WRAL Investigates

Suspended Raleigh business changes name, keeps collecting Medicaid

Posted February 26, 2013
Updated February 27, 2013

WRAL Investigates

— Less than a year after the state suspended a Raleigh business for questionable Medicaid billing, the WRAL Investigates team has learned that the business changed its name and continued operating undetected by the state.

Last May, the state Department of Health and Human Services suspended Rehoboth Counseling & Consulting Agency’s Medicaid payments because the department determined "a credible allegation of fraud exists for which an investigation is pending."

Out of $1.3 million in taxpayer money spent, DHHS records showed psychologist Eunice Gatabaki accounted for the bulk, working an average of 60 hours per day. Her daily average increased in June 2011, as records show she worked more than 100 hours per day for 17 days.

Through her attorney, Gatabaki said Rehoboth handled the billing and that she merely signed off on other counselors' work.

Not long after WRAL Investigates’ story aired on May 21, 2012, the old Rehoboth sign was gone, and a new one – “Optima” – took its place. WRAL called the state about the new company, but there was no record of its existence.

Three weeks ago, with the Optima sign still in place, the WRAL Investigates team found a new company listed in the Secretary of State’s records at the very same address on Garner Road, providing the same services, this time as “Ultimate Contracting Services.”

The registered agent, Brendora King, and one of the members, Lisa King-Hodge, are the same women who ran the now-defunct Rehoboth Counseling & Consulting Agency. WRAL Investigates tried contacting Ultimate Contracting Services in person, by email and phone, but no one responded.

WRAL Investigates notified DHHS on Feb. 6 about the company and, within two weeks, the state visited Ultimate’s office and opened an investigation.

New billing records show Ultimate collected money from April through May 19 last year. WRAL’s story aired two days later, and Ultimate took a two-month break from billing before starting up again. In all, Ultimate brought in $1.2 million in Medicaid money.

Compared with Rehoboth’s records, the hours worked by individual counselors each day for Ultimate appeared to be reasonable, and Gatabaki was not included in the new company’s billing. However, Ultimate's application with the state raised some questions.

Raleigh business changes name, keeps collecting Medicaid Raleigh business changes name, keeps collecting Medicaid

The owner is listed as Marcellin Daniel Hodge, the husband of King-Hodge, who owned Rehoboth. The provider background check looked for Marcellin Hodge’s name, the name of the new company and the employer identification number to see if the company had done business with the state in the past. All three checks came up clear.

Despite having the ability to search the business address, the records WRAL Investigates received show that didn’t happen. Both companies listed 1500 Garner Road, Suite A, as their place of business.

Also in the application, when asked if the new company was forming due to a change of ownership, merger or acquisition, the answer “No” was circled. When asked if they had ever been a Medicaid provider before, they also circled "No." However, every therapist listed on Ultimate’s billing records is also listed on Rehoboth’s billing statements.

State Rep. Nelson Dollar, R-Wake, says software already helping to identify suspicious billing should have caught the change.

“They shouldn't be able to do this and come right back at taxpayers and start milking them for money under another name,” he said. “We need to make sure that bad providers, which is only a small number, bad providers are put out of business permanently … We simply don't have the extra money in this state to be able to run our Medicaid system with $100 or $200 million in fraud.”

DHHS has referred dozens of cases to the state Attorney General's office for possible prosecution, but neither agency will comment on where those investigations stand. DHHS spokeswoman Julie Henry released a statement Tuesday afternoon, saying the department's No. 1 priority is "reforming Medicaid to ensure money is being spent on services for those who need it most."

"Any dollar that is misspent in Medicaid, whether through mismanagement or through fraudulent billing, is one less dollar to help the individuals and families we serve," Henry added. 


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  • HeadsUp Feb 28, 2013

    This will pale in comparison to the cost, disruption, and political fallout if the state's new half a billion dollar Medicaid payment system fails or falters when it launches this summer, as Governor McCrory has said it might.

  • tigo7 Feb 28, 2013

    Like i said fraud is rampant in medicaid. Health care practices cannot afford to even stay in business if they have more than 40% medicaid patients or clients in their practices. One cannot stay in business because reimbursement is so low. The rest has to be private or self pay patients or clients to pay your salary and staff salaries and rent, insurance etc. Regulations through Obamacare will likely put the small practices out of business.

