As many as 90 percent of the addicts who were supposed to be getting treatment while living in sober homes connected to the notorious drug-treatment businesses operated by Kenneth Chatman were openly using drugs, enabling Chatman to continue billing their insurance for millions of dollars in unnecessary drug tests, according to the former clinical treatment director.
New details of Chatman’s enterprise surfaced in a plea bargain taken by Barry Gregory, a licensed mental health counselor who worked as the clinical director at Chatman treatment centers, Journey to Recovery in Lake Worth and Reflections in Margate.
As clinical treatment director, Gregory signed orders for urine and saliva drug screens even though he was not licensed to do so and the tests were not medically necessary, according to court documents. In addition to urine and saliva drug screens, Gregory also ordered DNA and allergy tests regardless of whether the addicts complained of allergies, according to court records.
Gregory was indicted on Feb. 14 on charges of conspiracy to commit mail fraud and giving false statements relating to health care matters. Two days later, Gregory pleaded guilty to conspiracy to commit health care fraud and knowingly falsifying a matter involving health care programs.
As part of the plea deal Gregory is required to help a federal task force investigating corruption in South Florida’s drug treatment industry by testifying before grand juries or at trials and providing documents, records or other evidence. He faces 15 years in prison and $5 million in restitution.
The Post exposed Chatman’s operations in a December 2015 story that referenced drug use in his sober homes.
While sober homes typically evict addicts who relapse, allowing them to stay can be lucrative. When addicts relapse, they begin treatment again. More treatment means more billing for the treatment center operator — in this case Chatman.
The federal indictment that led to the arrests of Chatman, his wife Laura, two doctors and three others in December alleges Chatman made a fortune by taking advantage of addicts and their insurance companies.
According to the indictments, Chatman also turned female patients into prostitutes and paid kickbacks to five laboratories — in South and Central Florida, Texas and Pennsylvania — to get them to test bogus urine samples, investigators wrote.
Gregory is the fourth member of Chatman’s drug treatment and sober home operation to plead guilty for their roles in Chatman’s enterprise. None have been sentenced.
With each plea, more details emerge of kickbacks paid and accepted to ensure addicts with insurance remained in Chatman’s treatment programs and lived in his sober homes.
Gregory owned and operated a company called Recovery Consulting Solutions that helped treatment providers obtain licenses. In July 2015, Chatman hired Gregory, not only to obtain licenses but to conceal Chatman’s ownership of Reflections. A year later, Gregory did the same thing for Chatman’s new business, Journey to Recovery in Lake Worth.
Florida law prohibits felons from owning and operating drug treatment businesses. Chatman was convicted of stealing credit card number and served seven months in federal prison in 2009.
Gregory told investigators he did not use his clinical expertise to treat addicts. Instead, Chatman dictated which patients were admitted and discharged and the type and frequency of lab tests based on the kickbacks and bribes he received from labs, according to court records.
Gregory knew, based on the results of drug tests, that the patients were continuing to use drugs and that Chatman told addicts that they were allowed to do so. When Gregory recommended that a patient attend detox or another treatment program, Chatman — who has no medical or clinical training — overruled Gregory.
Discharging a patient would end Chatman’s ability to bill the patient’s insurance plans.
Gregory admitted that drug testing was “useless” because most of the patients were continuing to use drugs.
Chatman and his wife, Laura, also are expected to plead guilty, according to court papers filed by Assistant U.S. Attorney Marie Villafana. More charges and arrests will be made by March 15, Villafana wrote.
Two other doctors who worked for Chatman also have been charged. Their cases are open.