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Press Release

Substance Abuse Treatment Provider and CEO Pay More Than $800,000 to Settle Improper Billing Allegations

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

United States Attorney John H. Durham and Connecticut Attorney General George Jepsen today announced that APT FOUNDATION, INC. and its Chief Executive Officer, LYNN MADDEN, have entered into a civil settlement agreement with the federal and state governments in which they will pay $883,859 to resolve allegations that they caused overpayments to be paid by the Connecticut Medicaid Program.

APT Foundation, Inc. (“APT”) is a healthcare organization that provides behavioral health and substance use disorder services to patients at its clinics in New Haven, North Haven and Bridgeport.  The allegations against APT and MADDEN arise out of improper billing for urine drug testing services.

APT 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 APT, 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 (emphasis added).

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.

In 2015, DSS conducted an audit of APT and found that both APT and an independent laboratory billed Medicaid for drug testing performed by the laboratory, contrary to DSS’ weekly rate payment regulation.  The Audit Report warned APT 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, APT and MADDEN routinely referred urine drug tests for APT’s patients to an outside, independent lab in Massachusetts.  As a result, Medicaid paid for the claims twice, once to APT pursuant to the bundled rate, and a second time to the outside lab in Massachusetts.

To resolve their liability, APT and MADDEN will pay $883,859 to the federal and state governments for conduct occurring between January 1, 2016 and November 30, 2016. 

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

This matter was investigated by the U.S. Department of Health and Human Services, Office of Inspector General.  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 December 8, 2017

Health Care Fraud