Judge dismisses Medicaid fraud case against Lincoln counselor

A district judge has dismissed a benefits fraud case against a Lincoln mental health counselor.

When the state rested its case at the end of Michael Keady's three-day jury trial last week, defense attorney Bob Creager made a motion for a directed verdict, saying the state had failed to prove an essential element of obtaining assistance benefits by fraud.

The state was required to prove that Keady obtained or attempted to obtain any payment made on behalf of a recipient of medical assistance or social services "by way of a willfully false statement, representation, impersonation or other device," according to the order that followed this week.

In it, District Judge Kevin McManaman said the evidence showed Keady had provided therapy to Medicaid patients and submitted Medicaid claims for payment for his professional services.

Prosecutors relied solely on a 2015 contractual settlement agreement the state had with Keady, where he agreed not to submit any future Medicaid claims to the Nebraska Department of Health and Human Services.

In an order filed Wednesday, McManaman, who dismissed the case last week, said there was no evidence Keady submitted any Medicaid claims to DHHS. Rather, they had been submitted to — and paid by — private insurance companies.

In court documents, the Medicaid Fraud and Patient Abuse Unit of the Attorney General's Office alleged Keady saw Medicaid clients contracted through private subcontractors for the state of Nebraska at United Health Care, Wellcare of Nebraska and Nebraska Total Care.

McManaman said the plain language of the settlement did not prohibit Keady from submitting claims to the private insurance companies.

Keady is a licensed independent mental health provider as well as a licensed marriage and family therapist.