Kyros CEO Daniel Larson resigns

GOLDEN VALLEY, Minn. – Daniel Larson, the founder and CEO of technology company Kyros, is stepping down, according to a statement from the company.

Kyros is one of the organizations at the center of KARE 11’s Recovery, Inc. investigation into alleged irregularities in Medicaid billing by addiction recovery organizations.

Earlier this month, KARE 11 reported that special agents from the Federal Bureau of Investigation’s Minneapolis field office, along with the U.S. Department of Health and Human Services’ inspector general, began interviewing former Kyros employees and contractors.

In February, the Minnesota Department of Human Services’ inspector general told state lawmakers that they had also launched an active investigation into Kyros and his nonprofit partner Refocus Recovery.

Since December, KARE 11 has been reporting on questionable billing practices by the two companies.

Former customers told KARE 11 they believed the Kyros-Refocus Partnership billed taxpayers for services they did not receive. KARE 11 documented how Kyros sponsored taxpayer-funded movie nights and contests to see who could bill Medicaid the most. Former employees said they were told to charge for things the law didn’t allow, such as phone calls and group outings.

The billings were for so-called “peer services,” in which people in recovery are paid to help others battle addiction.

Effective in 2019, Minnesota lawmakers for the first time allowed peer services to be reimbursed through Medicaid, the taxpayer-funded federal health insurance program for the poor and disabled.

KARE 11’s investigation revealed how Larson founded both the technology company Kyros and the nonprofit Refocus Recovery and used the nonprofit to funnel millions of taxpayer dollars into the for-profit organization.

Under the law, for-profit companies cannot bill Medicaid peer services directly. But nonprofits can. So records show that Refocus Recovery, the nonprofit founded by Larson, hired Kyros, the nonprofit he founded, to care for the colleagues.

According to state records, Refocus was reimbursed more than $14 million between January 2022 and October 2023 – more than all other nonprofit peer support organizations in Minnesota combined.

In publicly filed tax returns, Refocus Recovery disclosed that more than 96% of the nonprofit’s 2022 revenue went to affiliates of Larson’s for-profit company.

The tax return also showed that Larson owned “more than 35%” of Kyros at the time. Tax returns for 2023 are not yet available.

In response to an inquiry from KARE 11, a Kyros spokesperson emailed a statement that said: “Daniel Larson has informed the Kyros Board of Directors that he will be stepping down from his position as CEO… Our goal is bigger than every single person and all of us. “Continue to focus on working diligently every day to advance a system that provides the highest levels of recovery care with improved outcomes.”

When KARE 11 called Larson, he said, “As always, I have no comment for you,” and he hung up.

According to the Kyros statement, the company’s COO, Kristin Landry, has been selected by the board to be the next CEO.

According to KARE 11 sources, a federal investigation is also underway into Evergreen Recovery, a well-known addiction treatment facility in St. Paul.

“Recovery Inc.” by KARE 11 The investigation uncovered whistleblower allegations of fraudulent billing practices at Evergreen. Like Kyros, former Evergreen customers and employees claim the company overbilled taxpayers for recovery services.

Officials from Kyros, Refocus and Evergreen all say they do important work to help people overcome addiction. While they acknowledge that billing errors can occasionally occur, they deny allegations that they intentionally overpaid Medicaid.

If you have a tip for our investigative team, email [email protected].

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