ARC DEBTS AND LAWSUITS BUILDING UP

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Case 3:26-cv-03397-D     Document 1     Filed 09/28/26      Page 1 of 14     PageID 1 IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS DALLAS DIVISION VERUSRX, LLC Plaintiff, v. ADDICTION RECOVERY CARE, LLC Defendant.  Case No. ____________________  ) ) ) ) ) ) ) ) ) ) ) ) PLAINTIFF’S ORIGINAL COMPLAINT Plaintiff Verus RX, LLC (“VerusRX”) files this Original Complaint against Defendant Addiction Recovery Care, LLC (“ARC”) and alleges as follows: I. Nature of the Action 1. This action arises out of ARC’s breach of an October 1, 2023, Pharmacy Services Agreement (the “PSA”)1 by failing to pay VerusRX for pharmacy benefit services provided to its members on behalf of ARC in the approximate amount of NINE HUNDRED SIXTY-TWO THOUSAND DOLLARS (“$962,000”). II. Parties 2. Plaintiff Verus RX, LLC is a Texas limited liability company with its principal place of business located at 12221 Merit Drive, Suite 1800, Dallas, Texas 75251.  1The PSA is not attached to this Complaint because it contains commercially sensitive and competitively valuable information, including pricing data. It will be produced to the Court and ARC upon the entry of a confidentiality agreement. 1 Case 3:26-cv-03397-D     Document 1     Filed 09/28/26      Page 2 of 14     PageID 2 3. Defendant Addiction Recovery Care, LLC is a Kentucky limited liability company with business offices at 332 River Bend Road, Louisa, Kentucky 41230, and may be served through its registered agent John Wilson at 2435 Aristocracy Circle, Lexington, KY 40509.   III. Jurisdiction and Venue 4. This Court has subject-matter jurisdiction under 28 U.S.C. § 1332(a) because the amount in controversy exceeds $75,000, exclusive of interest and costs, and there is complete diversity of citizenship between Plaintiff and Defendant.   5. Personal jurisdiction exists because Defendant agreed to an exclusive forumselection clause submitting to the jurisdiction of the state and federal courts in Texas located in Dallas County, Texas for disputes arising out of the Parties’ Agreement. PSA § 44b. The PSA provides the Parties “irrevocably and unconditionally submit to the exclusive jurisdiction of the state and federal district courts located in Dallas County, Texas, waive any objection to forum or venue and agree to accept service of process by mail in any action arising out of this agreement.” PSA § 44b. 6. Venue is proper in this District under 28 U.S.C. § 1391(b) and (c) because the Parties agreed to exclusive venue in Dallas County, Texas, which lies within the Northern District of Texas, Dallas Division. PSA § 44b. The Agreement provides for exclusive jurisdiction and venue in the state and federal district courts located in Dallas County, Texas. Id.   IV. Background Facts A. The Pharmacy Services Agreement 7.  Effective October 1, 2023, VerusRX entered into a Pharmacy Services Agreement (“PSA”) with ARC, under which VerusRX, as “PBM,” provided pharmacy benefit management services to Addition Recovery, as “Client” in exchange for payment from ARC.  2 Case 3:26-cv-03397-D     Document 1     Filed 09/28/26      Page 3 of 14     PageID 3 8. Pursuant to the PSA, ARC agreed that VerusRX would be the exclusive provider of Prescription Benefit Services and Formulary Management Services during the term of the PSA. PSA § 41.  9. Under the PSA, PBM agreed to provide pharmacy benefit management services to Client’s health plan Members, including claims processing, eligibility verification, participating pharmacy contracting and management, pharmaceutical manufacturer contracting and administration, financial benefits management, reporting, formulary and clinical support, and related services. PSA §§ 1.55 and 4. 10. The initial term of the PSA was two years from the Effective Date and renewed for successive one-year terms unless either party provided written notice of intent to terminate at least ninety days before the applicable renewal date. PSA § 43. Neither party submitted a written notice of intent to terminate before ARC breached the agreement.  11. The PSA requires Client to provide and timely update electronic eligibility files identifying all covered Members, to ensure the accuracy and completeness of the Member List, and to pay PBM for all Paid Claims dispensed to persons listed as active on the Member List, with retroactive disenrollment not constituting a basis to refuse payment. PSA § 3. 