The Department of Justice (DOJ) recently announced the guilty plea of two individual alcohol and substance abuse treatment center owners for their participation in what the DOJ labeled a “multi-million dollar health care fraud and money laundering scheme.” The two individuals owned a licensed substance abuse service provider (or treatment center) offering clinical treatment services for persons suffering from alcohol and drug addiction. The treatment center also offered medication-based treatment for opioid addiction.
The government had accused the two owners of paying illegal kickbacks/bribes to “sober homes” in exchange for the referral of the sober homes’ insured residents to a treatment program. The sober homes provided safe and drug-free residences for individuals suffering from drug and alcohol addiction. This made them a prime source of potential referrals to the treatment program.
The accusations against these defendants read like a laundry list of thinly veiled kickback schemes. Some of the specific accusations included:
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Providing funds used to purchase or rent several sober home properties under purchase agreements or leases that were in the names of other parties so as to disguise the source of funds.
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Paying remuneration for referrals in the form of free or reduced rent, insurance premium payments, and other benefits to individuals with insurance who agreed to reside at the sober homes and attend drug treatment.
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Using a separate entity to pay insurance premiums for treatment patients so the treatment program could continue to bill the patients’ insurance companies for treatment expenses.
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Hiring a doctor to serve as the medical director who frequently pre-signed prescriptions that were used to dispense controlled substances.
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Continuing to employ the medical director after the doctor’s license was suspended.
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Failing to inform the Florida Department of Children and Families that it could not continue to operate when the treatment center lost the medical director.
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Submitting insurance claims that falsely stated testing and treatment was medically necessary.
If the allegations made by the government are to be believed, the treatment center is an illustration of exactly what intentional fraud looks like. This was not a mistake. Rather, it appears the defendants deliberately set up a system intended to generate referrals and providing financial benefits to individuals in a position to make or influence those referrals. In short, this is what health care fraud looks like.
Providers that we work with go to great lengths just to make certain they proactively look for potential risk areas and take affirmative and proactive actions to be certain they are not making mistakes that could inadvertently result in an overpayment or imputed knowledge. A great deal of expense goes into assuring these providers are in complete compliance. By contrast, cases like the one involving these treatment programs illustrate the very reason well providers with the best of intentions find it necessary to look over their shoulders.
