CHARLESTON, W.Va. — Calling it the largest healthcare fraud settlement in the history of West Virginia, U.S. Attorney for the Southern District of West Virginia Mike Stuart announced a $17 million settlement with Acadia Healthcare Company Inc.

Acadia will pay the millions to resolve allegations of a billing scheme that resulted in an $8.5 million loss of Medicaid in the state.

U.S. Attorney Mike Stuart

Stuart was joined alongside officials from United States Department of Health and Human Services, Drug Enforcement Administration, West Virginia Department of Health and Human Resources (DHHR), and the West Virginia Medicaid Fraud Control Unit (MFCU) for the announcement on Monday in Charleston.

“If you’re cheating the system and we find you, you’ll not only pay the cost of your wrongdoing, you’ll pay far more than that,” Stuart said.

“I think this is a substantial message of deterrence to other would be fraudsters and other companies who need to make sure they have proper compliance in place to make sure things like this don’t happen.”

Stuart said nearly $2.2 million of the settlement will go directly to the State of West Virginia’s Medicaid fund within the next five days while the remainder of the $8.5 loss will go to the health and human service.

The other $8.5 million will go to the general treasury in Washington.

Through its subsidiary CRC Health, Acadia operates seven drug treatment centers in West Virginia with locations in Charleston, Huntington, Parkersburg, Beckley, Williamson, Clarksburg, and Wheeling.

The settlement comes from a billing scheme when Acadia treatment centers sent blood and urine samples to an outside laboratory, San Diego Lab, from January 1, 2012, to July 31, 2018.

“The San Diego Lab performed the testing and invoiced Acadia’s treatment centers for the services,” Stuart explained.

“Acadia’s treatment centers paid the San Diego Lab but Acadia’s West Virginia treatment centers then billed West Virginia Medicaid for the urine and blood testing performed by the San Diego Lab as though the testing had been performed by Acadia and its subsidiary.”

Jake Flatley/

The settlement totaled $17 million.

Stuart said the exact losses were $2,181,000 to the state and $6,318,900 to the United States.

Bill Crouch, the Cabinet Secretary of the DHHR, was on hand Monday and applauded the work of everyone in the room, including the department’s MFCU.

“They discovered this and kept investigating and working this forward,” he said. “The rest of the team came in to help and it was a terrific outcome”

“The dollars that are going to return to DHHR will now be used to assist vulnerable people who need services. This is a tremendous win for West Virginia and I thank everyone here for the help with that.”

According to a release, CRC Health and Acadia Healthcare entered into a five-year corporate integrity agreement (CIA) with HHS-OIG as part of the settlement.

The CIA requires CRC and Acadia to maintain a compliance program, implement a risk assessment program, and hire an Independent Review Organization to review Medicaid claims.

Read more on the settlement HERE