Another round of layoffs hits Addiction Recovery Care in KY, as FBI probe looms
When Theo Shackleford got an email on a recent Friday afternoon from his employer, Addiction Recovery Care, he knew what was coming.
A now-former client and peer support coordinator, Shackleford had survived four rounds of layoffs. But not this one.
He recalled the two-minute, Aug. 1 meeting as such: “We regrettably inform you that your position has been dissolved. Anything we can do, feel free to reach out to HR for your case. Thank you for your dedication and work. Meeting’s over.”
Shackleford said he was one of at least a dozen people laid off that day by the for-profit company, which began with one addiction treatment center in Louisa in 2010 and now owns and operates nearly 40 facilities across Kentucky. The largest addiction treatment center in the commonwealth, ARC was the top contributor to Kentucky’s status as the state with the most residential treatment beds per capita in 2023.
But the layoffs were the latest installment in a tumultuous year for the addiction treatment giant. Hundreds of employees have been laid off — ARC won’t say exactly how many — as federal cuts to Medicaid cuts have hampered funding and led to the closure of multiple facilities.
And an FBI investigation into potential Medicaid fraud at the center is ongoing. When federal officials announced the probe in August 2024, they asked current and former employees and patients who had been “victimized by ARC” to submit their stories via online questionnaire. As of July, the FBI said it had received more than 600 responses.
Vanessa Keeton, a spokesperson for ARC, said the company does not comment on personnel matters, so it could not confirm the recent round of layoffs.
“Addiction Recovery Care, like all providers, has been deeply affected by the recent significant cuts to payment for behavioral and mental healthcare services in Kentucky,” Keeton said in an emailed statement. “ARC, like other providers, is working hard to determine the best way to continue to provide critically needed addiction and mental health services to thousands of Kentucky’s most vulnerable citizens with far less resources. Despite these challenges, ARC remains committed to providing comprehensive and accessible treatment options for people with substance use disorders, mental health concerns, or both.”
Keeton also said ARC does not comment on ongoing government investigations but “will continue to fully cooperate with relevant government entities.”
Former ARC employees speak out
With many ARC workers in active recovery, the layoffs are more than a business shakeup. Former staff say the sudden loss of work has “upended” lives and endangered hard-won sobriety.
Some of those employees began as clients who completed ARC’s yearlong “crisis to career” program. They credit the organization with helping them get sober. That same organization has now made them feel used and expendable, they told the Herald-Leader.
“They did it in such a way that it was callous and heartless,” said Beckie Rose Bowman, a former client and director at Riverplace, one of ARC’s largest all-male facilities. She was fired in September 2024.
“Everyone was waiting for that Friday email, and if you got an HR email, you knew you were going to be on this call — where you were muted — and told, ‘We are having to make some really hard decisions; you can file for unemployment; See ya, bye,’” Bowman said.
The panic and uncertainty led to multiple relapses and overdoses among former employees, Bowman said.
“What you ended up with was people who just completed treatment, they have a car, they have a job and maybe an apartment,” Bowman said. “They think they are living the dream. Here they are working their guts out, and (ARC) laid off almost 500 people.”
Here’s a timeline of events the Herald-Leader has published since the FBI announced their investigation.
- August 2024 — The FBI announces their investigation with a questionnaire for people to fill out if they have been “victimized” by ARC. No criminal charges have been filed against ARC.
- Aug. 27, 2024 — ARC Founder and CEO Tim Robinson preaches to clients that the company planned to continue their growth by expanding facilities to surrounding states.
- Sept. 13, 2024 — Five facilities close, and an unknown number of employees are suddenly laid off. Former spokesperson Kyle Collier says one of the facilities was closed for renovations, and the other four are being “repurposed.”
- Oct. 16, 2024 — Four additional ARC facilities abruptly close their doors, bringing the total to nine in two months. ARC won’t disclose how many people were laid off or if any clients are displaced.
- January 2025 — Three top ARC officials leave their positions: Chief Operating Officer Pat Fogerty, Senior Vice President of Medical Services Paige Ross and President Matt Brown.
- August 2025 — Another round of layoffs hit the company. A former employee said at least a dozen people are laid off.
