On Friday, September 15th, the United States Attorney’s Office for the District of Massachusetts (United States) and the Massachusetts Attorney General’s Office (Massachusetts) filed a joint complaint in the United States District Court for the District of Massachusetts against a Massachusetts-based substance abuse treatment provider. According to the complaint, the United States seeks to recover damages, restitution, and civil penalties against Bournewood Inc. d/b/a Bournewood Health Systems (Bournewood) and First Psychiatric Planners, Inc. d/b/a Bournewood Hospital (FPP) under the federal False Claims Act (FCA) and under the common law. Massachusetts seeks to similarly recover under the Massachusetts False Claims Act (MFCA), the Massachusetts Medicaid False Claims Act (MMFCA), common law. The case was initially filed as a qui tam whistleblower action in 2021 by the former operator of the group of sober homes, David Perry.

Specifically, the United States and Massachusetts alleged that Bournewood and FPP induced thousands of Medicare and Medicaid patients to use their outpatient program, promising free sober housing, which violated federal and state anti-kickback and false claims laws.

According to the complaint, the defendants induced substance abuse recovery patients to enroll in and attend the defendants’ outpatient, intensive substance use treatment program by paying for and offering to pay for sober housing for the substance use recovery patients who agreed to attend the defendants’ outpatient program.

The complaint alleges that such behavior violated the federal and Massachusetts Anti-Kickback Statutes. Through such illegal conduct, the complaint also alleges the defendants caused the submission of false claims for payment to federal and state healthcare programs in violation of the FCA, MFCA, and MMFCA.

The defendants are believed to have received over $7.5 million in reimbursements for participants in its outpatient programs from federal health care programs and $1.85 million dollars in kickbacks to sober home operators from September 2013 to May 2022.

The Federal government also alleged that the two companies, subsidiaries of Arizona-based Alita Care Inc., ignored safety concerns about some of the sober housing, which included complaints of sexual solicitation and harassment.

Takeaway: The pursuit of this case by both the Federal government and the Massachusetts State government demonstrates their commitment to join forces and use all statutory tools available to investigate and challenge the relationships between substance abuse and behavior health treatment providers and sober homes.