

Jason Turner, director of the attorney general’s Medicaid Fraud Unit, said that beginning in September 2016 Maple Leaf didn't have enough licensed alcohol and drug abuse counselors at its inpatient facility to bill Medicaid for services.

Maple Leaf continued to bill Medicaid anyway, amassing hundreds of thousands of dollars in false claims, a legal term of art for overbilling government programs, during the four-month period from September to when the inpatient facility closed in early January.

The other manner in which Maple Leaf racked up false claims was by outsourcing urinalysis for patients, according to Turner. The state was paying for the urine tests twice, once in the bundled rate paid to Maple Leaf and a second time when a third-party contractor billed Medicaid.

That practice occurred over a much longer period, Turner said, but only accounts for roughly $60,000 of the total overbilling by Maple Leaf. The other $800,000 stems from the period where the state alleges Maple Leaf didn’t have enough staff to be billing Medicaid at all.

Turner was not immediately able to say how the $860,000 compares to what Maple Leaf billed Medicaid for its services annually.

Shortly after the nonprofit drug treatment provider disbanded, the board of directors announced Maple Leaf would be filing for bankruptcy. As a result, the state was unable to bring a false claims case against Maple Leaf, and instead was forced to line up with other creditors in the company’s ongoing bankruptcy proceeding.

The attorney general's office initially filed motions saying it planned to make a claim in Maple Leaf's bankruptcy case in May, but requested more time to determine what the company owed the state. A filing this week showed the state believes it's owed the $860,000.

Turner was not sanguine about the state’s prospects for recouping its money. “I think certainly there are concerns about collectability,” he said.

While the state has a duty to try to recoup taxpayers money, Turner said the attorney general’s office doesn’t want to do that at the expense of employees who are owed unpaid wages and contractors who haven’t been paid for their services.

“I think it’s important for the state to protect its residents, but we also have to protect those who worked hard for their money,” Turner said.

Maple Leaf’s bankruptcy filings show it had $2.4 million in assets and $1.1 million in liabilities. The filing states, “After any administrative expenses are paid, no funds will be available to unsecured creditors.”

The filing shows Maple Leaf owes unsecured creditors, former employees and vendors, a total of $210,000. Many of its former employees are owed hundreds, and in some cases thousands of dollars, according to the filing.

Turner declined to say whether, in a scenario where Maple Leaf had remained open and the state had the opportunity to bring its own false claims case against the treatment provider, such a case would have named specific individuals in leadership positions at the company.

“It may have. I can’t answer that. We don’t have to make that decision,” Turner said.

However, Turner did express confidence in the case his team built against Maple Leaf. “I do believe if litigation was commenced and completed we would be able to establish that they filed false claims,” he said.

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Morgan True

About Morgan

Morgan True is VTDigger's Burlington bureau chief covering the city and Chittenden County. A Seattle native, he graduated from Boston University with a Bachelor of Science in Journalism before working for several publications in Massachusetts. He came to VTDigger in December 2013 from The Brockton Daily Enterprise, where he covered government, schools and hospitals in a city of about 100,000 people. Before joining The Enterprise, he worked for The Associated Press in Concord, N.H., where he served as a relief reporter in the Statehouse. He previously worked for The Quincy (Mass.) Patriot Ledger and as an intern at the Worcester (Mass.) Telegram & Gazette.

Email: [email protected]

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