They Needed Treatment for Drug Addiction. The Company They Turned to May Have Used Them to Commit Fraud.

Renault Shirley remembers the first time he was asked to falsify billing reports for Kentucky’s largest drug rehab center. He had just returned from a church service in 2023 where the company’s founder and owner, a charismatic Christian from Eastern Kentucky, preached about the value of getting sober to hundreds of clients and staff at Addiction Recovery Care. Shirley, 58, who led recovery group discussions at ARC, said one of his supervisors told him to submit an invoice for the day’s canceled treatment sessions.

With it, Shirley said, he was told to fabricate the details of a group discussion, including quotations from clients, as if they had attended a meeting.

“It was fraud,” Shirley told the Lexington Herald-Leader and ProPublica, adding that he refused. But he said he saw others do it often when they gathered to enter their reports into the billing system. Shirley and ARC were part of a new economy, a boom fueled by misery and addiction and easy money from government officials desperate to curtail the opioid crisis that was devastating rural America.

Kentucky’s payouts for drug treatment became so lucrative that companies bused in clients from other states to fill their treatment centers. ARC reigned above them all, providing more than two-thirds of all treatment beds in Kentucky at its peak in 2024. Between 2019 and 2024 ARC billed the state $1.7 billion, of which it was paid more than $377 million in state Medicaid money for addiction treatment services.

During those years ARC won praise for its programs. The U.S. Department of Health and Human Services lauded ARC as a model, and Newsweek named the company one of the best addiction treatment providers in the country. Kentucky Gov. Andy Beshear called its founder “an essential partner in our fight against addiction.”

But ARC’s growth was fueled in part by billing practices that federal prosecutors and former employees now allege may have amounted to fraud. FBI investigators were alerted to the case through a whistleblower suit filed in 2023, which alleged ARC fraudulently billed Medicaid for a therapeutic service called psychoeducation. The FBI has asked those who “believe you were victimized by ARC” to fill out a tip form.

That investigation is ongoing, according to the FBI. ProPublica and the Herald-Leader interviewed six people affiliated with the company over the last six years, including former staff members, clients and some who came for treatment and were later hired on. They shared publicly for the first time how they came to ARC seeking help for addiction but became reluctant participants in the company’s alleged billing scheme.

Two of them have said they made similar statements to federal investigators. Part of the fraud, three of them said, was committed at the explicit urging of supervisors who told them they were under pressure to meet billing targets set by ARC leaders — a circumstance exacerbated by a persistent lack of qualified staff, they said. Those who talked to the news organizations did not keep contemporaneous notes and do not have access to company emails that could support their claims because they no longer work for ARC.

But their accounts are corroborated by other clients and referred to in two key documents. The first was a draft settlement agreement between ARC, the state of Kentucky and the Department of Justice filed by lawyers suing ARC in January as evidence in an unrelated civil suit. That suit, which is pending, alleges that ARC failed to repay at least $8 million it borrowed from two loan companies to pay the DOJ settlement.

ARC denied it failed to pay the company. The draft DOJ settlement document alleges that ARC knowingly falsified some medical records from 2018 to the start of 2024 in order to collect $16 million for group meetings like Shirley described. It allegedly collected millions more by using low-level staff to bill the state for services that under the law must be delivered by a doctor or licensed therapist.

The second document was a 2025 investigative report by the Kentucky Cabinet for Health and Family Services that has yet to be released but was obtained by ProPublica and the Herald-Leader. That report said state investigators found that ARC had violated so many regulatory standards, lack of staff chief among them, that the conditions posed “an immediate danger to client health, safety and welfare.”

In response to questions for this story, ARC said it “voluntarily disclosed” billing errors to state and federal authorities after the company hired an outside agency to audit its billing practices. The draft settlement with the DOJ, the company said, was not supposed to be made public and therefore it could not comment. The draft settlement was unsigned.

“ARC has never knowingly or fraudulently billed Medicaid for services, and there is no evidence that the organization encouraged employees to falsify group notes for billing purposes,” ARC’s Vice President of Marketing Vanessa Keeton wrote in a March 23 email in response to written questions about the company’s billing practices and employee allegations.

She said that the company could not comment on staff, but that it “maintains a strict, zero-tolerance policy for fraud and non-compliant billing practices.” Keeton added that “any claims from clients or Peer Support Specialists about whether a specific service was billed are based on assumptions and do not accurately reflect actual billing practices.” Nearly all of the people interviewed for this story credit ARC with playing a key role in their sobriety.

But most also said they felt betrayed by an organization that publicly touted a Christian message and a commitment to helping others while internally prioritizing money over the well-being of their clients and staff. Called by God In late 2008, ARC owner Tim Robinson was working as an assistant county attorney near Ashland when he had an epiphany. An evangelical Christian who’d recently gotten sober from alcoholism, Robinson has said God told him to start a “health care ministry” to help his neighbors in the mountains and hollows of Appalachia hit hard by the opioid crisis.

There were few treatment centers in the state at the time. Robinson in 2010 opened the first ARC center in Louisa, a small town on the West Virginia border, 30 miles from his hometown in Martin County. ARC steadily grew across Eastern Kentucky.

In 2015, the company was the state’s first drug treatment provider to accept Medicaid patients, which dramatically increased the number of available clients. The following year, ARC unveiled its yearlong “crisis-to-career” program, equal parts drug treatment and job training that ultimately helped clients become staff at ARC. But it was during the COVID-19 pandemic that ARC exploded in size, thanks in large part to changes to billing rules put in place by the governor.