12. Per the PSA, Client must furnish Benefit Plan design information, copayment structures, and timely notice of Benefit Plan changes, while PBM provides semi-monthly statements reflecting all processed claims and applicable fees, and supports real-time accumulator tracking and reporting obligations identified in the PSA. PSA §§ 3, 5, 20.   13. PBM provides a network of participating retail, mail, and specialty pharmacies, maintains an online adjudication system for real-time eligibility and claim processing, and supplies 3 Case 3:26-cv-03397-D     Document 1     Filed 09/28/26      Page 4 of 14     PageID 4 standard monthly and quarterly reports, with additional ad hoc reports available for stated fees. PSA §§ 1, 12, 14.      14. Formulary management is provided exclusively by PBM under the PSA; Client agreed to adopt one of PBM’s formulary options, maintain differential cost-sharing where applicable, and refrain from negotiating independent manufacturer rebate arrangements during the term. PSA § 21.   15. The PSA includes clinical and administrative prior authorization processes administered by PBM, with specified fees for administrative overrides, pharmacist clinical review, appeals, and optional external review through PBM’s contracted IRO. PSA §§ 7-10.   16. Pricing and reimbursement to PBM for claims are governed by its Network Pricing, which sets AWP-based reimbursement methodologies, MAC application for generics, and specialty drug pricing through an exclusive specialty pharmacy, subject to Lesser of Usual and Customary price rules.     17. Client must reimburse PBM the total invoiced claims and pay Administrative and Additional Fees by wire or ACH within two business days of receiving each invoice and invoice detail, with late payments potentially disrupting member service and subject to a late fee of up to 1.5% per month after ten days. PSA § 3o.     18. If Client has two or more invoices past due or PBM reasonably believes Client may be delinquent, PBM may require a deposit equal to one month’s average billing based on recent history, to be retained and applied as set forth in the PSA. PSA § 3q. 19. Per the PSA, PBM administers manufacturer rebate programs and retains compensation for formulary management; rebate distribution to Client, with Client’s reporting 4 Case 3:26-cv-03397-D     Document 1     Filed 09/28/26      Page 5 of 14     PageID 5 duties for governmental program requirements and PBM’s right to withhold or set off rebates against delinquent balances.  PSA §§ 3p-y, 22-24. 20. The PSA allocates responsibility for taxes included on pharmacy claims invoices, sets fees for eligibility and ID card production, and outlines optional program integration charges and termination-runout services, with all such amounts payable by Client as invoiced. PSA §§ 1, 7, 11, 29, 30.   21. Termination for breach permits the non-breaching party to give written notice specifying the breach and terminate if uncured within thirty days (or a shorter period if provided in the Agreement), with early termination by Client during the initial term subject to an early termination fee. PSA §§ 43c. 22. Upon termination, claims incurred through the final contract date remain Client’s responsibility. PSA § 3m.  23. The PSA authorizes the prevailing party in litigation relating to the agreement to recover its costs and expenses, including legal fees and expenses. In the event of litigation relating to the PSA, the prevailing Party shall be entitled to recover from the other Party its costs and expenses (including, without limitation, legal fees and expenses) incurred in connection with such litigation. 24. B. VerusRX’s Demand for Payment ARC failed to pay amounts due and owing to VerusRX under the PSA, resulting in an outstanding balance of approximately $962,000.00.  25. In August of 2026, VerusRX demanded payment of approximately one million dollars due to ARC’s failure to pay amounts owed under the PSA.   5 Case 3:26-cv-03397-D     Document 1     Filed 09/28/26      Page 6 of 14     PageID 6 26. On August 6, 2026, VerusRX sent ARC a written demand for payment in full of $1,058,351.82, reserving all rights to late fees at the contractual rate and costs of collection, and providing notice of breach with a cure provision consistent with the Agreement. 27. The demand letter further explained ARC’s breach for failure to pay, and referenced rights to late fees, costs of collection and notice-and-cure provisions under the Agreement.   