An alleged multimillion-dollar Medicaid fraud scheme in New York City has been exposed by a number of whistleblowers. A whistleblowers lawsuit has been filed against Narco Freedom Inc., a network of non-profit substance abuse treatment homes. Six former employee’s, have come forth claiming that the company engaged in a number of Medicaid fraud schemes. This includes insurance fraud, kickbacks, and providing excessive services, backdating records, falsifying records, and billing for alleged treatments to patients.
An investigative case was started in October in which the US government had intervened. The whistleblower lawsuit alleges the owners of Narco Freedom misused millions of Medicaid dollars to live a luxurious lifestyle. The alleged scheme also involves Joining Hands Management Inc. and some people who have to do with both companies, the government said.
Narco Freedom has been operating since 1971, offering a variety of services like substance abuse programs, social, medical , and mental services to more than 35,000 people.
Narco Freedom runs sober houses also known as “Freedom Houses”, which are offered to people undergoing treatments. They are also required to enroll in outpatient programs still run by the same company, the whistleblowers said.
Narco Freedom scams Medicaid with excessive services by allegedly forcing patients to stay in treatment by submitting false claims, as well as falsifying medical records and treatment plans. The lawsuit said, ” Narco Freedom then bills Medicaid for the outpatient program services that are a condition of residency at its Freedom Houses, as a result of this illegal kickback scheme, Narco Freedom has received tens of millions of dollars in Medicaid funds.”
According to the government, kickbacks, were also allegedly made by Narco Freedom houses by making monthly payments to Joining Hands, which also runs their own sober houses. Joining hands then referred its residents to Narco Freedom’s outpatient programs in exchange for the kickback of funds. Medicaid was billed for treatments that did not comply with Medicaid regulations.
Narco Freedom houses are also accused of insurance fraud by running unregulated residential treatment programs, that were in violation of numerous Medicaid rules, were not properly staffed and were in facilities that were not fit for human habitation. Narco Freedom provided this transitional housing to over 1,500 homeless New Yorkers and requiring them to the participation in its treatment programs, just to collect Medicaid on them they have already been cited for this illegal activity.
The Medicaid fraud lawsuit, however, is nothing new to Narco Freedom as its top executives faced earlier charges of multiple counts of fraud and larceny, it is estimated they have bilked the Medicaid system and the US Taxpayers tens of millions of dollars.