Skip to main content
You are the owner of this article.
You have permission to edit this article.
Two Medicaid fraud cases swirl around Powell treatment center
alert top story

Two Medicaid fraud cases swirl around Powell treatment center


In December 2014, a therapist took a group of children from their Powell drug treatment facility into the Bighorn National Forest. Over the course of six hours, the patients cleaned a ranch, winterized cabins and carried trash out on a snowmobile, according to a note filed in the treatment center’s records.

Northwest Wyoming Treatment Center charged a government insurance program $112 per hour, per child, government and medical records show. For each child’s six-hour stint, the government insurance provider paid $672.

A progress note from the trip indicates a therapist’s plan for at least one child was to “continue providing opportunities to experience physical labor as a real-life expectancy.” This trip was one of at least a dozen to the ranch for “therapeutic” purposes. Though the trip was taken as a group, it was billed to Medicaid as community-based individual therapy for drugs and alcohol.

That December, the center billed Medicaid $176,618.88 for therapy to ostensibly treat the substance abuse disorders of fewer than a dozen juvenile patients.

The Powell center charged the state for 70 hours a week per kid — all described as therapy. Medicaid investigators discovered that those hours, a therapeutic load that far exceeded treatment plans at other facilities, included the time the patients were sleeping, playing video games, sitting in class and working on the ranch, which was owned by the founder of the center. That man, Gibson Condie, would later be charged with 234 counts of health care fraud. He would plead guilty to a single count in 2017.

Over the course of about 21 months between 2013 and 2015, the state shelled out $4.4 million to the center for therapy for 47 juveniles, according to records compiled by a government investigative agency and provided this year to the Star-Tribune. More than $8.5 million for fraudulently billed medical care was paid out to the treatment center over six years, according to federal prosecutors.

However, that money would only prove to be a portion of millions worth of allegedly fraudulent medical bills submitted to the government for treatment in northwest Wyoming, according to state and court documents and the state’s former Medicaid watchdog. Condie, for instance, was accused by prosecutors of defrauding Medicaid out of $6.8 million. He agreed to pay nearly a third of that — $2.3 million — to the government as a condition of his criminal conviction.

Condie is in prison. Three other men alleged to have run a closely-connected scheme are, as of late September, under federal indictment.

In both cases the money came from taxpayers and Wyoming Medicaid coffers. But more critically, hundreds of pages of documents reveal the extent that patients — kids with drug issues, vulnerable adults and people with disabilities — are alleged to have been treated more as vehicles to make money than as members of Wyoming’s most vulnerable populations. Progress notes that were used to support Medicaid bills show medical providers were paid for therapy while the teens went to the gym and spent hours playing video games. In at least one instance, adult patients walked in a park and watched a demolition derby, an investigator said.

Condie’s case is complete; the case of the other three men has begun to proceed through the court system. Though charges have been filed, the three men are presumed innocent until proven guilty in a court of law.

The cases have close connections in geography, the alleged methodology and personal and professional relationships. The total alleged fraud spanned a decade and covered not just the treatment center, but other areas of mental health care in northwest Wyoming, according to a Star-Tribune review of hundreds of pages of government documents and court case files, along with hours of interviews with the former state investigator who inspired the doctor’s prosecution.

The total sum shelled out by the state in connection with the cases is hard to fully determine. The final cost to the patients under the care and supervision of the men is unclear. But documents allege the amount of fraudulently earned dollars easily passed $10 million.

“What we were seeing, on scale from one to 10, one being innocent error by provider to — this was worst fraud we’d ever seen; this was a 9.5,” said Mark Gaskill, the former state Medicaid watchdog. “It had everything in it. It was as about as bad as we’d seen.”

Medicaid watchdog

Gaskill now works in private practice running a mental health treatment clinic.

He began July 1, 2015, at the job overseeing Medicaid investigations for a state agency housed within the Department of Health. The agency dismissed him in May 2016. His letter of termination, provided to the Star-Tribune by Gaskill, shows no reason was given for his dismissal.

Kim Deti, a Health Department spokeswoman, confirmed Gaskill worked for the department, but otherwise she declined “to discuss his employment further as it is a personnel matter.”