C. ARC’s Default and Nonpayment 28. The last payment received by VerusRX from ARC pursuant to the PSA occurred in October of 2025. In the same month, ARC’s third-party administrator (“TPA”), UMR, discontinued remitting payment to VerusRX on behalf of ARC.  29. On November 11, 2025, VerusRX receives a demand notification from UMR for ten invoices to ARC totaling an amount of FOUR HUNDRED NINETEEN THOUSAND SEVEN HUNDRED TWENTY-NINE DOLLARS AND NINETY-TWO CENTS (“$419,729.92”) and suggested VerusRX engage with ARC directly to recover the funds.  30. VerusRX did not have any contractual privity with UMR; therefore, VerusRX did not refund UMR the amount demanded. VerusRX’s PSA runs directly to ARC, not UMR. As of November 11, 2025, ARC had a zero balance (“$0.00”) with VerusRX. 31. On December 11, 2025, VerusRX invoiced ARC directly for the first time with instructions on how to remit payments directly to VerusRX. In the notice, VerusRX further advised ARC that its TPA, UMR, was no longer remitting payments on its behalf 32. On January 23, 2026, VerusRX sent a first delinquent payment notice to ARC that there was a balance owed in the amount of ONE HUNDRED SIXTY THOUSAND THREE HUNDRED SIX DOLLARS AND FIFTY-SIX CENTS (“$160,306.56”) of which TWENTY6 Case 3:26-cv-03397-D     Document 1     Filed 09/28/26      Page 7 of 14     PageID 7 THREE THOUSAND SIXTY-SEVEN DOLLARS AND EIGHTY-TWO CENTS (“$23,067.82”) was over sixty (“60”) days late. No response was received from ARC.  33. On February 5, 2026, VerusRX sent a second notice of overdue balance to ARC. Again, no response was received from ARC.  34. On February 13, 2026, VerusRX sent a third notice of late payment to ARC with balance stated: THREE HUNDRED SEVENTEEN THOUSAND NINE HUNDRED TWENTYTWO DOLLARS AND THIRTY-ONE CENTS (“$317,922.31”), of which EIGHTY-SEVEN THOUSAND FIVE HUNDRED FORTY-FOUR DOLLARS AND NINETEEN CENTS (“$87,544.19”) was over 60 days late. VerusRX further demanded a payment status by close of business on February 17, 2026. 35. On February 17, 2026, after repeated attempts by VerusRX, ARC responds to VerusRX for the first time. ARC explains the state of its business in that a pending acquisition is closing, which will result in a positive financial impact to ARC. ARC therefore asked for additional time to pay the balance owed. VerusRX granted ARC a thirty-day period.  36. On February 18, 2026, VerusRX issues a fourth written notice to ARC, copying ARC’s CEO and the Broker. The notice included an interest payment owed of SEVEN THOUSAND ONE HUNDRED THIRTY-EIGHT DOLLARS AND NINETY-ONE CENTS (“$7,138.91”) and a deposit of NINETY-SIX THOUSAND EIGHT HUNDRED NINETY-ONE DOLLARS AND FORTY-SIX CENTS (“$96,891.46”) per the PSA. Total demand was FOUR HUNDRED TWENTY-ONE THOUSAND NINE HUNDRED FIFTY-TWO DOLLARS AND SEVENTY-FOUR CENTS (“$421,952.74”) which was due in full by 5:00 p.m. CST on March 20, 2026. The notice further stated that if the payment was not received in full by that time, plan benefits and member cards would terminate at 11:59 p.m. CST on March 20, 2026.  7 Case 3:26-cv-03397-D     Document 1     Filed 09/28/26      Page 8 of 14     PageID 8 37. In March of 2026, four follow-ups were made to either ARC or ARC’s Broker requesting status of payment as the deadline of March 20, 2026, was rapidly approaching. ARC’s Broker alleges that ACR committed to paying fifty percent (“50%”) of the outstanding balance by Friday March 27, 2026, with the remaining balance paid two to three weeks after. ARC’s Broker assured VerusRX that funding had been approved.  38. On March 18, 2026, VerusRX withdrew the March 20, 2026, termination notice and substituted an agreed payment schedule. At this time, the outstanding balance owed was FIVE HUNDRED EIGHTY-NINE THOUSAND SEVEN HUNDRED SIXTY DOLLARS AND EIGHT CENTS (“$589,760.08”). VerusRX and ARC agreed that ARC would pay TWO HUNDRED NINETY-FOUR THOUSAND EIGHT HUNDRED EIGHTY DOLLARS AND FOUR CENTS (“$294,880.04”) by 5:00 p.m. CST on March 27, 2026, and the remaining $294,880.04, by 5:00 p.m. CST on April 17, 2026, as well as keep the account current thereafter. Termination was restated in the notice as the consequence of missing either date.  39. ARC.  40. On March 27, 2026, the agreed first installment date, no payment was received from On April 3, 2026, VerusRX send written communication to ARC informing that no payment was received and that the balance and interest continue to accrue. VerusRX further noticed ARC that member cards would be shut off at close of business April 7, 2026.  