The owner of a now-defunct Rhode Island-based chain of addiction treatment centers has been sentenced to more than eight years in federal prison for defrauding Medicare, Medicaid, and other health insurers out of millions of dollars.
The 62-year-old owner from Newton, Massachusetts, admitted in court that he and his company shortchanged patients suffering from substance abuse disorders in Rhode Island and Massachusetts. They failed to provide required counseling sessions and treatment, which were critical to the patients’ care, while fraudulently billing Medicare, Medicaid, and other insurers for those sessions. In many cases, the owner and his company billed for 45-minute sessions, while the actual sessions lasted only 5–10 minutes.
Under the guise of running recovery clinics that supposedly provided much-needed medical and therapy services, the defendants shortchanged their patients, offering little to no therapy or support, all while billing Medicare and other insurers as if they had fully served their patients. One counselor was known as the “five-minute queen” because the counseling sessions lasted no longer than five minutes. In another instance, an employee was equipped with a bell to ensure that the flow of patients moved along briskly.
The defendants admitted to submitting a fraudulent application to Medicare, misrepresenting the owner’s role in the business and failing to disclose his 2013 criminal conviction for federal tax crimes, which was relevant to Medicare’s consideration of the application. The owner had been sentenced to 27 months in prison in 2013 for that conviction.
On January 7, 2025, the owner was sentenced to 98 months in federal prison, followed by three years of supervised release. He was also ordered to pay restitution of $3,515,100. At the government’s request, the court ordered the forfeiture of approximately one million dollars from various bank and investment accounts, along with the owner’s interest in a beachfront property in Panama and two luxury vehicles.
The owner’s company was sentenced to one year of probation and ordered to pay restitution in the amount of $3,515,100.
Compliance Perspective
Issue
Healthcare fraud involves intentionally submitting false or misleading claims to Medicare, Medicaid, or private insurers for services that were not provided or were misrepresented. This includes inadequate documentation, substandard care, and failure to meet service requirements. False claims can result in significant penalties, including fines up to three times the loss to the programs, plus $11,000 per fraudulent claim. Healthcare providers must implement comprehensive policies and procedures to prevent fraud, ensure accurate billing, and verify employee qualifications. Regular background checks, including criminal history and exclusion list verification, are essential for maintaining compliance with healthcare regulations.
Discussion Points
- Review and update policies and procedures to prevent fraudulent billing and ensure accurate documentation and compliance with healthcare regulations, reflecting current best practices.
- Provide comprehensive training to all staff on identifying and preventing healthcare fraud, including recognizing false claims and suspicious billing practices. Ensure that employees understand their responsibility to report any concerns promptly. Keep records of training completion and ensure that staff members are regularly updated on relevant policies and regulations.
- Conduct regular audits and background checks on employees to verify qualifications, certifications, and exclusion status, ensuring that all staff are compliant with regulatory requirements and remain eligible to work in healthcare.
*This news alert has been prepared by Med-Net Concepts, Inc. for informational purposes only and is not intended to provide legal advice.*
