Two central Maine mental health agencies that saw their MaineCare payments suspended by the state a year ago for allegations of fraudulent billing had the payments restored in July after federal investigators declined to pursue further action.

The payment suspensions forced the two companies, Umbrella Mental Health Services and AngleZ Behavioral Health Services, to shutter, leaving around 500 clients in the Kennebec and Lincoln counties region without MaineCare-funded services and more than 100 people without jobs. Despite the nearly year-long closures, the owners of both companies plan to reopen the mental health agencies.

The Maine Department of Health and Human Services’ Division of Audit was notified in September 2013 that the Office of the Inspector General in the U.S. Department of Health and Human Services was investigating a credible allegation of fraud against the two companies. The department suspended the payments the companies had billed MaineCare, Maine’s version of Medicaid, as required by the federal Affordable Care Act, according to Maine DHHS spokesman John Martins.

The investigations into the two companies were separate, Martins said, but they appear to have been connected because the owner of AngleZ was previously a co-owner of Umbrella.

Following an email on July 2 from the U.S. Attorney’s Office in Maine, the department restored $59,462.12 in payments to AngleZ and $42,905.56 in payments to Umbrella for services billed in August and September of 2013, according to Martins.

The email, which Martins provided to the Kennebec Journal, said the U.S. Attorney’s Office was declining to “pursue a federal affirmative civil enforcement action against AngleZ and Umbrella because, when comparing the available remedies and the likelihood of success and recovery, it appears that the matter is best pursued by the state of Maine.”

Martins said in an email Wednesday that he couldn’t comment on what action the state may or may not take. A spokesperson for the U.S. Attorney’s Office didn’t respond to a request for comment.

The inspector general’s office began an investigation into Umbrella, which had offices in Augusta, Damariscotta and Wiscasset, in early 2013 for allegations of billing for inappropriate services, billing for services not provided and billing for services that were not documented or sufficiently documented, according to the hearing record for AngleZ’s appeal. Then in June 2013, the inspector general’s office began its investigation into AngleZ, according to the hearing record.

The owner of AngleZ, Annalee Morris, co-owned Umbrella with Marjorie Averill before leaving in 2012 to start AngleZ, which had offices in Augusta and Winthrop.

An attorney for AngleZ brought the issue to Kennebec County Superior Court in June, appealing the department’s final ruling that confirmed its decision to suspend the payment. The attorney, Jay McCloskey of McCloskey, Mina & Cunniff, LLC in Portland, filed a motion Aug. 8 to withdraw the appeal.

McCloskey, speaking by phone for his client, said there was no evidence of fraud and the state shouldn’t have suspended the payments, effectively putting the company out of business. He said he doesn’t fault the agency for investigating the allegations, but he doesn’t think anyone wanted the case to go in front of a judge.

“Whatever caused the investigation, there’s nothing wrong with that. The idea is you’ve got to do the work to determine if there’s any truth to the allegations, especially if you’re putting someone out of business,” McCloskey said.

He said the state has been working with Morris to help her reopen her business.

Averill also denied the fraud allegations against her company, Umbrella Mental Health Services.

“They have to do what they have to do, but it was not something that was ultimately investigated or substantiated before they shut the office down,” Averill said of the state’s actions. “It’s one thing to make an allegation. It’s another thing to take out a whole company.”

She said she’s applied for a license with the state to open a new company, the Umbrella Agency, in Damariscotta, and she’s happy the investigation is over.

“I just really still want to focus on moving forward,” Averill said.

Paul Koenig — 621-5663

[email protected]

Twitter: @paul_koenig

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