On March 6, 2025, federal prosecutors charged a Minnesota couple — Gabriel Adam Alexander Luthor and Elizabeth Christine Brown — with orchestrating a $15 million healthcare fraud scheme involving overbilling and submission of false claims for neurofeedback and other behavioral health services performed by a network of behavioral health clinics. This newly unsealed federal indictment underscores the Department of Justice’s increasing focus on fraud involving neurofeedback and other emerging behavioral health treatments.
Neurofeedback is a therapeutic intervention that uses real-time monitoring of brainwave activity to assist individuals in improving their emotional regulation and stress resilience. The therapy is often marketed as a non-invasive alternative to medication and is gaining popularity for treating anxiety, ADHD, depression and related conditions, including in wellness settings. While the FDA has cleared some neurofeedback devices, neurofeedback’s clinical efficacy remains debated, and reimbursement policies vary widely across payors.
The Allegations
According to the indictment filed in the U.S. District Court for the District of Minnesota, over the course of several years, the couple used shell companies and related entities to perpetrate fraud through questionable billing practices across multiple clinic locations. The scheme was alleged to involve extensive billing to public insurance programs such as Medicare and Medicaid, causing over $15 million in improper payments from government and commercial payors.
Key allegations contained in the indictment include:
- Fraudulent Overbilling. Luthor and Brown allegedly conspired to submit false and inflated claims to Medicare, Medicaid and private insurers for services that were not provided, were not medically necessary or were not eligible for reimbursement.
- Improper Use of Billing Codes. The indictment details multiple coding abuses, including:
- Billing neurofeedback therapy using CPT codes intended for reimbursable biofeedback services, a therapy distinguishable from neurofeedback;
- Using combinations of billing codes that are not permitted to be billed together (i.e., billing under a bundle and then concurrently billing a specific code covering a portion of the services within the bundle);
- Improperly billing CPT Modifier 59 (indicating that a procedure is separate and distinct from another procedure performed on the same day); and
- Misrepresenting the duration of services to justify use of higher-paying codes.
- Disregard of Payor Warnings. Despite receiving repeated denials and warnings from insurers, including the Centers for Medicare & Medicaid Services, the defendants allegedly continued to engage in improper billing practices.
- Use of Funds for Personal Benefit. The indictment also alleges that proceeds of the scheme were diverted for personal use, including expenditures related to Luthor’s personal relationships.
Takeaways for Behavioral Health Providers and Investors
While the facts and allegations set forth in the indictment seem egregious, this case is part of a broader enforcement wave targeting fraud and abuse in behavioral health, telehealth and alternative care delivery models. For providers, investors and platform operators, it highlights key diligence and post-closing compliance considerations, especially in transactions involving behavioral health services, and the need to ensure proper billing and compliance is integrated into a practice. Some best practices include:
- Ensure Clinical Oversight and Licensure. Many emerging treatment methods — including neurofeedback, TMS and ketamine — require careful structuring to ensure that clinical oversight, provider licensure and scope of practice rules are satisfied.
- Keep Proper Billing and Coding Practices. Behavioral health providers and potential investors should ensure documentation supports payor policy for services reimbursement — especially with respect to unique treatment offerings. This includes assessing whether services are truly reimbursable and that medical necessity criteria are consistently met. Behavioral health practices and investors should consider regular third-party and internal billing and coding audits to best ensure compliance.
- Create Culture of Compliance. Internal compliance processes are essential for preventing and identifying fraud. Passive or paper-only compliance programs create exposure not only for providers, but for investors. Those in the behavioral health space should implement and enforce a culture of compliance and ensure that internal processes and procedures are not only established, but followed, reviewed and updated as needed.
