A judge in Tallahassee has dismissed Medicaid fraud charges against a former owner of PlayBig Therapy, finding that the case hinged on alleged violations of state agency rules, not criminal statutes.
Rachel Lynn Scharlepp was arrested last year on charges of racketeering and Medicaid fraud in a case investigated by the Florida Attorney General's Office. But Leon Circuit Judge Martin Fitzpatrick on Friday sided with lawyers for Scharlepp and tossed out all the charges.
State investigators alleged Scharlepp hired employees who didn’t meet criteria to provide targeted case management and that children who received the services weren’t qualified to get them. The Attorney General's Office said Scharlepp billed Medicaid $104,538 for the services and that PlayBig was reimbursed for just over $88,000.
The state contended Scharlepp violated rules contained in the Agency for Health Care Administration’s handbook for targeted case management coverage and limitations. But Fitzpatrick found that statutes don't specify which services are authorized for Medicaid reimbursement or set qualifications for employees who provide services.
Fitzpatrick wrote that AHCA is free to adopt Medicaid program requirements and enforce them through the administrative process. But, he said in the ruling, the agency “may not criminalize behavior and subject persons to criminal penalties based on mere violations of administrative rules.”
“Any criminal prosecution must be based on the language of a statute adopted by the Legislature,” he wrote. “Anything less than that would allow unelected bureaucrats from an administrative agency to adopt rules which would subject citizens of this state to criminal prosecutions for behaviors that are clearly not prohibited by an appropriately adopted criminal statute. Florida’s Constitution simply does not allow this behavior.”
PlayBig, located on West Shannon Lakes Drive, uses play therapy to help children with autism and other developmental issues.
Scharlepp was represented by Tallahassee attorneys Tom Findley and Bill Dillon.
“We are very happy that the court agreed that Ms Scharlepp committed no crime,” Findley said.
With the legal case decided, Kelley Hutto, owner and founder of PlayBig, said she hopes to bring back targeted case management as soon as possible.
“Our families were put at heightened risk without these needed supports,” she said.
Contact Jeff Burlew at firstname.lastname@example.org or follow @JeffBurlew on Twitter.