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Justice News

Department of Justice
U.S. Attorney’s Office
Southern District of New York

FOR IMMEDIATE RELEASE
Monday, December 21, 2020

Acting Manhattan U.S. Attorney Announces Settlement With Substance Abuse Treatment Center And Its Owner For Enrolling Patients Through Kickbacks And Using Falsified Patient Admissions Forms

Addiction Care Interventions Chemical Dependency Treatment Centers and Owner Steven Yohay Agree to Pay $6 Million and Admit Misconduct; Yohay to be Excluded from Participating in Federal Healthcare Programs and Must Divest Ownership of ACI

Audrey Strauss, the Acting United States Attorney for the Southern District of New York, and Scott J. Lampert, Special Agent in Charge of the New York Regional Office of the U.S. Department of Health, Office of Inspector General (“HHS-OIG”), announced today a $6 million settlement of a civil healthcare fraud lawsuit against A.R.E.B.A.-CASRIEL, Inc. d/b/a ADDICTION CARE INTERVENTIONS CHEMICAL DEPENDENCY TREATMENT CENTERS (“ACI”), a substance abuse treatment provider in New York City, and STEVEN YOHAY, ACI’s primary owner and former CEO.  This settlement resolves allegations that ACI and YOHAY provided kickbacks and engaged in fraudulent conduct in connection with the enrollment of Medicaid beneficiaries into ACI’s inpatient treatment program.  Specifically, the Government’s complaint alleges that ACI’s drivers targeted homeless individuals and offered them food, cash, money to purchase drugs, and/or alcohol in order to induce them to enroll in ACI’s inpatient treatment program.  The lawsuit further alleges that ACI paid an individual a kickback in the form of a sham job for which she was compensated more than $75,000 to induce her to refer patients to ACI programs.  The lawsuit also alleges that ACI used medical admissions forms containing photocopied physician signatures to make it appear that new patients had been evaluated by a qualified health care professional as required by law. 

Under the settlement approved December 17 by U.S. District Judge Vernon S. Broderick, ACI agreed to pay $3 million, and YOHAY personally agreed to pay an additional $3 million.  Of the $6 million total, $2.4 million is being paid to the United States and the remaining amount is being paid to the State of New York.  The amount paid by ACI is based on the Office’s assessment of ACI’s ability to pay based on the financial information it provided. 

ACI and YOHAY admitted and accepted responsibility for conduct alleged in the Government’s complaint as further described below.  YOHAY also agreed to divest ownership and control of ACI, and ACI agreed to implement procedures designed to ensure that its patient transportation services comply with legal requirements.  In addition, YOHAY has entered into a Voluntary Exclusion Agreement with HHS-OIG, under which he will be excluded from participation in Medicaid and other federal healthcare programs for a period of 15 years. 

Acting U.S. Attorney Audrey Strass said:  “ACI and Steven Yohay engaged in unscrupulous and illegal practices – including hiring drivers to scour the streets for potential patients – to fill the beds at their facilities and maximize the payments they received from Medicaid.  This Office will continue to act aggressively to ensure that substance abuse treatment providers and those who run them are held accountable when they cheat the system to fraudulently obtain federal health care funds.” 

HHS-OIG Special Agent in Charge Scott J. Lampert said:  “ACI and Stephen Yohay operated a fraud scheme that targeted some of the most vulnerable people in our society and diverted valuable Medicaid funds that millions of New Yorkers depend on for vital services.  This settlement should send a message that this behavior will not be tolerated, and we will hold those that attempt to steal from federal health care programs accountable for their actions.” 

The Complaint filed in Manhattan federal court alleges three forms of illegal conduct:

First, from January 2014 to December 2019, ACI and YOHAY improperly induced Medicaid beneficiaries to be admitted into ACI’s inpatient treatment program by employing drivers, who were compensated based in part on the volume of patients they recruited for admission into the treatment program, to solicit and transport potential new patients to ACI’s facility.  The drivers routinely targeted homeless individuals and sometimes offered them food, cash, money to purchase drugs, and/or alcohol to persuade them to enroll in the program.  The drivers were expected to pick up a certain number of potential patients in order to be eligible for a pay raise.  Most of the new enrollments into ACI’s inpatient program resulted from the ACI drivers’ solicitation efforts.

