Spectrum Health Systems, Worcester, Mass., Spectrums ex-president and its former management company will pay $7.5 million to settle allegations that they wrongly billed Massachusetts for management fees. The settlement involves Spectrum, a substance-abuse treatment provider; CiviGenics, Marlborough, Mass.; and CiviGenics President Roy Ross, who was Spectrums president before founding CiviGenics. According to a 2004 state audit, Spectrum paid CiviGenics excessive management fees and charged unallowable expenses to state programs, improperly spending more than $17 million over a 10-year period. Spectrum, a not-for-profit, will pay $3.5 million of the settlement, CiviGenics will pay $3.4 million, and Ross will pay $650,000. They settled without admitting wrongdoing. At deadline, Spectrum and CiviGenics officials couldnt be reached for comment. The settlement also requires Spectrum to add four independent members to its board, including two members who have expertise in finance or not-for-profit governance, and to review its bylaws and policies. Spectrum provides substance-abuse treatment at 55 facilities in six states. CiviGenics primarily manages mental-health programs and substance-abuse treatment in correctional centers. -- by Mark Taylor
Firms resolves dispute with Mass.
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