Addiction Clinic Owners in Tricare Fraud Investigations – Healthcare Fraud Group

Tricare is an organization that offers insurance to military personnel and their family members. This year addiction clinic owners that accept Tricare insurance from their patients and/or family members have been the target of a full-blown federal fraud investigation and will require a Tricare fraud lawyer.

These addiction clinics provide addiction care to:

  • military officers
  • enlisted military personnel
  • veterans
  • military family members

These clinics must comply with and maintain strict Tricare billing rules and regulations. Violations, whether intentional or unintentional, can lead to Tricare fraud charges. According to the False Claims Act, clinics that are accused of fraud can face numerous civil and criminal charges.

What Constitutes Tricare Fraud?

Unfortunately, there is no clear definition of what constitutes Tricare fraud. Therefore, all clinics that accept Tricare health care insurance have to be sure that they abide by billing regulations established by Tricare. Any violation of the rules can (and usually will) be considered fraudulent insurance practice. The most common place for evidence to be found is within billing data. Normally the infraction involves the clinic overbilling Tricare. Whether the incident is fraudulent with intent or caused by a simple employee error, there is an incredibly high likelihood that the addiction clinic will be investigated. Unfortunately, the likelihood of an owner facing criminal prosecution for Tricare fraud is high.

There are addiction clinics that have been highly committed to remaining in compliance and still have found themselves in painstaking fraud investigations. An investigation is every office manager’s nightmare. Some of the infractions that commonly occur and lead to federal investigations include, but are not limited to:

Providing Treatment or Medication Without Authorization and Billing

All federal health benefit programs cover only procedures and prescriptions that are considered to be medically necessary, as determined by program guidelines. However, what Tricare considers to be medically necessary and a doctor’s medical decision based on the patient’s immediate condition and protocol for treatment may not coincide. This creates a problem for addiction clinics more than other health facilities. Under Tricare’s coverage guidelines, covered addiction treatment includes:

  • In-patient services, both emergent and non-emergent
  • Intensive outpatient programs
  • Treatment requiring medication administration
  • Mental health therapy
  • Intensive outpatient opioid treatment
  • Partial hospitalization
  • Residential substance use disorder treatment

Billing For Methods With No Tangible Proof of Success

Tricare will not cover substance abuse treatment that does not have reliable evidence demonstrating its success (as determined by Tricare). Tangible medical efficacy must be available. There are many treatment methods that aren’t proven and, therefore, are deemed medically unnecessary. Unauthorized treatments include aversion therapy. Any treatments deemed unnecessary will be considered ineligible for Tricare reimbursement under all circumstances.

Administrative errors in the keeping of records and billing and coding errors

Billing and coding errors made by administration personnel of addiction clinics and failing to keep proper records make up the highest occurrences of Tricare fraud. Usually, if the problem is an administrative mistake, the investigation is going to be a civil court matter. If there is any indication during the investigative process that coding errors or submission of falsified patient records happened intentionally, then the charges will be filed in a criminal court. Administrative errors come in various forms, most commonly:

  • Failure to generate and/or maintain patient records substantiating Tricare billing
  • Submission of wrong or outdated billing codes
  • Charging bundled services at singular rates
  • Upcoding addiction treatments to receive higher reimbursement
  • High volumes of billing for the same or similar services (raises a red flag for no medical necessity)

Non-compliant Medical Directorships

Addiction clinics have to be very careful when structuring a medical director’s pay range. Questions can be raised under the Anti-Kickback Statute if the pay that the director is receiving is not commensurate with the position or the director’s job responsibilities when reconciled with the facility’s budget. The statute bans the receipt of referral fees or any other form of remuneration concerning Tricare referrals. Criminal sentences can be administered for intentionally violating the Anti-Kickback Statute. When illegal remuneration arrangements exist, they can also lead to False Claims liabilities.

Illegal Fees Received For Referrals

Relationships with pharmaceutical companies, DME companies, laboratories, marketers, or any other health care providers, whether it is by contract or not, can raise Tricare fraud suspicions. Paying referral fees, accepting referral fees, paying compensation-based patient census, and other relational transactions are completely banned when dealing with Tricare patients.

How The False Claims Act Affects Addiction Clinics

Tricare fraud investigations usually involve inquiries into alleged violations of the False Claims Act. These typically are investigations that are compounded atop an existing Anti-Kickback Statute investigation and/or other federal law violations. Under the False Small Claims Act, if a billing request is intentionally submitted inaccurately to Tricare, there is the possibility of both civil and criminal prosecution.

For example, 18 U.S.C. § 287 of the False Claims Act states:

“Whoever makes or presents to . . . department or agency [of the United States], any claim upon or against the United States, or any department or agency thereof, knowing such claim to be false, fictitious, or fraudulent, shall be imprisoned not more than five years and shall be subject to a fine in the amount provided in this title.”

The False Claims Act imposes sentenced penalties on a per claim basis in both civil and criminal cases. Every time a code is incorrect, a claim is filed for services that were never rendered, and any other filed claims are found to be fraudulent, there will be a separate claim. Therefore, a separate charge will likely be filed in the courts. If an investigation is launched against an addiction clinic, there is a risk for tremendous loss that has the potential for penalties so substantial that the business could be in danger of going out of business.


Penalties For False Claim Act Violations

When assessing the potential penalties for an addiction clinic according to the False Claims Act, the first step is to determine if the inquiry is going to be in civil or criminal court. Even though a simple mistake in billing is not a crime, it is still a federal offense. If evidence is uncovered showing intentional fraud, the clinic owner and any other staff involved are at risk of being implicated in the investigative allegations, and will be in danger of being prosecuted criminally.