41. On April 7, 2026, VerusRX met with ARC and extended the deadlines once more to Friday, April 10, 2026. The outstanding balance at this time was FIVE HUNDRED THIRTYEIGHT THOUSAND SEVEN HUNDRED EIGHTY-TWO DOLLARS AND FORTY-SEVEN CENTS (“$538,782.47”), excluding the $96,891.46 deposit. Internally, VerusRX formulated a proposed plan for ARC to pay off the remaining balance of weekly payments rising from 8 Case 3:26-cv-03397-D     Document 1     Filed 09/28/26      Page 9 of 14     PageID 9 TWENTY-FIVE THOUSAND DOLLARS (“$25,000”) to FIFTY THOUSAND DOLLARS (“$50,000”), clearing all items with balances due over 60 days by May 29, 2026, and bringing the account fully current by July 3, 2026.  42. On April 8, 2026, VerusRX sent ARC the proposed installment plan and remittance instructions with the first payment of $25,000.00 required by 5:00 p.m. CST on Friday, April 10, 2026. If ARC failed to pay the installment, benefits would be shut off at that time.  43. On April 10, 2026, ARC remitted $25,000.00 by ACH and provided a bank payment-detail confirmation. This is the only payment reflected anywhere in the record after October 2025. No further installment under the plan was paid by ARC. 44. On May 11, 2026, ARC advises its Broker that its Emend Healthcare transaction has been delayed and that ARC is moving to a contingency: an ownership and real-estate partnership with Actus Group, which is expected to close with Actus’s lender within 15–20 days. In place of installment payments, ARC proposed a written use-of-funds agreement under which VerusRX, UMR, PacLife and Berkley would be paid at closing while ARC continued to operate without interruption. VerusRX agreed. 45. On May 12, 2026, VerusRX prepared a balance sheet for ARC’s broker with the balance as of May 12, 2026: aging FIVE HUNDRED NINETY-FOUR THOUSAND TWO HUNDRED FORTY DOLLARS AND EIGHTY-FOUR CENTS (“$594,240.84”), interest TWENTY THOUSAND THREE HUNDRED FORTY-THREE DOLLARS AND SIXTYSEVEN CENTS (“$20,343.67”), deposit $96,891.46 for a total amount of SEVEN HUNDREDN ELEVEN THOUSAND FOUR HUNDRED SEVENTY-FIVE DOLLARS AND NINETYSEVEN CENTS (“$711,475.97”). 9 Case 3:26-cv-03397-D     Document 1     Filed 09/28/26      Page 10 of 14     PageID 10 46. On May 15, 2026, ARC circulated a draft Use of Proceeds Agreement dated May 13, 2026, among ARC, Actus Management, LLC and each vendor, and asked VerusRX for edits. The draft recited that ARC was “in the process of securing a bridge loan,” that the vendor will continue providing services in exchange for payment from the loan proceeds, and expressly affirmed that “the Bridge Loan closing has not occurred.” Payment was contingent on the loan closing. 47. On May 26, 2026, the broker requested an updated statement of all amounts owed for ARC’s closing documents, which VerusRX provided the following detail of balance owed as of June 26, 2026: aging SEVEN HUNDRED EIGHTY-FIVE THOUSAND THIRTY-THREE DOLLARS AND EIGHTY THREE CENTS (“$785,033.83”), interest THIRTY-FIVE THOUSAND FOUR HUNDRED TWENTY-FOUR DOLLARS AND FOURTEEN CENTS (“$35,424.14”), deposit $96,891.46 with total amount of NINE HUNDRED SEVENTENN THOUSAND THREE HUNDRED FORTY-NINE DOLLARS AND FORTY-THREE CENTS (“$917,349.43”).   48. 49. 50. On June 30, 2026, benefits were suspended at midnight for lack of payment.  ARC missed another committed to payment date as of July 31, 2026.  Presently, ARC’s balance as reflected in the aging extract totals NINE HUNDRED THREE THOUSAND NINETY-SIX DOLLARS AND EIGHTY-TWO CENTS (“$903,096.82”), of which EIGHT HUNDRED NINETY-ONE THOUSAND ONE HUNDRED THRITY DOLLARS AND THIRTY-ONE CENTS (“$891,130.31”) (98.7%) is more than sixty (“60”) days past due and SEVEN HUNDRED EIGHT THOUSAND SEVETY-SIX DOLLARS AND EIGHTY-ONE CENTS (“$708,076.81”) is more than ninety (“90”) days past due. VerusRX holds FORTY-ONE THOUSAND TWO HUNDRED SIXTY-EIGHT DOLLARS AND FORTY-FOUR 10 Case 3:26-cv-03397-D     Document 1     Filed 09/28/26      Page 11 of 14     PageID 11 CENTS (“$41,268.44”) in unremitted rebates available for offset. No payments have been received since April 10, 2026 51. Over eleven months, VerusRX put the overdue balance in front of ARC and its broker in writing more than fifteen times through providing invoices, follow-ups, formal 30-day notice, aging statements, and a negotiated installment plan, while continuing to pay ARC’s Pharmacy claims. The balance grew from ZERO DOLLARS (“$0.00”) to approximately $962,000, and every deadline VerusRX set was ultimately extended until benefits were finally terminated on July 1, 2026.     