NJ Rehab Center to Pay $19.75 Million in False Claims Act Settlement

Seabrook facility accused of billing federal and state health programs for unlicensed care and misleading inspectors; whistleblower to receive over $3.5 million.

Summit BHC New Jersey, LLC, operating as Seabrook in Bridgeton, Cumberland County, has agreed to pay $19.75 million to settle allegations it violated the federal False Claims Act. The allegations involve improper billing practices targeting both the U.S. Department of Veterans Affairs and New Jersey’s Medicaid program, according to an announcement by U.S. Attorney Alina Habba.

Federal authorities allege that between January 1, 2022, and December 31, 2024, Seabrook submitted claims for short-term residential and partial hospitalization treatment that it was not licensed or contracted to provide. The facility reportedly billed the Veterans Health Administration’s Community Care Program and the state’s Medicaid program for services performed by insufficiently credentialed staff and misrepresented the nature and quality of care delivered.

Investigators contend Seabrook misled state inspectors by concealing improperly provided services, failed to employ adequate numbers of licensed personnel qualified in co-occurring mental health and addiction treatment, and did not provide the specialized veteran-focused care it claimed. The center was also accused of keeping false and inconsistent medical records related to veterans and other patients.

“Today’s resolution demonstrates once again this Office’s commitment to ensure that America’s veterans receive the care they deserve and for which the government has paid. Veterans and Medicaid recipients must receive care from fully qualified, licensed providers in facilities that meet state law in all respects. We stand ready to enforce these standards and protect the Americans who need this care.” - U.S. Attorney Alina Habba

The civil resolution includes a qui tam, or whistleblower, component. A former Seabrook employee initiated the claim under the False Claims Act’s whistleblower provisions and will receive approximately $3.56 million as her share of the recovery.

As part of the resolution, Seabrook cooperated with the government’s investigation. The company conducted an internal review, implemented corrective actions, and disciplined individuals deemed responsible.

“Our federal health care systems serve vulnerable populations, and by not providing the level of care they deserve that purpose is undermined,” stated Special Agent in Charge Naomi Gruchacz with the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). “HHS-OIG, together with our law enforcement partners, will continue to vigorously pursue those who exploit government health programs.”

The investigation was led by the U.S. Attorney’s Office for the District of New Jersey, with support from the Offices of Inspectors General at both the Department of Veterans Affairs and the Department of Health and Human Services. Assistant U.S. Attorney Paul W. Kaufman handled the matter for the government.

Authorities emphasized that the case reflects ongoing federal efforts to address healthcare fraud affecting veterans and public health programs. Allegations resolved by this settlement are civil in nature, and there has been no admission or determination of liability.

The case is formally titled United States ex rel. Coulter and the State of New Jersey v. Seabrook House, Inc., et al., under docket number 23-cv-00451 in the District of New Jersey.