The referrals from licensed treatment centers to sober living facilities owned by the same or related parties is one red flag. In addition, a common issue is whether reduced rent to impoverished or unemployed clients is a referral payment.
The cases that have more extreme facts are the ones that then get referred for criminal prosecution. A recent case has extreme facts alleged including billing for services not provided, falsification of records, not discharging clients using drugs, and excessive or unnecessary urine drug testing.
On December 21, 2016, six Florida defendants, including owners, doctors, and an employee of sober homes and alcohol and drug addiction treatment centers were charged in a health care fraud scheme for filing fraudulent insurance claim forms and license applications and defrauding health care benefit programs.
Kenneth
Chatman, Dr. Joaquin Mendez, Dr. Donald Willems, Fransesia Davis, Michael Bonds and Laura Chatman are charged
in a Criminal Complaint with conspiracy to commit health care fraud, in
violation of Title 18, United States Code, Section 1349. Kenneth and
Laura Chatman are also charged with making false statements related to a health
care matter, in violation of Title 18, United States Code, Section 1035(a)(1).
According
to the Criminal Complaint, defendants Chatman, Davis, and Bonds
established four sober homes, including Stay’n Alive, Inc., Redemption Sober House,
Inc., and Total Recovery Sober Living LLC, and an unnamed facility at 962 West
43rd Street, West Palm Beach, in Palm Beach County, Florida, which were
purportedly in the business of providing safe and drug-free residences for
individuals suffering from drug and alcohol addiction.
The Complaint alleges that to
obtain residents for the sober homes, some members of the conspiracy provided
kickbacks and bribes, in the form of free or reduced rent and other benefits,
to individuals with insurance who agreed to reside at the sober homes, attend
drug treatment, and submit to regular drug testing that members of the
conspiracy could bill to the residents’ insurance plans.
One of the allegations is that although the sober homes were purportedly drug-free residences, some of the defendants permitted the residents to continue using drugs as long as they attended treatment and submitted to drug testing.
One of the allegations is that although the sober homes were purportedly drug-free residences, some of the defendants permitted the residents to continue using drugs as long as they attended treatment and submitted to drug testing.
Defendants
Kenneth Chatman, Bonds, and Davis allegedly referred the sober homes’ residents with
insurance to treatment centers owned by Kenneth Chatman but titled in the name
of Laura Chatman. These treatment centers purportedly offered clinical
treatment services for persons suffering from alcohol and drug addiction. It was alleged that in some or most instances, Mr. Chatman knew that the sober home residents
referred to the treatment centers, Journey to Recovery LLC, in Lake Worth,
Florida, and Reflections Treatment Center, LLC, in Margate, Florida, were using
drugs.
Mr. Chatman allegedly hired doctors, including Drs. Mendez and Willems, to
serve as medical directors of his treatment centers. The doctors allegedly ordered drug
treatment and drug testing for the sober home residents, specifically expensive
urine and saliva drug screens and allergy testing, regardless of whether such
treatment and testing were medically necessary.
It was alleged that the defendants provided services meant solely to maximize insurance reimbursements. In some instances, Mr. Chatman and Ms. Davis submitted urine and saliva samples from employees instead of urine and saliva from patients.
In other instances, Mr. Chatman allegedly caused confirmatory testing to be performed and billed for residents who left the sober homes and were no longer receiving treatment at the treatment centers. Doctors Mendez and Willems allegedly also falsely documented patient files to make it appear as though they reviewed the test results.
It was alleged that the defendants provided services meant solely to maximize insurance reimbursements. In some instances, Mr. Chatman and Ms. Davis submitted urine and saliva samples from employees instead of urine and saliva from patients.
In other instances, Mr. Chatman allegedly caused confirmatory testing to be performed and billed for residents who left the sober homes and were no longer receiving treatment at the treatment centers. Doctors Mendez and Willems allegedly also falsely documented patient files to make it appear as though they reviewed the test results.
The more extreme allegations are that Mr. Chatman and Ms. Davis engaged in various tactics to keep patients from
being able to leave Reflections and Journey, including threatening violence,
and confiscating their belongings, such as car keys, telephones, medications,
and food stamps, in order to maintain the ability to continue fraudulently
billing the insurance companies. It is common for sober living and treatment centers to take medications and cell phones and any funds for sobriety reasons so it would need to be shown that these were for non-treatment purposes.
The allegations got more outrageus with the Complaint alleging that Mr. Chatman and Ms. Davis recruited and coerced female patients and residents into
prostitution, telling them that they would not have to pay rent or participate
in treatment or testing so long as they would allow him to continue to bill
their insurance companies for substance abuse treatment and testing that the
patients did not receive.
It is also alleged that there was self-referral in that Kenneth and Laura Chatman allegedly submitted to the Florida Department of
Children and Families fraudulent applications for licensure for Journey to
Recovery and Reflections Treatment Center, stating that Laura Chatman was the
sole owner of those entities and hiding the fact that Kenneth Chatman owned and
operated the treatment centers.
Posted by Tracy Green, Esq.
Green and Associates, Attorneys at Law
Email: tgreen@greenassoc.com
Phone: 213-233-2260
