Psychiatric hospital in Washington County pays $150,000 to settle suit alleging abuse, fraud
A private psychiatric hospital in Washington County paid $150,000 to settle a suit alleging it over-medicated and abused juveniles the state Department of Public Welfare sent there in 2005.
The settlement, negotiated by the Department of Justice, includes no admission of wrongdoing. It contains an agreement outlining standards of care and oversight at Southwood Psychiatric Hospital.
A federal prosecutor said the settlement should send a message to facilities that care for vulnerable children.
The suit was filed by Dr. Stefan Kruszewski, a Harrisburg-area psychiatrist who under state contract monitored private facilities for fraud and abuse from 2001 until his firing in 2003.
He charged that Southwood held juveniles who did not require hospitalization, prescribed and administered unnecessary medication to increase government reimbursements, and billed the government for care that was not provided.
Southwood, licensed as a school and hospital, houses as many as 132 boys ages 6 to 18 at four residential treatment facilities in Washington County. The complaint cited only the 76-bed residential campus in rural Prosperity.
In a written statement, Steven Quigley of Youth and Family Centered Services, Southwood's parent company, said changes to improve services at the facility were under way during settlement discussions. Youth and Family Centered Services operates programs in nine states.
Quigley said the agreement should make the Prosperity facility "a model program for similar providers," and that the changes exceed state standards. He said the facility underwent successful licensing reviews the past three years.
The suit, filed in 2005 under the federal False Claims Act, was made public last month only when the U.S. Attorney's Office in Philadelphia settled the case.
The False Claims Act allows individuals with evidence of fraud against the government to file suit under the false claims act. If the U.S. attorney intervenes, plaintiffs in such cases are eligible to collect a portion of proceeds. In this case, Kruszewski will receive $22,500 of the $150,000 payment; the rest will reimburse Medicaid.
Laurie Magid, the U.S. attorney in Philadelphia, said the settlement should be a warning for facilities providing such services.
"Children and adolescents who temporarily live in psychiatric residential treatment facilities, often at a significant distance from home, are particularly vulnerable and need a safe environment and a quality of care that will effectively treat their underlying conditions and allow them to return home as soon as possible," Magid said in a written statement.
Kruszewski said he learned of problems at Southwood while reviewing records for the Welfare Department. His suit was an effort to "right some wrongs in the system," and filed after the state dismissed his warnings, he said.
"The state response was pathetic. ... DPW stymied virtually every and any attempt to investigate," Kruszewski said. "DPW had only a few nurses and a few administrative people trying to investigate hundreds of complaints. They didn't have the resources, the senior directive, nor the will to proceed."
He said he was fired in 2003 when he reported a pattern of rampant abuse in facilities housing Pennsylvania Medicaid recipients in Pennsylvania, Florida, Texas, Oklahoma and Virginia. In 2007, the state paid Kruszewski $374,000 to settle a civil rights whistleblower suit that charged he was fired for speaking about his findings.
A spokeswoman for the Welfare Department said the agency was independently reviewing Southwood when federal authorities approached with an offer to pool resources because of Kruszewski's suit.
"The (Department of Justice) and the (Bureau of Program Integrity) were able to collaboratively share notes, on-site evidence and assessments to complete the investigation," said Stacey Witalec.
Assistant U.S. Attorney Margaret Hutchinson confirmed the state provided critical assistance when approached about the suit.
Kruszewski said Southwood's agreement to expand its clinical staff and improve oversight and monitoring was the most important result of his suit.
"I am satisfied with what's in place at Southwood at the present time ... at least what I know of their progress and agreements."
Southwood houses 35 patients for the state at a cost of $151 a day, according to the Welfare Department.
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