Addiction Recovery Care says recent layoffs and closures not related to FBI investigation

Kentucky’s largest addiction recovery provider has abruptly closedfive facilities in its flagship city of Louisa, laying off employees, and transporting dozens of clients to its other facilities.

A spokesperson for Addiction Recovery Care would not tell the Herald-Leader exactly how many employees or clients have been impacted by the move, citing medical privacy and personnel concerns. Additionally, the company would not name the specific facilities that closed. 

ARC spokesperson Kyle Collier said Thursday the business was forced to make “difficult decisions” as a result of “impending and significant reimbursement cuts for addiction and mental health service providers.”

This announcement comes a month after the FBI launched a probe into the recovery network for potential health care fraud. ARC has not been charged, and it is cooperating with the investigation. 

According to Collier, the closures of facilities is not related to the FBI’s inquiry.

Since opening in 2010, ARC has grown and expanded its operation with the stated goal of helping to stem the tide of the drug crisis across Kentucky — an epidemic fueled by opioids.

The for-profit company, which began with one addiction treatment facility in Louisa, owns and operates around 40 treatment centers across the state.

ARC is the top contributor to Kentucky’s distinction of having the most residential treatment beds per capita in the country.

But that’s beginning to change.

When pressed, ARC told the Herald-Leader Thursday it had made “difficult decisions impacting some of our staff members.” The company blamed the reduction on “impending and significant reimbursement cuts for addiction and mental health service providers.”

“This is not a decision we made lightly, and we are doing everything possible to support the affected individuals during this transition,” Collier told the Herald-Leader. 

One of the five facilities is being renovated and will reopen in 2025, Collier confirmed. The other four are being repurposed for workforce housing for people receiving college certificates and vocational training. The spaces are not currently housing individuals for addiction recovery efforts.

One temporarily closed facility includes the Carpenter’s Village in Owsley County for “essential renovations” to enhance the facility, Collier confirmed.

ARC would not disclose all the facilities affected by the closures. 

Additionally, Collier said as part of the business’s ongoing commitment to their touted crisis-to-career model, the decision was made to transition some Louisa facilities to workforce housing for clients pursuing college certifications and vocational training — “to best help Kentuckians achieve successful long-term recovery.”

The claim that ARC is facing reimbursement cuts which resulted in shuttered facilities and layoffs comes around three weeks after the founder and CEO, Tim Robinson, bragged about upcoming expansions. 

Robinson, an ordained minister, spoke at ARC’s monthly three-hour gathering, which brings together hundreds of clients who are who are currently matriculating through their program. He assured ARC’s continued growth. 

The organization still plans to open its first center in Virginia, Collier said. He did not say when.

And Robinson told the crowd of clients that more space has been leased in Bowling Green for a future outpatient center, which he said will become ARC’s “west Kentucky hub.” 

ARC is also renovating facilities in Adena, Ohio, and it just acquired the Southeastern Beauty Academy in Paintsville as part of the program’s vocational training. 

“No matter what storms are raging, this boat is floating,” Robinson told thehundreds of clients at an Indiana church in late August. “With your help, we’re winning in our state, we’re winning as an organization, and as we continue to work through some choppy waters, just keep looking for that walk-on-water moment.”

This story was originally published September 13, 2024 at 5:00 AM.

Taylor Six

Lexington Herald-Leader

Taylor Six is the criminal justice reporter at the Herald-Leader. She was born and raised in Lexington attending Lafayette High School. She graduated from Eastern Kentucky University in 2018 with a degree in journalism. She previously worked as the government reporter for the Richmond Register.