A federal judge Tuesday dismissed a lawsuit filed against the McHenry County Mental Health Board by a local drug- and alcohol-abuse treatment center over $1.1 million in funding that the board wants back.
The lawsuit filed last October by The Advantage Group Foundation alleges that the board is trying to push the Crystal Lake-based nonprofit “to the brink of extinction” by trying to recoup money that the Mental Health Board alleges was improperly billed between 2009 and 2011.
Judge Philip Reinhard dismissed two of the three counts with prejudice, meaning they cannot be refiled. He threw out charges that the Mental Health Board inappropriately burdened The Advantage Group with extra audits, and violated antitrust laws by seeking to eliminate the nonprofit “to instead benefit providers [the] defendant prefers.”
The third count – that ordering extra audits constituted a breach of contract – can be refiled, but Tuesday’s ruling concludes that it is a state law claim.
Advantage Group Director Patrice Owens said the agency, which provides tailor-made outpatient programs to adolescent and young adult clients, is considering its next move.
“We’re trying to see what our options are at this point and really determine what to do next. Our whole goal here was to protect our agency and to survive,” Owens said. “We knew [a federal lawsuit] was a bold move, but we knew we had to get it out of this county and out of the system here.”
The Mental Health Board collects a special property-tax levy that it disburses to agencies treating mental illness and injury. But criticism has been growing regarding how the board allocates the money and the amount it keeps internally – about one-third of its $13 million 2012 budget stayed internal.
Mental Health Board funding accounts for about 30 percent of The Advantage Group’s budget. An additional 30 percent comes from the Illinois Department of Human Services Office of Alcoholism and Substance Abuse, and the remaining 40 percent comes from contracts, private insurance and Medicaid payments.
Board attorney Frank Gosser could not be reached for comment on Tuesday’s ruling.
The Mental Health Board alleges that a 2012 audit shows that The Advantage Group’s billing records contained errors and instances in which it billed both the board and patients’ private insurance or Medicaid for the same counseling sessions.
The Mental Health Board in its legal filings alleges that The Advantage Group lawsuit is nothing more than an attempt to stop the consequences of being “caught red-handed.”
The Advantage Group has maintained that it has passed all of its state audits, but the Mental Health Board’s accusations were relayed to the Office of the Inspector General at the Illinois Department of Healthcare and Family Services, after a DHS analysis found “instances of possible concern.”
Owens said The Advantage Group hopes to have the situation resolved within several weeks. Spokeswoman Kelly Jakubek said the healthcare and family services department does not comment on investigative matters.
The Mental Health Board has been rocked by change and departing officials over the past year.
Its executive director stepped down last fall to take a job with Virginia Commonwealth University, and two other top deputies retired. Two Mental Health Board members have resigned to take jobs with agencies that receive funding.
The County Board in March ousted former Board President Lee Ellis, denying him another four-year term.