The former investigator says, however, that the firing came as part of an attempt to slow his investigation into Condie. Gaskill’s allegation of retaliation has not been proven in court. He brought and then last year dismissed a set of civil claims brought against state government officials as part of a whistleblower lawsuit pertaining to the Condie investigation.

Gaskill has told the Star-Tribune he decided to dismiss those claims because he thought state law would require too substantial a fight to make pursuit of wrongful termination litigation worthwhile.

Star-Tribune requests for comment from federal prosecutors were largely declined on the basis of agency policy and ethical requirements preventing comment pertaining to ongoing criminal cases. According to a written statement provided to the Star-Tribune, however, state and federal law enforcement began investigating Condie as the result of a referral from Gaskill.

“Wyoming Medicaid’s Program Integrity Unit (which Gaskill led at the time) referred Condie and NWTC to the Wyoming AG’s Medicaid Fraud Control Unit and the FBI. These agencies then opened a joint criminal investigation led by the FBI,” the U.S. Attorney’s Office for Wyoming said in an email. “This criminal investigation resulted in the indictment and conviction of Gib Condie, the civil forfeiture of NWTC’s property, and the indictment of Ty Barrus, Greg Bennett, and Devin Dutson. However, beyond making the referral, Gaskill was not a part of the criminal investigation or any resulting prosecution.”

Lawyers for Barrus, Bennett and Dutson — the three men indicted last month — all either declined to comment or did not respond to requests for comment for this story.

While watching Wyoming’s Medicaid program, Gaskill’s responsibilities were expansive.

The government insurance provider is designed to provide care to the poor, the unemployed and the disabled. It’s a joint program between the federal government and Wyoming that is among the largest pots of money on the state’s books. For fiscal year 2019, for instance, the state spent about $300 million on Medicaid. The federal government’s share was nearly $400 million.

A person must apply and be enrolled with the state to receive Medicaid benefits. The barrier for entry into the program is high here, and only the most needy are approved. All are poor, and most are old, disabled, a caregiver or a single mother.

On the other side of the exam table, a provider — a doctor, a psychologist or other type of health care provider — must also enroll with the state to be eligible to bill Wyoming for Medicaid services. If you’re not enrolled and approved, you don’t have a Medicaid ID and cannot be reimbursed for Medicaid services.

And finally, not all medical services are covered by Medicaid. Just because a patient is on Medicaid does not mean everything done for him or her is billable. Take the case of Northwest Wyoming Treatment Center: Documents reviewed by the Star-Tribune show the center was billing Medicaid for recreational activities, for educational services, for times the patients were sleeping, for travel time to and from the ranch and elsewhere.

While providing those services isn’t illegal, they can’t be billed to Medicaid.

Deti said in response to an inquiry generally describing this story that the agency has worked to ensure services remain available for Medicaid clients.

“At every step in this complex case, which has spanned several years, the Wyoming Department of Health, including Wyoming Medicaid and its program staff, have fully cooperated with law enforcement and all other authorities. We will continue to do so,” Deti said in an emailed statement provided earlier this month. “We will also continue to be fiscally responsible with the public funds entrusted to the department as we serve the needs of Wyoming Medicaid clients.”

Sprawling system

Even in Wyoming, the Medicaid system is sprawling. Seven hundred million dollars requires oversight. Enter the state’s program integrity unit. Gaskill took over the unit in 2015 and quickly zeroed in on Northwest Wyoming Treatment Center and a psychologist who was closely tied to it, Gibson Condie.

Gaskill said that in late summer 2015, the state’s Medicaid system caught claims — the bills sent from a provider to Medicaid for payment — that were out of the ordinary. The claims were linked to Northwest Wyoming Treatment Center, and an investigation into that group led to Condie.

In a series of interviews over the course of this year, Gaskill described the various schemes Condie undertook to bilk Medicaid, to the detriment of the state and his Medicaid patients. Gaskill’s allegations are supported by hundreds of pages of legal filings and state investigative documents obtained and reviewed by the Star-Tribune. Condie is serving three years at a federal prison camp in South Dakota.

