Former Connecticut Group Home Operator Pays $1.5 Million to Settle Overbilling Allegations

U.S. Attorney Deirdre M. Daly and Connecticut Attorney General George Jepsen today announced that REM CONNECTICUT COMMUNITY SERVICES, INC. (“REM”) has entered into a civil settlement agreement with the federal and state governments in which it will pay $1.5 million to resolve allegations that it received overpayments from the Connecticut Medicaid Program.

REM, formerly located in Middletown, Conn., operated various group homes that provided residential and day services to the intellectually disabled and at-risk youth.  REM ceased operating in Connecticut at the end of 2014.

The allegations against REM arose from REM’s submission of Annual Reports of Residential and Day Services (“cost reports”) to the State of Connecticut related to its operation of group homes during the period from July 1, 2007 through June 30, 2014.  The government contended that REM reported certain interest expenses as allowable costs in the cost reports that were in fact not allowable under the State of Connecticut’s Cost Standards.  As a result, the government alleges that REM received overpayments that it was not entitled to receive from the Connecticut Medicaid Program.

“Providers who bill government health insurance programs, such as Medicaid, must scrupulously follow the rules and regulations, and the failure to do so will have serious consequences,” said U.S. Attorney Daly.  “The U.S. Attorney’s office will vigorously pursue health care providers who receive payments from federal health care programs that they are not entitled to receive.”

To resolve its liability, REM will pay $1.5 million to the federal and state governments.  Part of the settlement amount will be satisfied by the government retaining $1,189,025 that had been suspended by the State of Connecticut because of REM’s questionable billing practices.  The additional $310,975 will be paid by REM collectively to the federal and state governments at the time the settlement agreement is executed.

This matter was investigated by the Office of Inspector General for the Department of Health and Human Services.  The case is being prosecuted by Assistant U.S. Attorney Richard M. Molot and by Assistant Attorney General Richard M. Porter of the Connecticut Office of the Attorney General.

People who suspect health care fraud are encouraged to report it by calling 1-800-HHS-TIPS or the Health Care Fraud Task Force at (203) 777-6311.