Former Middletown Group Home to Pay $1.5 Million to Settle Overbilling Allegations

MIDDLETOWN, CT — A former Middletown group home that provided residential and day services to the intellectually disabled and at-risk youth has agreed to pay $1.5 million to settle overbilling allegations with the government, according to authorities.

REM Connecticut Community Services, Inc. (REM), which ceased operating in Connecticut at the end of 2014, 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, U.S. States Attorney Deirdre M. Daly and Connecticut Attorney General George Jepsen announced in a joint statement.

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The allegations against REM arose from its submission of “cost reports” to the state related to its operation of group homes during the period from July 1, 2007 through June 30, 2014, according to the press release.

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’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,” Daly said in a statement. “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, according to Daly.

The additional $310,975 will be paid by REM collectively to the federal and state governments at the time the settlement agreement is executed.