Condie and the center are heavily interwoven. He founded the center in 2000 and only formally signed it away in 2016, records show.

Gaskill first looked at Condie.

“I’ve been in this business a long time,” Gaskill said, “and I’ve never seen a provider (who had) as many schemes as Condie did.”

In court and investigative documents, as well as with interviews with Gaskill, Condie’s scheme comes into focus. He ran a company — Big Horn Basin Mental Health Group — out of his home in Powell. For years, dozens of people would provide “services” to Medicaid patients in Wyoming and bill for them through Condie. Think of these providers as largely unqualified freelancers who worked under Condie.

“A lot of them were unlicensed, and none of them were enrolled with Medicaid,” Gaskill said.

The “services” these freelancers provided ranged from psychological evaluations to acting essentially as babysitters for people with various disabilities, according to Gaskill’s investigations, federal prosecutors’ filings and internal government documents provided to the Star-Tribune. The “providers” who took care of these patients were not enrolled with Wyoming Medicaid, according to federal prosecutors’ filings, so they couldn’t bill for their services.

But with Condie’s Medicaid ID, the providers were able to get reimbursed by the state. In exchange for billing the services through him, Condie would take a cut — at least 10 percent, Gaskill said. Some of these other “providers” would just be paid a flat hourly rate by Condie, Gaskill alleged. Those activities are prohibited by Medicaid rules.

In an investigative document produced for the state agency, Gaskill lists 13 alleged infractions committed by Condie, ranging from falsifying medical records and inconsistent diagnosing to billing Medicaid for services that never happened.

Gaskill’s investigation noticed something else: On all of their claims, Condie and Big Horn Basin wrote that their patients had depressive disorder. Indeed, over a roughly three-year review conducted by Gaskill’s office, Condie filed 7,307 claims for depression, an investigative document shows. He billed using only two other diagnoses, for a total of nine claims.

Condie claimed late in 2015 that he diagnosed all patients with depression because his training and education taught him that depression was often the underlying condition for substance abuse or other mental illness, according to notes from his interview with investigators. A medical doctor and state Medicaid official, in an email sent in March 2016 and later obtained by the Star-Tribune, called Condie’s understanding incorrect and said the psychologist was “hiding behind his degree.”

Support Local Journalism

Your membership makes our reporting possible.

In a whistleblower lawsuit Gaskill filed in summer 2016 against Condie and others, he wrote that Condie “re-diagnosed each patient even though he had no records in front of him, had never seen the patients, and had no basis to assign this fraudulent code to a claim.” In other words, Gaskill said in an interview, Condie used the diagnosis of depression because the state Medicaid system was more likely to accept it.

As part of his investigation, Gaskill in 2016 spoke with one of Condie’s former providers, Nate Cook. Cook, who had contacted investigators with concerns, recalled being previously asked if the depression diagnoses were legitimate, and answered with his own prompt, “of course not,” according to a transcript of the conversation provided to the Star-Tribune. Cook had spoken with authorities about Condie’s fraud years prior, and he has not been accused of wrongdoing or malfeasance. Indeed, he told investigators he confronted Condie about the billing.

Cook did not respond to repeated requests for comment from the Star-Tribune.

Over the three years reviewed by the state, Condie billed Medicaid well outside of a normal range. Gaskill’s investigation indicates the psychologist billed nearly triple the service that’s possible in a 24-hour period. Other than Condie himself, Gaskill said, no one was authorized to provide treatment through Big Horn Basin. Yet the company was able to provide 67 hours worth of service every single day for 1,035 days, Medicaid investigation documents show.

In all, Wyoming Medicaid paid $5.2 million to Condie’s Big Horn Basin over those 1,035 days.

According to Medicaid investigation documents, Condie was the only registered Medicaid provider of the dozens of people who billed through him.

In a conversation with investigators, Condie insisted that his facility was merely a billing agent — meaning that it would process the claims for the providers and the money would go to them.

But, documents show, Condie and Big Horn Basin were not enrolled as a billing agent. The treatment center was enrolled in Medicaid as a provider. Not only that, but on the claims themselves, Big Horn Basin — Condie — would be listed as the treating provider, not the “freelancer” working underneath him.

