Recovery Centers of America to pay million to settle claims of illegal controlled substances dispensing and fraudulent Medicaid billing.

Recovery Centers of America (RCA), a major player in the addiction rehabilitation sector, has agreed to pay million to settle allegations from the federal government regarding the improper dispensing of regulated medications and fraudulent billing practices involving Medicaid. This settlement comes as a result of an extensive investigation conducted by the Drug Enforcement Administration (DEA) that scrutinized RCA facilities in Pennsylvania and Maryland from 2019 to 2024.

The U.S. Attorney’s Office for the Eastern District of Pennsylvania announced that the DEA uncovered a series of violations linked to RCA, which operates 13 rehabilitation centers nationwide, including a corporate headquarters located in King of Prussia, Pennsylvania. RCA provides inpatient and outpatient services aimed at treating addiction and also offers mental health support.

According to the DEA, RCA was found to be dispensing controlled substances unlawfully and failing to adhere to federal regulations concerning the meticulous record-keeping required for drugs prone to abuse. Specific details regarding the controlled substances in question were not disclosed by federal authorities.

The settlement agreement indicates that significant issues regarding record-keeping were identified at RCA’s Devon location. These deficiencies included an inability to maintain adequate records of controlled substances received, as well as inconsistencies related to the quantity and receipt dates of these substances. Alarmingly, some prescriptions were noted to be issued to “house stock,” rather than to named patients—a violation of established protocols.

Similar record-keeping inadequacies were reported at an RCA facility in Maryland, expanding the scope of the investigation’s findings. Furthermore, a lawsuit from a whistleblower, a former RCA employee, was filed in 2017, alleging that the company had admitted Medicaid patients but failed to meet state and federal guidelines in providing them with necessary rehabilitation services.

Under federal law, whistleblowers are afforded the right to sue entities they believe have submitted false claims for government funding. The whistleblower’s lawsuit claimed that between 2017 and 2019, RCA facilities billed for services that lacked proper documentation and were not provided to patients. The settlement resolves this lawsuit.

RCA has agreed to allocate million each for the claims regarding controlled substances and fraudulent billing practices. While RCA did not admit any liability in the settlement, whistleblower protections allow the former employee to receive compensation totaling 0,000. Additionally, RCA will provide 0,000 to the whistleblower and cover attorney fees amounting to ,000.

As U.S. Attorney David Metcalf stated, facilities providing drug and alcohol treatment are bound to comply with stringent regulations designed to prevent the misuse of dangerous medications and to ensure that services rendered meet all applicable laws. Non-compliance in these critical areas will lead to formidable repercussions, reinforcing the federal government’s commitment to protecting the integrity of healthcare practices.

This settlement underscores the ongoing scrutiny and regulatory oversight facing addiction treatment providers in an industry that is critical to the public’s health. The case serves as a stark reminder of the importance of compliance with legal and ethical standards in healthcare.

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