Boca Drug Clinic Bilked Medicaid, Lawsuit Claims

WThe Palm Beach Post

Patients watched movies or went bowling, but the government was billed for “therapy,” court papers say.

Palm Beach Post Staff Writer

They were supposed to be in drug treatment, specialized counseling or mental-health therapy.

But patients at a Boca Raton-based drug rehabilitation clinic actually were bowling, at the beach or watching movies such as Thelma and Louise, according to court papers filed Friday by the U.S. Attorney’s Office in Miami.

The government is seeking more than $7 million in civil damages and payments for medical and Medicaid fraud from the National Recovery Institute Group.

The drug-treatment program is owned by Sheldon Russakoff, 53, a Boca Raton resident who also owns Sunrise Health Plan, a South Florida HMO the state agreed to take over this week.

Officials are investigating whether Sunrise is paying its doctors on time and not approving medical services, as well as its questionable financial status, according to state Insurance Department records.

They also are investigating Russakoff’s $800,000 annual salary, about half of which was paid as the company was deep in debt.

The papers filed Friday against the National Recovery Institute ‘ which has offices in Boca Raton, Fort Lauderdale and Sunrise – appear to be the other shoe dropping on Russakoff’s health empire.

An attorney for the institute denied the charges.

But the federal suit says the treatment program, known as NRI, bilked $1.6 million from Medicaid and more than $700,000 from a health program for dependents of military personnel known as CHAMPUS.

If true, NRI could be ordered to pay three times the amount, as well as $5,000 to $10,000 for each false claim. In the lawsuit, the court papers cite more than 3,000 such claims.

Many were like the $475 that NRL billed for 90 minutes of “social rehabilitation therapy” when patients were actually shown movies such as The Fugitive and Judgment Night, the court papers say.

“Generally, movies in lieu of mental health therapy is not an activity for which CHAMPUS or Medicaid will provide reimbursement,” the suit says.

“Examples of movies shown were Twister, The Abyss, Independence Day and E.T, and had no therapeutic value.”

Identifying more than a dozen patients with pseudonyms such as Theresa C. and James I., the suit quotes medical bills, patient records and other material federal attorneys say show NRI defrauded the government.

And it cites numerous other questionable activities.

For instance, it says James J. attended a talent show that the institute billed as “adult living skills” for $165.

Other adult living skills were going to Kmart, the beach and the bowling alley. Kathy S. went on a 2′-hour outing to Spanish River Park that was billed for $695, the suit says.

The papers filled Friday are an amendment to a 1996 lawsuit filed by a therapist who said the institute told her to falsify patient records. The amendment, called an intervention, allows federal attorneys to join her suit.

Joelee Caplan, 26, of North Miami Beach, worked at National Recovery in Sunrise from December 1995 to April 1996 and filed what is tantamount to a whistle-blower’s suit, said her attorney, Kenneth Nolan of Hollywood.

Caplan is suing for back pay and damages and stands to gain between 15 percent and 25 percent of any amount the government recovers, Nolan said.

An attorney for the institute called Caplan “a disgruntled employee” and said the suit has no merit.

The allegations may have been based on material found as a result of a March search warrant at the institute, but those records were taken out of context, said attorney Jon Sale of Miami.

Russakoff, who opened the Boca Raton clinic in 1990, was not available for comment Friday, Sale said.

A former official with New York City’s human resources administration, Russakoff has a $1 million home on the Intracoastal Waterway as well as a condominium in North Miami Beach.

In 1995, he tried to expand his operation to Delray Beach but was rebuffed by neighbors and city officials.

But Sale said the fact that courts often order defendants to therapy at the institute shows it does a good job helping patients.

“NRI has produced a very high quality substance abuse treatment,” he said. “We dispute the allegations that there was any fraud.”

Kenneth Nolan is a Ft. Lauderdale, FL attorney who concentrates in the area of qui tam, or civil false claims litigation.

Kathleen Hawkins

Dignity Health
$37 million

Kathleen Hawkins, RN MSN, had been employed by Defendant, Catholic Healthcare West (CHW) for approximately 6 years when she decided she had had enough of trying to change the hospital system from within.

CHW, a California not-for-profit corporation that operated hospitals in California, Arizona, and Nevada, was at the time the eighth largest hospital system in the nation and the largest not-for-profit hospital provider in California.


Joe Strom

Johnson & Johnson
$184 Million

Joe Strom contacted us in 2005. We were very grateful that he did. We immediately formed an all-star legal team and a process to stop a very harmful pharmaceutical marketing strategy. It was this process we set into motion that ultimately returned hundreds of millions of dollars to the U.S. Treasury, and a portion of that, very well-deserved, into Joe’s bank account.

Joe told us a very troubling story about the off-label promotion of a pharmaceutical drug for patients who already suffered from chronic heart failure.


Bruce A. Moilan Sr.

$27 Million

Bruce Moilan was a seasoned hospital systems expert by the time he contacted our Firm. At the time he decided to file his qui tam lawsuit, he was employed by South Texas Health System as a System Director for Materials Management. In this position, he oversaw $24 million in annual purchases of supplies and equipment and helped determine budget, reduction and cost analysis throughout the contract bidding and negotiations process. His job was to insure proper implementation for purchasing, receiving and management of inventory, for McAllen Hospitals, L.P.


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