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Substance Use Recovery Center in Louisville, Kentucky Agrees to Pay $300,000 to Resolve Alleged False Claims Act Violations

LEXINGTON, KY — The U.S. Attorney's Office, Eastern District of Kentucky is reporting that Recovery Services, LLC, a recovery center that provides outpatient alcohol and drug services in Louisville, Kentucky, agreed to pay $300,000 to resolve civil allegations that it violated the False Claims Act, a federal law that prohibits causing the submission of false or fraudulent claims to the federal government.

According to the settlement agreement, the United States alleged that Recovery Services, formerly known as Recovery Chestnut, billed Kentucky Medicaid for urine drug screens for patients who did not receive individualized medical assessments.  Kentucky Medicaid only pays for urine drug screens that are individualized to each patient for their medical diagnosis or treatment.  The United States also alleged that Recovery Services billed Kentucky Medicaid for urine drug screens for residential patients, despite only being licensed to provide outpatient services.  Kentucky Medicaid does not pay for residential services, including urine drug screens, performed by outpatient providers.

The United States encourages anyone with information about the improper billing of urine drug testing, or about other potential fraud, abuse, or mismanagement of Medicare or Medicaid funds, to please call the U.S. Department of Health and Human Services’ hotline at 800-HHS-TIPS (800-447-8477). 

The case against Recovery Services was investigated by the United States Attorney’s Office for the Eastern District of Kentucky; the U.S. Department of Health and Human Services, Office of Inspector General; and the Kentucky Attorney General’s Office of Medicaid Fraud and Abuse Control.  Assistant United States Attorney Meghan Stubblebine represented the United States.

The settlement resolves claims alleged by the United States; there has been no determination of liability.



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