TRANSPORTATION COMPANY CRIMINALLY CHARGED WITH PERPETRATING $19 MILLION FALSE BILLING SCHEME

TRANSPORTATION COMPANY CRIMINALLY CHARGED WITH PERPETRATING $19 MILLION FALSE BILLING SCHEME

Services Were Allegedly Never Provided or Not Provided as Claimed; Cash and Gift Cards Offered to Recruit New Clients

BOSTON – A transportation company, its owner, and three managers have been indicted in connection with an alleged scheme involving $19 million in false claims billed to the state’s Medicaid program (MassHealth), Attorney General Maura Healey announced today. The company primarily provided MassHealth members with non-emergency transportation services to methadone clinics.

            The AG’s Office alleges that between April 2011 and September 2015, Westminster-based Rite Way LLC (Rite Way) fraudulently and repeatedly billed MassHealth for transportation services that were never provided, including claims for individuals who were hospitalized in inpatient settings, no longer used the company’s services, or were deceased on the claimed dates of service.

“We allege that in order to rack up millions of dollars in payments from the state, this company orchestrated a massive false billing scheme for transportation services that they never provided or were not necessary,” AG Healey said. “To protect the integrity and success of our MassHealth program, we need to make sure companies are not intentionally taking advantage of taxpayers and the patients who are truly in need of these services.”

Rite Way, its owner Michael Davini, and former managers Gary Carbonello, Dwayne Pelkey and Lynn Maguire were indicted last week by a Statewide Grand Jury on the following charges:

Rite Way

·         Larceny Over $250 (2 counts)

·         Medicaid False Claims (4 counts)

·         Kickbacks (1 count)

Michael Davini, Rindge, N.H., age 56

·         Larceny Over $250 (2 counts)

·         Medicaid False Claims (4 counts)

·         Kickbacks (1 count)

Gary Carbonello, Leominster, age 46

·         Larceny Over $250 (2 counts)

·         Medicaid False Claims (2 counts)

·         Kickbacks (1 count)

Dwayne Pelkey, Winchendon, age 49

·         Larceny Over $250 (1 count)

·         Medicaid False Claims (1 count)

Lynn Maguire, Abington, age 50

·         Larceny Over $250 (1 count)

·         Medicaid False Claims (1 count)

·         Perjury (2 counts)

The defendants will be arraigned in Worcester Superior Court at a later date.

The AG’s Office began an investigation in 2013 into Rite Way after the matter was referred by MassHealth.

“In the fall of 2013 MassHealth identified allegations of fraudulent billing by transportation provider Rite Way LLC and referred the company to the Attorney General's Medicaid Fraud Unit,” said Secretary of the Executive Office of Health and Human Services, Marylou Sudders. “MassHealth then suspended all payments to Rite Way and subsequently terminated its contract. We are pleased with the outcome of the investigation and hope it signals that the actions of Rite Way are reprehensive and will not be tolerated by MassHealth as it continues to strengthen its program integrity to ensure its members have access to medically necessary services.”

“Data analytics enabled us to substantiate and quantify MassHealth’s concerns about Rite Way,” said Auditor Suzanne Bump. “The Attorney General did the right thing last year by initiating the suspension of payment to Rite Way when we shared our findings with them, and she’s doing the right thing again by bringing forward these charges.”

Until September 2015 when it ceased operations, Rite Way was a fee-for-service transportation company that provided MassHealth members with non-emergency transportation. The company was headquartered in Westminster and provided transportation services throughout the state with offices located in Worcester, Barnstable, Norfolk, and Hampden counties.

MassHealth provides non-emergency transportation services to aid its members in traveling to obtain covered medical services when public or personal transportation is not available or not suitable due to the member’s physical condition and circumstances. Pursuant to its regulations, MassHealth only pays transportation providers for non-emergency wheelchair van services provided to members who: (1) use wheelchairs; (2) need to be carried up or down stairs or require the assistance of two persons; or (3) have severe mobility handicaps that prevent them from using public transportation, dial-a-ride, or taxi transportation. 

The AG’s investigation also revealed that beginning as early as 2011 and until September 2015, Rite Way allegedly submitted fraudulent claims for non-emergency wheelchair van transportation provided to ambulatory individuals. Most of the members transported did not require wheelchair van services and were not transported in wheelchair vans.

Authorities allege that Rite Way offered and paid cash to MassHealth members to recruit others to use its transportation services. Davini and Carbonello allegedly personally offered and paid existing clients cash—up to $50 per referral—and other incentive rewards like Visa and Dunkin’ Donuts gift cards in exchange for the referral of new clients.

The AG’s Office also alleges that Maguire committed perjury by making false statements during her testimony before a Worcester County Grand Jury investigating this matter.

All of these charges are allegations and defendants are presumed innocent until proven guilty.

In 2014, the owner of a medical transportation company in Webster was sentenced to jail and ordered to pay full restitution for defrauding MassHealth more than $470,000 by billing for services under the names of deceased individuals and for other medical trips that were never provided. 

This matter is being handled by Assistant Attorney General Ian Marinoff, Investigations Supervisor Dean Bates, Investigators Robert Ames, Aleksandra Andriyevskaya and Eduardo Guardiola, all of AG Healey’s Medicaid Fraud Division. MassHealth and the State Auditor’s Office assisted in this investigation.