Alternative Learning Center and Adult Educational Technologies: The Regional-Center Billing Settlement

Alternative Learning Center and Adult Educational Technologies, together with their leaders, agreed to an approximately $2 million Medicaid settlement over allegations that they billed for developmental-disability services never provided. The government alleged that the California vendors and their leaders created false supporting records and kept overpayments they knew they were not entitled to. For someone inside a vendor’s billing or finance office, the case reaches both the claim sent out and the money kept after it came back.

The Justice Department announced the joint settlement on August 28, 2017. A whistleblower brought the federal lawsuit, which concerned claims submitted to California’s Department of Developmental Services in Sacramento. The resolution covered federal and state False Claims Act allegations against the companies and the individuals who headed them. The Department of Health and Human Services Office of Inspector General, the Federal Bureau of Investigation and California’s Bureau of Medi-Cal Fraud and Elder Abuse investigated the case, which the U.S. Attorney’s Office for the Eastern District of California handled.

How California’s Regional-Center Billing Worked

California’s regional-center billing structure placed nonprofit regional centers between the state department and the vendors delivering care. The Department of Developmental Services contracted with those centers, which in turn contracted with companies such as Alternative Learning Center and Adult Educational Technologies to provide in-home support. The services included personal care and homemaking.

That work served a specific purpose: helping people with developmental disabilities live in the community instead of an institution. Both vendors were authorized to provide services in Alameda and Contra Costa counties.

The wider home and community-based services business depends on state choices about covered services and payment terms. In waiver programs, the state’s approved service definitions and billing units give the service record its meaning. Knowing that a document says personal care is the beginning of the inquiry. We want to understand what care it represents, who supplied it and how it became a request for payment. Here, the government alleged a direct break in that chain: the claimed services never happened.

Alternative Learning Center and Its President

Alternative Learning Center agreed to pay $562,600. Its president’s obligation went beyond her separate $159,400 payment: she also agreed to sell her primary residence and remit the proceeds to the government.

Adult Educational Technologies and Its Executive Director

Adult Educational Technologies Inc. agreed to pay $322,500, and its executive director separately agreed to pay $107,500. Like Alternative Learning Center, the company contracted through regional centers to provide in-home support. For both companies and their leaders, the settlement required substantial up-front payments to the United States and California, followed by additional payments over time.

False Services, False Records and Retained Overpayments

The settlement announcement describes connected allegations: claims for services never performed, intentionally falsified documents supporting those claims, and overpayments the defendants allegedly knew they had no right to keep. The false-document allegation explains how missing care could acquire a paper history. The government alleged that the defendants made documents reflect services that had never actually occurred. The paperwork was supposed to substantiate the claim. According to the allegation, it instead gave the nonexistent service something to point to.

We see the insult to the program in that detail. Personal care and homemaking were meant to help someone remain at home. A document describing care cannot deliver it. Paying against a fabricated account diverts money from the people the program exists to serve.

The retained-overpayment allegation concerned another decision: keeping funds the defendants allegedly knew they were not entitled to. That is why a finance employee’s account of an overpayment can matter alongside a caregiver’s account of a missing service. One concerns what happened before the bill. The other concerns what management knew about money already received.

For our review of a case like this, the connection matters more than any isolated form. We examine the claimed service, the document offered to support it, the payment and the information that reached the people deciding whether to return it. An insider who understands how those records were created can explain why a plausible-looking claim tells the wrong story.

Claims Reviews Found Overpayments That Still Went Unreturned

The inspector general’s compliance record for Alternative Learning Center lists a five-year corporate integrity agreement with the company and its president, effective November 8, 2016. The follow-up makes the retained-overpayment issue concrete. In its September 18, 2019 enforcement account, the inspector general says the company and its president paid a stipulated penalty for failing to repay identified overpayments within 60 days. Claims reviews under the agreement had already identified the overpayments.

We see the absurdity: even under a government integrity agreement, with overpayments identified in claims reviews, the company and its president still missed the repayment deadline. Detection had done its job.

Can You Get Paid for Reporting Medicaid Fraud?

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. In this case, the Justice Department said the whistleblower would receive a 20% share of settlement proceeds paid to the United States.

That federal payment base is the point of the whistleblower reward here. The settlement involved payments to both the United States and California, while the announced share attached to proceeds paid to the United States. We work through the payment structure with you as part of evaluating your case.

What Evidence Is Needed to Prove Fraud?

For regional-center billing allegations, the useful evidence connects the service actually delivered, the supporting documents, the claim and what the people handling an overpayment knew. For insiders delivering health care at home, that means knowing the work behind the records, not just how a claim was processed.

A 1999 report, Controlling Fraud and Abuse in Medicaid: Innovations and Obstacles, prepared at Harvard University’s Kennedy School of Government from seminars sponsored by the Health Care Financing Administration, described the purpose of checking claims against events outside the billing system:

The report also explained why access to claims data needs the knowledge of people who understand the fraud being investigated. Applied here, that means asking what sits behind the vendor’s account of care. A billing record may repeat a service record faithfully and still repeat something false.

The same problem appears in another organizational structure in the Community Options settlement. Its New York operation delivered services while the parent organization provided a centralized billing team. The defendants admitted failures in policies and training concerning day-habilitation services and documentation, and failure to return overpayments identified in their own reviews. The people delivering services and the people submitting claims occupied different parts of the organization.

In Sola’s nursing-billing settlement, the government alleged that billed nursing units exceeded the hours nurses worked according to their time records. That comparison put the billing against a separate account of the work. For a regional-center vendor, we look for the same connection between the care claimed and what an insider knows about its delivery, documentation or review.

You Know What Happened Behind the Service Record

If you worked with regional-center claims, service documentation or overpayment reviews, tell our whistleblower experts where the records part company with the care. We develop the case with you and bring in Medicaid home and community-based services whistleblower lawyers who understand vendor billing and retained overpayments. From the first conversation through the case, you have partners who can connect what you saw to the decisions behind the claims.