DeWITT, Iowa — What state officials called a "credible" case of Medicaid fraud at Community Care Inc. in DeWitt, Iowa, has resulted in the firing of its management team and a temporary suspension of payments.
The Iowa Department of Human Services, or DHS, said Friday that it came to an agreement with the organization after an investigation found "a credible allegation of fraud" in Community Care's Medicaid billing.
Community Care Inc. offers programs and services to individuals with developmental and/or intellectual disabilities, mental illness and brain injury in nine Iowa counties, several of which are in the Quad-City region. The nine counties are Clinton, Scott, Jackson, Cedar, Jones, Linn, Marion, Chickasaw and Howard.
Community Care terminated the services of its chief executive, Bill Bonnes; chief operating officer, Angela Ganzer-Bovitz; chief financial officer, Jeff Morehead, as well as two others on the management team in DeWitt, according to Dave Pillers, the vice president and incoming president of the board.
Also fired were the administrator, Angie Smith, and an administrative assistant at the Community Care facility in Knoxville, Iowa, he added.
As part of the agreement with DHS, Community Care hired a replacement team of managers from the Columbus Group in King of Prussia, Pa. According to its website, the Columbus Group supplies management teams for centers all over the country that serve persons with disabilities.
The switch from the former management team to the one from Pennsylvania has been "seamless," Pillers said. The new team took over Wednesday.
"We have a competent and dedicated staff," he said, adding that employees were informed Thursday of what was taking place.
The Community Care Inc. organization was formed 25 years ago, but its roots trace to the 19th century. It has 340 adult clients who receive benefits from the Medicaid waivers program. There are more than 400 employees, Pillers said.
A search warrant for the Community Care premises was executed Oct. 8, said Amy McCoy, a DHS spokeswoman. In addition to agreeing to bring in the third-party management firm, Community Care is taking a temporary 35 percent suspension of its Medicaid reimbursements, she added. Finally, Community Care agreed to hire a cost report preparation firm to re-examine its Medicaid financial reports, she said.
Pillers said the 340 clients at Community Care include adults diagnosed with mental illness, as well as intellectual, developmental and/or physical disabilities and brain injury. They live and work in several parts of eastern Iowa.
According to its website, services offered include residential care facilities, intermediate care facilities for the intellectually disabled, home and community-based services, supported community living, home health care and vocational services.
Medicaid fraud investigations originate at the federal level and involve the U.S. departments of Justice and Health and Human Services. At the state level, it involves the Iowa Department of Justice and DHS.
In fiscal year 2012, the government announced that fraud prevention and enforcement efforts recovered a record $4.2 billion from attempts to defraud the Medicaid and Medicare programs. That is up from nearly $4.1 billion in 2011. The investigations involve individuals and companies that attempted to defraud federal health programs or sought payments to which they were not entitled.
In 2011 — the most recent year for which records are available in Iowa — there were 90 investigations resulting in 45 convictions, according to the regional offices for the Centers for Medicaid & Medicare Services. A total of $16,583,327 was recovered.
Nine staff members investigate Medicaid fraud cases in Iowa. Total Medicaid expenditures in Iowa during 2011 were $3,447,207,807.