Maryland Health Department pauses new Medicaid provider enrollment amid fraud concerns

During the recent City Council Hearing of the Public Health & Environment Committee on July 23, 2025, significant concerns were raised regarding the integrity of psychiatric rehabilitation programs (PRP) in Maryland. The meeting highlighted alarming allegations of fraudulent practices within these services, prompting the Maryland Department of Health to take decisive action.

The department reported receiving numerous complaints from constituents, family members, and advocacy groups, alleging that many providers were unknown to participants, leading to claims that services were never rendered. This situation has raised serious questions about the accountability and transparency of PRP services, which have seen substantial growth over the years. As of 2023, there were 700 PRP programs serving approximately 51,000 Marylanders.

In response to these concerns, the department conducted a review of claims data, focusing on patterns of utilization and potential Medicaid fraud. They analyzed a subset of 1.1 million claims, predominantly from PRP providers, and discovered that $600,000 in Medicaid payments were retractable. This prompted the department to seek permission from the Centers for Medicare & Medicaid Services (CMS) to pause new provider enrollments into Medicaid, a measure that took effect in July.

While this pause does not prevent providers from seeking licensure for PRP services or enrolling in private pay options, it does limit their ability to bill Medicaid. The department emphasized that this action is part of a broader commitment to address fraud, waste, and abuse in the system, ensuring that the integrity of services provided to Marylanders is upheld.

The meeting also included discussions on the importance of data transparency and ongoing monitoring of PRP services. The department committed to providing CMS with regular data extracts to track the situation closely. This proactive approach aims to safeguard public health and ensure that residents receive the quality care they deserve.

As Baltimore continues to navigate these challenges, the outcomes of this meeting signal a critical step towards enhancing the accountability of mental health services in the community. The pause on new provider enrollments is expected to allow for a thorough review and reform of the system, ultimately benefiting those who rely on these essential services.