Recovery Centre of USA and its CEO, Warrick Stewart, have agreed to pay $15.2 million to the U.S. government to settle fraud allegations brought by private citizens over inflated Medicaid billings for children with mental health needs in Maryland, Kentucky and Ohio.

Authorities alleged that the centre operated the Aspire Day Programme for children with behavioural and mental health conditions while submitting exaggerated payment claims between August 2022 and June 2025.

Although Medicaid is designed to cover only healthcare services, Recovery Centre facilities in Ohio and Kentucky allegedly billed the government for non-medical activities, including education, lunch breaks and recreational time for children.

The scheme reportedly cost the U.S. government millions of dollars, as the inflated claims were routinely paid.

Prosecutors also raised concerns about staffing, alleging that the centre misrepresented the qualifications of personnel providing care. While claims were submitted as though services were delivered by licensed healthcare professionals, authorities said much of the work was carried out by lower-level staff without the required certifications.

Billing for highly credentialled practitioners typically attracts higher reimbursements and officials said this misrepresentation resulted in overpayments.

“Vulnerable populations, like children who need behavioral health services, deserve to be treated by qualified clinicians,” Jason Parman, First Assistant United States Attorney for the Eastern District of Kentucky said, reacting to the settlement. “Our office is committed to investigating behavioural healthcare fraud to ensure that Kentuckians receive necessary medical care and that Medicaid programs only pay for covered services.”

Susan Edwards, chief counsel for the Department of Health and Human Services Office of Inspector General (HHS OIG) echoed similar sentiments.

“HHS OIG remains committed to combatting Medicaid fraud and enforcing compliance with billing requirements,” said Ms Edwards. “In connection with today’s settlement, Recovery Center has entered into a five-year Corporate Integrity Agreement with HHS OIG. This agreement imposes strengthened compliance obligations to ensure Recovery Center establishes and maintains robust systems that protect Medicaid funds and uphold the delivery of appropriate, compliant services to beneficiaries.”