Recovery Centers Of America Gets $2,000,000 Fine For Improper Billing
United States Attorney David Metcalf announced today that Recovery Centers of America (RCA) has agreed to pay $1,000,000 to resolve allegations that it failed to comply with provisions of the Controlled Substances Act (CSA) that are designed to prevent the diversion of controlled substances for illegal uses, and an additional $1,000,000 to resolve allegations that it violated the False Claims Act (FCA) by billing the government for drug and alcohol treatment services that it failed to adequately provide.
The United States’ allegations under the CSA arise from audits and investigations the Drug Enforcement Administration (DEA) conducted at RCA facilities in Pennsylvania and Maryland between 2019 and 2024. Based on those audits and investigations, the United States contends that RCA dispensed controlled substances in an unlawful manner, that certain controlled substances were missing from the company’s records, and that the company failed to comply with additional recordkeeping requirements of the CSA.
In addition, the United States alleges that, at certain facilities during a period from 2017 through 2019, RCA violated the FCA by billing the Federal Employees Health Benefits Program and Medicaid for the care of beneficiaries to whom it failed to provide and document the requisite treatment services.
“Drug and alcohol treatment facilities must prescribe and store controlled substances in a manner that comports with rules designed to ensure that dangerous drugs do not fall into the wrong hands. They also must provide treatment services that comply with all governing laws and regulations,” said U.S. Attorney Metcalf. “When they fail in either of those critical duties they will face significant consequences.”
“When rehabilitation and treatment centers do not live up to their obligations, our office will vigorously pursue the violations,” said Thomas Hodnett, Special Agent in Charge of the Drug Enforcement Administration’s Philadelphia Division. “Careless behavior and failure to adhere to the provisions of the CSA allows for substances to be diverted and sold without accountability.”
“This settlement underscores our agency’s steadfast commitment to investigating alleged False Claims Act violations targeting federal health care programs,” said Maureen Dixon, Special Agent in Charge of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). “Unlawful dispensing of controlled substances and billing for unprovided care endanger patients and defraud taxpayers. HHS-OIG will continue working with our partners to hold providers accountable and protect patient safety.”
“Patients seeking to recover from addiction should be able to trust that treatment facilities will provide safe, legitimate care in support of their health,” said Derek M. Holt, Special Agent in Charge of the U.S. Office of Personnel Management Office of Inspector General (OPM-OIG). “We thank our dedicated staff and federal law enforcement partners for holding accountable those facilities that instead seek to exploit vulnerable federal employees and their family members.”
The settlement resolves a lawsuit filed under the whistleblower provisions of the False Claims Act, which permit private parties to sue on behalf of the government when they believe that a defendant has submitted false claims for government funds and receive a share of any recovery. The settlement in this case provides for the whistleblower, a former Outcomes Supervisor at RCA’s corporate headquarters in King of Prussia, Pa., to receive a $230,000 share of the settlement amount. The qui tam case is captioned U.S. ex rel. McLoyd v. TRC-OC, Trading as Recovery Centers of America Holdings, LLC, No. 17-cv-5164 (E.D. Pa.).
The resolution obtained in this matter was the result of a coordinated effort among the United States Attorney’s Office for the Eastern District of Pennsylvania, the DEA, the Office of Personnel Management Office of Inspector General, and the Department of Health and Human Services Office of Inspector General.
The matter was handled in the U.S. Attorney’s Office for the Eastern District of Pennsylvania by Assistant U.S. Attorneys Peter Carr and Charlene Keller Fullmer and former auditor Dawn Wiggins.