Sunburst mental health clinic closes amid Medicaid fraud investigation

Sunburst Mental Health’s Kalispell clinic closed its doors last month amid a Montana Department of Justice investigation into allegations of Medicaid billing fraud, nonprofit officials say.

The facility’s board of directors launched an internal investigation in early February after learning of allegations that an employee had been filing fraudulent Medicaid reimbursement claims, said board President Mark Anderlik. The employee was subsequently fired and the uncovered evidence given to the state Department of Justice, he said.

“As a board we saw enough evidence that we were forced to terminate that employee,” Anderlik said.

The employee denied any wrongdoing, he said. Anderlik said board members could only speculate about motive, but said that the alleged fraud would only have benefited the clinic, not the employee.

Anderlik said that in such fraud cases, Medicaid can claw back disputed funds, which would have bankrupted the clinic.

Anderlik said the clinic’s prior financial struggles stemmed from the slashing of Medicaid reimbursement rates, though he believed that the clinic could have survived if it weren’t for the threat of the investigation looming over them.

He described the fact that the alleged fraud led to the clinic’s demise as a cruel irony.

“The best explanation that we can come up with is that they did this for the benefit of the clinic,” he said. “We would have survived.”

The nonprofit closed its drop-in day center last year, and this recent closure marks the end of Sunburst’s services.

THE CLOSURE leaves about 200 patients scrambling to find mental health care in a county already plagued by provider shortages and long waitlists.

Patients and clinic employees had only a week to make plans following the nonprofit board’s Feb. 8 decision to shutter its 13,000-square-foot facility south of town. The group moved into the building in September 2022.

The clinic offered sessions with licensed therapists, as well as chemical dependency treatment, medication management and case management services, and was planning on adding trauma support groups later in the year, according to its website.

Administrators called patients after learning of the board’s decision to let them know that the clinic would be closing, said Sonja Pitzer, the nonprofit’s former operations director.

“We referred them out, and let them know we were shutting,” said Pitzer. “But the problem is we don’t have a lot of facilities here [in Flathead County], and a lot have six-month waiting periods or more.”

The closure increases the burden on the other providers in the county's already strained mental health infrastructure.

“We have a limited amount of services already in the county, and everyone is already fully booked,” said Jerramy Dear-Ruel, mental health collaboration specialist for Flathead City-County Health Department. “It has impacts all the way around any time we lose any behavioral health entity.”

Greater Valley Health Center has received four to five referrals per day for former Sunburst patients and are scheduling them for appointments, though the appointments are often months away. This week, Greater Valley made the decision to turn new psychiatric patients away, unless they were already enrolled in the health center’s integrated care system, according to spokesperson Catherine Todd.

Todd said the medical group is collaborating with other providers to find ways to help Sunburst’s former patients.

In the hopes of assisting other providers taking on former patients, Anderlik said that the clinic had used a database known as Azalea to manage patient data.

Pitzer said that the clinic had struggled financially since the onset of the Covid pandemic, with donations down from previous levels, but that Paycheck Protection Program funds of nearly $1 million had helped keep the doors open.

The clinic staff found the board’s decision to close the clinic difficult to process, with Pitzer calling it a shock.

“We’re all grieving over it right now,” Pitzer said. “Despite all our struggles we were willing to work through it because of the very important service we provided to the community. We poured our hearts and souls into that business.”

Reporter Adrian Knowler can be reached at 758-4407 or aknowler@dailyinterlake.com.