Federal Conviction of Kentucky Addiction Clinics for Medicare Fraud

Three individuals linked to opioid addiction treatment clinics in Kentucky have been sentenced to federal prison for orchestrating a scheme that defrauded Medicare and Kentucky Medicaid of over $4.8 million. The U.S. Department of Justice reported that Michael Bregenzer from Houston, Texas, received a 48-month sentence with three years of supervised release. José Alzadon, M.D., from Paintsville, Kentucky, was sentenced to 60 months, while Barbie Vanhoose from West Van Lear, Kentucky, was handed a 24-month sentence.

The defendants must also repay $812,881.09 in restitution. Evidence revealed that the fraudulent billing was conducted through Kentucky Addiction Centers, operating across several cities. José Alzadon, as medical director, prescribed Suboxone to treat opioid dependence. Michael Bregenzer served as CEO, and Barbie Vanhoose managed billing operations. Prosecutors stated they billed government insurance programs for unrendered or misrepresented services to inflate claims.

The accused even utilized the prescribing credentials of Alzadon's father to issue unauthorized Suboxone prescriptions. In March 2025, Bregenzer, Alzadon, and Vanhoose were convicted of conspiracy to commit health care fraud and other related charges. The investigation involved various agencies, including the Drug Enforcement Administration and FBI. The Justice Department emphasized its Health Care Fraud Strike Force Program, which has charged over 6,200 individuals with defrauding federal health care programs of more than $45 billion since 2007.