Agency says it received a ‘credible allegation of fraud’

A letter from the state’s Medicaid agency to New River Behavioral HealthCare says the agency received ‘a credible allegation of fraud.’ This is page one of the 4-page letter, issued to Carolina Public Press following a public records request. The entire document is available within this post. Click to view full-size.

Carolina Public Press reported on Sept. 30 that the state’s Medicaid agency had suspended payments to the Boone-based New River Behavioral HealthCare, one of the region’s largest providers of mental-health services, as the agency began an investigation into the agency.

A letter released by the state to Carolina Public Press yesterday, following a public records request, offers more details into the allegations levied against the agency.

The letter, written by Patrick Piggott, section chief of the Behavioral Health Review Section of the N.C. Department of Health and Human Services’ Division of Medical Assistance (DMA) to Pam Andrews, director of New River Behavioral HealthCare states:

DMA has received a credible allegation of fraud against New River Behavioral Healthcare.

The general allegations as to the nature of the suspension action include but may not be limited to:

Failure to produce documentation for services billed including clinical assessments, PCPs and service notes; failure to transition recipients to appropriate level of care prior to closing agency and rendering proper notification to Local and State authorities, failure to present qualified staff to deliver clinical services; and failure to provide services to recipients including scheduled outpatient appointments (i.e. Medication Management) resulting in poor quality of care.

DMA is not required to disclose any specific information concerning an ongoing investigation. The State Medicaid agency has reviewed all allegations, facts and evidence carefully prior to taking this action.

The letter continues, saying payments have been suspended as of Oct. 4. There is also options for the agency to refute the allegations, provide evidence to the contrary and request telephone or personal hearings. Read the entire letter, below.

The Watauga Democrat recently reported that dissolution of the agency could be as soon as Nov. 15, and that a new board had been established to guide the process. The board is scheduled to meet today, the newspaper reports.

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Angie Newsome was the executive director and editor of Carolina Public Press. Contact her at (828) 774-5290 or e-mail her at

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