United States Attorney Announces $17 Million Healthcare Fraud Settlement

CHARLESTON, W.Va. – United States Attorney Mike Stuart, along with Special Agent in Charge Maureen R. Dixon, United States Department of Health and Human Services – Office of Inspector General (HHS-OIG), Acting Assistant Special Agent in Charge Justin Schoeman, Drug Enforcement Administration (DEA), Cabinet Secretary Bill J. Crouch, West Virginia Department of Health and Human Resources, and Director Mike Malone, West Virginia Medicaid Fraud Control Unit (MFCU), announced that his office has settled healthcare fraud claims against Acadia Healthcare Company, Inc. (“Acadia”). Pursuant to the settlement agreement, Acadia will pay $17 million to resolve allegations of a billing scheme that defrauded Medicaid of $8.5 million. The settlement represents the largest healthcare fraud settlement in the history of West Virginia and is twice the actual loss from the scheme. Of the $17 million settlement, nearly $2.2 million will be paid directly to the State of West Virginia.

“$17 million – the largest healthcare fraud settlement in the history of West Virginia,” said United States Attorney Mike Stuart. “$8.5 million in Medicaid fraud means $8.5 million in fraud to the taxpayers. Nearly 600,000 West Virginians rely on Medicaid for the payment of critical services. Medicaid fraud is not a victimless crime. I am proud of the work of my office and that of our partners to ensure the end of this multi-million dollar scheme. In this case, every dime in false billings was doubled for a total settlement that represents twice the harm caused. This is a strong message and a massive penalty. The message is clear – if you are cheating the system and we find you, you’ll not only pay for the damage done but far more. This is a message of deterrence to other would-be fraudsters.”

Acadia, acting through its subsidiary, CRC Health, L.L.C. (“CRC”), operates seven drug treatment centers in West Virginia. These treatment centers are located in Charleston, Huntington, Parkersburg, Beckley, Williamson, Clarksburg, and Wheeling. The West Virginia Centers provide outpatient drug treatment, including the administration of Methadone and the prescribing of Suboxone and Subutex. Each of Acadia’s West Virginia treatment centers is certified by the Centers for Medicare and Medicaid Services (“CMS”) to perform uncomplicated “waived” laboratory testing only. Waived laboratory tests are simple tests with a low risk for an incorrect result. “Non-waived” laboratory testing, in contrast, consists of moderate and high complexity testing. Laboratories that perform non-waived tests are required to have a significantly higher level of certification than the certifications held by the Acadia treatment centers.

From January 1, 2012 to July 31, 2018, Acadia’s treatment centers sent urine and blood samples to an outside laboratory, San Diego Reference Laboratory (the “San Diego Lab”) for all moderate and high complexity drug testing. The San Diego Lab performed the testing and invoiced Acadia’s treatment centers for the services, and did so at the request of the treatment centers. Acadia’s treatment centers paid the San Diego Lab directly. However, Acadia’s West Virginia treatment centers then billed West Virginia Medicaid for the urine and blood testing performed by the San Diego Lab, as though the testing had been performed by the treatment centers. In the claims for reimbursement submitted to Medicaid, Acadia’s treatment centers represented that they had performed the moderate and/or high complexity laboratory services. Medicaid, induced by the claims submitted by Acadia’s treatment centers, paid the treatment centers a substantially higher amount than the San Diego Lab charged to actually perform the testing. Medicaid regulations and policies specifically prohibited Acadia’s treatment centers from seeking reimbursement for moderate and complex urine and blood testing which they were not certified to perform, and did not, in fact, perform.

Read more: https://www.justice.gov/usao-sdwv/pr/united-states-attorney-announces-17-million-healthcare-fraud-settlement