“That’s illegal from about eight different directions,” Gaskill said.

What’s more, state Medicaid rules and federal guidelines do not allow a billing agent to keep a cut, as Condie was doing. Without those protections, Gaskill said, billing agents could be incentivized to jury-rig the numbers and maximize their own payout.

Gaskill called Condie’s claim about the origins of mental illness and substance abuse was “beyond ridiculous.” He said it was just an example of Condie’s use of creative and frequently fraudulent billing techniques to maximize payout.

“Say I picked up three kids from a day program, and I take them to a park, and we swing at the park,” Gaskill said. “Then I bill: individual therapy, individual therapy and individual therapy, for each of those kids. If I bill group therapy, I might get $89. If I bill as individual therapy, I get $400 an hour.”

Gaskill often laughs when he talks about Condie. The psychologist was a genius, Gaskill said.

He just got caught.

The treatment center

The now-disgraced psychologist founded Northwest Wyoming Treatment Center in 2000 as Vernon Clegg Condie Youth Homes. The center would change its name in 2006 and would in 2016 officially distance itself from Condie. Much of the fraud Condie was accused of perpetuating was happening at the treatment center, too, court filings and state investigation documents contend.

The center was intended to treat juveniles with substance abuse issues. Many, if not all, were court-ordered there. Gaskill, the investigator, said the road that led each patient to the center varied, but he believed very few — if any — arrived voluntarily.

Many were from the Wind River Reservation and all were Medicaid patients. The center housed no more than a dozen patients at a time, documents indicate. These kids sought — or, more precisely, were ordered to seek — treatment for their substance abuse issues.

Instead, they got the center, which — documents show — treated them more as funnels through which Medicaid dollars flowed into the organization’s coffers.

Reams of progress notes show how the scheme worked. On March 16, 2014, one patient’s afternoon and evening were logged. Over those eight hours, the patient ate noodles, watched TV, played video games, watched others play video games, ate dinner, played more video games and then went to sleep. All eight hours were billed to the state using the Medicaid code for “comprehensive community support services for individual rehab.” None of those services could be legitimately billed to Medicaid in such a manner, according to the agency’s own rules.

The center billed the state $240 for the “therapy” it provided over those eight hours.

Another progress note, from September 2014, logs three hours of a student studying. That was billed as community-based drug and alcohol individual therapy. Those three hours cost $336.

Another: Nine hours of recreation skiing at Sleeping Giant, also billed as individual therapy. Total cost: $1,008.

The list goes on. The residents baled hay, worked on Condie’s ranch, played basketball, went to the gym, played paintball. All are services that cannot be billed under Wyoming Medicaid. There’s very little mention of actual therapy in the progress notes obtained by the Star-Tribune.

Cook, the provider who spoke to Gaskill, told the investigator that the patients would be taken to the gym, where their “therapist” would work out while the kids wandered around.

“ ... I went to (Condie) and said, ‘Gib, I do not agree with what is going on here,’” Cook told Gaskill, according to a transcript. “I said, ‘Your guys are doing crap therapy and billing it.’ And it’s just mass billing.”

When Gaskill told Cook that the center was billing the state for what amounted to tens of thousands of dollars a month for therapy, Cook replied, “See, that’s a joke.”

“(T)hat’s what I told (Condie),” Cook continued, according to the transcript. “’Gib, they’re only playing football games.’”

This “mass billing” was costing the state hundreds of thousands of dollars a year. The center was billing for more than 10 hours of therapy a day, every day — including Christmas and Easter — for every patient, Gaskill alleged, a load that far exceeded treatments at similar facilities in Wyoming.

For example, Vivian Whethem, the residential director at Central Wyoming Counseling Center, said their patients must receive at least 30 hours of structured services per week. Those services can include individual therapy, job training, case management assessment and group therapy.

The center in Powell was regularly billing for more than double that. What’s more, Gaskill alleged, the exact structured services that Whethem described weren’t laid out in any patient’s treatment plans at Northwest Wyoming Treatment Center. Whethem is not affiliated with NWTC and spoke to the Star-Tribune about general best practices.

