PHILADELPHIA — Recovery Centers of America has agreed to pay $2,000,000 to resolve federal allegations that it mishandled controlled substances and improperly billed government health programs, U.S. Attorney David Metcalf announced.
Under the settlement, the addiction treatment provider will pay $1,000,000 to address alleged violations of the Controlled Substances Act and an additional $1,000,000 to resolve claims under the False Claims Act. Federal authorities allege the violations stem from failures to properly safeguard, track, and document controlled substances, as well as billing the government for treatment services that were not adequately provided.
The Controlled Substances Act allegations arose from audits and investigations conducted by the Drug Enforcement Administration at Recovery Centers of America facilities in Pennsylvania and Maryland between 2019 and 2024. According to the government, those reviews found that controlled substances were dispensed in an unlawful manner, that certain drugs were missing from required records, and that the company failed to meet key recordkeeping obligations designed to prevent diversion for illegal use.
Separately, federal officials allege that between 2017 and 2019, Recovery Centers of America violated the False Claims Act by billing the Federal Employees Health Benefits Program and Medicaid for drug and alcohol treatment services that were not sufficiently provided or documented at certain facilities.
“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,” Metcalf said in a statement. “When they fail in either of those critical duties they will face significant consequences.”
DEA officials said the case highlights the risks posed when treatment providers fail to follow federal safeguards. Thomas Hodnett, special agent in charge of the DEA’s Philadelphia Division, said careless behavior and noncompliance with the law can allow controlled substances to be diverted and sold without accountability.
The investigation also involved the U.S. Department of Health and Human Services Office of Inspector General and the U.S. Office of Personnel Management Office of Inspector General. Officials from both agencies said the settlement reflects a continued focus on protecting patients and taxpayers from unlawful billing and unsafe practices in health care settings.
The case was brought under the whistleblower provisions of the False Claims Act, which allow private individuals to sue on behalf of the government and share in any recovery. The whistleblower in this matter, a former outcomes supervisor at Recovery Centers of America’s corporate headquarters in King of Prussia, Pennsylvania, will receive $230,000 from the settlement. The lawsuit was filed as U.S. ex rel. McLoyd v. TRC-OC, Trading as Recovery Centers of America Holdings, LLC, in federal court in the Eastern District of Pennsylvania.
The settlement resolves allegations only. Federal officials emphasized that there has been no determination of liability.
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