Madison Center to Vigorously Defend Lawsuit

SOUTH BEND, Ind., June 28 /PRNewswire/ — Madison Center, Inc., a not-for-profit
community mental health provider, confirmed today that a “whistleblower”
lawsuit, filed under seal by two former employees, Kathleen McCoy and Jean Marie
Thompson, in October 2005 was unsealed on or about June 25, 2010, after a
decision by the United States Department of Justice (DOJ) not to prosecute the
action following an extensive investigation. Madison Center was notified in
March 2006 of the investigation and has cooperated with the DOJ since that time.
The lawsuit alleges that Madison Center did not properly document or file for
Medicaid claims during the early 2000s.

Madison Center intends to vigorously defend the lawsuit and is represented by
Harold R. Bickham, Partner at Barnes & Thornburg, LLP, and former Civil Chief of
the United States Attorney’s Office for the Southern District of Indiana.

“We believe that Madison Center has viable defenses to the claims raised in this
lawsuit,” said Ken Davis, interim Chief Executive Officer for Madison Center.
“Madison Center cooperated with the U.S. Department of Justice beginning in
March 2006 when we were originally notified of the investigation. We are pleased
that, following this extensive investigation, the U.S. Government has decided
not to pursue any false claims actions against Madison Center.”

The whistleblower lawsuit alleges that in the early 2000s, Madison Center
provided inadequate documentation to support the level of children’s mental
health services billed to Indiana Medicaid and referred too many patients to
intensive outpatient day-treatment programs for treatment of mental illness. The
lawsuit does not accuse Madison Center of any continued or ongoing violations of
the Medicaid billing rules, and there have been no allegations of criminal
misconduct.

The Indiana Medicaid program requires extensive documentation by healthcare
service providers. Madison Center denies that documentation errors, if any were
made, caused the state to make any submissions of false claims to the Medicaid
program. Rather, Madison Center provided mental health services to patients only
following the recommendation of a qualified health professional who determined
the necessity of services to treat mental illness. Nonetheless, Madison Center
enhanced its corporate compliance program in 2006 to further improve
documentation and billing practices.

The Federal False Claims Act permits private citizens to bring lawsuits on
behalf of the United States. In this case, McCoy and Thompson filed the lawsuit
in the United States District Court for the Northern District of Indiana,
Hammond Division. The lawsuit had been under seal since October 2005.

“We are committed to operating an organization that honors the highest ethical
standards, complies with all appropriate laws and regulations, and provides
quality care to those we serve,” said Davis. “While we strongly deny the
allegations in this lawsuit, we respect the legal process and welcome a complete
review of the facts in court.

“In the meantime, we are a not-for-profit organization under financial strain -
like many healthcare providers throughout the country.” continued Davis. “We
need to focus on our day-to-day operations and guiding this institution back to
financial stability so we can continue to provide our patients, regardless of
their ability to pay, the quality care they deserve. We will not be discussing
the details of the lawsuit and will allow the legal process to take its proper
course.”

Madison Center is a not-for-profit organization that provides a full continuum
of behavioral healthcare services in St. Joseph, Elkhart, LaPorte, Marshall,
Allen and Porter counties.

SOURCE Madison Center, Inc.