The Office of the Massachusetts Attorney General (“AGO”) has long been one of the nation’s leaders in pursuing False Claims Act cases at the state level. The AGO’s Medicaid Fraud Division and False Claims Division both have relatively new leaders – Kevin Lownds and Colleen Nevin, respectively – and their recent statements suggest that the AGO intends to continue taking aggressive action against companies and individuals that have defrauded the Commonwealth. Moreover, the new leaders recognize that whistleblowers will play a key role in the AGO’s efforts to combat fraud protect taxpayer dollars. Below, I highlight a few of the areas where whistleblowers could contribute to anti-fraud efforts in Massachusetts (and potentially earn a reward for themselves) by bringing qui tam cases under the False Claims Act.
Seeking Whistleblowers on Private Equity Investors in Health Care
The Massachusetts AGO has been a pioneer in seeking to hold private equity firms and executives accountable for the fraudulent conduct of their portfolio companies, and recent events and statements suggest that the AGO will only continue that focus.
In 2017, the AGO intervened in a District of Massachusetts qui tam case against South Bay Mental Health Center, Inc. (“South Bay”), its private equity owner, and two of its executives, even though the federal government declined to intervene in the case. The AGO and the relator alleged that South Bay had violated the False Claims Act by knowingly submitting claims to the Massachusetts Medicaid program (“MassHealth”) for services provided by unlicensed, unqualified, and unsupervised staff in violation of MassHealth regulations. They further alleged that the private equity firm and the two individual defendants were aware of South Bay’s fraudulent conduct and had allowed it to continue. With the relator, the AGO subsequently defeated the well-resourced defendants’ motions to dismiss and for summary judgment, and then negotiated a $4 million settlement with South Bay and a $25 million settlement with the private equity firm and the two individual defendants.
In the process of litigating the South Bay matter, the AGO helped to make precedent-setting law on the potential False Claims Act liability of private equity firms. In a 2021 decision denying the defendants’ motion for summary judgment, the court cited evidence that the private equity firm was aware of South Bay’s regulatory violations and did not take steps to ensure that South Bay fixed the violations. See United States ex rel. Martino-Fleming v. South Bay Mental Health Centers, Inc., 540 F. Supp. 3d 103, 129-30 (D. Mass. 2021).
Meanwhile, in 2010, a private equity-backed company, Steward Health Care, took over several Massachusetts hospitals, including St. Elizabeth’s, a large tertiary hospital in Boston. By 2021, the private equity firm, Cerberus Capital Management, had exited from Steward, having made several hundred million dollars on its initial investment while Steward was beginning to show signs of inability to provide adequate patient care. In 2024, Steward filed for bankruptcy, creating a major public health crisis in Massachusetts. See Private Equity Stakeholder Project, The Pillaging Of Steward Health Care: How a private equity firm and hospital landlord contributed to Steward’s bankruptcy (2024).
In early 2025, in response to the Steward fiasco, Massachusetts amended its state False Claims Act to impose liability on any entity that “has an ownership or investment interest in any person who violates [the False Claims Act], knows about the violation, and fails to disclose the violation to the commonwealth or a political subdivision thereof within 60 days of identifying the violation.” Mass. Gen. Laws c. 12, § 5B(11). In recent statements, AGO leaders have expressed a desire for whistleblowers to come forward with information that could lead to potential cases against private equity firms under this new law.
The AGO is particularly interested in hearing from whistleblowers with information about malfeasance by private equity-backed firms providing Applied Behavioral Analysis (“ABA”) services to people with autism spectrum disorder. According to a 2023 report, “[b]etween 2017 and 2022, private equity firms completed 85 percent of all mergers and acquisitions in autism services.” Rosemary Batt, et al., Pocketing Money Meant for Kids: Private Equity in Autism Services, Center for Economic Policy and Research (June 14, 2023). Since 2018, the Department of Justice has settled several cases against ABA providers that allegedly defrauded TRICARE, the health care insurance programs for members of the military and their families, but none of those settlements was with a private equity investor in an ABA services provider. See, e.g., DOJ settlements with Early Autism Project, Inc., The Shape of Behavior, and Applied Behavior Center for Autism. Given the recent surge in private equity acquisitions of ABA services providers, whistleblowers with inside knowledge of fraud by these providers and their private equity backers likely would find a welcome audience at the AGO.
Of course, private equity firms have become increasingly aggressive players in many other areas of the health care sector, and the AGO surely would like to see more whistleblowers come forward with information about fraud in those areas, too. For example, as the South Bay case showed, private equity firms have acquired non-autism mental health services providers. They also have acquired substance use treatment providers, nursing homes, and dental, dermatology, ophthalmology, gastroenterology, urology, obstetrics/gynecology, and orthopedics practices, all of which bill MassHealth. See generally, Massachusetts Health Policy Commission, HPC Policy Brief, Private Equity Investments in Massachusetts Health Care and State Policy Opportunities (July 2024).
Seeking Whistleblowers in Other Emerging Areas of Medicaid Fraud
Nursing Home PDPM Fraud. Effective October 1, 2023, Massachusetts adopted the Patient Driven Payment Model (“PDPM”) for MassHealth reimbursement of nursing home stays. Four years earlier, Medicare adopted PDPM in an attempt to “bas[e] payments predominantly on clinical characteristics rather than service provision, thereby enhancing payment accuracy and strengthening incentives for appropriate care.” See 83 Fed. Reg. 39162, 39195 (Aug. 8, 2018). In other words, the government intended PDPM to eliminate incentives to deliver excessive amounts of care. But PDPM has created its own set of perverse incentives, with nursing homes reaping inflated reimbursements by fraudulently diagnosing patients with depression, acute neurologic conditions, and speech language pathology comorbidities. Given the recent implementation of PDPM at the state level, the AGO has expressed interest in seeing whistleblowers come forward with evidence of nursing homes that are trying to game the new Medicaid reimbursement system in Massachusetts.
MCO Risk Adjustment Fraud. At the federal level, the Department of Justice has expended considerable resources bringing cases against Medicare Advantage insurers that allegedly defrauded Medicare by claiming that their insureds were sicker than they actually were. Notably, Medicaid Managed Care Organizations (“MCOs”) also can engage in such risk adjustment fraud, but that area has seen comparatively scant enforcement attention at the state level. As a result, the AGO undoubtedly would like to hear from whistleblowers with knowledge of risk adjustment fraud by Medicaid MCOs.
Seeking Whistleblowers on Other Types of State Government Fraud
In Massachusetts, the Medicaid Fraud Division (formerly the Medicaid Fraud Control Unit) traditionally has handled most cases under the Massachusetts False Claims Act, but the AGO’s False Claims Division handles all Massachusetts False Claims Act cases arising outside of the Medicaid context. In July 2025, for example, the AGO announced that three construction firms had agreed to pay the Commonwealth over $3 million to resolve allegations that they made misrepresentations of completed work and submitted false claims during a runway rehabilitation project at Westfield-Barnes Regional Airport.
Even in health care cases, the False Claims Division can get involved, because it has responsibility for pursuing fraud cases involving other state agencies that provide health care services. For example, the Massachusetts Group Insurance Commission provides insurance coverage for over 400,000 public employees and retirees in the Commonwealth. Earlier this year, the AGO announced that Traveler’s Transit, Inc., a non-emergency transportation provider, had agreed to pay over $1 million to resolve allegations that it defrauded the Commonwealth’s Department of Developmental Services and MassHealth by submitting claims for routes not actually driven.