Drug Medi-Cal Fraud Case Set for Trial in May 2016 For Alleged Submission of False Claims for Alcohol and Drug Treatment and Counseling for Students

Trial is set for May 10, 2016 in federal court in Los Angeles regarding the operation of a Caliornia Drug Medi-Cal provider Atlantic Health Services, formerly known as Atlantic Recovery Services (ARS) in which eight individuals were indicted and charged with health care fraud and aggravated identity theft.

The Drug Medi-Cal programs in the schools was a unique program and there may be very good defenses to this case given the County contracts, the approval of billing and submissions in the past, the State agency that regulated these programs and upon which the programs relied, and the aggressive tactics that Medi-Cal used when it decided to cut these programs.  

The overall allegation was that ARS submitted more than $50 million in fraudulent bills to a California state program for alcohol and drug treatment services for high school and middle school students that, in many instances, were not provided or were provided to students who did not have substance abuse problems. 

The eight defendants are all former employees of ARS, which received contracts to provide substance abuse treatment services through the Drug Medi-Cal program to students in schools in Los Angeles County. 

The schools included various sites operated by Soledad Enrichment Action and public schools in Montebello, California, Bell Gardens, Californina, Lakewood, and the Antelope Valley. ARS submitted claims for payment to the Drug Medi-Cal program for at least ten years and ARS shut down in April 2013, when California suspended payments to the company.

The individuals charged were: (1) Lori Renee Miller, the program manager at ARS who supervised substance abuse recovery managers and counselors; (2) Nguyet Galaz who oversaw services provided at approximately 11 schools in Los Angeles County; (3)  

Angela Frances Micklo who managed counselors at approximately nine schools in Los Angeles County, including several in the Antelope Valley; (4) Maribel Navarro who managed counselors at approximately ten schools in Los Angeles County; (5) Carrenda Jeffery who managed counselors at approximately three schools; (6) LaLonnie Egans who managed counselors at three schools; (7) Tina Lynn St. Julian who worked as a counselor at two schools; and (9) Shyrie Womack who worked as a counselor at three schools. An indictment contains allegations that a defendant has committed a crime.  Every defendant is presumed innocent until and unless proven guilty in court.

According to the indictment, the claims submitted to the Drug Medi-Cal program were false and fraudulent for a number of reasons, including:

A. ARS billed for services provided to students who did not have substance abuse disorders or addictions and therefore did not qualify to receive Drug Medi-Cal services. This allegation may be defendable on the ground that the standards for students who need drug counseling is very different than an adult who is diagnosed as an "addict."
 

B. It is claimed that ARS billed for counseling sessions that were not conducted at all.
 

C. It is claimed that ARS billed for counseling services that were not conducted in accordance with Drug Medi-Cal regulations regarding length, number of students, content and setting.
 

D. It is claimed that ARS personnel falsified documents, including treatment plans, group counseling sign-in sheets, progress notes and update logs (which listed the dates and times of counseling sessions). 

E. It is claimed that ARS personnel forged student signatures on documents.

Previously, eleven (11) other defendants pleaded guilty to health care fraud charges stemming from the ARS operation.  Those defendants are former ARS managers Cathy Fernandez, Erin Hoover, Elizabeth Black, Helsa Casillas, and Sandra Lopez; and former ARS counselors Tamara Diaz, Margarita Lopez, Irma Talavera, Laura Vasquez, Cindy Leticia Ortiz, and Arthur Dominguez. These individuals have already plead guilty in this matter which will complicate the case at one level since they will be cooperating with the government but depending on the credibility could give the defense some opportunities.

Another defendant, Dr. Leland Whitson, 75, of Redondo Beach, California, the former Medical/Clinical Director of ARS, previously pleaded guilty to making a false statement affecting a health care program. The dozen defendants who have already pleaded guilty are pending sentencing by U.S. District Judge Philip S. Gutierrez.

Posted by Tracy Green, Esq.
Work 213-233-2260