The Maine Department of Health and Human Services recently upheld its decision to suspend Medicaid payments to a Portland-based service provider that is facing fraud allegations.

DHHS suspended the payments to Gateway Community Services, which provides Medicaid services for people with disabilities, in December after it was accused of falsifying billing records. The state conducted an informal review of the suspension at Gateway’s request, the first step in an administrative appeal process.

In a May 12 letter to Gateway attorney Maureen Sturtevant, of Drummond Woodsum, DHHS upheld the payment suspension, saying evidence supported that there was a “credible allegation of fraud.”

A state audit found there had been $1.1 million in overpayments from March 2021 to December 2022, state officials previously confirmed. DHHS had also identified about $663,000 in overpayments made to Gateway between 2015 and 2018, from earlier audits.

Sturtevant said in a statement: “Gateway Community Services declines to comment at this time, other than that it stands by its denial of the allegations of fraud.”

Among the allegations were that Gateway billed for services that were not delivered, or for those, such as interpretation services, that were considered unnecessary or not covered by Medicaid, according to the May 12 letter from William Logan, associate director of compliance for the Office of MaineCare Services. The letter was provided to the Portland Press Herald by DHHS.

In response to Gateway’s arguments related to the credibility of informants, Logan wrote in the letter that sources of the investigation by Medicaid’s Program Integrity Unit “included records submitted by (Gateway) and records maintained by government agencies.”

According to the letter: “Those records established a foundational basis that warrants further investigation of the potential fraud.”

Pawel Binczyk, an attorney representing Gateway last year, said in a December statement that Gateway “maintains strict billing, documentation and compliance protocols, and has cooperated with state oversight agencies.” 

Gateway can appeal the ruling within 60 days by requesting a Maine DHHS administrative hearing.

“The decision will be reviewed and the options will be considered by Gateway during the 60-day time frame provided by the regulation,” Sturtevant said in the statement.

The payment suspension is occurring amid an investigation into whether MaineCare — the state’s name for its Medicaid program — should permanently prohibit Gateway from providing the services, Logan wrote.

The Trump administration has recently deferred $1.3 billion in Medicaid payments to California, and $91 million in Minnesota, over fraud accusations. This month, U.S. Centers for Medicare and Medicaid Services announced a six-month moratorium on new home health and hospice agencies that provide Medicare services, also citing fraud allegations.

Vice President JD Vance criticized Maine for its Medicaid oversight during a Bangor visit last week. Vance called a federal audit that found $45.6 million in improper MaineCare payments the “tip of the iceberg” and accused Gov. Janet Mills of fighting the Trump administration’s efforts to root out fraud.

Mills disputed Vance, arguing the state has gone after MaineCare fraud during her two terms as governor.  

Lindsay Hammes, a Maine DHHS spokesperson, said in a statement Wednesday that the agency is “committed to ensuring funds are used lawfully, effectively, and in direct support of the programs and people they are intended to serve.”

Maine officials have also said the federal audit did not include any findings or allegations of fraud.

In a bipartisan move, the Maine Government Oversight Committee in February directed the state’s Office of Program Evaluation and Government Accountability to evaluate Maine’s system of investigating Medicaid fraud.