Recovery Centers of America will pay $2 million to settle claims of illegally dispensing controlled substances and falsely billing Medicaid
The DEA says its investigation found RCA “dispensed controlled substances in an unlawful matter,” and didn’t comply with federal recordkeeping rules.
Recovery Centers of America, a prominent addiction rehab provider, will pay $2 million to settle claims by the federal government that they illegally dispensed strictly regulated medications and billed Medicaid for services they did not provide.
The Drug Enforcement Administration audited and investigated RCA facilities in Pennsylvania and Maryland between 2019 and 2024, the United States Attorney’s Office for the Eastern District of Pennsylvania said in a statement.
RCA operates 13 rehab centers across the country, with its corporate headquarters in King of Prussia. The for-profit company offers inpatient and outpatient treatments for people in addiction, as well as mental health services.
The DEA said RCA “dispensed controlled substances in an unlawful matter,” and didn’t comply with federal recordkeeping rules for drugs and other substances that are closely regulated due to their potential for abuse.
Federal officials did not specify the controlled substances involved.
In a settlement agreement, federal authorities said that the DEA found a number of record-keeping issues at an RCA facility in Devon, including that the facility did not maintain records showing that they’d received controlled substances, and did not record the number of containers of the substances or the date they’d been received. Some prescriptions for controlled substances were issued to “house stock” instead of named patients, authorities said.
The facility also did not keep accurate records of the controlled substances on hand at the site, authorities allege.
They also found record-keeping issues at another RCA facility in Maryland.
In 2017, a whistleblower who was once employed at RCA filed a lawsuit alleging that some facilities had admitted patients on Medicaid, but had not complied with state and federal regulations around providing them with rehab services.
Under federal law, whistleblowers can sue on behalf of the government when they believe a company has submitted false claims for government funding, federal authorities said.
Federal authorities said that between 2017 and 2019, some RCA facilities billed the Federal Employees Health Benefits Program and Medicaid for care that it didn’t document and didn’t actually provide.
The settlement will resolve the whistleblower’s lawsuit.
RCA did not immediately return a request for comment.
The company has agreed to pay $1 million to resolve the controlled substance claims, and $1 million to resolve the billing claims. RCA did not admit liability as part of the settlement agreement.
That law also enables whistleblowers to receive money from the settlement. The former employee will receive $230,000, authorities said.
RCA will also pay the employee $450,000 and $75,000 to cover attorney’s fees, according to the settlement agreement.
“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,” U.S. Attorney Davis Metcalf said in a statement.
“When they fail in either of those critical duties they will face significant consequences.”