Shatterproof called for tighter oversight of addiction treatment after federal prosecutors alleged that four people submitted claims exceeding $1.6 billion to private insurers for sham programs.
The U.S. Department of Justice (DOJ) announced charges Oct. 22 against Nathan Young and David Young of Los Angeles, and Honey Phipps and Cody Phipps of Greenville, Texas. Prosecutors allege the Youngs controlled dozens of businesses presented as treatment providers and sent brokers to approach people in vulnerable situations, including those experiencing homelessness or poverty and people attending substance use support groups.
Prosecutors say the defendants sought insurance plans with high reimbursement rates and often signed people up for new policies they were not eligible to receive. DOJ also alleges the Youngs moved patients between facilities while limiting their contact with relatives and ability to leave, allowing billing to continue. The indictment further alleges that some patients who tried to leave were to be drugged.
Shatterproof issued its response Oct. 29, a week after the charges were announced. CEO Pam Jenkins said, “Quality addiction treatment should be the expectation, not the exception.” The nonprofit says its Quality Matters Family Guide helps families understand what quality care looks like and prepare questions for providers.
The alleged billing total was more than $1.6 billion; DOJ did not state how much insurers paid.
The four defendants face conspiracy charges involving health care fraud and wire fraud, and conspiracy to violate the Eliminating Kickbacks in Recovery Act (EKRA), as well as three health care fraud counts and two EKRA counts. Nathan and David Young face five additional health care fraud counts and four additional EKRA counts. DOJ said defendants are presumed innocent unless prosecutors prove guilt beyond a reasonable doubt in court.
