Port Norfolk ‘sober home’ operator held in Medicaid scheme
Oct. 6, 2011
The operator of a controversial sober house in Dorchester’s Port Norfolk section was arrested last Thursday as state attorney general Martha Coakley pressed her probe into an alleged kickback scheme involving the state’s Medicaid program.
Carl Smith, the 65-year-old manager of New Horizon House LLC, has been charged with participating in a fraudulent drug-screening operation. Arraigned on Friday, he pleaded not guilty and is being held on $30,000 bail. He is due back in Suffolk Superior Court on Oct. 14.
Smith has come under fire recently from local elected officials and residents of the Port Norfolk neighborhood for operating a sober home – a residential drug and alcohol recovery program – out of a house on Lorenzo Street without first consulting the community’s civic association. Boston Inspectional Service workers have since investigated the property following concerns about overcrowding.
According to a court filing from the attorney general’s office, Smith has a “lengthy criminal record” dating back to 1975 when he was convicted of armed robbery. He was sentenced to three to five years in state prison.
He was also convicted of kidnapping and armed robbery in 1979, larceny in 1989, forgery and embezzlement in 1991, forgery and larceny in 1994, and possession of a hypodermic needle or syringe in 1995, the filing noted.
In late September, members of Port Norfolk’s civic association said they were opposed to the sober home operating at 12 Lorenzo St., saying they had not been consulted before it opened and expressing concern over the potential backgrounds and activities of several sober home residents.
The program on Lorenzo Street is part of the New Horizon House network, a group of at least eight sober homes operated by Smith, including locations on Savin Hill Avenue, Rill Street, and Draper Street.
Aimed at people recovering from substance abuse who have completed a more intensive therapeutic program and want to live among others in recovery, sober homes have no legal status or regulations in Massachusetts. The Department of Public Health is expected to complete a report, which will likely be used as a guideline for future laws, by the end of the year.
“It’s sad, there’s some good rehabs out there, this just wasn’t one of them,” said Ryan Whitcomb, a Port Norfolk resident.
The neighborhood association has also focused on property owners George and Shirley Bragel, who own four Lorenzo Street properties as well as others which are being used as sober homes. Association members were concerned that that meant more sober homes in the neighborhood, but the Bragels said at last month’s meeting that they do not intend to rent the other buildings to another recovery program.
Smith’s indictment was one of 118 brought by Coakley through a statewide grand jury and others in Suffolk and Bristol counties. The alleged scheme involves three health care companies, ten individuals, and $10 million fraudulently obtained, largely from the state Medicaid program.
State Rep. Marty Walsh, who attended the Port Norfolk meeting, said he was troubled by the allegations. “I question what kind of program he’s actually running there,” he said. “If he’s defrauding the government, is he defrauding the clients as well and not providing them with services?”
Describing four unrelated cases, state prosecutors said Adlife Healthcare of Framingham allegedly billed the state for medical treatment to people who were deceased. Preventive Medicine Associates, and its owner, Dr. Punyamurtula Kishore, of Brookline, allegedly ran a “kickback scheme” with sober houses throughout the state.
Smith is accused of getting paid $34,000 in return for arranging the ordering of urine drug screening tests for which MassHealth paid Kishore and PMA more than $786,000.
According to the State House News Service, David Benson of New Bedford allegedly over-billed the state by making it seem as though his psychotherapy patients had more dire medical needs. Pond View Nursing Facility, in Jamaica Plain, was shut down in June 2008 for bad service, Coakley said, and its owner, Carolyn Wetterberg, was indicted for allegedly inflating the supposed medical needs of Pond View patients.
“They may as well be walking over to MassHealth and taking money out of the Treasury,” Coakley said about the four companies and the “separate but very serious violations of public trust.”
Asked about the extent of fraud in the massive program, Coakley said she was unable to provide a specific estimate but said, “obviously there’s a lot.”
Adlife, an adult foster care program, is accused of the biggest fraud, amounting to $5.5 million in which the company claimed adults, who would visit during the day, were round-the-clock patients and billed the state for patients who are actually dead. Adlife had offices in West Springfield, Dorchester, and Hyannis, but Adlife and the other accused companies are “not in business,” according to Coakley.
Preventive Medicine Associates was the next largest, accused of $3.8 million in unnecessary drug tests as part of a kickback scheme with sober houses in Dorchester, Malden, New Bedford and elsewhere that would contract with PMA to perform the unnecessary drug screens.
After the state shutdown, Pond View and the patients were moved to other nursing homes. Many of them reportedly needed help eating and walking, but in the move out of Pond View many were able to perform both those activities without any assistance, according to Coakley, who said, “We do not believe there were miracles performed after those patients left that nursing home.”
MassHealth, which runs the state’s Medicaid program, is budgeted at $10.3 billion, or about a third of the state’s budget. The 118 indictments, which Coakley described as difficult and expensive to achieve, accuse the four companies of defrauding about a tenth of one percent of the MassHealth budget.
Material from State House News Service was used in this report.