Dominion can stay open

But mental health provider must pay

RALEIGH -- A mental health services provider that the state tried to shut down will repay $1.6 million for disputed Medicaid claims under an agreement that will allow the company to continue operating in North Carolina.

Regulators tried to shut down Dominion Healthcare Services, which has offices around the state, because of questions about its services and the accuracy of its bills.

Dominion, run by former basketball coach Joel Hopkins, began offering a mental health service called community support in 2006. When the program started in March 2006, the state offered companies up to $61 an hour to assist people with mental illnesses in learning tasks to help them stay out of mental institutions.

The state Department of Health and Human Services soon found that the service was being mis-used. Providers were billing the program for taking clients to movies and helping children with homework. People with high school diplomas or their equivalents, and who made far less than $61 a hour, were employed to do the work.

Medicaid, the federal health insurance program for the poor and disabled, paid most of the bills.

In 18 months, Dominion charged taxpayers $33.9 million for the service, more than all but one other agency, according to a News & Observer investigation.

State investigators also investigated complaints that Dominion was offering a mentoring service under the community support program, that it signed up children whose parents were not told they had mental illnesses, and that the company was charging for work it did not do.

Dominion then sued the state and local mental health offices for more than $1 billion, saying the move to shut its offices was motivated by race.

The state announced Tuesday that an agreement was signed Oct. 21 for all of Dominion's claims to be reviewed individually for compliance with Medicaid rules. Offices that don't meet certain standards will be closed. The company will pay its $1.6 million, plus interest in six installments, according to DHHS. Dominion's lawyer, Hugh Eighmie II, could not be reached for comment.