Substance Abuse Treatment Providers Pay More Than $1.3 Million to Settle False Claims Act Allegations

United States Attorney John H. Durham and Connecticut Attorney General George Jepsen today announced that NEW ERA REHABILITATION CENTER, DR. EBENEZER KOLADE and DR. CHRISTINA KOLADE have entered into a civil settlement agreement with the federal and state governments in which they will pay $1,378,533 to resolve allegations that they violated the federal and state False Claims Acts.   

NEW ERA REHABILITATION CENTER (“NEW ERA”) provides behavioral health and substance abuse services to patients at its clinics in New Haven and Bridgeport.  DR. EBENEZER KOLADE and DR. CHRISTINA KOLADE (the “KOLADES”) are the co-founders and owners of NEW ERA.

As part of their practice, NEW ERA and the KOLADES provide methadone maintenance services to Medicaid beneficiaries.  Medicaid pays providers a weekly “bundled rate” for methadone maintenance services.  Included in the bundled rate, pursuant to state regulations, is the intake evaluation of the patient; the initial physical examination; on-site drug abuse testing and monitoring; and individual, group, and family counseling services.  The counseling services provided to methadone maintenance patients are included in the bundled rate and should not be billed as separate services.

The government alleges that NEW ERA and the KOLADES provided methadone maintenance counseling services to its Medicaid patients and were paid the bundled rate for those services, but also submitted claims to Medicaid for psychotherapy services for the same patients.  The government alleges that NEW ERA and the KOLADES did not provide the psychotherapy services, but only provided methadone maintenance counseling services, which were already included in the weekly bundled rate.  The United States and the State of Connecticut contend that the claims NEW ERA and the KOLADES submitted for psychotherapy services constituted false claims submitted to the Medicaid program. 

To resolve the allegations under the federal and state False Claims Acts, NEW ERA and the KOLADES have agreed to pay $1,378,533, which covers conduct occurring from October 1, 2009 through November 30, 2013.

“We must ensure that taxpayers’ health care dollars used for substance abuse treatment are properly spent,” said U.S. Attorney Durham.  “Medical practices and physicians who treat patients for substance abuse must bill their services accurately and honestly.  Health care providers who submit false claims to federal health care programs will be held accountable.”

This matter was investigated by the Office of Inspector General for the Department of Health and Human Services.  The case is being prosecuted by Assistant U.S. Attorney Richard M. Molot and by Assistant Attorneys General Antonia Conti and Robert Teitelman of the Connecticut Office of the Attorney General.

People who suspect health care fraud are encouraged to report it by calling 1-800-HHS-TIPS or the Health Care Fraud Task Force at (203) 777-6311.