CleanSlate Agrees to Pay $4.5 Million to Settle False Claims Act Case

December 30, 2021

CleanSlate, a nationwide chain of opioid treatment centers agreed to pay $4.5 million to partially settle a False Claims Act case.  The case, originally brought by a client of Whistleblower Law Collaborative LLC , alleged fraud against Medicaid and Medicare patients. In particular, that CleanSlate and its founder required expensive urine drug tests at every patient visit.  They ran tests regardless of medical necessity.  Moreover, these tests were always directed to CleanSlate’s own clinical laboratory.  The suit also alleged that defendants illegally backdated prescriptions.

CleanSlate owns and operates opioid treatment centers in Massachusetts and around the country. At these centers, individuals receive medication-assisted treatment for substance use disorders. Locations in Massachusetts include Athol, Boston, Falmouth, West Springfield, and Worcester. Additionally, CleanSlate  operates a clinical laboratory in Holyoke where it performs drug tests for its patients.

This suit was originally filed by our client under the whistleblower (or qui tam) provisions of the federal and Massachusetts False Claims Acts.  In October 2020, the Massachusetts Attorney General intervened in the False Claims Act case against CleansSlate.  In October 2021 a federal judge rejected CleanSlate’s bid to dismiss the case.  This settlement resolves only the allegations relating to Massachusetts.

First-of-its-Kind Self-Referral Case Recoups Money and Imposes Oversight

In total CleanSlate will pay $4.5 million to settle the False Claims Act case.  CleanSlate and its founder will pay $3.2 million to Massachusetts Medicaid (known as MassHealth).  Additionally, they will pay $1.3 million to the Medicare program for patients in Massachusetts.  CleanSlate will also enter into an compliance program with annual audits reported to the Massachusetts Attorney General’s Office.

This settlement is the “first of its kind” under the Massachusetts clinical laboratory anti-self-referral law originally enacted in 2014.  The anti-self-referral law (MGL Chapter 111D, Section 8 (17) and Section 8A), prohibits referrals between clinical laboratories and any entity with a direct or indirect ownership interest in the laboratory and vice versa.  State law also prohibits a laboratory from testing any specimen from an entity it owns.  The related federal settlement similarly covers allegations under the federal anti-self-referral law known as the Stark law.  The company’s policies directed clinicians at CleanSlate to refer laboratory work to its own Holyoke laboratory.  These policies therefore violated federal and state self-referral statutes.  Defendants owned both the clinic and laboratory in Massachusetts and developed the policies directing the self-referrals.

False Claims Act Case Exposes CleanSlate’s Opioid Addiction Treatment Practices 

As previously explained, our client alleged that CleanSlate and its founder required expensive urine drug tests at every patient visit.  They ran tests regardless of medical necessity.  These tests were always directed to CleanSlate’s own clinical laboratory.  The defendants also illegally backdated prescriptions.

The Massachusetts Attorney General’s Office, through its Medicaid Fraud Control Division, took the lead in investigating our client’s allegations.  The investigation led to the Commonwealth filing a Complaint in Intervention in our client’s case. That lawsuit had three core allegations that mirrored our clients’.

• CleanSlate required patients, to submit to a variety of urine drug tests, some of which were medically unnecessary.  This caused false claims to be submitted to MassHealth.
• CleanSlate directed clinicians at CleanSlate to refer laboratory work to its own Holyoke laboratory.  This violated federal and state self-referral statutes.  This is because Defendant owned both the clinic and laboratory in Massachusetts and developed the policies directing the self-referrals.
• CleanSlate and its founder also engaged in practices that led to backdating of prescriptions for Suboxone by physicians.  After MassHealth patients had already picked up prescriptions that were sent to pharmacies by midlevel clinicians, CleanSlate physicians later reviewed the notes from the patient visits and backdated the prescriptions to the office visit dates.  CleanSlate previously resolved similar allegations involving Medicare in a 2016 settlement with the United States Attorney’s Office for the District of Massachusetts.

The CleanSlate False Claims Act Settlement Benefits Taxpayers and Protects Patients

“Our client is pleased with the settlement and grateful to the Massachusetts Attorney General’s Office for their diligent pursuit and now settlement of her case,” said David W. S. Lieberman, who along with Suzanne E. Durrell and Bruce C. Judge, represents the Relator.

As we face a worsening opioid crisis in Massachusetts, it’s important that treatment centers follow the rules and not cut corners to increase their bottom line. Our resolution with CleanSlate will bring millions of dollars back to the state and implement the oversight needed to protect patients and prevent these violations from happening again. We are grateful to our federal partners for their work to help bring accountability in this case, and to the whistleblower for bringing these issues to our attention.

-Attorney General Maura Healey

Whistleblower Law Collaborative

Whistleblower Law Collaborative LLC, based in Boston, devotes its practice entirely to representing clients in bringing actions under the federal and state False Claims Acts and other whistleblower programs. Under the False Claims Act, a private citizen (known as a “relator”) who suspects or knows of fraud against the government can act as a whistleblower and file a sealed complaint on behalf of the government. If the case is successful, the relator is entitled to a share of the government’s recovery.  Among the firm’s many successes is the government’s $465 million settlement with Mylan for failing to pay the correct Medicaid rebates on its high–priced drug EpiPen.

For more information, contact Whistleblower Law Collaborative LLC at 617.366.2800