Roots of Allegations and Investigations
Tim Robinson, founder of Addiction Recovery Care (ARC) in Kentucky, was inspired by his faith to start a drug treatment program during the opioid crisis. ARC grew to become the state’s largest provider. However, several former employees and whistleblowers have accused the center of falsifying invoices to claim millions of Medicaid dollars. The FBI is investigating these allegations following a whistleblower suit filed in 2023.
Billing Practices Under Scrutiny
Many former staff members claim they were instructed by supervisors to submit false billing for canceled sessions or services not rendered.
From 2019 to 2024, ARC billed the state $1.7 billion, receiving over $377 million from Medicaid for addiction treatment services. Allegations suggest ARC fraudulently billed for psychoeducation—a therapeutic service involving educational sessions about diagnosis and treatment—often conducted by low-level staff instead of required licensed professionals.
Reports from the Ground
Six individuals affiliated with ARC, including former staff and clients, reported being reluctantly involved in fraudulent billing practices. They stated billing quotas pressured them into falsifying records.
Renault Shirley, a former leader of recovery groups at ARC, refused to participate in fraudulent billing but witnessed others comply when entering the day’s reports into the system.
Odell Hager, who experienced ARC both as a client and later as a peer support specialist, reported sessions often involved watching movies instead of meaningful discussions about addiction recovery.
The Role of State and Federal Regulations
The rapid expansion of ARC during the COVID-19 pandemic was aided by changes to Medicaid billing rules, which allowed treatment providers more flexibility in billing without prior authorization. This change was influenced by Tim Robinson’s political connections and lobbying efforts during the pandemic.
From 2019 to 2024, psychoeducation and peer support accounted for over $125 million of ARC’s revenue, but concerns about the validity of these billings arose as evidence suggested inadequate clinical support.
Staffing Concerns and Compliance Issues
An investigation by the Kentucky Cabinet for Health and Family Services in 2025 cited a lack of qualified staff and systemic regulatory violations at ARC, which placed client well-being in jeopardy.
Shirley and other staff claimed they were unable to provide adequate services due to understaffing, frequently resorting to recording or self-reporting of client activities.
ARC disputed these allegations, advocating that they had implemented compliance measures upon recognizing any auditing discrepancies.
Repercussions and Legislative Responses
Recently, sweeping state reforms adjusted Medicaid payouts and regulations for billing services like psychoeducation and peer support. This resulted in financial challenges for ARC, including layoffs and facility closures.
Amid legislative and financial pressures, ARC’s founder attempted to sell most of the company to meet legal settlements, but the deal did not proceed.
Kentucky lawmakers continue to question Medicaid spending on addiction treatment, suggesting financial motives are prioritized over genuine patient recovery.
Shirley, now employed at a different treatment center, reflects on ARC’s practices as prioritizing financial gains over effective client support and recovery.