West Virginia-based Acadia Healthcare, along with subsidiary CRC Health, has agreed to dole out $17 million to settle accusations of fraud, representing the largest fraud-related settlement in the history of the state, according to a settlement agreement released this week.
CRC Health had been accused of collecting blood and urine samples at drug treatment centers in a number of West Virginia towns, which it then sent for screening to San Diego Reference Laboratory.
CRC allegedly billed Acadia, and Acadia paid the San Diego lab, while at the same time billing West Virginia's Medicaid program, with the latter company receiving more than $8 million from Medicaid.
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The problem is that Medicaid paid the facilities a much higher amount for the tests than the lab had charged for the analysis. That's because the West Virginia centers billed West Virginia Medicaid for the urine and blood testing performed by SDRL, the San Diego reference lab, and another lab, the CRC-owned 10th street lab, as though it had been performed by the West Virginia Centers.
The settlement is about double the payment that Acadia received from Medicaid. The organization will pay $17 million to the United States and $2.2 milion to the state of West Virginia.
The settlement was reached with the United States through the Department of Justice, the Department of Health and Human Services and the state of West Virginia via its Department of Health and Human Resources and Medicaid Fraud Control Unit.
Acadia owns seven treatment centers in West Virginia, in Beckley, Charleston, Clarksburg, Huntington, Parkersburg, Wheeling and Williamson.
The company also tried to buy Highland Hospital in Charleston in 2016, with the Highland board unanimously approving the sale, but hospital officials later said the deal was nixed, and Highland instead was scooped up by Meridian Behavioral Health Systems in 2017.
In August 2018, the Department of Justice announced the creation of a new regional Medicare fraud strike force covering Newark, New Jersey and Philadelphia, Pennsylvania, adding to similar such strike forces in Miami, Los Angeles, Detroit, Chicago and other major metropolitan areas.
The strike force works with law enforcement agencies including State Medicaid Fraud Control Units. The Medicaid Fraud Control Unit in West Virginia is the single entity of the West Virginia state government that is certified annually by the Secretary of the U.S. Department of Health and Human Services to conduct statewide investigations of healthcare providers that defraud the Medicaid program.