The cost was enormous. Between March and May 2015, the center billed Medicaid $650,000 for 12 patients. In July 2014 alone, Wyoming Medicaid paid $25,778 per child.

In 2015, the center posted $540,000 in net income, with its two top officials — Ty Barrus and Greg Bennett — banking six-figure salaries. Both men are now facing federal criminal charges in connection to their work at the facility.

The center’s profit margin that year was 23 percent. While for tax purposes the center is a nonprofit, it’s still capable of making money, just like other nonprofits. Those gains just have to be used for the center’s purpose.

Those numbers are especially significant when compared to other facilities around the state. Sheridan’s Normative Services Inc., for instance, offers a wider range of services than Northwest Wyoming Treatment Center did. It lost money last year. In 2015, the Sheridan facility’s profit margin was just 2.3 percent, according to federal tax filings.

The Youth Emergency Service House in Gillette also provides inpatient substance abuse treatment for juveniles. It’s larger than the Powell center but posted $112,000 in profits last year. That’s a margin of just 1.7 percent. In 2015, the Gillette facility lost money.


Because the progress notes provided to the Star-Tribune are redacted and sparse, the quality of the services provided to the center’s patients is unclear. Gaskill claims that whatever legitimate therapy the center did provide was shoddy.

What is known is that juveniles with substance abuse issues were sent to Powell for treatment, largely by way of court orders and other government recommendations. Instead of recovering from substance use issues, those kids became a vehicle to siphon funds away from Wyoming Medicaid, enrich Condie and, prosecutors now allege, fraudulently benefit three more men: Barrus, Bennett and a therapist named Devin Dutson.

A federal judge late last month unsealed documents formally charging Dutson, Barrus and Bennett. The three face a total of 15 criminal charges, which allege health care fraud, conspiracy and racketeering. In an indictment, prosecutors alleged that the men used the treatment center as part of a scheme to defraud Wyoming Medicaid out of $8.5 million between April 2009 and November 2015.

The three men have pleaded not guilty and their defense attorneys have all declined to comment or failed to respond to requests for comment. A trial date has not yet been set in the case.

Earlier this year, a judge ruled prosecutors had demonstrated the center’s assets were connected to health care fraud and awarded multiple buildings, two bank accounts, an all-terrain vehicle vehicle and a trailer to the federal government.

The center itself has been shuttered. The corporation dissolved early this year. Publicly listed phone numbers are disconnected.

The federal government had the option to take over Gaskill’s whistleblower lawsuit, but declined to do so when a judge unsealed the case last year. Gaskill dismissed claims against Condie and Big Horn Basin Mental Health following the psychologist’s criminal conviction. The whistleblower, the former psychologist and federal prosecutors struck a deal to end that portion of the litigation. The exact details of the settlement were not available earlier this month; federal prosecutors could not provide documents governing the deal. A lawyer for Gaskill did not respond to a phone message requesting a more-detailed description of the settlement terms.

Condie, meanwhile, is expected to be released in September 2020. When he gets out, he will be responsible for repaying the government $2.28 million of his improper gains; a recent court accounting stated he still owes more than $2 million. Gaskill said a portion of the reclamation is due to him. The remainder will go to the state and federal governments.

However, following the conviction, Condie turned over to the government his remaining assets, which prosecutors have asked permission to use toward the restitution judgement. The assets include what remained in the psychologist’s bank accounts, multiple vehicles and the ranch children labored on years ago in the Bighorn National Forest.


Be the first to know

* I understand and agree that registration on or use of this site constitutes agreement to its user agreement and privacy policy.

Crime and Courts Reporter

Shane Sanderson joined the Star-Tribune in 2017. He covers courts and law enforcement agencies in Natrona County and across the state. Shane studied journalism at the University of Missouri and worked at newspapers there before moving to Wyoming.

Education and Health Reporter

Seth Klamann joined the Star-Tribune in 2016 and covers education and health. A 2015 graduate of the University of Missouri and proud Kansas City native, Seth worked for newspapers in Milwaukee and Omaha before coming to Casper.

Related to this story

Get up-to-the-minute news sent straight to your device.


News Alerts

Breaking News