W.Va. to receive $2M from health care fraud settlement

U.S. Attorney Mike Stuart, joined at the podium by state and federal officials, announces a $17 million settlement with Acadia Healthcare for a Medicaid fraud scheme. (Photo by Steven Allen Adams)

CHARLESTON — In what federal officials are calling the largest health care fraud settlement in state history, the U.S. Attorney’s Office for the Southern District of West Virginia announced Monday a $17 million settlement with Acadia Healthcare Co. in a Medicaid fraud scheme.

U.S. Attorney Mike Stuart held a press conference to announce the settlement, of which West Virginia will receive $2.181 million and the federal government will receive the remainder. He was joined by officials with the U.S. Department of Health and Human Services, the state Department of Health and Human Resources and investigators with the West Virginia Medicaid Fraud Control Unit.

“This is a strong message and a massive penalty,” Stuart said. “The message is clear: if you’re cheating the system, we will find you. You will not only pay the cost of your wrongdoing, you’ll pay for more than that.”

In the settlement, Acadia agreed to pay $17 million to resolve the allegations brought by the U.S. Attorney’s Office that the firm defrauded Medicaid of $8.5 million using a billing scheme.

“I’m proud of the work of my office and that of our partners to ensure the end of this multi-million-dollar scheme,” Stuart said. “In this case, every dime of false billings was doubled for a total settlement that represents twice the harm caused, as well as additional compliance requirements moving forward.”

According to investigators, Acadia operates seven out-patient drug treatment centers in the state as CRC Health: Charleston, Huntington, Parkersburg, Beckley, Williamson, Clarksburg, and Wheeling. As well as administering Methadone, Suboxone and Subutex for opioid addiction, the centers conducted blood and urine drug testing.

Between 2012 and 2018, Acadia used a subcontractor to handle complex drug testing that Acadia itself couldn’t handle in-house. Acadia directly paid San Diego Reference Lab, but then billed West Virginia Medicaid for the drug testing that San Diego Reference was doing. Medicaid then paid Acadia a substantially higher reimbursement for the more complicated testing which it was not qualified to perform.

“We all know that West Virginia has been hard hit with the opioid epidemic,” said Maureen R. Dixon, special agent in charge of the Office of Inspector General of the Department of Health and Human Services. “When Acadia inappropriately charged the government for urine drug screens and drug test, there were fewer clients available to provide the desperately needed drug addiction treatment services.”

Bill Crouch, secretary of the state Department of Health and Human Resources, said the discrepancies were first found by the state Medicaid Fraud Control Unit, which then began working with federal and law enforcement partners. Crouch said every dollar returned to the state is valuable.

“The dollars that are going to be returned to DHHR will now be used to assist vulnerable people who need services,” Crouch said. “This is a win for West Virginia.”

As well as the monetary award, Acadia and its CRC clinics in West Virginia have entered a five-year corporate integrity agreement with the Department of Health and Human Service’s Office of Inspector General. The agreement requires Acadia to maintain a compliance program, implement risk assessments, and conduct an independent review of its business practices.

According to the Government Accounting Office, improper billing of Medicaid in 2018 cost taxpayers more than $40 billion. With more than 540,000 West Virginians depending on Medicaid, Stuart said the settlement should send a message.

“Medicaid fraud is not a victimless crime,” Stuart said. “There are a lot of victims here. Not only those people who get Medicaid, but those taxpayers — all of us — who pay into these funds.”

Also involved in the investigation and settlement were the federal Drug Enforcement Agency and the U.S. Attorney’s Healthcare Fraud Abuse, Recovery and Response Team.