Madison Center to Vigorously Defend Lawsuit

Jun 28, 2010, 16:57 ET from Madison Center, Inc.

SOUTH BEND, Ind., June 28 /PRNewswire/ -- Madison Center, Inc., a not-for-profit community mental health provider, confirmed today that a "whistleblower" lawsuit, filed under seal by two former employees, Kathleen McCoy and Jean Marie Thompson, in October 2005 was unsealed on or about June 25, 2010, after a decision by the United States Department of Justice (DOJ) not to prosecute the action following an extensive investigation. Madison Center was notified in March 2006 of the investigation and has cooperated with the DOJ since that time.  The lawsuit alleges that Madison Center did not properly document or file for Medicaid claims during the early 2000s.  

Madison Center intends to vigorously defend the lawsuit and is represented by Harold R. Bickham, Partner at Barnes & Thornburg, LLP, and former Civil Chief of the United States Attorney's Office for the Southern District of Indiana.

"We believe that Madison Center has viable defenses to the claims raised in this lawsuit," said Ken Davis, interim Chief Executive Officer for Madison Center.  "Madison Center cooperated with the U.S. Department of Justice beginning in March 2006 when we were originally notified of the investigation.  We are pleased that, following this extensive investigation, the U.S. Government has decided not to pursue any false claims actions against Madison Center."

The whistleblower lawsuit alleges that in the early 2000s, Madison Center provided inadequate documentation to support the level of children's mental health services billed to Indiana Medicaid and referred too many patients to intensive outpatient day-treatment programs for treatment of mental illness.  The lawsuit does not accuse Madison Center of any continued or ongoing violations of the Medicaid billing rules, and there have been no allegations of criminal misconduct.

The Indiana Medicaid program requires extensive documentation by healthcare service providers. Madison Center denies that documentation errors, if any were made, caused the state to make any submissions of false claims to the Medicaid program.  Rather, Madison Center provided mental health services to patients only following the recommendation of a qualified health professional who determined the necessity of services to treat mental illness.  Nonetheless, Madison Center enhanced its corporate compliance program in 2006 to further improve documentation and billing practices. 

The Federal False Claims Act permits private citizens to bring lawsuits on behalf of the United States.  In this case, McCoy and Thompson filed the lawsuit in the United States District Court for the Northern District of Indiana, Hammond Division.  The lawsuit had been under seal since October 2005.  

"We are committed to operating an organization that honors the highest ethical standards, complies with all appropriate laws and regulations, and provides quality care to those we serve," said Davis.  "While we strongly deny the allegations in this lawsuit, we respect the legal process and welcome a complete review of the facts in court.

"In the meantime, we are a not-for-profit organization under financial strain - like many healthcare providers throughout the country." continued Davis.  "We need to focus on our day-to-day operations and guiding this institution back to financial stability so we can continue to provide our patients, regardless of their ability to pay, the quality care they deserve.  We will not be discussing the details of the lawsuit and will allow the legal process to take its proper course."

Madison Center is a not-for-profit organization that provides a full continuum of behavioral healthcare services in St. Joseph, Elkhart, LaPorte, Marshall, Allen and Porter counties.

SOURCE Madison Center, Inc.