V. Cause of Action — Breach of Contract 52. 53. VerusRX incorporates the foregoing paragraphs as if set forth fully herein. The PSA is a valid and enforceable contract between VerusRX and ARC. The Parties executed the Pharmacy Services Agreement effective October 1, 2023.   54. VerusRX performed, or was ready, willing, and able to perform, its obligations under the agreement. PBM agreed to and did provide PBM Services described in the PSA at the rates set forth therein, including providing Statements reflecting Claims processed and associated fees.   55. ARC breached the PSA by failing to timely pay invoiced amounts and other fees when due under the agreement’s payment terms. Client must pay the invoiced amount within two business days of receipt of the invoice and invoice detail, and ARC failed to pay the outstanding balance.  56. As a direct and proximate result of ARC’s breach, VerusRX has been damaged in at least the amount of NINE HUNDRED SIXTY-TWO THOUSAND DOLLARS (“$962,000.00”), plus contractual late fees, costs, and attorneys’ fees. VerusRX demanded 11 Case 3:26-cv-03397-D     Document 1     Filed 09/28/26      Page 12 of 14     PageID 12 approximately one million dollars as the outstanding balance owed, and the Agreement permits late fees and recovery of prevailing-party fees and expenses in litigation.  VI. Attorneys’ Fees 57. VerusRX seeks recovery of its reasonable attorneys’ fees and costs as the prevailing party pursuant to the PSA’s fee-shifting provision. The PSA entitles the prevailing Party in litigation relating to the agreement to recover its costs and expenses, including legal fees and expenses.   58. law. VerusRX also seeks its recoverable costs and fees as permitted by applicable Texas VII. Interest and Late Fees 59. 60. VerusRX seeks prejudgment and postjudgment interest as allowed by law. VerusRX seeks contractual late fees on unpaid invoices at a rate of no more than 1.5% per month from the date specified in the PSA until paid. A late fee of no more than 1.5% per month applies to unpaid invoices after 10 days from the date PBM forwards the invoice and invoice detail to Client.   VIII. 61. Conditions Precedent All conditions precedent to VerusRX’s claims have occurred, been performed, or have been waived. VerusRX provided written notice of breach and demand for payment consistent with the PSA’s notice-and-cure provisions.  IX.           Jury Demand and Contractual Jury Waiver 62. VerusRX acknowledges the PSA’s jury trial waiver and pleads in accordance with it. Each Party waived the right to a jury trial for claims based upon or arising out of the Agreement and the transaction.  12 Case 3:26-cv-03397-D     Document 1     Filed 09/28/26      Page 13 of 14     PageID 13 63. In the alternative, and only to the extent the contractual waiver is found unenforceable in whole or in part, VerusRX demands a trial by jury on all issues so triable. Prayer for Relief VerusRX respectfully requests that the Court enter judgment in its favor and against ARC as follows: a) b) c) d) e) Awarding VerusRX damages for breach of contract in the principal amount of NINE HUNDRED SIXTY-TWO THOUSAND DOLLARS (“$ 962,000.00”), or such other amount proven at trial.  Awarding contractual late fees at a rate not to exceed 1.5% per month on unpaid invoices as provided in the PSA. Late fee of no more than 1.5% per month applies to unpaid invoices after 10 days from forwarding of the invoice and invoice detail. Awarding VerusRX its reasonable attorneys’ fees, costs, and expenses as the prevailing party under the PSA. The PSA provides that the prevailing Party is entitled to recover its costs and expenses, including legal fees and expenses, in litigation relating to the agreement. Awarding prejudgment and post judgment interest as allowed by law. Awarding such other and further relief as the Court deems just and proper. Respectfully submitted, THOMPSON, COE, COUSINS & IRONS, L.L.P. /s/ Barry A. Moscowitz  Barry A. Moscowitz State Bar No. 24004830 700 N. Pearl Street, Twenty-Fifth Floor Dallas, Texas 75201-2832 Telephone: (214) 871-8200 Facsimile: (214) 871-8209 E-Mail: bmoscowitz@thompsoncoe.com 13 Case 3:26-cv-03397-D     Document 1     Filed 09/28/26      Page 14 of 14     PageID 14 Victoria L. Jimenez State Bar No. 24060021 4400 Post Oak Parkway, Suite 1000 Houston, Texas 77027 Telephone: (713) 403-8210 Facsimile: (713) 403-8299 E-Mail: vjimenez@thompsoncoe.com  ATTORNEYS FOR PLAINTIFF

