Bean Town Times

First Psychiatric Planners, Inc., operating as Bournewood Health Systems and Bournewood Hospital, has agreed to pay between $5.5 million and $6.5 million to settle allegations of violating 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 their participation in Bournewood’s Partial Hospitalization Program (PHP), contravening the federal and Massachusetts Anti-Kickback Statutes.

Bournewood is a behavioral health organization based in Brookline, offering inpatient and outpatient mental health services for adults and adolescents. Its PHP is an outpatient therapy program providing substance use treatment and psychiatric care following rehabilitation in an inpatient detoxification facility.

The settlement agreement reveals that from September 16, 2013, through May 31, 2022, Bournewood contracted with sober homes to house PHP patients receiving federal or state healthcare benefits. Housing fees were only paid if the patient enrolled in Bournewood’s PHP. Payments ceased if the patient stopped attending the program.

Three primary sober homes—Steps to Solutions, Inc., Brady’s Place, and Recovery Education Services—housed 79% of Bournewood's PHP patients. Legal issues surrounded these facilities: Steps to Solutions faced a sexual harassment lawsuit; Brady’s Place was involved in a fraud scheme; Recovery Education Services’ owner pleaded guilty to multiple charges related to managing a sober home.

The Anti-Kickback Statute (AKS) prohibits financial incentives for referrals of services covered by federally funded programs like Medicare. The United States and Massachusetts argue that Bournewood’s actions violated this statute by inducing vulnerable patients to enroll in its PHP through free housing offers.

“Unlawful kickbacks can corrupt medical judgment,” said Acting United States Attorney Joshua S. Levy. “Our office remains committed to investigating and holding companies that pay kickbacks accountable.”

Roberto Coviello of the U.S. Department of Health and Human Services stated: “Kickback arrangements have no place in our health care system... We are committed to protecting taxpayer-funded health care programs.”

Massachusetts Attorney General Andrea Joy Campbell added: “When medical providers put their own financial incentives over the wellbeing of their patients, vulnerable individuals... are unfairly harmed.”

The resolution resulted from coordinated efforts among the U.S. Attorney’s Office for the District of Massachusetts, the Massachusetts Attorney General’s Office, and HHS-OIG.

Acting U.S. Attorney Levy, HHS-OIG SAC Coviello, and AG Campbell announced today that Assistant U.S. Attorneys Steven T. Sharobem and Julien M. Mundele handled this matter along with Gregory J. Dorchak and Anuj Khetarpal from the Civil Rights Unit. Katie Cooper Davis and Mary-Ellen Kennedy represented the Massachusetts Attorney General's Office’s Medicaid Fraud Division.