Youth Rehabilitation Center Agrees to Pay Over $3.4 Million to Resolve Allegations of False Claims Act Violations

Youth Rehabilitation Center Agrees to Pay Over $3.4 Million to Resolve Allegations of False Claims Act Violations

MOBILE, AL – Pathway, Inc. and Pathway of Baldwin County, LLC have agreed to pay $3,496,331.92 to resolve allegations that Pathway of Baldwin County, LLC wrongfully billed Medicaid for services it did not actually provide, in violation of the False Claims Act.

Pathway, Inc. is a private corporation that operates Pathway of Baldwin County, LLC. Pathway of Baldwin County, LLC provides services to certain Medicaid-eligible youth recipients through a contractual arrangement with the Alabama Department of Youth Services, which in turn contracts with the Alabama Medicaid Agency. Pathway of Baldwin County billed Medicaid for individual basic living skills services that it did not actually provide.

“Ensuring that taxpayer money is spent appropriately is a responsibility the Justice Department takes seriously,” said U.S. Attorney Sean P. Costello. “The False Claims Act is an important tool that we and our agency partners rely on to stop practices that misuse public funds.”

“Submitting false claims to Medicaid undermines the integrity of federal health care programs and wastes valuable taxpayer dollars,” said Special Agent in Charge Tamala E. Miles, at the Department of Health and Human Services, Office of Inspector General (HHS-OIG). “Working closely with our law enforcement partners, HHS-OIG remains committed investigating and holding accountable bad actors who attempt to defraud federal health care programs.”

The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act against Pathway, Inc. and Pathway of Baldwin County, LLC. Under the qui tam provisions of the False Claims Act, a private party can file an action on behalf of the United States and receive a portion of the settlement if the government takes over the case and reaches a monetary agreement with the defendant. The qui tam case is captioned U.S. ex rel. Richard Sheppard v. Pathway of Baldwin County, LLC and Pathway, Inc., No. 1:17-cv-00355-KD-N (S.D. Ala).

The resolution obtained in this matter were the result of a coordinated effort between the U.S. Attorney’s Office for the Southern District of Alabama and the Department of Health and Human Services – Office of the Inspector General.

Assistant U.S. Attorney Scott Gray investigated the matter on behalf of the United States.

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