Mental health counselor guilty of $500,000 fraud scheme

April 27, 2013

Memphis, TN – Mechell D. Toles, 44, of Collierville, TN, pleaded guilty this morning to a one count Information charging her with health care fraud, announced United States Attorney for the Western District of Tennessee, Edward L. Stanton III. Toles, a licensed professional counselor who formerly operated offices in Memphis and Collierville, will be sentenced on July 1, 2013 before Chief United States District Judge Jon Phipps McCalla.

According to the Information and to statements made at the guilty plea hearing this morning, Ms. Toles – who has an undergraduate degree from Purdue University, a masters degree from the University of Mississippi, and a Ph.D. from Walden University – received referrals from the Shelby County Juvenile Court, which was the primary source of her counseling clientele. Hundreds of Ms. Toles’ patients were enrolled in TennCare, Tennessee’s Medicaid program. In western Tennessee, TennCare operates through two managed care organizations: Blue Care, which is associated with Blue Cross Blue Shield; and AmeriChoice, which is associated with United Health Care.

The investigation began after AmeriChoice audited Ms. Toles based on her high volume of counseling services and, upon finding incomplete documentation in her files, provided her with training on proper documentation and billing. The TennCare Office of Integrity referred the audit and inquiry into Ms. Toles’ billing practices to the Tennessee Bureau of Investigation on suspicion that she had engaged in health care fraud.

Investigators obtained billing information from the managed care organizations, reviewed correspondence and documentation from Juvenile Court, interviewed patients, surveilled Ms. Toles, and obtained a search warrant. The investigation revealed numerous occasions for which Ms. Toles billed for more than 24 hours of services in a single day. It also revealed instances in which Ms. Toles billed for counseling sessions on dates before patients had been referred to her and on dozens of dates after she had discharged patients. Ms. Toles’ files were largely devoid of any documentation of services provided, and patient records showed blank sheet after blank sheet for the purported dates of service. Based on billings for which there was no documentation of any services, investigators estimate approximately $500,000 to $600,000 was billed by Ms. Toles and paid by TennCare for which no valid services were actually rendered.

After her offices were searched, Ms. Toles was interviewed and admitted that her patient files were “horrible” and that only one or two were correct. She also admitted that she billed for services on dates when no services were provided. She claimed she was not sure how much money she had obtained, that she wanted to pay it back, that she did not have any particular need for the money – which had been spent – and that she knew at the time it was wrong but that it was just easy to do.

“While serving in a position of trust and being paid to help children in need, Ms. Toles instead helped herself to more than a half-million dollars of taxpayer monies,” said U.S. Attorney Stanton. “By doing so, she brazenly diverted resources from deserving clients and unscrupulously manipulated our nation’s health-care benefits system for her own benefit.”

This investigation is being conducted by the Tennessee Bureau of Investigation. Assistant U.S. Attorney John Fabian represents the government.

Source: "Shelby County Juvenile Court Psychiatric Counselor Pleads Guilty To $500,000 Health Care Fraud Scheme," press release of United States Attorney's Office for the Western District of Tennessee, March 25, 2013.