A drug and alcohol rehabilitation facility in Bridgeton, New Jersey, has agreed to pay $19.75 million to resolve allegations that it violated the federal False Claims Act, US Attorney Alina Habba announced on April 30. According to the allegations, the facility submitted claims to the Veterans’ Health Administration’s (VHA) Community Care Program and New Jersey’s Medicaid program for short-term residential treatment and partial hospitalization services it was not properly licensed or contracted to provide, and misled state inspectors.
The settlement resolves allegations relating to the care provided and billed by the facility, principally to the VHA Community Care Program. The United States alleged that, from January 1, 2022 through December 31, 2024, the facility provided services for which it had no license; sought to conceal those improperly performed services from state inspectors; failed to employ a sufficient number of properly-credentialed caregivers; failed to employ a sufficient number of caregivers credentialed in treating patients with both mental health and addiction issues; provided the same care to veterans it provided to other patients, while claiming to be providing specialized care; and kept false, inconsistent, and inadequate records of the care provided to veterans and other patients.
The facility cooperated with the investigation, conducted its own internal review, took corrective actions, and disciplined individuals involved.
The resolution was the result of efforts by the United States Attorney’s Office for the District of New Jersey and the Offices of Inspectors General for the Department of Veterans Affairs and Department of Health and Human Services.
Compliance Perspective
Issue
All healthcare services and items billed to government or private payers must be medically necessary, properly documented, and compliant with applicable licensure and contracting requirements. Submitting claims for services that a facility is not authorized, licensed, or contracted to provide may violate the False Claims Act. Each improperly billed service can be treated as a separate claim, potentially resulting in significant financial penalties. Staff should be trained to recognize and report potential compliance issues, and facilities must foster a culture that encourages reporting without fear of retaliation.
Discussion Points
- Review your policies and procedures to ensure that all billed services are medically necessary, properly documented, and provided under the appropriate licensure and contractual arrangements. Policies should clearly address how compliance with these requirements is monitored and maintained.
- Provide training to appropriate staff on billing compliance, documentation standards, and the importance of verifying licensure and scope of services. Reinforce how to recognize potential billing or documentation issues, and ensure staff know how to report them through established channels, such as a supervisor, the compliance officer, or via the anonymous hotline.
- Periodically audit to verify the accuracy of billing and documentation. Ensure that services billed are supported by proper credentials and licenses, and that documentation reflects the actual care provided. Address and correct any discrepancies promptly.
*This news alert has been prepared by Med-Net Concepts, Inc. for informational purposes only and is not intended to provide legal advice.*