A settlement has been reached in a whistleblower class action lawsuit brought against CRC Health Corp who is accused of submitting false claims by providing substandard treatment to adult and adolescent Medicaid patients suffering from alcohol and drug addiction at its facility in Burns, TN called New Life Lodge.
The whistleblower will receive a $1.5 million share of the settlement proceeds.
Filed in 2011, the lawsuit alleged that between 2006 and 2012, 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 lawsuit 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 to those accusations, the case claims that New Life Lodge double-billed Medicaid for prescription substance abuse medications given to residents at the facility.
