Minnesota Addiction Treatment Provider Nuway Alliance To Pay $18.5 Million In Medicaid Kickback Settlement

Minnesota Addiction Treatment Provider Nuway Alliance To Pay $18.5 Million In Medicaid Kickback Settlement

MINNEAPOLIS, MN – June 29, 2025 – Nuway Alliance, a prominent addiction treatment provider with facilities across Minnesota, has agreed to an $18.5 million settlement to resolve allegations that it violated federal anti-kickback rules and submitted false Medicaid claims. The settlement, announced by Minnesota Attorney General Keith Ellison and the United States Attorney's Office, concludes a multi-year investigation into the organization's billing practices and patient recruitment methods.

The allegations against Nuway Alliance centered on two primary areas of misconduct:

• Illegal Kickbacks: From January 2019 through February 2025, Nuway allegedly provided illegal kickbacks to Medicaid recipients to induce them to receive intensive outpatient substance abuse disorder treatment services from the provider. These kickbacks reportedly included offering free housing to clients in exchange for their participation in Medicaid-billable treatment. Federal law strictly prohibits such inducements, as they can improperly influence patient choice and inflate healthcare costs.
• Double Billing and False Claims: The settlement also addresses claims that from January 2020 through September 2024, Nuway engaged in double billing for substance abuse disorder treatment services. This involved billing Medicaid for multiple services during the same period, leading to overpayments by the Minnesota Department of Human Services for services that were not provided as claimed. Reports indicate that Nuway systematically inflated its billings, in some instances charging for an hour of treatment for only 35 minutes of actual service, and even double-billing for overlapping time periods.

"When someone steals from Medicaid, they are both stealing from taxpayers and stealing money meant to pay for poor people's healthcare. That's disgraceful and I will not stand for it," said Attorney General Ellison in a statement regarding the settlement. "I am proud to be holding Nuway accountable for their wrongdoing."

Acting U.S. Attorney Joseph H. Thompson

Acting U.S. Attorney Joseph H. Thompson echoed this sentiment, stating, "The submission of false claims for federally funded government contracts will not be tolerated. Protecting taxpayer dollars from fraud and abuse is one of our top priorities at the U.S. Attorney's Office."

Of the $18.5 million settlement, the State of Minnesota is slated to receive over $8 million, which will be returned to the State's General Fund. This amount alone is significant enough to cover more than five years of state funding for Attorney General Ellison's Medicaid Fraud Control Unit (MFCU), highlighting the impact of this investigation.

The investigation was a collaborative effort involving the Minnesota Attorney General's Office's MFCU, the FBI, the U.S. Department of Health and Human Services' Office of Inspector General (HHS-OIG), and the United States Attorney's Office. This settlement also resolves several False Claims Act lawsuits brought against Nuway by whistleblowers, individuals who played a crucial role in bringing these alleged schemes to light.

As part of the settlement, Nuway Alliance has entered into a five-year Corporate Integrity Agreement with the U.S. Department of Health and Human Services' Office of Inspector General. This agreement mandates that Nuway maintain a robust compliance program to ensure adherence to federal healthcare program requirements and will require an independent organization to review claims submitted to Medicaid.

While the settlement does not constitute an admission of guilt from Nuway, the organization has stated its decision to pay the settlement to "preserve their mission of treating patients with substance use disorder" and has indicated a focus on inpatient care moving forward. The claims resolved by this settlement are allegations only, and there has been no determination of liability or wrongdoing through a judicial process.

This case serves as a stark reminder of the rigorous enforcement of federal anti-kickback statutes and the False Claims Act, underscoring the commitment of state and federal authorities to safeguard taxpayer dollars and ensure the integrity of healthcare programs designed to serve vulnerable populations.

MinneapoliMedia