ALBANY — The region’s most prominent health care official previously served as the chief executive officer for an online behavioral health service during a period in which the company recently admitted to billing patients for appointments that did not occur and other improper practices.
Daniel Pickett III was appointed president and CEO of the Albany Med Health System in December. Prior to assuming the top position at the region’s largest health care provider, Pickett served as president and CEO of aptihealth between April 2020 and June 2025.
The Saratoga County-based mental health service that Pickett co-founded in 2017 was the subject of a whistleblower complaint filed in July 2023 by Heather Hagerty, a former employee, that resulted in a settlement with the U.S. Department of Justice and New York state totaling $300,000. Hagerty was also awarded a $55,000 payout from the company.
The health system’s board “has been fully aware of Mr. Pickett’s work with aptihealth and his other professional activities aimed at improving patient access to healthcare and efficient delivery of services,” said a statement provided by the Albany Med Health System’s Communications and Marketing Office.
The statement also notes that Pickett “was not personally accused of any wrongdoing, was not a party to the DOJ settlement agreement, and to our knowledge, was never a target in this matter.”
The complaint is the latest claim filed against aptihealth by a former employee that alleges improprieties by the company in recent years.
Joan Hayner, a health care executive recruited to work for aptihealth as the company’s Northeast market president in April 2022, filed a separate civil lawsuit against the company in 2023 alleging wrongful termination after her position was eliminated shortly after she raised concerns about the company’s billing practices.
Hayner’s lawsuit claims that Pickett and other top executives at aptihealth at the time of her employment were not just aware of the fraudulent billing practices but actively participated in them.
Pickett previously served as the managing partner of Hudson River Capital Holdings, a private investment and advisory firm he founded. He also served as an IT executive and has been active in civic leadership roles, including as a member of Rensselaer Polytechnic Institute Board of Trustees and the Gilda’s Club of the Capital Region, according to his Albany Med bio.
Whistleblower claims
Hagerty was hired by aptihealth in May 2021 as a provider performance manager and promoted to the company’s coding operations manager in September 2022 before her employment was terminated on Feb. 17, 2023.
The complaint is detailed in a lawsuit filed under the federal False Claims Act that allows private individuals to file civil claims on behalf of the government and receive a portion of any recovered funds.
Hagerty, in her complaint, said she “learned of various schemes that aptihealth used to illegally increase their reimbursements from Medicare and Medicaid” during her employment, including billing patients for a “brief emotional/behavioral assessment” without provider input or proper documentation, according to the complaint.
Pickett is not mentioned by name in the complaint, though he appears to be referenced as “an aptihealth executive” who sits on the Board of Directors at Albany Medical Center that used the “relationship to try and generate referrals for aptihealth.”
Pickett joined the board of Albany Medical Center in 2012 and was later appointed its president in June 2025, just months before becoming the top executive for the Albany Med Health System, which employs more than 17,000 and includes hospitals in Albany, Hudson, Glens Falls and Saratoga Springs.
“At the time of [Hagerty’s] departure, aptihealth was working on a program to embed social workers at Albany Medical so that those social workers could refer hospital patients to aptihealth for further treatment,” the complaint reads.
Albany Med first began contracting with aptihealth for its patients in 2021, according to the health system’s communications department.
“These services were approved through Albany Med’s standard conflict disclosure and clearance process. Mr. Pickett’s interest in aptihealth was fully known to all involved in that process and the rules were followed,” the office said in a statement. “Neither the Board of Directors nor Mr. Pickett had knowledge of the specifics in the DOJ settlement agreement with aptihealth until DOJ announced the settlement.”
The complaint accuses aptihealth of engaging in a “kickback scheme” that resulted in false claims for services to Medicare and Medicaid patients. The alleged scheme took place “from at least May 3, 2021″ until the lawsuit was filed.
“Specifically, aptihealth has provided patients and potential patients with valuable inducements including transportation services, food deliveries (Uber Eats), and gift cards to induce that patient to obtain health care services from aptihealth,” the complaint reads.
Aptihealth was also accused of failing to provide proper cybersecurity measures for its providers, who “instead worked on their own personal devices” that did not require the use of a virtual private network of multifactor identification when logging onto the aptihealth telehealth platform.
In at least one instance, an unauthorized user accessed a patient’s information via a provider’s unsecured computer. Hagerty notified management “who did not take any immediate steps to improve” the online platform’s security, the complaint reads.
Admission of wrongdoing
In a settlement dated June 12 and announced this week, aptihealth admitted and took responsibility for several inaccuracies in its billing practices that took place between Jan. 1, 2020 and Dec. 31, 2023.
