By Fisher, JD, CHC, CCEP
Substance Abuse Treatment Center Owners Plead Guilty in Fraud Scheme
The Department of Justice recently announced that two owners of a licensed alcohol and substance abuse treatment provider pleaded guilty for their roles in what DOJ described as a “multi-million dollar health care fraud and money laundering scheme.” The provider offered clinical treatment services for people suffering from alcohol and drug addiction, including medication-based treatment for opioid addiction.
The government accused the two owners of paying illegal kickbacks or bribes to “sober homes” in exchange for referrals of insured residents to the treatment program. Because sober homes provided safe, drug-free residences for people recovering from drug and alcohol addiction, they were a significant source of potential referrals to the program.
According to the allegations, the case centered on whether the treatment center owners used payments and other inducements to steer insured residents from sober homes into their treatment program. The allegations illustrate the line between legitimate referral relationships and arrangements the government viewed as kickbacks.
The government’s allegations described several arrangements that it viewed as improper referral-related payments. Specific accusations included:
- Submitting insurance claims that allegedly falsely stated that testing and treatment were medically necessary.
- Providing funds to purchase or rent several sober home properties through purchase agreements or leases held in other parties’ names, allegedly to disguise the source of the funds.
- Paying remuneration for referrals through free or reduced rent, insurance premium payments, and other benefits to insured individuals who agreed to live at the sober homes and receive drug treatment.
- Using a separate entity to pay insurance premiums for treatment patients so the treatment program could continue billing the patients’ insurance companies for treatment expenses.
- Hiring a doctor to serve as medical director who allegedly pre-signed prescriptions used to dispense controlled substances.
- Continuing to employ the medical director after the doctor’s license was suspended.
- Failing to inform the Florida Department of Children and Families that the treatment center could no longer operate after losing its medical director.
