A major investor-owned mental health and addiction treatment company will pay the federal government $17 million to settle allegations it defrauded Medicaid in West Virginia.
The federal government alleged that a subsidiary of the publicly traded Acadia Healthcare Co., which owns seven drug addiction treatment centers in West Virginia, defrauded Medicaid over several years through false claims for laboratory tests related to the opioid epidemic.
From January 2012 through July 31, 2018, these centers used the San Diego Reference Laboratory in California to conduct moderately to highly complicated analysis of urine and blood, according to the Justice Department.
The West Virginia centers billed Medicaid directly for the tests that the San Diego laboratory performed on their behalf, according to the Justice Department. And Medicaid subsequently paid the facilities a "substantially higher amount" for these tests than the laboratory had charged for the actual analysis.
All told, Medicaid paid Acadia's centers $8.5 million for these tests. West Virginia lost nearly $2.8 million due to the scheme and the federal government lost about $6.3 million.
"As a result of the $17 million settlement, which represents twice the actual loss suffered by Medicaid, both the state and federal programs will be made whole," the Justice Department said.
An Acadia representative did not immediately respond to a request for comment.
West Virginia is among the states hardest hit by the opioid epidemic, which has accelerated demand for addiction treatment. Just last week, the state reached a $37 million settlement with McKesson Corp. after suing the drug distributor for allegedly shipping millions of suspect orders for opioids.
Acadia subsidiary CRC Health runs outpatient facilities in several towns across the state. There and nationwide, treatment of opioid addiction has fallen increasingly on Medicaid, which covers nearly 600,000 West Virginians.
Acadia Healthcare Co. owns more than 580 facilities across 40 states, Puerto Rico and the United Kingdom; its treatment options range from outpatient to residential and partial hospitalization. Beyond addiction, the company's clinics treat behavioral health issues and post-traumatic stress disorder.
Acadia reported more than $760 million in revenue in the first quarter of this year.