Second, in October 2012, ACI created a sham part-time Spanish “translator” position so that it could employ an individual whose real job was primarily to provide a stream of patient referrals.  The individual was simultaneously employed at an organization that refers individuals to substance abuse clinics.  ACI placed the individual on its payroll to receive referrals to its treatment programs.  The individual translated only a few times, even though she remained on the payroll until March 2017 and was paid more than $75,000.

Third, from July 2012 through July 2013, ACI admitted Medicaid patients into its inpatient treatment program who were not evaluated by a qualified health care professional to determine the appropriate level of care, as required by applicable state law.  ACI staff fraudulently created medical forms containing a photocopied physician’s signature to make it appear that a physician had conducted the evaluation.  The falsified forms were used to support claims for reimbursement, for the indicated level of care, from Medicaid.

In the settlement agreement, ACI and YOHAY admit, acknowledge, and accept responsibility for the following conduct:

Role of Drivers:

  • From January 2014 to December 2019, ACI employed drivers who were involved in identifying, recruiting, and providing transportation services for new patients who were admitted into ACI’s inpatient treatment program.  During the relevant period, ACI employed approximately five to 10 drivers at any given time.
  • ACI drivers rode in unmarked vehicles and picked up individuals, who were often homeless, from a wide range of locations, including parks, train stations, shelters, hospitals, under bridges, and from other substance abuse treatment centers. 
  • ACI financially incentivized its drivers to bring in new patients.  ACI paid the driver who brought in the most new patients during the relevant period an annual salary of more than $200,000, as well as a bonus consisting of thousands of dollars.
  • ACI’s management, including YOHAY, were made aware of allegations that certain ACI drivers gave some potential new patients money, drugs, and/or alcohol to induce them to enroll in ACI’s inpatient program.  However, ACI and YOHAY failed to investigate these allegations adequately or take appropriate corrective actions in response.

Use of Paid Employee to Make Patient Referrals:

  • In October 2012, ACI created a part-time “translator” position and hired an individual to fill the position who was simultaneously employed at an organization that refers individuals to substance abuse clinics, like ACI, for treatment as an alternative to incarceration. 
  • Throughout the course of her employment with ACI, the individual provided ACI managers with lists of individuals who were being referred by the organization to ACI for substance abuse services. 
  • Although the individual was hired to be a “translator,” she rarely was asked by ACI to provide any translation services.  The individual translated for ACI only a few times in 2012, and thereafter, she did not perform any translation services for ACI but continued to be paid by ACI until 2017.
     

Medical Assessments Not Completed by Physicians:

  • From July 2012 through July 2013, ACI admitted certain patients into its inpatient program who were not properly evaluated by a qualified health professional as required. 
  • During the relevant period, ACI admissions staff, who were not qualified health professionals, conducted the patient assessment and completed the admissions criteria forms.  These forms, which were part of a patient’s file used to support claims for reimbursement from Medicaid, contained a photocopy of a physician’s signature.

In connection with the filing of the lawsuit and settlement, the Government joined a private whistleblower lawsuit that had previously been filed under seal pursuant to the False Claims Act.

Ms. Strauss thanked HHS-OIG, the Medicaid Fraud Control Unit of the New York State Attorney General’s Office, and the New York State Office of Addiction Services and Supports for their assistance with the case. 

The case is being handled by the Office’s Civil Frauds Unit.  Assistant U.S. Attorney Kirti Vaidya Reddy is in charge of the case.

Topic(s): 
Health Care Fraud
Contact: 
James Margoln, Nicholas Biase (212) 637-2600
Press Release Number: 
20-298
Updated December 21, 2020