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State sues mental health care company, alleging fraud in Medicaid billing, unlicensed staffers

Massachusetts Attorney General Maura HealeySteven Senne/Associated Press

Attorney General Maura Healey has sued a Brockton mental health care company, accusing it of providing services by unlicensed, unqualified, and unsupervised staff and fraudulently billing the state for tens of millions of dollars.

The company, South Bay Community Services (formerly known as South Bay Mental Health) provided services to some 30,000 people on the Massachusetts Medicaid program for low-income residents, called MassHealth.

Since August 2009, the state has paid the company more than $123 million for providing mental health counseling and other services to MassHealth members — but Healey’s office said “a significant portion” of that sum was based on fraudulent claims.


“This company provided substandard care to many vulnerable patients and fraudulently billed the state for its inadequate services,” Healey said in a statement. “MassHealth members deserve competent treatment from qualified individuals, and our office will continue to take action in order to remove these significant barriers to accessing critical mental health care in our state.”

In a statement issued through a public relations firm, South Bay Community Services disputed the allegations.

The company “intends to follow the legal steps necessary to resolve this matter as efficiently as possible,” the company said. “We remain focused on the well-being of our consumers and employees. Our daily operations have not been affected, and we will continue to provide the best possible behavioral health services to those who need it most in the New England area.”

The company has several clinics in Massachusetts, including in Boston, Fall River, Lawrence, Springfield, and Worcester and on Cape Cod. The company says it offers services to children and adults, including mental health and substance abuse counseling and other outpatient services.

The attorney general’s suit, filed in federal court in Boston on Friday, joins a federal whistle-blower case that raised similar allegations of fraud against the company.


Healey’s suit cites allegations against 17 clinics operated by South Bay Community Services. It alleges that many employees at those clinics did not have degrees in social work, making them ineligible for the licenses needed to provide services. (Instead, the workers allegedly had degrees in other fields, such as art therapy and school counseling.)

South Bay is backed by H.I.G. Growth Partners, an arm of H.I.G. Capital, a global private equity firm with offices in Boston.

Priyanka Dayal McCluskey can be reached at Follow her on Twitter @priyanka_dayal.