Southeastern Behavioral Healthcare Services: Claims for Absent, Deceased or Incarcerated Patients

In the Southeastern Behavioral Healthcare Services fraud case, the company and its owners agreed to pay $2,505,000 to resolve allegations that they billed North Carolina Medicaid for services never provided, including claims for deceased or incarcerated patients. For an employee who knows the appointments, patient histories or billing, the critical detail is the date Medicaid was told the care occurred.

The Department of Justice announced the settlement on December 2, 2024. Southeastern operated a behavioral health business in Lumberton and Maxton, North Carolina. The United States and the State of North Carolina alleged that the company and its owners violated the federal False Claims Act and North Carolina’s False Claims Act.

What Southeastern Was Accused of Billing

The governments alleged that Southeastern submitted claims for services that were unnecessary or were not delivered as billed. The allegations covered March 1, 2016, through July 14, 2020.

The government’s account connected those claims to recipient interviews and a pervasive lack of medical records supporting either the care or its necessity. Recipients described services that were unnecessary or systematically not rendered as billed. The allegations reached the patient, the encounter and the clinical reason for charging Medicaid.

Medicaid allegedly received bills for care delivered to people who were dead or in jail on the service date. The people familiar with those patients could recognize the contradiction before anyone opened a billing manual. Taxpayers were being asked to pay for encounters the governments alleged never happened.

What Evidence Is Needed to Prove Fraud?

The evidence depends on what the provider billed and how its clinical and billing work fit together. We examine those connections with the insider who knows the operation, assessing the claims against the care actually delivered.

Behavioral health payment makes that comparison specific. A timed therapy service, a group session and a program paid by the day represent different units of care. A person’s appearance on a schedule answers less than a claim representing that a particular service was delivered. The service, the worker and the period covered by the bill all matter to that comparison.

For example, Medicare’s psychotherapy coding guidance calls for start and stop times or total psychotherapy time, excluding time spent on medical evaluation and management. Group psychotherapy instead uses session units. That is why a treatment note’s account of the work matters: a visit’s duration and the service charged can tell different stories. These Medicare examples illustrate the payment distinctions; Southeastern’s allegations concerned North Carolina Medicaid.

A clinician, scheduling worker or billing employee may recognize a different part of the same false claim. Schedules, attendance information, treatment notes and billing records can show where those accounts meet. We work with the person who knows what happened to identify what supports a whistleblower case.

The Owners, the Clinicians and the Billing Office

Southeastern and its owners were parties to the settlement. The governments directed their false-billing allegations at both the business and the owners.

For an insider, the useful account is concrete: the service you provided, the appointment you handled, the record you worked with or the billing decision you saw. We connect that account to the organization and the people responsible for the particular work. A worker who knows the clinical side and a worker who knows the billing side can each bring knowledge the other does not have.

What Agency Investigates Healthcare Fraud?

Federal health care fraud investigators and state Medicaid investigators can work together on the same provider’s bills. In Southeastern’s case, the U.S. Attorney’s Office for the Eastern District of North Carolina, the U.S. Department of Health and Human Services Office of Inspector General, and the Medicaid Investigations Division of the North Carolina Attorney General’s Office investigated the allegations.

The state division investigates healthcare providers that defraud Medicaid. The U.S. Attorney’s Office works with law enforcement agencies and state entities on fraud against government health programs. Southeastern’s settlement brought those federal and state efforts together over the same claims for care.

The Settlement Included an Integrity Agreement

Southeastern also agreed to enter an Integrity Agreement with the HHS Office of Inspector General as part of the settlement. The agency’s agreement summary describes a three-year agreement for review of its claims, effective November 22, 2024.

Tree of Life and Claims That Conflict With Patient History

At Tree of Life, the government alleged Medicaid claims for hospitalized or deceased patients, paralleling Southeastern’s alleged claims for incarcerated or deceased recipients.

How Much of a Settlement Does a Whistleblower Get?

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. For a worker who knows that Medicaid bills diverge from patient care, we assess the potential case around the services, the claims and the decisions behind them.

You Know Whether the Visit Happened

If you know Southeastern’s billing or see the same disconnect at another provider, speak with our whistleblower experts about bills for visits that never happened. We build your strongest Medicaid whistleblower case with you and bring in Medicaid fraud whistleblower lawyers who understand behavioral health services and the records behind them. We stay beside you through the case, from understanding the billing decisions you saw to pursuing a recovery.