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WRONGFUL DEATH LAWSUIT FILED AGAINST ADDICTION RECOVERY CARE RELATED TO FORMER PIKE COUNTY, KY. FACILITY

A now-closed local substance abuse treatment center located on Millard Highway in Pikeville is the focus of a civil lawsuit charging the facility with the wrongful death of one of its patients. 

The 27-page complaint was filed with the Pike Circuit Clerk’s office on Sept. 14 on behalf of Michael Anthony Rison’s estate. It alleges that treatment and care failures caused Rison’s death.

Rison was admitted to the ARC Riverplace (Addiction Recovery Center) as a walk-in client for clinically managed high-intensity residential services on June 9, 2025, with an anticipated release date of Dec. 10 of that same year. He died on July 17, 2025.

The lawsuit names Addiction Recovery Care LLC (doing business as Addiction Recovery Care Riverplace), Odyssey Inc. and Pioneer Health Group LLC as defendants in the case. It also names three unidentified defendants listed as John Doe 1–3.

The lawsuit was filed by P. Kevin Hackworth, Esq., with the Lexington-based law firm of Hughes and Coleman.

The lawsuit said that, upon admission, Rison was listed as having chronic obstructive pulmonary disease (COPD), heart valve inflammation and severe opioid use disorder. It also stated he was prescribed several sedating and central nervous system depressants. 

It further states that ARC Riverplace staff began treatment on Rison, including one medication — Brixadi —  that was gradually increased to its maximum weekly dosage. It alleges that the medication carried a box warning label, directing that patients be monitored for possible life-threatening respiratory depression during the initial dose, during dosage increases and that risks increase when combined with depressants.

“Defendant knew … that this combination of circumstances required heightened observation and monitoring during the hours following that injection and, in particular, during the overnight hours,” the lawsuit states.

It further states that medical hourly rounding had ceased on July 9, with the last recorded vital signs being on July 14. 

The complaint alleges Rison was given the first maximum weekly dose of Brixadi at 2:20 p.m. on July 16. He was found unresponsive at 4 a.m. the next morning and death was pronounced by the Pike County Coroner’s Office at 5:40 a.m.

“Rounding on Mr. Rison ceased entirely eight days before his death and never resumed,” the lawsuit states. 

The Pike County Coroner’s Office arrived at 5:37 A.M., on July 17, according to the lawsuit. Death was pronounced at 5:40 a.m.”

According to the lawsuit’s account of the coroner’s investigation, the coroner arrived at 5:37 a.m. and pronounced Rison dead at 5:40 a.m. It further says the coroner estimated Rison had been “down eight to 10 hours.”

