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Press Release

Connecticut Substance Abuse Treatment Provider Pays Over 354K to Settle Improper Billing Allegations

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

John H. Durham, United States Attorney for the District of Connecticut, today announced that RECOVERY NETWORK OF PROGRAMS, INC. (“RNP”), a healthcare organization that provides substance abuse and mental health services in Fairfield County, has entered into a civil settlement agreement with the federal and state governments in which it will pay $354,367 to resolve allegations that it caused overpayments for urine drug testing services to be paid by the Connecticut Medicaid Program.

RNP entered into contracts with the State of Connecticut Department of Social Services ("DSS") to provide behavioral health and substance use disorder services to Medicaid beneficiaries.  Medicaid reimburses methadone clinics, such as RNP, 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 RNP and found that both RNP 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 warning RNP 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, RNP routinely referred urine drug tests for RNP’s patients to an outside, independent laboratory.  As a result, Medicaid paid for the claims twice, once to RNP pursuant to the bundled rate and a second time to the outside laboratory.

To resolve its liability, RNP will pay $354,367 to the federal and state governments for conduct occurring between March 1, 2017 and October 17, 2017. 

“Overbilling of Medicaid and other government health insurance programs cannot be tolerated and providers who fail to follow the rules, especially after multiple warnings, face 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 Cole and Greggory 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 July 23, 2020

Health Care Fraud