IDAHO, USA — The United States Department of Health and Human Services has launched a federal investigation into two Idaho entities who allegedly participated in Medicaid fraud.
The Idaho Attorney General's Office confirmed they are assisting with the investigation.
The Idaho nonprofit, 'Idaho Community Outreach Behavioral Services' (COBS) was founded in 2014 by Puala Barthelmess. They relied completely on donations to provide services and resources to victims of sex trafficking.
Last fall, the nonprofit decided to dip into some available state and federal funding to help pay for their expanding staff who operate the safe houses Idaho COBS began opening in 2020.
They remain the first and only nonprofit offering safe houses in Idaho for adult sex trafficking survivors. They now operate three safe houses in the Treasure Valley.
But now they face a federal investigation over allegations of Medicaid fraud.
Investigate West reveals victim and former employee's testimonies
A few former residents and employees claim Idaho COBS management uses manipulating and controlling tactics. They told their stories to Investigate West, a non-profit investigative media company based in Seattle, who published a five-part series.
The articles also accused Idaho COBS of participating in Medicaid Fraud with a for-profit clinic that they send some of their woman to for mental health services.
Advanced Clinical Trauma Services, also known as ACTS is owned by Tylar Bell, who is Barthelmess' son.
Barthelmess told KTVB she helped start ACTS as a consultant.
She added they send about 85% of their woman in the houses to ACTS because Idaho COBS feels ACTS therapists and case managers are "well versed in treating victims and survivors of sex trafficking."
Barthelmess is adamant that Idaho Cobs and ACTS operate separately, and that Barthelmess is no longer a consultant for ACTS.
"For us, we have very clear lines," she told KTVB Monday. "We have very clear policies. We keep everything very separate. I've stepped clear out of being a consultant... Was it probably messed up a little bit to begin with? and trying to separate it all out. It probably was in the beginning."
Barthelmess added she does not see how sending the majority of their woman to ACTS for mental health treatments is any conflict of interest or unethical.
But Investigate West reports former employees and clients allege the lines between the two entities are blurred and that Barthelmess still helps operate ACTS.
Woman who lived in the safe house told Investigate West they were "forced into counseling sessions at ACTS," that ACTS "billed Medicaid for services victims never received" and that per Barthelmess' instruction ACTS would bill Medicaid for case management workers driving woman in the safe houses' short distances, and for "making phone calls for clients."
Investigate West reports all of that is "not allowed under federal regulations."
Barthelmess told KTVB all of the allegations in the Investigate West articles are false.
KTVB reached out to ACTS for a comment. They were not immediately available.
"The U.S. Department, whoever can come in, it doesn't mean there's fraud there," Barthelmess said. "I'm 100% sure there's no fraud. I'm 100% confident there is no fraudulent behavior happening. Absolutely not. So, we stand strong where we are, and so do our partners."
While Idaho COBS can't bill Medicaid, the U.S. Department of Health and Human Services is investigating both organizations for any involvement in Medicaid fraud.
Barthelmess believes all of this will be cleared up and the allegations are coming from former house guests and employees, some of which are upset over being kicked out or fired.
The aftermath of the Investigate West articles has impacted Idaho COBS financially, Barthelmess said. Donors have backed out of giving Idaho COBS donations.
At this time the federal investigation is looking into solely Medicaid fraud allegations. KTVB had not received any confirmation as to whether or not the other allegations in the Investigate West article are being or will be investigated.