Recently, Quarles & Brady Partner Kirti Reddy wrote an article for the American Health Law Association about a major behavioral health fraud scheme uncovered in Arizona. The scheme specifically targeted homeless individuals and/or Native Americans for fraudulent substance use treatment. As co-chair of the firm’s Government Enforcement Defense and Investigations team, Reddy shared her insights on the two primary categories of fraud that were discovered.
The first type of fraud involved fraudulent billings by behavioral health treatment providers, who were found to be billing for services not actually provided or necessary to the Arizona Health Care Cost Containment System (AHCCCS). Additionally, patient brokering, which involves referring patients to addiction treatment providers in exchange for payment, was also a significant component of the fraud.
Perpetrators of the scheme reportedly bribed victims by offering housing in unlicensed “sober living” homes and enrolled non-Native Americans in Arizona’s American Indian Health Program. Subsequently, victims were sent to behavioral health treatment centers not for proper treatment but simply to allow the treatment centers to bill for services to AHCCCS. This exploitation of vulnerable individuals is both disheartening and concerning, and the discovery of this scheme highlights the need for increased oversight and accountability in the behavioral health industry.