Three Individuals Sentenced to Prison for Fraudulently Billing Medicare and Medicaid Through Opioid Addiction Treatment Clinics

A Texas businessman, a Kentucky doctor, and a Kentucky woman have been sentenced to federal prison for their roles in a scheme that fraudulently billed Medicare and Kentucky Medicaid more than $4.8 million through a series of addiction treatment facilities. Michael Bregenzer, 53, of Houston, Texas, the CEO of Kentucky Addiction Centers, was sentenced to 48 months in prison. Dr. José Alzadon, 62, of Paintsville, Kentucky, the medical director, received 60 months. Barbie Vanhoose, 63, of West Van Lear, Kentucky, the billing manager, was sentenced to 24 months. All three were ordered to pay restitution of $812,881.09.

According to evidence presented at trial, the defendants operated their healthcare fraud scheme through Kentucky Addiction Centers, which had locations in Winchester, Paducah, Paintsville, and London, Kentucky. Together, they falsely billed taxpayer-funded programs like Medicare and Medicaid for medical services that were not provided or were billed as more complex and expensive services than patients actually received.

They also conspired to bill for services using the credentials of Alzadon’s elderly father—who had not seen any of the patients—including his DEA registration number and electronic prescribing token, to prescribe Suboxone, a controlled substance used to treat opioid addiction.

In March 2025, all three defendants were convicted at trial of conspiracy to commit health care fraud, eight counts of health care fraud, and conspiracy to distribute controlled substances using the registration number of another person. Alzadon and Vanhoose were also convicted of two counts of aggravated identity theft. This case reflects the government’s aggressive pursuit of healthcare fraud, particularly schemes that exploit patients struggling with addiction and defraud programs designed to help them. The investigation was conducted by the DEA, FBI, HHS-OIG, and the Kentucky Medicaid Fraud Control Unit.