Local Psychologist Sentenced In Medicaid Fraud Scheme

BIRMINGHAM, AL — A former psychologist who ran a counseling clinic in Vestavia Hills has been sentenced to three years in prison for her role in a scheme that defrauded the Alabama Medicaid Agency of at least $1.5 million.

Shannon Waltz, 51, pleaded guilty in 2019 to one count of conspiracy to commit healthcare fraud for filing false claims for individual and group counseling services for at-risk youth, and agreed to pay $1.5 million in restitution. Thursday, U.S. District Court Judge R. David Proctor sentenced Waltz to three years’ imprisonment on top of the monetary restitution.

An investigation was initiated by the Program Integrity Division of the Alabama Medicaid Agency after an audit showed that billings submitted by Capstone for counseling services had increased from $99,000 in 2015 to more than $2 million in 2017. The Program Integrity Division referred its findings to the Attorney General’s Medicaid Fraud Control Unit after Waltz submitted falsified records during the Program Integrity Audit.

A subsequent investigation was conducted by the Medicaid Fraud Control Unit and the Office of Investigations of the U.S. Department of Health and Human Services Office of Inspector General. This investigation determined that Waltz billed for services that were never provided, and that most claims submitted by Capstone during 2016 through 2018 were fraudulent.

“Waltz’s actions demonstrated reckless disregard for at-risk youth, and she will now face the consequences of those actions,” U.S. Attorney Prim F. Escalona said. “Today’s sentence demonstrates our commitment to insuring that at-risk youth receive needed Medicaid services.”

In November, another employee of Capstone, Heidi Robertson, was sentenced to 18 months in prison and ordered to pay $850,000 in restitution. Robertson was the primary insurance billing official for Capstone.