Molina Healthcare and its former subsidiary, Pathways of Massachusetts, agreed to pay more than $4.6 million to resolve false claims and whistleblower allegations, the Justice Department said Tuesday.
The Massachusetts Attorney General’s Office alleged Pathways submitted fraudulent claims to the state’s Medicaid program, MassHealth, for behavioral health services provided by unlicensed and loosely supervised staff.
As part of the settlement, Molina and Pathways did not admit to the truth of the allegations. They also agreed not to make any public statements denying the allegations.
“This company routinely allowed unlicensed and unsupervised mental health professionals to provide care to patients, all while billing MassHealth for it,” Attorney General Maura Healey said in a news release. “MassHealth patients deserve to receive treatment from qualified individuals, and my office will continue to hold providers accountable.”
The four whistleblowers, who worked at Pathways from 2014 to 2018, also brought a qui tam action in the state’s district court. They alleged Pathways lacked enough staff to qualify as eligible mental health centers under MassHealth and the state’s public health rules.
The whistleblowers will receive $810,000 of the settlement plus interest. They also could pursue attorneys’ fees as well as civil lawsuits alleging employment retaliation claims.
Molina and Pathways did not return requests for comment.
Molina, a Long Beach, California-based managed healthcare services company, provides healthcare plans to state and federal programs, like MassHealth. Molina operated mental health clinics in Massachusetts through Pathways before selling the subsidiary to private investment firm Atar Capital in 2018.
The Justice Department said healthcare fraud led its False Claims Act settlements in fiscal year 2021. Of the $5.6 billion in settlements from civil cases involving fraud and false claims, more than $5 billion related to healthcare industry matters.