  • whatelseisnew Feb 28, 2013

    Just another example of why Medicaid AND Medicare should not exist. NO matter HOW hard the Federal and State Governments attempt to uncover fraud it will be widespread and ongoing. It would not surprise me to learn that more than half of all payments are fraudulent. You have the outright thieves, and then you have people that will manipulate billing codes to try to make up for some of the underpayment that they get from the Government. Time to get GOVERMENT OUT OF THE HEALTH CARE BUSINESS. As is usual they are causing vast harm. If you want affordable health care, get rid of ALL GOVERNMENT Programs associated with health care.

  • anonymous99977 Feb 28, 2013

    WRAL staff do your research, do not biased by righ-wing conservative propaganda. The NC-DMA Medicaid Policy manual 8-C allowed "incident to" billing but did not specified who could do this billing until late 2011 or 2012. Do your research. It wasn't until late 2011 - 2012 that NC-DMA clarified "incident to" to note that only Medical Doctors could bill "incident to". I can understand why this doctorate level mental health professional made this mistake. Read the facts. Will NC ever be fair, partcularly to minorities? That is the true issue. I found it truly alarming that a white-male conservative Republican is the one starting this inquisition against minorities owners. How come they haven't target white business owners who have been engaging in these practices or get rid of LME's/MCO's in the state which are a waste of tax payers dollars. I'll tell you why, they are creating a bigger bureaucracy for their "cronies friends" and less services for clients/families.

  • anonymous99977 Feb 28, 2013

    Read facts previously enter. Read NC-DMA Policy Manual 8-c, you will find discrepancies and errors that would have made this licensed professional made the mistake she made. I hope that her legal defense team looks at how the state changes rules in the middle on the game and expect providers to abide by them.

    WRAL staff, the question should be, why a white-male Republican is targeting a female African-American business owner? This is the new institutionalized racism. Clearly, this has been an example of it. Hope her legal defense team picks up this one too.

  • bmac813 Feb 28, 2013

    Like I have told my Wife, Take all the Fraud and Cheating out of Medicare, Welfare,Medicade and the Bad Spending by our Politicans they can Lower our Taxes another 10%.
    ButI only went to the 12th Grade, Never went to College, So I guess I am not so smart as some of the College Grads who went to Harvard and Have no Common Sense. They must of all Flunked MATH.

  • anonymous99977 Feb 28, 2013

    I hope her legal defense team uses the following facts. WRAL staff, please do your research prior to preliminary judging someone or finding them guilty. Are you a right-wing news organization? It will be good to know.

    Fact # 1: NC-DMA on their Policy Manual 8-c for direct enrolled outpatient providers, allowed "incident to" billing but did not specify until on or about late 2012 of who could bill "incident to", which is only for Medical Doctors (MD's) (personal opinion: unfair to other doctorate level professionals in the counseling/mental health field).

    Fact # 2: In the NC-DMA Policy manual dated 12/2/2012 there was another admendment to "Incident to" which reads:
    "Date Section Revised Change
    12/01/2012 Section 6.1 Specified that providers of these services must be licensed in
    North Carolina and be direct enrolled in Medicaid and that
    these providers are prohibited from allowing any other
    individual or practitioner to use their Medicaid number as
    this would be treated as Medica

  • streetglide Feb 28, 2013

    kind of strange how WRAL can get ths insight and knowledge and abuse, but the people handing out the money just can't.. as mentioned below,, makes you wonder, if maybe they don't want to know... follow the money people,, follow the money, in goverment, that is where the truth lies.

  • bmac813 Feb 28, 2013

    corey3rd2, Did you get hit in the Head or What. ACORN a GOP Backer?
    Wall Street, they gave Oblamea More money than anyone before him, $45 Million Dollars. Big Money backers, Do you meanLike George Soros, Or Michael Moore, Or maybe Hollyweed, Sorry I mean Hollywood.
    Cheating in Elections, Do you mean like ACORN, The NAACP,Or maybe the druggies in Ohio And Florida who were given Drugs to fill out Election Forms?
    You and junkmail must get along Fine.
    I think Both of you can only see out of One EYE and that isn't to good.

  • Crumps Br0ther Feb 28, 2013

    It's what every other modern nation in the world does.

    Yes but thats not what was sold, and you know it. They lambasted anyone who used the words death panels or rationing. But now you are saying it has to be done, but when they were lobbying for it they never told that dirty little secret. And nwo that it was voted on we get to find out whats in it, a big ol do do sammich!