The civil penalties for Tricare fraud under the False Claims Act include but are not limited to:

  • restitution
  • fees
  • up to three times the damages
  • attorney fees payable to the US government


Criminal penalties can include substantial monetary fees and/or the imposition of federal prison sentences for each billing offense. Whether the addiction clinic is found to be civilly or criminally liable, the liability can result in a ban from participation as a Tricare addiction provider.

How NOT to be on the Receiving End of Fraud Charges

It is essential for addiction clinics to be hypervigilant when mitigating risk in order to avoid being involved in a Tricare fraud audit or investigation. Comprehensive compliance programs that are focused specifically on the Tricare billing regulations and the False Claim Act need to be adopted by all addiction clinics. Each clinic needs a program that is custom-tailored for the scope of its practice and the nature of service that it provides. It is essential that the design comprehensively addresses any issues that could lead to Tricare billing errors and subsequent violations. The fundamental elements of a Tricare compliance program include (but are not limited to):

  • written policies, procedures, and standards of conduct
  • clear and concise comprehensive documentation of all the steps that addiction clinic staff must take to be in compliance
  • third-party agreements (compliant contracts with compensation arrangements that are properly structured)
  • employment records and documentation (employees must be classified properly, including contractors)
  • records must be properly maintained
  • compliance officers and committee personnel must be designated as responsible authority figures who maintain Tricare compliance and run risk management to address any administrative issues that may arise
  • ongoing training and education; all addiction clinic staff members should have ongoing training focused on addiction clinic policy compliance and procedural performance compliant with standards of conduct
  • Clinics that focus on patient addiction should provide patient treatment that is not compromised by acknowledging and addressing the boundaries that Tricare sets forth as medically necessary
  • records that provide tangible proof of compliance – at all times clinics must be able to produce adequate documentation of medical necessity 
  • channels for reporting addiction clinic personnel – addiction clinics must provide the proper channels for confidentiality when reporting suspected Tricare violations
  • monitoring and auditing – addiction clinics must demonstrate active and constant monitoring of its Tricare compliance efforts
  • established defense – there should be documented procedural guidelines for addressing possible billing violations and enacting an immediate response in the event a Tricare audit or investigation is triggered

If addiction clinic owners develop a Tricare compliance program, it will mitigate the risk of erroneous billing and allegations of fraud. Additionally, a front-line defense should be prepared if auditors or federal agents launch an inquiry into the business protocols of the clinic. With the potential of the clinic closing its doors and the owner’s life completely shaken, addiction clinics must be hypervigilant about focusing time and resources on avoiding Tricare billing allegations.

Avoiding Guilty Findings In a Hearing

Addiction clinics and interventions are highly scrutinized. The best way to protect your clinic from civil liability or criminal prosecution is to be sure that everything about your clinic is thoroughly documented with diligence at all times. As a clinic owner, you should have a staff that is continuously asking themselves whether their performance would be considered completely and consistently compliant if a federal agent were to investigate.

If federal agents are already investigating your addiction clinic’s Tricare billing practices, you need to quickly assess if you are at risk. If you cannot say that you are 100% sure that you are safe, you need to consider why the federal agents are investigating you. Is your Tricare billing data raising red flags? Is there a third party who has raised allegations against you in an attempt to protect themselves in a parallel investigation? Until you know the reason for the investigation, you can’t make educated decisions about how to defend yourself. Making decisions in the dark is risky business; that is the time you should seek a legal team to represent your clinic immediately.

Speak with our Criminal Fraud Defense Lawyers Today!

If your addiction clinic or organization is currently under investigation, call the Healthcare Fraud Group today to get your initial consultation scheduled. One of our skilled healthcare fraud defense attorneys will sit down with you immediately to get started on forming an aggressive defensive and/or assist you with creating a compliance program if one is not in place. Our group has over 100 years of combined experience in defending clients from charges that can result in imprisonment, substantial monetary fines, and irreparable damage to their character and reputations. Call our health care fraud defense lawyers today at 888-402-4054, or contact us online to schedule your confidential consultation.

Bell, P.C. – Healthcare Fraud Group Track Record

Throughout the Healthcare Fraud Group’s existence and our team of attorney’s careers as federal defense attorneys and prosecutors, we have built a fantastic track record of success. Bell, P.C. achieved the largest verdict in 2017 and the ninth-largest verdict in the history of the US in a case against JP Morgan Chase bank, yielding a payout of over six billion dollars for malice, fraud, breach of fiduciary duty, conversion, and gross negligence.

  1. The group also served as lead counsel for the pharmaceutical company TWINMED during arbitration in a ten million dollar defense case and walked away with a victory.
  2. As lead trial counsel for a medical center, a substantial jury verdict was delivered to our client, in addition to prevailing party attorney fees against the hospital.
  3. A fifty million dollar settlement was awarded to our client stemming from a confidential dispute.
  4. We also served as lead counsel in the Qui Tam healthcare lawsuit, which resulted in a dismissal of the charges.
  5. We defended a company that was investigated for fraud by the US Attorney’s Office and the FBI. The result was no civil or criminal liability.

Allow the Healthcare Fraud Group to guide you through this rough patch in your professional career. An investigation does not mean your clinic is going to close, and it does not mean financial devastation. We can win for you as we’ve won for many other facilities and organizations, and in our victory, we will not use your business as a marketing device. As you can see, we do not disclose our clients’ names. A federal investigation into your livelihood can and will be a trying time for you and your staff. We can offer you reinforcement and reassurance. Call us at 888-402-4054 or contact us online to schedule your confidential consultation.