Kentucky Addiction Centers (KAC)

Winchester, KY 2019--2025 Behavioral Health

DEA DOJ HHS-OIG Dea Controlled Substance Diversion Medicare Fraud Medicaid Fraud Identity Theft Controlled Substance Criminal Distribution

Penalty

$8 million

Outcome

Medical director Dr. José Alzadon, CEO Michael Bregenzer, and billing manager Barbie Vanhoose convicted March 2025 for $8 million Medicare and Medicaid fraud at Kentucky Addiction Centers; all three convicted of conspiracy to distribute controlled substances using another person's DEA number; Alzadon and Vanhoose convicted of aggravated identity theft with mandatory 2-year consecutive sentence.

Details

Kentucky Addiction Centers — $8 Million Medicare/Medicaid Fraud and Controlled Substance Distribution (2019–2025)

Outcome: Medical director Dr. José Alzadon, CEO Michael Bregenzer, and billing manager Barbie Vanhoose of Kentucky Addiction Centers were each convicted in March 2025 of conspiracy to commit healthcare fraud, eight counts of healthcare fraud, and conspiracy to distribute controlled substances using another person's DEA registration number; Alzadon and Vanhoose were additionally convicted of two counts of aggravated identity theft (mandatory 2-year consecutive sentences); sentencing scheduled June 2025.

Kentucky Addiction Centers (KAC) operated addiction treatment clinics in Winchester, Paducah, Paintsville, and London, Kentucky. The three defendants orchestrated a scheme to defraud Medicare and Medicaid of over $8 million by falsely billing for medical services that were not performed or were misrepresented as more complex than the services actually provided.

Dr. José Alzadon, 61, served as KAC's medical director and prescribed Suboxone (buprenorphine/naloxone) — a Schedule III controlled substance used to treat opioid addiction — under DEA regulations. Michael Bregenzer, 52, served as KAC's CEO, and Barbie Vanhoose, 62, served as KAC's billing manager. Together, they ran a scheme falsely billing Medicare and Kentucky Medicaid for services that were not delivered or were billed at higher complexity levels than what was actually provided.

The conspiracy to distribute controlled substances charge — the most serious from a DEA perspective — involved using the DEA registration number of another person to prescribe or distribute controlled substances, which is a federal felony. Alzadon and Vanhoose were additionally convicted of aggravated identity theft, which carries a mandatory consecutive two-year prison term. All three defendants are scheduled for sentencing in June 2025.

Primary Source: DEA Press Release — Three Convicted for Fraudulently Billing Over $8 Million to Medicare and Medicaid Through Opioid Addiction Treatment Clinics in Kentucky (Mar. 24, 2025)

How Crucible Prevents This

All three defendants were convicted of using another person's DEA registration number to distribute controlled substances — a clear identity and credential fraud that Crucible's prescriber authentication controls would have detected. Crucible's requirement to verify the DEA number against the prescribing practitioner's current registered identity before each prescription would have blocked the use of a stolen or borrowed DEA number at point of prescribing.

Source: DEA Press Release — Three Convicted for Fraudulently Billing Over $8 Million to Medicare and Medicaid Through Opioid Addiction Treatment Clinics in Kentucky (Mar. 24, 2025)

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