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Three Ohio-Based Psychiatric Hospitals Will Pay $10.25 Million Over Anti-Kickback Violations  

Cambridge Behavioral Hospital, Ridgeview Behavioral Hospital, The Woods at Parkside, and their parent company Oglethorpe Inc. (collectively Oglethorpe) have agreed to pay $10.25 million to resolve allegations that they violated the Anti-Kickback Statute.

Three Ohio-Based Psychiatric Hospitals Will Pay $10.25 Million Over Anti-Kickback Violations  

Oglethorpe operates medical facilities throughout Florida, Texas, Louisiana, and Ohio. Its alleged misconduct came to the attention of the Justice Department through a False Claims Act (FCA) complaint filed by a former Cambridge Behavioral Hospital employee. The FCA enables healthcare industry insiders to report Medicare fraud and collect cash awards ranging from 15 to 30 percent of any resulting recoveries.

According to the whistleblower’s allegations, Florida-headquartered Oglethorpe Inc. illegally recruited Medicare beneficiaries to receive unnecessary inpatient treatment at its Cambridge and Ridgeview hospitals.

The FCA complaint alleges that “Defendants knowingly submitted false claims to the United States by billing for unnecessary inpatient psychiatric hospitalizations and for psychiatric evaluations that either were not performed or did not meet Medicare’s requirements” and “misled patients into voluntarily admitting themselves and transported them to its facilities by van.”

Prosecutors stated that Oglethorpe offered free long-distance transportation to eligible individuals to induce them to become patients at its facilities even when they did not require inpatient treatment. This illegal conduct resulted in defendants submitting false claims for payment to Medicare.

The complaint further states that between August 2013 and June 2019, Oglethorpe submitted claims for payment to the government for: “(1) inpatient hospital stays at Cambridge, Ridgeview, and Parkside that were tainted by illegal kickbacks, in the form of free transportation provided to beneficiaries, in violation of the Anti-Kickback Statute, 42 U.S.C. § 1320a-7b; and (2) inpatient hospital stays at Cambridge and Ridgeview for psychiatric services that were also medically unnecessary.”

Cambridge and Ridgeview are psychiatric hospitals, while Parkside is a substance abuse treatment facility. By illegally recruiting patients, Oglethorpe allegedly violated the Anti-Kickback Statute (AKS). When it submitted claims for payment for treatments tainted by its alleged misconduct, it violated the False Claims Act.

A spokesperson for the Inspector General of the U.S. Department of Health and Human Services said in a press release that “kickbacks in the form of free van rides and the false claims subsequently submitted to federal health care programs come at a tremendous cost to patients and the taxpayers.”

Acting U.S. Attorney for the Southern District of Ohio Vipal J. Patel said in a statement, “Submitting false claims by billing for unnecessary inpatient psychiatric hospitalizations is not only inappropriate–it’s illegal.”

This is not Oglethorpe’s first brush with the law. In February 2020, Cambridge Behavioral Hospital was put on probation after regulators detected numerous deficiencies, including lack of medical oversight by a psychiatrist. According to one former employee, “some patients were [at Cambridge] 30-plus days and never met the doctor.” The Ohio Mental Health and Addiction Services launched its investigation after a patient died at the hospital.

Whistleblower Darlene Baker filed her complaint after detecting suspicious activity while working as a client rights advocate at Cambridge Behavioral Hospital. She worked there from July 2009 till November 2012. Her position involved ensuring “patients/clients rights during drug and alcohol rehabilitation.”

A Capital University graduate and licensed social worker, Ms. Baker received $175,000 from the defendants to cover her attorney’s fees. She also received a multimillion-dollar whistleblower award—the exact amount is confidential. She is now “retired and enjoying time to pursue personal interests and family,” according to her Linkedin profile.

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