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Federal authorities have reached a $2 million settlement with Recovery Centers of America to resolve allegations of controlled substances mishandling and improper government billing practices, according to an announcement from the U.S. Attorney’s Office for the Eastern District of Pennsylvania.
The settlement, revealed by U.S. Attorney David Metcalf, addresses multiple violations of federal regulations that allegedly occurred across the addiction treatment provider’s facilities in Pennsylvania and Maryland between 2019 and 2024. The case came to light through a whistleblower lawsuit filed under the False Claims Act.
Federal investigators claim Recovery Centers of America violated the Controlled Substances Act through unauthorized dispensing practices at its treatment centers. The allegations include missing medications and inadequate recordkeeping – serious issues for facilities that routinely handle controlled substances as part of addiction treatment protocols.
Beyond the controlled substances violations, the company allegedly submitted improper billing claims to the Federal Employees Health Benefits Program and Medicaid over a two-year period from 2017 through 2019. The government contended these claims sought payment for treatment services that were either inadequately provided or lacked proper documentation to justify reimbursement.
The case represents another significant enforcement action in the addiction treatment industry, which has faced increased scrutiny as the opioid crisis continues to strain healthcare resources nationwide. Federal authorities have intensified oversight of substance abuse treatment providers in recent years, particularly those receiving substantial government reimbursements.
The settlement resulted from coordinated investigative efforts involving multiple federal agencies, including the Drug Enforcement Administration, the Department of Health and Human Services Office of Inspector General, and the Office of Personnel Management Office of Inspector General. Assistant U.S. Attorneys Peter Carr and Charlene Keller Fullmer handled the government’s case.
The whistleblower who initiated the case previously worked as an outcomes supervisor at Recovery Centers of America’s corporate headquarters in King of Prussia, Pennsylvania. Under the qui tam provisions of the False Claims Act, which permit private citizens to file lawsuits on the government’s behalf, the whistleblower will receive $230,000 from the federal recovery as compensation for bringing the allegations forward.
In addition to the federal settlement, the whistleblower resolved a separate anti-retaliation claim under the False Claims Act for $450,000, plus litigation costs and attorneys’ fees. This suggests the individual may have experienced workplace consequences after raising concerns about the company’s practices.
Philadelphia-based law firm Kang Haggerty LLC represented the whistleblower throughout the proceedings. The firm’s attorneys Edward Kang, Kandis Kovalsky, and Ross Wolfe emphasized that the case highlights the crucial role of internal reporting mechanisms in exposing potential misconduct at healthcare providers that depend heavily on federal reimbursement programs.
Recovery Centers of America operates multiple addiction treatment facilities across the northeastern United States and has positioned itself as a major provider in the substance abuse treatment field. The company has not issued a public statement regarding the settlement.
The case, formally identified as U.S. ex rel. McLoyd v. TRC-OC, Trading as Recovery Centers of America Holdings, LLC (No. 17-cv-5164), was filed in the U.S. District Court for the Eastern District of Pennsylvania.
This settlement reflects ongoing efforts by federal authorities to ensure healthcare providers comply with both controlled substance regulations and proper billing practices, particularly when taxpayer dollars are at stake through government healthcare programs.
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10 Comments
This case highlights the critical importance of ensuring addiction treatment centers strictly adhere to all relevant laws and regulations. Improper handling of controlled substances and fraudulent billing practices erode public trust and put patients at risk. Robust oversight and enforcement are essential.
Absolutely. The $2 million settlement sends a clear message that regulatory violations will be met with significant consequences. Facilities must be held accountable to maintain high standards of care and ethics in this vital industry.
It’s troubling to see addiction treatment facilities engaging in such unethical and illegal practices. Patients and their families deserve to have confidence that they are receiving proper, responsible care. This settlement underscores the need for ongoing oversight and accountability.
I agree. Regulatory bodies must stay vigilant to identify and swiftly address any misconduct in this sensitive industry. The well-being of vulnerable patients should always be the top priority.
Interesting case around opioid mishandling and fraudulent billing in the addiction treatment industry. It’s crucial that facilities strictly adhere to controlled substance regulations to keep patients safe. Glad to see the whistleblower came forward to expose these violations.
Yes, the $2 million settlement is a significant penalty. Regulatory compliance is paramount in the sensitive field of addiction treatment, where patient trust and safety must be the top priorities.
This highlights the importance of robust oversight and accountability in the addiction treatment sector. Patients and their families put their faith in these facilities, so any breaches of trust or improper practices need to be swiftly addressed.
Agreed. Whistleblower lawsuits can play a vital role in uncovering misconduct and driving improvements in the industry. Facilities need to uphold the highest ethical and regulatory standards.
Allegations of controlled substance mishandling and fraudulent billing practices at addiction treatment centers are deeply concerning. Thorough investigations and appropriate penalties are crucial to maintaining public trust and ensuring patient safety.
Absolutely. Addiction treatment must be provided with the utmost care and integrity. This settlement serves as a reminder that regulators will not tolerate violations, and that whistleblowers play a vital role in exposing wrongdoing.