Recovery Centers of America to pay million to resolve allegations of illegal controlled substance distribution and fraudulent Medicaid billing.
Recovery Centers of America (RCA), a leading provider of addiction rehabilitation services, has agreed to pay million to settle allegations of improper medication dispensing and fraudulent billing practices involving Medicaid. The U.S. Attorney’s Office for the Eastern District of Pennsylvania announced the settlement, which comes on the heels of a thorough investigation conducted by the Drug Enforcement Administration (DEA) between 2019 and 2024.
The DEA’s audit revealed that RCA, which operates a network of 13 rehabilitation facilities nationwide and is headquartered in King of Prussia, Pennsylvania, engaged in unlawful practices related to controlled substances. Specifically, authorities cited the company for failing to adhere to federal recordkeeping regulations aimed at preventing the misuse of drugs that are at high risk of abuse.
The investigation found significant recordkeeping deficiencies at RCA facilities, particularly at one in Devon, Pennsylvania. RCA was unable to provide adequate documentation showing the receipt of controlled substances, including the number of containers received and their respective dates. Furthermore, prescriptions were reportedly issued not to specific patients but to “house stock,” which raises serious concerns about accountability and patient safety in drug dispensing.
In addition to the issues identified at the Pennsylvania facility, similar recordkeeping violations were noted at an RCA center in Maryland. These lapses echo broader allegations made by a whistleblower in 2017, who asserted that RCA inadequately served Medicaid patients, failing to comply with required state and federal regulations.
According to federal officials, RCA improperly billed government programs such as the Federal Employees Health Benefits Program and Medicaid for services that were neither documented nor delivered from 2017 to 2019. The settlement will aid in resolving the whistleblower’s lawsuit filed under federal law, which allows individuals to pursue legal claims on behalf of the government when they suspect fraudulent practices.
As part of the agreed settlement, RCA will allocate million to address the claims related to controlled substances and another million concerning billing practices. Importantly, RCA did not admit liability in the settlement terms. Federal law stipulates that whistleblowers may receive a portion of the settlement proceeds, with the former employee in this case set to receive 0,000. Additionally, RCA has committed to paying 0,000 to the whistleblower and ,000 in attorney’s fees.
U.S. Attorney David Metcalf emphasized the critical importance of compliance with regulations governing drug dispensing and treatment services. He noted that failures in these areas carry significant consequences, reinforcing a commitment to uphold the integrity of addiction treatment facilities and protect public health.
