New Life Lodge to pay $9.25M over fraud claims

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BURNS, Tenn. (AP) - Owners of the New Life Lodge drug and alcohol treatment facility in Burns have agreed to pay $9.25 million to settle allegations of TennCare fraud.

According to the state attorney general’s office, the state claims that CRC Health Group provided substandard services, repeatedly exceeded its patient capacity and caused third-party pharmacies to bill the TennCare program for prescription drugs that New Life Lodge was obligated to provide.

The state claims the fraud took place between 2006 and 2012.

The settlement is the result of a joint investigation between the state of Tennessee and the United States. The recovery will be divided between the state and federal governments, with Tennessee receiving approximately $3.4 million.

CRC has not admitted to any wrongdoing.

“We dispute the validity of the allegations in the lawsuit, but to avoid the distraction that a protracted legal process would provide, we have agreed to settle this suit,” the company said in a statement to The Tennessean. “We cooperated fully with the government’s investigation; we are pleased it has ended.”

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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