Contract Counselor For Shelby County Juvenile Court Sentenced To Three Years For Health Care Fraud Scheme

Memphis, TN – Mechell D. Toles, 44, of Collierville, TN, was sentenced today by United States District Court Chief Judge Jon Phipps McCalla to three years in prison following her guilty plea to one count of health care fraud, announced U.S. Attorney Edward L. Stanton III.

“While serving in a position of trust and being paid to help at-risk children, Dr. Toles instead brazenly helped herself to more than $600,000 of taxpayer monies by manipulating our nation’s health-care benefits system,” said U.S. Attorney Stanton. “Today’s sentence should serve as a clear reminder that there are stiff and severe consequences for violating the public’s trust.”

According to the Information and to statements made at the guilty plea and today’s sentencing, Toles – who has an undergraduate degree from Purdue University, a masters degree from the University of Mississippi, and a Ph.D. from Walden University – received referrals from the Shelby County Juvenile Court, which was the primary source of her counseling clientele. Hundreds of Toles’ patients were enrolled in TennCare, Tennessee’s Medicaid program. In western Tennessee, TennCare operates through two managed care organizations: Blue Care, which is associated with Blue Cross Blue Shield; and AmeriChoice, which is associated with United Health Care.

The investigation began after AmeriChoice audited Toles based on her high volume of counseling services and, upon finding incomplete documentation in her files, provided her with training on proper documentation and billing. The TennCare Office of Integrity referred the audit and inquiry into Toles’ billing practices to the Tennessee Bureau of Investigation on suspicion that she had engaged in health care fraud.

Investigators obtained billing information from the managed care organizations, reviewed correspondence and documentation from Juvenile Court, interviewed patients, surveilled Toles, and obtained a search warrant. The investigation revealed numerous occasions for which Toles billed for more than 24 hours of services in a single day. It also revealed instances in which Toles billed for counseling sessions on dates before patients had been referred to her and on dozens of dates after she had discharged patients. Toles’ files were largely devoid of any documentation of services provided, and patient records showed blank sheet after blank sheet for the purported dates of service. Based on billings for which there was no documentation of any services, investigators estimate at least $602,769.42 was billed by Toles and paid by TennCare for which no valid services were actually rendered.

After her offices were searched, Toles was interviewed and admitted that her patient files were “horrible” and that only one or two were correct. She also admitted that she billed for services on dates when no services were provided. She claimed she was not sure how much money she had obtained, that she wanted to pay it back, that she did not have any particular need for the money – which had been spent – and that she knew at the time it was wrong but that it was just easy to do.

"The State of Tennessee has no tolerance for health care fraud. This is an example of a provider taking advantage of the system even when she knew it was wrong,” said Tennessee Bureau of Investigation Director Mark Gwyn. “TBI is glad to see the truth come to light and Dr. Toles appropriately sentenced."
In addition to the three-year prison sentence, Judge McCalla ordered Toles to pay $602,769.42 in restitution and to serve three years of supervised release. There is no parole in the federal prison system. This investigation was conducted by the Tennessee Bureau of Investigation. Assistant U.S. Attorney John Fabian represented the government.