Brookline Hospital to Pay Up To $6.5 Million to Resolve False Claims Act Liability Concerning Kickback Allegations

BOSTON - First Psychiatric Planners, Inc. d/b/a Bournewood Health Systems and Bournewood Hospital (Bournewood) has agreed to pay at least $5.5 million and up to $6.5 million to resolve allegations that it violated the federal and Massachusetts False Claims Acts. According to court documents, Bournewood provided free sober housing to substance use recovery patients enrolled in Medicare and Medicaid to induce these patients to participate in Bournewood's Partial Hospitalization Program (PHP) in violation of the federal and Massachusetts Anti-Kickback Statutes. Bournewood frequently sent recovery patients to sober homes whose owners and operators engaged in unlawful behavior and exploited vulnerable recovery patients.

Bournewood is a behavioral health organization that provides inpatient and outpatient mental health and dual diagnosis care for adults and adolescents in Brookline with offices in Dedham and Woburn, Mass. Bournewood's PHP is a month-long outpatient therapy program providing substance use treatment and psychiatric care to patients after they complete rehabilitation in an inpatient detoxification facility.

According to the settlement agreement, Bournewood admits and acknowledges that from at least Sept. 16, 2013 through May 31, 2022, it contracted with sober homes to house patients of Bournewood's PHP receiving federal or Massachusetts health care program benefits. Bournewood only paid housing fees to sober homes on behalf of a patient if that patient enrolled in and attended Bournewood's PHP. Bournewood did not require a patient to be homeless or housing insecure to receive sober housing in exchange for their attendance at Bournewood's PHP. Once a patient ceased attending the PHP, Bournewood stopped paying the sober home costs for those patients, regardless of the patients' financial condition, housing status or housing availability.

The three largest sober homes that Bournewood contracted with were Steps to Solutions, Inc., Brady's Place and Recovery Education Services, who collectively housed 79% of Bournewood's PHP patients. In May 2024, a federal jury in Boston found the owner and operator of Steps to Solutions, Inc. liable for sexual harassment and retaliation against tenants of his sober homes, in violation of the Fair Housing Act and awarded seven victims a combined total of $3.8 million. In May 2023, the United States Attorney's Office announced a 37-count indictment against the manager of Brady's Place for his participation in a fraud scheme. In 2019, the owner and operator of Recovery Education Services, Inc. pleaded guilty to a 36-count indictment brought by the Massachusetts Attorney General's Office related to his management of the sober home which included former Bournewood PHP patients. He was sentenced to two-and-a-half years in state prison.

The federal Anti-Kickback Statute (AKS) prohibits offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by Medicare and other federally funded programs. The statute is intended to ensure that medical providers' judgments are not compromised by improper financial incentives and are instead based on the best interests of their patients. The United States and Massachusetts contend that the claims that Bournewood submitted, or caused to be submitted, to Medicare and Medicaid were false because Bournewood's payment in the form of free sober housing induced vulnerable patients not only to enroll in Bournewood's PHP, but to regularly attend and remain with the PHP, in violation of the AKS.

"Unlawful kickbacks can corrupt medical judgment, jeopardize patients' health and create an uneven playing field for companies that play by the rules," said Acting United States Attorney Joshua S. Levy. "Our office remains committed to investigating and holding companies that pay kickbacks accountable. As we continue to combat the opioid crisis, we need to focus on getting people services based on what will best aid their recovery, not based on amenities that providers use to lure vulnerable patients to increase profits. That's especially so where the supposed amenities place patients at risk."

"Kickback arrangements have no place in our health care system, and such allegations are particularly troubling when they involve the exploitation of vulnerable patients," said Roberto Coviello, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General. "We are committed to protecting taxpayer-funded health care programs and the patients served by those programs, and we will continue to thoroughly investigate schemes that put patient safety at risk."

"When medical providers put their own financial incentives over the wellbeing of their patients, vulnerable individuals in need of care are unfairly harmed," said Massachusetts Attorney General Andrea Joy Campbell. "My office and the USAO took action, and we're proud to have reached a meaningful settlement as we continue to hold accountable those who unlawfully compromise patient care for profit."

The resolution of this matter was the result of a coordinated effort between the U.S. Attorney's Office for the District of Massachusetts, the Massachusetts Attorney General's Office and the U.S. Department of Health and Human Services, Office of Inspector General.

Acting U.S. Attorney Levy, HHS-OIG SAC Coviello and AG Campbell made the announcement today. This matter was handled by Assistant U.S. Attorneys Steven T. Sharobem and Julien M. Mundele of the Affirmative Civil Enforcement Unit, Assistant U.S. Attorneys Gregory J. Dorchak and Anuj K. Khetarpal of the Civil Rights Unit. Assistant Attorneys General Katie Cooper Davis and Mary-Ellen Kennedy handled the matter for the Massachusetts Attorney General's Office's Medicaid Fraud Division.