The Massachusetts Attorney General’s Office has reached a $275,000 settlement with Elm Tree, LLC, a provider of substance use disorder treatments, to resolve allegations that the clinic submitted false claims to MassHealth. The agreement follows an investigation into the company’s billing practices across its locations in Quincy, Lowell, and Malden.
The settlement centers on allegations that Elm Tree billed the state’s Medicaid program for urine drug tests that were not medically necessary. In addition to the financial penalty, the clinic is now under strict oversight, requiring the implementation of a three-year independent compliance monitoring program and the creation of new internal policies to align with state regulations.
As a physician, I have seen how critical diagnostic testing is for patients recovering from opioid use disorder. However, there is a sharp distinction between clinical necessity and billing inflation. The current case highlights a growing effort by state regulators to ensure that the resources intended for vulnerable patients are not diverted through redundant or unnecessary medical testing.
The Mechanics of the Billing Dispute
The investigation, triggered by a referral from MassHealth, found that Elm Tree’s testing practices deviated from specific state mandates. Under MassHealth regulations, urine drug tests are only reimbursable if they are properly ordered by a provider and deemed medically necessary for the patient’s care. Crucially, the state prohibits billing for a drug test on the same date of service as a drug screen.
Whereas drug screens provide a broad, preliminary look at the presence of substances, a full drug test is a more specific, confirmatory analysis. Billing for both on the same day is often viewed as “unbundling” or redundant billing, as the second test frequently provides no additional clinical value that would alter the course of treatment for that specific visit.
To prevent future occurrences, Elm Tree must now fund its own independent monitoring program for the next three years. This program will include annual audits, the results of which must be reported directly to the Attorney General’s Office to ensure the clinic adheres to the legal requirements of the program.
Comparison of Recent MassHealth Fraud Settlements
| Provider/Entity | Settlement/Action | Primary Allegation | Date |
|---|---|---|---|
| Elm Tree, LLC | $275,000 | Unnecessary urine drug tests | 2025 |
| Savida Health | $2 million | Upcoding visits & unnecessary tests | Dec 2024 |
| Various Providers | $7.8 million (Claims) | Fraud and kickback schemes | March 2025 |
A Broader Crackdown on Opioid Treatment Fraud
The action against Elm Tree is not an isolated incident but part of a systemic push by the AGO to protect the integrity of services for members with opioid use disorder. The state is increasingly scrutinizing “pill mills” and clinics that exploit the high demand for medication-assisted treatment (MAT), such as Suboxone.
This pattern of enforcement is evident in several other high-profile cases. In November 2025, the AGO announced a guilty plea from a physician in Dracut who faced charges of involuntary manslaughter and the illegal prescription of opioids. In March 2025, the state obtained indictments against multiple providers in a scheme involving over $7.8 million in false claims, which included improper billing for urine drug tests and home health services that were either not provided or not authorized.
These cases suggest that the state is focusing heavily on the “financialization” of addiction medicine, where the focus shifts from patient outcomes to maximizing reimbursement through unnecessary diagnostics and fraudulent billing codes.
The Role of the Medicaid Fraud Division
The prosecution of the Elm Tree case was handled by Assistant Attorney General Mary-Ellen Kennedy and Investigator Rachel Wiesler of the Medicaid Fraud Division. This unit serves as a Medicaid Fraud Control Unit, certified annually by the U.S. Department of Health and Human Services.
Beyond financial fraud, the division is tasked with investigating the abuse, neglect, and financial exploitation of patients in long-term care facilities and other healthcare settings. The unit’s operations are heavily subsidized by federal funds; for the 2026 fiscal year, 75 percent of its funding—totaling $6,458,176—is provided by the U.S. Department of Health and Human Services, with the remaining 25 percent funded by the Commonwealth of Massachusetts.
For patients or employees who suspect fraudulent billing or abuse within the MassHealth system, the state provides a dedicated portal to file complaints through the Attorney General’s official website.
Disclaimer: This article is for informational purposes only and does not constitute legal or medical advice. For specific legal concerns regarding healthcare billing or medical guidance on substance use disorder treatment, please consult a licensed professional.
The Attorney General’s Office will continue to monitor Elm Tree, LLC through the newly mandated annual audits. The next phase of oversight will involve the submission of the first compliance report under the three-year monitoring agreement.
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