Drug clinic admits phony billing scheme, agrees to pay NYS $6 million

New York Attorney General Letitia James on Monday announced an agreement with A.R.E.B.A.-CASRIEL, Inc. d/b/a/ Addiction Care Interventions Chemical Dependency Treatment (ACI) and its majority owner, Steven Yohay, regarding multiple schemes that defrauded the state Medicaid program, as part of a joint state-federal investigation. 

Filed this past Friday in the United States District Court for the Southern District of New York, ACI and Yohay admitted that they failed to respond to reports of wrongdoing — which the investigation substantiated — that ACI engaged in multiple illegal schemes, including that its employees bribed homeless people into getting inpatient treatment there.

ACI admitted to many instances of  fraudulent behavior, such as: paying an individual for a “no-show” job at ACI, while that person worked as a full-time employee at another organization with the same function as ACI; encouraging “outreach” drivers who regularly bribed potential Medicaid patients into seeking inpatient treatment at ACI, many of whom were experiencing homelessness at the time; and allowing Medicaid patients to enroll in its inpatient treatment program despite not being evaluated by a qualified health care professional. 

Instead of the evaluations, ACI used fraudulent signatures from medical providers that were photocopied onto medical forms in order to falsely substantiate an evaluation by a medical provider where none had occurred, the New York State AG’s Office said. 

Among these allegations, the most serious incidents took place between January 2014 and December 2019, when ACI’s “outreach” drivers coerced out-of-state residents to enroll in ACI’s inpatient treatment program by offering them money, drugs and/or alcohol. 

“Exploiting individuals who are experiencing homelessness is disgraceful,” said Attorney General James. “My office will use its power to seek out Medicaid providers looking to defraud the Medicaid system and New York state taxpayers.”

ACI has agreed to reimburse the New York state Medicaid program in the amount of $3 million, and Yohay personally agreed to reimburse the New York state Medicaid program another $3 million. 

Additionally, all current owners of ACI, including Yohay’s brother, agreed to divest themselves of their ownership interests in ACI. Yohay has also agreed to be banned from participation as a provider in any government-funded health care program for fifteen years. 

The new owners of ACI have agreed to be bound by the terms of this agreement, which includes changes to the ACI program to ensure it steers clear of future illegal conduct. 

The case against ACI and Yohay was initiated by a former employee and whistleblower, who will receive a portion of the agreement. The whistleblower lawsuit was filed under the qui tam provisions of the federal and New York State False Claims Act, which allows average citizens to file civil actions on behalf of the government and to share in the proceeds of any recovered funds.

New York’s claims in the qui tam case were handled by the Medicaid Fraud Control Unit (MFCU) in the Office of the Attorney General (OAG), which worked closely with the U.S. Attorney’s Office for the Southern District of New York.

This case is being prosecuted by Special Assistant Attorneys General David G. Abrams and Amy B. Delfyett, with assistance from Civil Enforcement Chief Alee N. Scott and NYC Regional Director Christopher M. Shaw. 

The Medicaid Fraud Control Unit of the Office of the New York State Attorney General enforces laws that protect the public by addressing Medicaid provider fraud and that protect nursing home residents from abuse and neglect.

If someone believes they have information about Medicaid provider fraud or about an incident of abuse or neglect of a nursing home resident, they can file a confidential complaint online on the OAG website at https://ag.ny.gov/nursinghomes or by calling the MFCU hotline at 212-417-5397.