Payoff ends Medicaid fraud & kickback troubles for Camden methadone clinic

An opioid abuse treatment facility in Camden will pay a total of $3.15 million to resolve criminal and civil claims that it caused kickbacks, obstructed a federal audit, and fraudulently billed Medicaid but a justice advocate says the arrangement is “white-washing white collar crime.”

Licensed by the New Jersey Department of Human Services and federally accredited by Commission on Accreditation of Rehabilitation Facilities (CARF), Camden Treatment Associates LLC (CTA) is an outpatient methadone treatment center that claims it has been addressing drug addiction since it was founded in September 2001.

Without admitting any wrongdoing and despite evidence that the company engaged in serious crimes, CTA agreed to pay $1.5 million in criminal penalties to resolve allegations that it violated the federal Anti-Kickback Statute and obstructed a Medicaid audit.

“Camden Treatment Associates collected at least $2.78 million from Medicaid and it broke the law by paying kickbacks, obstructing a federal audit, and fraudulently billing the government,” said Lisa McCormick, a critic of civil settlements and deferred prosecution agreements that she said are used for “white-washing white collar crime.”

“As a corporation, they play by different rules than you or I,” said McCormick, who reiterated her call for a ‘corporate death penalty’ that would punish white collar crimes by abolishing the companies that engage in thievery and other corrupt practices. “Here is a corporation that got caught stealing almost $3 million from Medicaid and as punishment, they have to give about half of it back and promise not to do it again for three years.”

“The crimes here were committed by people, whose names are not divulged by this payoff deal,” McCormick said. “The criminals will write a check and go back to doing business as usual, trafficking in opiates at taxpayer expense.

As part of the resolution, a criminal information was filed on December 2, 2022 in Camden federal court charging CTA with this conduct and the company entered into a three-year deferred prosecution agreement (DPA) that requires it to abide by certain measures to avoid conviction.

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.

Although the price for opioid treatment may vary based on a number of factors, a December 2021 analysis from the National Institute on Drug Abuse reported that a certified program of daily methadone maintenance visits, including medication and integrated psychosocial and medical support services, may reasonably cost $126 per week or $6,552 per year for each patient.

According to First Assistant U.S. Attorney Vikas Khanna, whose brother is a Congressman representing California, the defendant admitted that between 2009 and 2015, CTA and a second company were owned and managed by related parties.

Armed FBI agents wearing tactical gear stormed the building and raided the methadone clinic around 7:30 a.m. Wednesday morning on April 18, 2018. FBI agents carried boxes of evidence from the Camden Treatment Associates and an attorney for the firm identified the separate but related entity as Urban Treatment Associates.

State government officials paid owners of the drug treatment clinic to move from its former location near Roosevelt Park and Camden City Hall around the same time that FBI agents were conducting raids to collect evidence about the kickback scheme.

A recovering addict who had been clean for three years said she had to wait about three hours to get dosed as a result of the raid but there was very little comment or complaint about the incident in any public forum.

Khanna said CTA admitted it had a kickback relationship with the second company in which CTA ordered all of its methadone mixing services from the second company and paid it more than $125,300 for those services.

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.

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. CTA submitted falsified materials to the auditor purporting to justify its claims to Medicaid.

Specifically, CTA added patient and counselor signatures to patient files, altered names of counselors listed as providing services, added credentials for staff listed as performing services, added sign-off dates for services and, in some instances, submitted entire patient notes to files to justify services rendered.

Metadata from CTA’s electronic patient software program revealed that the company employed these fraudulent means.

Despite its record of kickbacks and other crimes, CTA remains in business and largely dependent on taxpayer money from Medicaid for distributing methadone to drug addicts.

The clinic reportedly treats about 1,000 patients a day, so the facility is likely to make more than $6 million annually.

Rowan University/Rutgers-Camden Board of Governors in 2017, signed a $1.55 million agreement with the owner of the Urban Treatment Associates clinic to purchase its former site across from Camden’s city and county government offices and assist in the relocation to Sixth and Atlantic avenues.

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