By: Christopher Parrella, Esq., CPC, CHC, CPCO
Parrella Health Law, Boston, MA.
A Health Care Provider Defense and Compliance Firm

A substance use treatment company’s compliance director tasked with upholding rules was one of two leadership figures convicted of orchestrating a Medicaid kickback scheme recently. This case underscores the critical importance of oversight from the provider’s vantage, not just the payer’s.

What Happened

Two senior staff at Life Touch LLC, Keke?Komeko?Johnson (Compliance Director) and Francine?Sims?Super (Office Manager), admitted guilt in a federal Medicaid kickback and tax fraud scheme. Over four years, they channeled more than $1 million in Medicaid reimbursement funds into gift cards, which were distributed weekly to patients as an incentive to attend treatment. The scheme generated over $25 million in Medicaid billings tied to patient attendance. Johnson allegedly lied to Medicaid auditors and fabricated supporting documents to cover the fraud. Both also accepted undisclosed kickbacks from 1st Choice Healthcare Services, a lab company linked to Life Touch and failed to report this income on their taxes. Sentencing is scheduled for November 2025, with Johnson facing up to 11 years in prison and Super up to 6 years.

Why This Matters to Providers

• When compliance leadership is compromised, the entire organization’s integrity collapses. This case shows how internal oversight can be weaponized, not wielded properly.
• Providers must maintain strict internal checks especially around incentive programs or patient engagement tactics that could cross legal lines.
• The focus must not only be on policy compliance but on consistent, real-time monitoring and swift corrective action when anomalies arise.

Key Takeaways for Provider Compliance Teams

1. Vet Compliance Leaders Vigilantly Ensure that compliance hires are beyond reproach and screen for ethics, conflicts of interest, and financial exposure.
2. Monitor Patient Incentive Programs Rewarding attendance or engagement is a very high-risk area and must be done in compliance with contingency management safe harbor mandates. Track incentives given, payments made, and audit transactions thoroughly.
3. Segregate Duties Clearly Compliance, billing, finance, and patient engagement functions must have strong internal separation and independent audits.
4. Watch for Third-Party Risks Lab partners or vendors may offer improper inducements. Monitor referral and kickback pathways closely.
5. Document and Disclose All incentive programs, payments, or collaborations must be fully documented and disclosed, especially in audits or financial disclosures.
6. Stay Prepared for Enforcement Actions This case underscores that misconduct by one actor can expose the whole organization. Reviewing state and federal laws, staying ahead of enforcement trends and conducting compliance audits is non-negotiable.

If you’re a provider, now is the time to confirm that your compliance leadership is acting with full integrity, especially when implementing patient incentives or vendor partnerships. Parrella Health Law specializes in defending providers, from compliance system reviews to litigation readiness. Contact Parrella Health Law at 857.328.0382 or Chris directly at cparrella@parrellahealthlaw.com.