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Press Release

Connecticut Substance Abuse Treatment Provider Pays $295K to Settle Improper Billing Allegations

For Immediate Release
U.S. Attorney's Office, District of Connecticut

New Haven – John H. Durham, United States Attorney for the District of Connecticut, today announced that CONNECTICUT COUNSELING CENTERS (“CCC”) has entered into a civil settlement agreement with the federal and state governments in which it will pay more than $295,000 to resolve allegations that it caused overpayments to be paid by the Connecticut Medicaid Program.

CCC is a healthcare organization that provides outpatient substance abuse and mental health services in Connecticut, with clinics located in Fairfield and New Haven counties.  The government’s allegations against CCC arise out of improper billing for urine drug testing services.

The State of Connecticut Department of Social Services (“DSS”) contracted with CCC to provide behavioral health and substance use disorder services to Medicaid beneficiaries.  Medicaid reimburses methadone clinics, such as CCC, utilizing a weekly rate payment for each Medicaid patient provided methadone treatment.  Regulations issued by the State of Connecticut in 2013 made it clear that the weekly payment was a “bundled” rate that included intake evaluation; initial physical examination; on-site drug abuse testing and monitoring; and individual, group and family counseling services. 

On September 3, 2014, Medicaid issued a Provider Bulletin to all methadone clinics reminding them that the weekly rate payment included reimbursement for on-site drug abuse testing and monitoring.

On February 1, 2015, DSS published on its website an Audit Protocol for methadone clinics.   The Audit Protocol stated that if a DSS audit found Medicaid paid another laboratory provider for drug testing within a week of the date a methadone clinic was paid for methadone treatment, Medicaid would reduce the methadone clinic’s payment for the methadone treatment service by the cost of the laboratory service.

DSS conducted an audit of CCC and found that both CCC and an independent laboratory billed Medicaid for drug testing performed by the laboratory, contrary to DSS’ weekly rate payment regulation.  In January 2016, DSS issued an Audit Report that warned CCC that continued non-compliance with the weekly rate payment rule would result in financial disallowances in future audits.

The government alleges that despite clear guidance from the Medicaid program and the audit finding indicating that on-site drug testing was part of the bundled rate, CCC routinely referred urine drug tests for CCC’s patients to an outside, independent laboratory.  As a result, Medicaid paid for the claims twice, once to CCC pursuant to the bundled rate and a second time to the outside laboratory.

To resolve its liability, CCC will pay $295,211 to the federal and state governments for conduct occurring between January 18, 2016 and December 31, 2016. 

“Providers who bill government health insurance programs, such as Medicaid, must follow the rules, and the failure to do so will have serious consequences,” stated U.S. Attorney Durham.

This matter was investigated by the Office of Inspector General for the Department of Health and Human Services.  The case is being prosecuted by Assistant U.S. Attorney Richard M. Molot and by Assistant Attorneys General Michael E. Cole and Gregory K. O’Connell of the Connecticut Office of the Attorney General.

People who suspect health care fraud are encouraged to report it by calling 1-800-HHS-TIPS or the Health Care Fraud Task Force at (203) 777-6311.

Updated May 5, 2020

Health Care Fraud