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North Carolina Family Sentenced For Defrauding South Carolina Medicaid

As CTSHealth explains, Rehabilitative Behavioral Health Services (or RBHS for short) involves strategies and techniques that help to change a person’s behavior and actions. “It is not just getting youth to follow program rules, although that certainly is one goal,” informs their website, “It also works to change the behavior of the youth and increase accountability. It helps youth develop pro-social skills. The reason for having a behavior management system is to bring about positive behavior from youth.”

Encouraging better behavior and life choices in our young generation is certainly a worthwhile venture. Unfortunately, an entire family from North Carolina chose to exhibit poor behavior in the way they manipulated RBHS for their own profit. As the District of South Carolina branch of the United States Department of Justice reports, this week, four members of the Covington family have been sentenced for their roles in a scheme to defraud South Carolina Medicaid.

The family defrauded South Carolina Medicaid out of over $3.6 million.

Sentenced were 50 year-old Tony Lee Covington, his 51 year-old wife, Priscilla Covington and his sisters, 56 year-old Vanessa Covington McPhaul and 51 year-old Mary Moses Covington. The Raeford, North Carolina-based foursome were officially sentenced for conspiracy to commit wire fraud. Evidence showed that the Covington family members claimed to provide rehabilitative behavioral health services via their two companies, Preferred Care Incorporated and Saving Grace Outreach.

They purported to offer RBHS to disabled, low-income individuals in South Carolina through the Medicaid program. However, between 2014 and 2016, the companies billed South Carolina Medicaid millions of dollars for what they called “crisis intervention.” It is a service that is offered to individuals experiencing extreme emotional distress such as suicidal thoughts or mental breakdowns.

The Covingtons' companies billed Medicaid for an exorbitant amount of money.

According to the DoJ report, the hearings unveiled that the two companies had fewer than 20 clients. Nevertheless, they actually billed South Carolina Medicaid more in total for crisis intervention services than the entire South Carolina Department of Mental Health.

“Clients contacted by investigators indicated that while they had received some services from the companies, they never received any crisis intervention,” reads the report, “Evidence in the case indicated that the services provided by the companies should have been billed at approximately $9.00 an hour, but by billing the services as crisis intervention, the companies were instead paid $67.88 per hour.”

The family changed businesses once an audit was conducted.

The DoJ reports that Medicaid instituted an audit of Preferred Care once the irregular billing was discovered. In response, the Covingtons started Saving Grace Outreach. They used this new company to continue their fraudulent billing practices.

Tony Covington has been sentenced to 51 months in federal prison. Priscilla Covington will spend 39 months in federal prison. Both Mary Covington Moses and Vanessa Covington McPhaul will serve 33 months in federal prison each. As well, all defendants were given a three-year term of court-ordered supervision and ordered to repay $3,647,094.83 in restitution to South Carolina Medicaid.

Are you an attorney who is currently working a health care fraud case?

The clinical experts at Allegiant Experts can help you! We coordinate and support courageous whistleblowers who shine lights on fraud, waste and abuse. Contact us today to schedule a complimentary consultation. Please don’t hesitate to give us a call at 407-217-5831. You may also email us at

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