Legal Services for Drug Rehabilitation Facilities
Drug rehabilitation facilities, drug treatment centers, and sober living homes across the U.S. are being charged and investigated for carrying out health care fraud and insurance fraud schemes.
According to the Center for Disease Control and Prevention (“CDC”), admissions to treatment facilities has gone up over 500% between 1999 and 2008.
This need for treatment led to an influx of treatment centers and sober living homes and created more opportunities for the individuals running these facilities to commit fraud. As a response, the federal government has been taking a long hard look into the facilities and their practices.
So what’s the problem..?
The problem is that while most drug treatment centers are legitimate facilities, trying to provide a safe place for recovering addicts to live, some facilities are undermining and discrediting the reputation of legitimate sober homes by engaging in fraudulent acts.
As a result, more and more innocent individuals are being accused of health care fraud, insurance fraud, and violations of the False Claims Act by federal, state, and local agencies.
Our attorneys have experience defending health care professionals against charges of fraud and can help you deal with health care fraud investigations. We have represented doctors, pharmacists, administrators, clinics, hospitals, and other health care industry professionals.
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What Is the Difference Between a “Drug Treatment Center” and a “Sober Living Home?”
“Sober living homes” are simply places for recovering addicts to live in a drug-free environment.
Generally, most “sober living homes” operate under a landlord-tenant agreement. This means that the resident recovering addict pays rent to the landlord in exchange for a place to live–without requiring the landlord to provide any form of treatment.
“Drug treatment centers,” also known as “inpatient drug rehab,” or “residential addiction rehab centers,” on the other hand, do provide treatment for these individuals. This means that these facilities must also be licensed to provide medical treatment.
What is “Sober Living Home Fraud?”
“Sober home fraud,” as is has been labeled by the federal government, is an umbrella term which refers to any drug rehabilitation facility, treatment center, or sober living home that engages in health care fraud, insurance fraud, or violations of the False Claims Act.
Regardless of whether you are operating a “sober living home” or a “drug treatment center,” you may face allegations of health care fraud and insurance fraud related to your practice.
Kenneth Chatman legally owned and operated several sober living homes, but he was not allowed to own a treatment facility or get the proper licensing because he was a previously convicted felon.
After opening up some sober living homes, he decided to open a treatment facility under his wife’s name in order to increase revenue.
Fraud in the Chatman Treatment Facility
Once the treatment facility was opened, Chatman began requiring patients to provide urine and saliva samples three times per week, even though he knew that they were continuing to use drugs in his facilities.
If a patient didn’t show up, Chatman would instruct his employees to pretend to be the patient and provide the sample themselves.
Chatman did this because the patient’s insurance providers would pay him $5,000 for each sample he collected in order to get the sample tested. Chatman would then personally pocket half of each of these payments ($2,500).
Chatman ultimately pleaded guilty to health care fraud, money laundering, and human trafficking and was sentenced to over 27 years in prison.
The FBI also charged Chatman for receiving “kickbacks” from the testing labs in exchange for the surplus in business.
To discover more about “kickbacks” and “patient brokering,” click the links provided.
Are There National Standards for Recovery Centers?
There are no national standards for recovery centers and no national certification.
However, 27 state agencies have adopted standards created by the National Alliance for Recovery Residences (“NARR”), and many more states are considering requiring facilities to adopt the NARR standards.
Has the Government Ever Tried to Pass A National Standard?
A national standard for promoting the best practices in recovery housing has been attempted recently with the Ensuring Access to Quality Sober Living Act of 2018 (HR 4684), but it has only made it past the House of Representatives.
This bill would create national housing standards if it were to pass the Senate, and the president and would direct the Center for Substance Abuse Treatment to publish and disseminate best practices for operating recovery housing.
What is the “Health Care Fraud” Statute?
The Federal Healthcare Fraud Statute makes it a felony to defraud a health care benefit program. If you own a drug rehab facility, treatment center, or sober living home and you obtain money from a health care benefit program under fraudulent pretenses, you may be liable for violating the Federal Health Care Fraud Statute.
What Makes Filing a “False Claim” Illegal?
The False Claims Act (“FCA”) makes it illegal for any person or entity to knowingly makes a false claim or a false statement when seeking to obtain an insurance payment or benefit.
Drug rehab facilities that violate the False Claims Act Violation may face fines of up to $250,000 fine, five years imprisonment, or both, for each false claim made.
How Are Punishments Determined?
Penalties for violating the health care fraud statute are determined by the seriousness of the offense, the prior criminal history of the defendant, how much was fraudulently sought or obtained, and whether the fraud involved a single fraudulent claim or multiple fraudulent claims.
How Are Drug Rehab Fraud Investigations Initiated?
Most drug rehab fraud investigations involve auditing your claim history and patient records.
Insurance providers initiate investigations after being tipped off by a complaint, or after their computerized fraud analytics detect suspicious claim activity.
Once a health care provider or insurance carrier initiate an investigation into your practice, they are obligated to inform federal, state, and local agencies of any fraudulent activity they become aware of.
To discover “What To Do If You Receive A Letter Requesting Patient Records,” click the link.
Who Investigates Charges and Accusations of Drug Rehab Fraud?
Generally, the federal agencies involved in investigating charges of health care fraud include:
- The Office of the Inspector General (“OIG”);
- The U.S. Department of Health and Human Services (“HHS”);
- The Department of Justice (“DOJ”) Health Care Fraud Unit;
- The Federal Bureau of Investigations (“FBI”) Health Care Fraud Unit;
- The National Insurance Crime Bureau (“NICB”);
- The Coalition Against Insurance Fraud (“CAIF”); and
- The National Association of Insurance Commissioners (“NAIC”).
Federal, state, and local authorities also have multi-agency health care fraud task forces to combat health care fraud and insurance fraud. Some examples include:
- The U.S. Department of Health and Human Services Office of the Inspector General (“HHS-OIG”) Medicare Fraud Strike Force;
- The Attorney General and the Secretary of Health and Human Services Health Care Fraud Prevention and Enforcement Action (“HEAT”) initiative; and
- The State Attorneys General Offices Medicaid Fraud Control Units (“MFCU”).
How Can I Defend Myself Against Charges Of Health Care Fraud?
In order to be found liable under the False Claims Act, an individual must have had “knowledge” that the claim was false. That means that submitting a false claim for your drug rehab facility by accident would not subject you or your facility to liability.
Proving that you had the knowledge to commit health care fraud is a tough task for prosecutors because they must prove that you knowingly presented a false claim for payment or approval, made a material false, or made a misleading statement in connection to the claim.
You need to have had knowledge at the time of the alleged illegal act, in this case, the filing of the claim. If you found out that the information you provided was false after submitting the claim, you should not be found liable.
You should only be found guilty if the prosecution can prove that you had (1) actual knowledge; (2) you deliberately ignored the truth; or (3) you exhibited a reckless disregard for the truth.
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Our focus is your freedom. If you have been charged with health care fraud or informed of a government investigation into your practice, you must act now.
We will work to help you avoid probation, fines, imprisonment, and loss of your business or professional license.
Our attorneys understand the health care industry and will provide you with the assistance and guidance you need during an investigation into your facility.