MONTGOMERY, Ala. – A Phenix City healthcare provider was forced to repay $300,000 after an investigation revealed that it was billing Alabama’s Medicaid agency for services it was not providing.
U.S. Attorney for the Middle District of Alabama Thomas Govan announced that his office reached a civil settlement with New Life Center for Change, Inc., operating as Teen University, earlier this week.
Teen University and its owner Alfonza Smith had a contract with the Alabama Department of Human Services to provide room, board and services to children with emotional and behavioral management issues.
This agreement included two hours of basic living skills programming per day for all residents, but an investigation by Alabama Attorney General Steve Marshall’s Medicaid Fraud Control Unit revealed that residents were not regularly receiving this service.
The state unit referred its discovery to the U.S. attorney’s office, which later started a Federal False Claims Act lawsuit against Smith.
The settlement resolved the fraud allegations. The Russell County facility is no longer a Medicaid provider.
“Protecting the integrity of Medicaid and ensuring that vulnerable children receive the services they are promised are among our highest priorities,” Govan said in a statement. “When providers bill for care that was never delivered, they waste taxpayer dollars and betray the trust placed in them.”
The investigation was a part of the 2026 National Healthcare Fraud Takedown, a countrywide effort to stop fraud in government-funded healthcare programs. Spanning 56 federal districts, the two-week program led to the discovery of more than $6.5 billion in alleged fraud and the charging of 455 defendants.
The Centers for Medicare and Medicaid Services also suspended more than 1,000 providers and revoked billing privileges for 1,400 more as a result of the fraud exposed. U.S. attorneys also reached civil payment settlements amounting to more than $72 million nationwide.
Marshall applauded the interagency effort in a news release announcing the settlement.
“The National Healthcare Fraud Takedown exists because fraud in government healthcare programs is a serious, ongoing threat. When providers take taxpayer money without delivering the services they promised, we will find them, and there will be consequences,” Marshall said. “We will continue to pursue those who defraud government healthcare programs, and we are proud to stand alongside our federal partners in this important national effort.”