NUWAY Alliance to Pay $18.5M in Medicaid Fraud Settlement

Minneapolis, MN — Addiction treatment provider NUWAY Alliance has agreed to pay $18.5 million to resolve allegations of Medicaid fraud—though the nonprofit does not admit wrongdoing.Star TribuneDepartment of Justice

Key Allegations

• Unlawful Kickbacks: From January 2019 through February 2025, NUWAY allegedly offered housing subsidies to Medicaid patients who participated in intensive outpatient programs—what federal prosecutors say violated the Anti-Kickback Statute and resulted in fraudulent claims.Star TribuneDepartment of Justice

• Double Billing: The settlement also addresses claims of billing Medicaid multiple times for the same treatment period, essentially charging for services that were not actually provided.Star TribuneDepartment of Justice

• No Admission of Guilt: NUWAY maintains that it did not break any laws but opted to settle so it could continue its mission of treating individuals with substance use disorder.Star TribuneBecker’s Behavioral Health

Enforcement and Oversight

• State and Federal Collaboration: The settlement comes after coordinated efforts by the U.S. Attorney’s Office for the District of Minnesota, the HHS Office of Inspector General, the Minnesota Attorney General’s Medicaid Fraud Control Unit, as well as DHS investigators.Department of JusticeMinnesota Attorney General's Office

• State Share of Funds: Over $8 million of the settlement will go to the State of Minnesota, supporting public funds and strengthening Medicaid fraud oversight.Minnesota Attorney General's Office

• Corporate Integrity Agreement: NUWAY must comply with a five-year Corporate Integrity Agreement, including implementing a robust compliance program and engaging an independent reviewer to monitor Medicaid claims.Department of JusticeMinnesota Attorney General's Office

Broader Implications

• Patient Influence vs. Compliance Risk: As The FCA Insider notes, offering incentives like housing—even for treatment adherence—can cross legal boundaries, leading to False Claims Act and Anti-Kickback violations.The FCA Insider

• Whistleblower Role: The case was initiated by a whistleblower who observed mismatches between patient needs and the level of care provided, highlighting how internal reports can surface significant fraud.The FCA Insider

What This Means for Your Practice

For organizations in the behavioral health and addiction treatment space, this settlement underscores critical lessons:

Insight	What It Means
Incentive Programs = Risk	Patient inducements—even those with well-intentioned motives—can be viewed as illegal kickbacks. Review any incentive-based programs closely.
Rigorous Billing Oversight	Double-billing or billing for unrendered services is a major compliance red flag. Robust internal audits are essential.
Policy and Legal Alignment	A tailored compliance program, paired with independent oversight, isn’t just best practice—it’s becoming mandatory under agreements like this one.
Watch for Whistleblower Activity	The use of internal reporting mechanisms can help identify potential issues early and protect your organization both legally and reputationally.

Final Thought

The NUWAY Alliance settlement serves as a high-profile reminder that behavioral health providers must carefully balance mission-driven care with strict legal adherence. Practices offering patient incentives, in particular, should pause and assess compliance risks with trusted legal counsel.