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Rehab Clinic To Pay $7.7M for Fraud

May 19, 1999

BOCA RATON, Fla. (AP) _ A drug rehabilitation clinic agreed to pay $7.7 million to settle allegations it sent patients to the beach or the movies, then billed the government for group therapy.

The case against National Recovery Institutes Group was triggered when therapist Joelee Caplan complained in a lawsuit that she was fired in 1996 for complaining to her supervisors about fraudulent billing.

A Pentagon investigation into Caplan’s allegations found records indicating National Recovery repeatedly double-billed the government or billed it for therapy when patients were sent to the beach or a movie.

The government claimed the company bilked $1.6 million from Medicaid and more than $700,000 from the military insurance plan.

In one case, investigators found National Recovery charged $125 for adult living skills therapy when the patient was playing water volleyball.

The clinic closed in March 1998, and the company filed for bankruptcy.

The settlement was reached Tuesday. Caplan will receive about $28,000 for blowing the whistle.

National Recovery was one of about a dozen companies operated by health care mogul Sheldon Russakoff, whose companies face $50 million in lawsuits from creditors, according to his lawyer.

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