Mindpath Health has agreed to pay $1.9 million to settle a whistleblower case alleging the company fraudulently billed for psychotherapy and medication management services, according to the U.S. Attorney’s Office in the Eastern District of North Carolina.

The case alleges that between 2018 and 2020, the behavioral health provider submitted Medicare claims without the required documentation of therapy treatments, failed to correct issues raised by employees and “demonstrated a pattern of reckless disregard or deliberate ignorance toward stated concerns about billing fraud,” according to the press release.

Mindpath’s former chief strategy officer, Jeff Williams, senior vice president of field operations, Abigail Sheriff, and senior integration and project manager, Sarah Williams, were specifically named in the case. All have since departed from the company for other behavioral health industry jobs.

Behavioral Health Business reached out to Mindpath Health for comment on the settlement, but has yet to receive a response.

“Behavioral health practices and other health care providers seeking Medicare funds must make honest claims for payment based upon documented medical need,” U.S. Attorney Ellis Boyle said in a statement. “We will hold those who abuse health care programs accountable. Our office will zealously pursue damages and civil penalties against medical practices who violate the laws.”

The development comes less than one week after Mindpath settled a class action lawsuit over a patient data breach for $3.5 million, which exposed the data of 193,947 individuals in June 2022.

The class action was subsequently filed on January 30, 2023, in the Eastern District of California. Patients filed two additional complaints, which were consolidated into a single class action suit filed in the Superior Court of California, County of Los Angeles.

Although Mindpath denied all claims of wrongdoing and liability in the data breach, according to court documents, the company still “determined it is desirable and beneficial that the litigation be settled.” 

After the 2021 merger of Community Psychiatry and Mindpath Care Centers, when the two rebranded under a unified identity that became the company’s current name, Mindpath Health, it has faced challenges.

At first, former Mindpath Health CEO Christopher Brengard set out with lofty expansion plans for 2022 after a wave of de novo openings and facility purchases in 2021. However, by 2023, the company wound up closing its offices across Ohio and laid off several employees as part of what it described at the time as a “restructuring” process.

Shortly after that, Brengard stepped down as CEO, and Stephen Farber, Mindpath’s current CEO, was named as his successor.

As Mindpath Health shells out a combined total of $5.4 million across these two settlements, it is unclear how its operations will be impacted heading into 2026.