Largest takedown in history halts opioid diversion, brokering, kickbacks

Catching fraudulent healthcare providers continues to be a collaborative process between federal and local authorities, and this week’s snare was unprecedented. On Thursday, federal officials announced a massive, nationwide enforcement action that involved 412 people and approximately $1.3 billion in false billings, including some from addiction treatment centers. Thirty state fraud units assisted in the takedown.

Federal officials also noted that 120 of the individuals charged were involved in prescribing and diverting opioids, making this the largest opioid-related fraud takedown in U.S. history.

Other charges range from patient brokering to false billing in Medicare, Medicaid and TRICARE programs. All treatment centers should be on alert because managed care payers tend to follow up with their own investigation units in the commercial segment and because the units typically cast a wide net when considering what qualifies as fraud.

"While the number of providers engaging in Medicare and Medicaid fraud is a small minority, we know that a few bad apples can spoil the public's faith in the whole system, so anti-fraud measures are needed," Tom Coderre, senior advisor with Altarum Institute and former SAMHSA official, tells Behavioral Healthcare Executive. "I am also concerned about increasing reports of fraudulent activity at substance use treatment facilities that appear to put profit ahead of people. Families and patients must be protected against predatory actors." 

But Coderre says the overall trends are positive. More providers are using prescription drug management databases to better understand prescribing habits and are adopting more effective practices in prescribing and treatment. Moving away from fee-for-service payments to a value-based payment system will also help prevent fraud, he says. 

South Florida is notorious

Among the 41 takedown areas, South Florida led with 77 people charged associated with $141 million in suspected fraud. One addiction treatment center’s former owner and a known patient broker allegedly conspired to illegally entice patients to enter Real Life Recovery Delray and the Halfway There Florida sober home. Both were arrested on Tuesday. Alleged fraud among the two providers also included splitting and mixing urine samples to obtain reimbursement for drug screenings as well as kickbacks to patients in the form of drugs, gift cards, plane tickets and trips to casinos and strip clubs. Their total take, according to the Department of Justice, amounted to $58 million.

Elsewhere, in California, 17 people were charged in relation to $147 million worth of fraud, and four others were charged in a drug-diversion and kickback scheme. In Texas, two people that ran a pain management clinic saw approximately 60 to 70 patients per day and issued medically unnecessary prescriptions for hydrocodone in exchange for approximately $300 cash per visit. 

In the past fiscal year, the Department of Justice has collectively won or negotiated more than $2.5 billion in judgments and settlements related to healthcare fraud. 

See individual indictments here.