Drug and alcohol processing facility owner pleads guilty to paying illegal kickbacks to Philadelphia recovery homes – PA Attorney General’s Office

HARRISBURG — Southwest No Stop Philadelphia Inc. (Southwest), a Philadelphia-based drug and alcohol processing facility, has been declared by Attorney Josh Shapiro, whose owner Dr. Lloyd Reed has pleaded guilty to Medicaid fraud for paying illegal kickbacks to Philadelphia’s recovery homes. As a result of this investigation, Southwest has closed both of its sites and ceased operations.

“As we continue to combat the opioid crisis in Pennsylvania, it is imperative that individuals struggling with addiction have treatment professionals they can trust. Dr. Reed has benefited from the very individuals he was supposed to aid recovery — all for personal gain and greed, ” Prosecutor Shapiro said. “Thanks to the hard work of my office and our federal partners at the Department of Health and Human Services, his operation has been stopped for good.”

An investigation conducted jointly by the Medicaid Fraud Division of the Office of the Attorney General and the United States Department of Health and Human Services (HHS) showed that Reid and Southwest benefited from receiving millions of dollars from Medicaid in exchange for providing poor-quality treatment to a recovering home. Residents forced to attend treatment in their facilities. CPRs will threaten residents with life on the streets if they choose to attend treatment at a different facility. More than 75 percent of all Southwest patients reside in recovery homes.

The facility was repeatedly reprimanded by the Philadelphia Community Behavioral Health (CBH) for providing substandard care to its patients. Southwest continued to provide inadequate treatment to its patients, and in January 2020, a client ingested a fatal overdose while at the Southwest treatment facility.

The investigation revealed between December 2016 and June 2019, Southwest received more than $12,662,864 in Medicaid money for allegedly providing drug and alcohol treatment. During this time, Reid paid recovery homes more than $1,178,453 in commissions.

Both Southwest and Reed entered guilty pleas to Medicaid fraud. The date for the verdict will be set at a later date. The case has been investigated by Supervisory Special Agent James Cohn, and is being tried by First Deputy Attorney General Eric Stride.

Pennsylvania’s Medicaid Fraud Unit receives 75 percent of its funding from the US Department of Health and Human Services under a grant totaling $9,133,920 for the Federal Fiscal Year (FY) 2022. Pennsylvania.

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