Opioid Abuse Treatment Facility to Pay $3.15 Million for Kickback Violations, Obstructing Federal Audit, and False Claims Submitted to Government Insurance Programs
CAMDEN, N.J. – An opioid abuse treatment facility in Camden will pay a total of $3.15 million to resolve criminal and civil claims that it caused kickbacks, obstructed a federal audit, and fraudulently billed Medicaid, Attorney for the United States Vikas Khanna announced today.
Camden Treatment Associates LLC (CTA) agreed to pay $1.5 million in criminal penalties to resolve allegations that it violated the federal Anti-Kickback Statute and obstructed a Medicaid audit. As part of the resolution, a criminal information was filed on December 2, 2022 in Camden federal court charging CTA with this conduct. CTA entered into a three-year deferred prosecution agreement (DPA) that requires it to abide by certain measures to avoid conviction. CTA also entered into a civil settlement agreement to pay $1.65 million to the United States to resolve claims that it violated the federal False Claims Act by submitting fraudulent claims to Medicaid.
According to CTA’s admissions in the DPA:
Between 2009 and 2015, CTA and a second company were owned and managed by related parties. CTA had a kickback relationship with the second company in which CTA ordered all of its methadone mixing services from the second company and paid it more than $125,300 for those services. This arrangement resulted in kickbacks being paid because the second company paid the profits it made on CTA’s orders of methadone mixing to the related parties who owned and managed both companies. As a result, CTA was induced to order services from the second company and to have CTA patients receive treatment using methadone mixed only by that company. CTA received more than $2.78 million from Medicaid for methadone administration services.
In a separate criminal scheme, CTA obstructed a Medicaid contractor’s 2016 audit of CTA’s claims for payment. CTA submitted falsified materials to the auditor purporting to justify its claims to Medicaid. Specifically, CTA added patient and counselor signatures to patient files, altered names of counselors listed as providing services, added credentials for staff listed as performing services, added sign-off dates for services and, in some instances, submitted entire patient notes to files to justify services rendered. Metadata from CTA’s electronic patient software program revealed that CTA employed these fraudulent means.
The settlement resolves the civil allegations that CTA submitted false claims to Medicaid stemming from the kickback relationship with the methadone mixing company described above. The settlement further resolves allegations that between 2013 and 2016, CTA failed to comply with certain federal and state regulations governing substance abuse treatment facilities. Specifically, CTA allegedly failed to maintain proper supervision and staffing at its facility. Instead, CTA typically used non-credentialed “counselor interns” to perform services at the facility and did not have sufficient licensed staff to properly supervise the interns. Consequently, CTA’s claims submitted to Medicaid for payment, which were contingent on CTA’s certified compliance with these regulations, were false.
The claims settled by this agreement are allegations only, and there has been no determination of liability.
As part of the DPA, CTA is required to adopt several compliance measures, including:
- have an effective compliance program, including enhanced compliance policies and annual compliance training regarding federal health care laws;
- retain an independent health care compliance consulting firm specializing in substance abuse disorder facilities to conduct a comprehensive review of its compliance program and to make improvement recommendations;
- create an independent board of advisors to oversee company compliance relating to federal health care laws;
- have a chief compliance officer to oversee compliance-related functions at the company;
- annually certify that its compliance program is effective; and
- provide written reports to the United States every six months over a three-year period detailing its progress in developing and enhancing its compliance program.
Attorney for the United States Khanna credited agents of the U.S. Department of Health and Human Services Office of Inspector General, under the direction of Acting Special Agent in Charge Susan Frisco, with the investigation and prosecution of the case. He also thanked the FBI Health Care Fraud Unit Data Analysis Response Team at FBI Headquarters in Washington, D.C., under the direction of Special Agent Greg Heeb; IRS-Criminal Investigation, under the direction of Special Agent in Charge Tammy Tomlins in Newark; and the FBI’s South Jersey Resident Agency, under the direction of Special Agent in Charge Jacqueline Maguire in Philadelphia, for their assistance with the case.
The criminal case was prosecuted by Acting Chief of the Health Care Fraud Unit Christina O. Hud, Chief of the Opioid Abuse Prevention and Enforcement Unit R. David Walk, Jr., and Assistant U.S. Attorney Diana V. Carrig of the Criminal Division in Camden. The civil case was prosecuted by Assistant U.S. Attorney Kruti Dharia of the Opioid Abuse Prevention and Enforcement Unit and Assistant U.S. Attorney Andrew A. Caffrey III of the District of Massachusetts and formerly of the District of New Jersey.