‘Cash machines.’ Three affiliated with Kentucky clinics convicted on health fraud charges
Three people associated with Kentucky drug treatment clinics took part in a conspiracy to defraud taxpayer-funded health programs, a jury has ruled.
The jury convicted Dr. Jose Alzadon, Michael Bregenzer and Barbie Vanhoose on one charge each of conspiracy to commit health care fraud; eight counts each of health care fraud; and one charge of conspiracy to illegally distribute drugs.
The jury in federal court in Lexington also convicted Alzadon and Vanhoose on two charges related to using the identity of another person in writing prescriptions, but acquitted Bregenzer on those charges.
According to court records, the three were associated with a group of clinics called Kentucky Addiction Centers that offered treatment for substance use disorder using buprenorphine.
That drug, commonly known by the name Suboxone, reduces symptoms of withdrawal from opioid drugs such as heroin, oxycodone and fentanyl, but can also be abused.
Kentucky Addiction Centers had offices in Winchester and Paintsville.
Alzadon worked as a doctor at the business, while Bregenzer was a part owner and Vanhoose was the billing and compliance manager.
Federal authorities charged that between October 2017 and December 2020, Alzadon, Bregenzer and Vanhoose took part in a scheme to submit false bills to programs that included Medicare and Medicaid.
The scheme included seeking payment for services that were more costly than those actually provided to clients; billing for services that weren’t provided; submitting bills in the name of a doctor who didn’t do the work; and agreeing to write prescriptions for Suboxone in the name of a doctor who wasn’t seeing the patients, the government alleged.
A prosecutor said in one document that while opioid treatment with Suboxone is legitimate, Bregenzer took steps to “turn these vulnerable patients into cash machines by directing policies that billed their insurers for unnecessary or unprovided medical services.”
Alzadon, Bregenzer and Vanhoose denied the charges, but the jury convicted them on March 20 after deliberating less than four hours, according to the court record.
The most serious charge against the three has a maximum sentence of 20 years in prison.
U.S. District Judge Karen K. Caldwell scheduled them to be sentenced in June.
Ronald W. Chapman II, who represents Bregenzer, said he continues to maintain his innocence and plans to appeal and seek a new trial.
Jurors did not hear testimony from some crucial defense witnesses, Chapman said.
Alzadon’s attorney, Noah Robert Friend, said that while he and Alzadon respect the verdict, they were disappointed by the decision and will weigh potential appeal options.
“Dr. Alzadon always worked to give the best care to his patients, and the evidence at trial reflected that,” Friend said.
Vanhoose’s attorney was not available for comment Monday morning.
Another owner of Kentucky Addiction Clinics, Kristy Berry, was initially charged with them but pleaded guilty in December 2023 to charges of conspiring to commit health care fraud and to illegally distribute drugs.
Her plea agreement said the fraud resulted in a combined loss of $814,820 to Medicaid and Medicare.
This story was originally published March 24, 2025 at 11:37 AM.