Those inaccuracies include falsely billing “Medicare and Medicaid for patient appointments that did not occur because the patient was a ‘no-show’” and improperly billing patients when company representatives responded to patient messages on its telehealth platform.
Aptihealth also admitted to implementing an “incentive program” where 15 patients received a $25 gift card for attending at least one therapy session — a potential violation of federal anti-kickback laws. The company said it disbursed “no more than $250 in total gift cards” and the program was discontinued by Dec. 31, 2021, according to the settlement agreement.
“During the relevant timeframe, aptihealth’s compliance program failed to meet New York statutory requirements for detecting inaccurate billings, maintaining a system for routine monitoring and identifying compliance risks, and/or ensuring adequate training and education,” the settlement reads.
Aptihealth, as part of its recent settlement with the U.S. Department of Justice, agreed to pay a combined $300,000 to the federal government and state of New York. That includes $183,296 to the federal government, including $91,648 in restitution.
The company has agreed to pay $116,703 to the state. Hageraty was also awarded $55,000.
Pickett, who resigned as aptihealth’s CEO in June 2025, is not mentioned in the settlement agreement.
Dustin Keller, the president and chief compliance and operations officer for aptihealth, said in a statement that the company remains “committed to delivering high-quality behavioral health services across New York and to the patients, providers and communities we serve.”
He noted that the company has strengthened its protocols and infrastructure “substantially since the period covered by this settlement.”
Keller also noted that no patient data was compromised and there were no finding about the quality of care patients receive.
“Aptihealth is one of several behavioral health resources available to Albany Medical Group patients who may benefit from follow-up mental health care. Referrals are made based on each patient’s clinical needs and appropriateness for services. Consistent with applicable law, aptihealth does not provide or receive compensation for referrals.”
The statement did not include a response to an inquiry about whether Pickett or other aptihealth executives had any direct knowledge of the improper billing process or other claims outlined in the settlement.
Additional claims of fraud
A separate lawsuit filed by Hayner in August 2023 alleges that Pickett and other top executives at aptihealth were made aware of issues with the company’s billing practices.
Hayner was recruited to work for aptihealth in April 2022 by Pickett and Gregory Stephan, the company’s chief financial officer at the time.
She filed a 16-page lawsuit against aptihealth in Albany County Supreme Court shortly after her employment was terminated in January 2023 after she notified Pickett and other executives of discrepancies with the company’s finances and billing practices.
Aptihealth, Pickett, Stephan and Timothy Koehler, the company’s chief operating officer, are listed as defendants in the case.
In one incident, Hayner was involved in negotiating a value-based contract with Capital District Physicians’ Health Plan. Before the contract was finalized, Hayner had a discussion with Pickett, Stephan and Koehler about the methods aptihealth would use to bill CDPHP for its services.
“Defendants Pickett, Stephan and Koehler intended to issue monthly invoices for any patient of the company that was eligible for services — rather than invoicing CDPHP for only those patients who actually received the services identified in the agreement,” the lawsuit reads. “Plaintiff [Hayner] was understandably (and appropriately) shocked to hear this, and pointedly stated to defendants Pickett, Stephan and Koehler that the company could not bill for services that were not in fact provided.”
Hayner, according to the lawsuit, informed the executives that the billing practice “would be considered fraud.”
“Defendants Pickett, Stephan and Koehler grew visibly angry with the plaintiff for making the point, which should have been obvious,” the lawsuit reads.
Hayner was relegated to minor roles in the company following the incident, and Pickett “began to disparage” her in front of leadership at health plans and hospitals, the lawsuit states.
In a statement, CDPHP said aptihealth is one of several telehealth providers with which the health plan contracts. The company also noted that it is “committed to responsibly managing public and private healthcare dollars, protecting our members and ensuring that care is delivered ethically, appropriately, and in compliance with all applicable federal and New York state requirements.”
The lawsuit also claims that two other former aptihealth employees — Elizabeth Rushford, the company’s then-chief legal counsel and compliance officer, and Erin McGarry, the company’s former vice president of finance — raised concerns about false representations regarding the company’s financials, inadequate compliance measures and incorrect contract language “concerning requisite security measures.”
“Upon information and belief, both Ms. Rushford and Ms. McGarry were met with open resistance and anger by defendants Pickett and Stephan when expressing these concerns; and both were separated from employment with aptihealth shortly after,” the lawsuit reads.
Currently, neither Koehler nor Stephan is listed as an aptihealth executive on the company’s website. It’s unclear when their employment with the company ended.
The case was settled out of court on Dec. 12, 2024.
Lisa Joslin, an attorney who represented Hayner during the lawsuit, said she was “unable to comment on the resolution of the matter.”