CRC Health Settles False Medicaid Claims for $9.25M; Whistleblower to Get $1.5M
CRC Health Corp. has agreed to pay $9.25 million to settle allegations that the company knowingly submitted or caused the submission of false claims to Medicaid and Tennessee Medicaid, the U.S. Department of Justice announced last week. CRC is a nationwide provider of substance abuse and mental health treatment services.
CRC owns and operates a residential substance abuse treatment facility in Burns, Tenn., called New Life Lodge. The government alleged that New Life Lodge billed the Tennessee Medicaid program (TennCare) for substance abuse therapy services that were not provided or were provided by therapists who were not properly licensed by the state of Tennessee. The government also alleged that New Life Lodge failed to make a licensed psychiatrist available to patients at the facility, as required by the state’s regulations; failed to maintain patient-staffing ratios required by Tennessee Department of Mental Health regulations and billed for Medicaid patients in excess of the state-licensed bed capacity at the facility. In addition, the government alleged that New Life Lodge double-billed Medicaid for prescription substance abuse medications given to residents at the facility. New Life Lodge currently is not treating Medicaid patients at its facility.
The allegations were originally raised in a lawsuit filed by Angie Cederoth, a former New Life Lodge employee, under the whistleblower provisions of the False Claims Act. The Act allows private parties with knowledge of fraud against the government to sue on behalf of the government and share in the recovery. Cederoth will receive $1.5 million as her portion of the settlement.
The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments. We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud. Read more about our expertise in False Claims Act cases and how you can take action.