The U.S. Attorney’s Office for the District of New Jersey announced Dec. 5 it reached a settlement with Camden Treatment Associates LLC (CTA), an opioid abuse treatment facility, to resolve criminal and civil claims it caused kickbacks, obstructed a federal audit and fraudulently billed Medicaid.
Under the settlement, Camden-based CTA entered into a deferred prosecution agreement (DPA) and consented to pay a total $3.15 million.
Of that amount, $1.5 million goes toward criminal penalties to resolve allegations that CTA violated the federal Anti-Kickback Statute and obstructed a Medicaid audit. CTA also entered into a civil settlement agreement to pay $1.65 million to the United States to resolve claims that it violated the federal False Claims Act by submitting fraudulent claims to Medicaid.
According to the DPA, CTA admitted to having a kickback relationship between 2009 and 2015 with another company that was owned and managed by related parties, which it ordered all of its methadone mixing services from.
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“This arrangement resulted in kickbacks being paid because the second company paid the profits it made on CTA’s orders of methadone mixing to the related parties who owned and managed both companies,” the U.S. Attorney’s Office said in a press release. “As a result, CTA was induced to order services from the second company and to have CTA patients receive treatment using methadone mixed only by that company. CTA received more than $2.78 million from Medicaid for methadone administration services.”
“In a separate criminal scheme, CTA obstructed a Medicaid contractor’s 2016 audit of CTA’s claims for payment,” the U.S. Attorney’s Office added.
The $1.65 million civil settlement resolves allegations that CTA submitted false claims to Medicaid stemming from the kickback relationship.
“This settlement further resolves allegations that between 2013 and 2016, CTA failed to comply with certain federal and state regulations governing substance abuse treatment facilities,” the U.S. Attorney’s Office said. “Specifically, CTA allegedly failed to maintain proper supervision and staffing at its facility. Instead, CTA typically used non-credentialed ‘counselor interns’ to perform services at the facility and did not have sufficient licensed staff to properly supervise the interns.”
The U.S. Attorney’s Office noted that the claims settled by this agreement are allegations only and there has been no determination of liability.
As part of the DPA, CTA is required to take the following measures:
- Have an effective compliance program, including enhanced compliance policies and annual compliance training regarding federal health care laws
- Retain an independent health care compliance consulting firm specializing in substance abuse disorder facilities to conduct a comprehensive review of its compliance program and to make improvement recommendations
- Create an independent board of advisors to oversee company compliance relating to federal health care laws
- Have a chief compliance officer to oversee compliance-related functions at the company
- Annually certify that its compliance program is effective
- Provide written reports to the United States every six months over a three-year period detailing its progress in developing and enhancing its compliance program
“Today’s announcement resolves outstanding issues which occurred more than six years ago at Camden Treatment Associates’ former location and had no impact on patient care,” Paul Zoubek of Montgomery McCracken Walker & Rhoads LLP, outside counsel for CTA, told NJBIZ in a statement. “CTA has a long-standing commitment to improving operations and has made significant investments over the past several years to become a stronger organization.
“CTA remains dedicated to serving the Camden community and providing its patients with exceptional care in its state-of-the-art facility.”