California Methadone Clinics Target of Fraud Probe; Clinic Reveals Patient Records to DEA, Patients Arrested

TREATMENT August 1997

Methadone clinics in California are the target of a probe by the California Department of Justice and the U.S. Drug Enforcement Administration (DEA) that officials allege has uncovered a pattern of poor management and overbilling (Dan Weikel, "State, DEA Probe Mismanagement in Methadone Clinics," Los Angeles Times (Washington Edition), July 21, 1997, p. A1).

There are 117 privately owned methadone clinics in California, serving approximately 32,000 people throughout the state. Nearly half have been investigated during the last two years. Many of the clinics targeted by the probe are parts of large chains owned by Robert B. Kahn, the president of the California Organization of Methadone Providers, and Dr. Forest S. Tennant Jr., the former director of drug testing for the National Football League. The California DOJ has started an investigation into a third chain.

Federal agents are focusing their case on clinics owned by Tennant, who operates twenty-nine facilities. In March, Tennant reached a settlement with the government and paid $625,000 to settle allegations that some of his clinics violated record-keeping requirements. "Dr. Tennant feels it's blatantly unfair that, as the largest chain in the industry, he is expected to follow regulations that no one else can follow. Other clinics would turn out to be just as bad if they were given the same level of scrutiny," said Jeff Schenkel, a spokesman for the chain. The DEA also claims that at least 95,000 milligrams of methadone, the equivalent of 1,580 60-milligram doses were unaccounted for at Tennant's clinics. "We have continued to do everything in our power to make sure there are accurate records and adequate training on the front end and maximum compliance on the other end," Schenkel said. Eva Reynoso, the founder of California Advocates for Methadone Patients told NewsBriefs that Tennant invited the DEA into his Woodland (CA) clinic to view patient files, which resulted in the arrest of several patients for parole violations.

Officials said some clinics have cumulatively overcharged two government health insurance programs, Medi-Cal and Drug Medi-Cal, by at least $9.9 million during the period between 1991 and 1995. Agents from the Medi-Cal fraud unit raided nineteen of Kahn's clinics and seized thousands of patient charts and billing records. "The owners of the methadone clinics have engaged in a massive fraud scheme, including double-billing and triple-billing of government health care programs," alleged California Deputy Attorney General Annie Featherman, a prosecutor in the Medi-Cal fraud case. Auditors from the state Department of Health Services found $4.4 million in alleged overbillings at Kahn's clinics.

According to Joycelyn Wood, executive vice president of the National Alliance of Methadone Advocates (NAMA), both Kahn and Tennant are notorious for running mismanaged clinics. Wood told NewsBriefs, "Tennant is a maverick ... I wouldn't be surprised if all of [his] clinics are mismanaged. I would hope the state would step in and take them over, their patients would be better off." Wood said that the DEA began raiding methadone clinics three years ago, and often used Medicaid abuses as an excuse.

National Alliance of Methadone Advocates, 435 Second Avenue, New York, NY 10010, Tel: (212) 595-6262, E-mail: nama@interport.net or visit the NAMA website at www.methadone.org.

California Advocates for Methadone Patients, P.O. Box 245606, Sacramento, CA 95824, Tel: (916) 456-4775.