According to the coroner’s death scene investigation, the coroner estimated that Mr. Rison had been “down eight to 10 hours prior.”

The lawsuit charges ARC Riverplace, along with the other defendants, with wrongful death; four counts of negligence, including general, medical and corporate negligence; fraud and misrepresentation; and violation of the Kentucky Consumer Protection Act.

The lawsuit seeks relief in a trial by jury, compensatory and punitive damages in an amount determined by a jury,  recovery of attorney fees and other relief.

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BOURBON COUNTY, KENTUCKY FAMILY SUES ARC AFTER THEIR RELATIVE DIES AT THEIR PIKE COUNTY, KY. FACILITY

He died from cardiac arrest, according to a coroner’s report obtained by the Herald-Leader. He had been dead “a while” before his body was found by ARC staff, the coroner told the Herald-Leader last year.

Earl believes ARC is to blame for his brother’s death, and he filed a wrongful death lawsuit in Pike Circuit Court Sept. 14. The lawsuit claims the embattled drug treatment center was negligent, in part by failing to properly monitor his brother in the days before he died.

The lawsuit claims Brixadi, which can cause “life-threatening respiratory depression,” counteracted other medications Mike was taking for heart disease, and that ARC staff inadequately monitored Mike’s dosage and symptoms after he complained repeatedly of severe chest pain.

Less than a month before Mike’s death, on June 23, he was taken by ambulance to the hospital “complaining of crushing chest pain and labored breathing,” according to the lawsuit.

Even after the emergency room visit, ARC staff did not make a record of checking Mike’s vital signs in the three days leading up to his death, the lawsuit states.

The coroner found Mike’s body the morning of July 17 in a state of rigor mortis – estimating he was dead for nearly eight to 10 hours by the time he was found, according to the lawsuit. This conflicts with reports from ARC staff that charted Mike as participating in ARC classes and receiving medication the morning he was found dead, the lawsuit alleges.

ARC staff marked Mike Rison as attending sessions through 2 P.M. on July 16, and an injection record places the Brixadi administration at 2:20 P.M. However, the coroner’s report, based on information from the facility, reportedly listed 9:30 A.M. July 16 as the last time he was seen alive.

“These were not one-off mistakes,” said Kevin Hackworth, the Rison family’s attorney. “(ARC) knowingly staffed the facility with too few qualified, licensed people and did so for financial gain.”

Mike had a long history of substance and alcohol use, Earl told the Herald-Leader in 2025 shortly after his brother’s death. Mike had 30 days of sobriety under his belt when he died.

In his own words, Mike told clinicians his stressors or triggers for his risk of crisis were “feeling alone and making mistakes,” according to a medical intake form obtained by the Herald-Leader. He said his reasons for living were “he wanted a good life” for himself.

“He died sober and he’s not chasing the demons anymore,” Earl said of his brother.

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WHAT THE LAWSUIT ALLEGES

The lawsuit claims ARC knowingly ran its Eastern Kentucky treatment center with underqualified and unlicensed staff, and routinely skirted patient safety protocols in an effort to maximize profits.

More than 80% of ARC’s clients receive health insurance through Kentucky’s Medicaid program, according to company leaders.

Mike, who was enrolled in Kentucky Medicaid, was living at Riverplace, a 120-bed men’s facility in Pikeville treating clients with high-intensity addiction and other complex health issues. Riverplace was one of several ARC facilities to close after the FBI launched its probe and the state of Kentucky reined in excess Medicaid spending on drug treatment, partially in response to ARC’s billing abuses.

Mike, who had chronic obstructive pulmonary disease and heart valve inflammation, was placed on Brixadi shortly after he was admitted to ARC. Throughout his stay, his dose was constantly increased, according to the lawsuit.

His original dose was 16 milligrams weekly beginning June 18. Less than a month later, on July 9, it was increased to 24 milligrams. One week later, Mike was taking the maximum labeled weekly dose of 32 milligrams, the lawsuit says.

At least once while in ARC’s care, on June 23, Mike was taken to Pikeville Medical Center with labored breathing and chest pain. He was prescribed oral antibiotics and released back to Riverplace. In addition to Brixadi, Mike was also taking central nervous system medications that act as depressants, the lawsuit says.

Brixadi’s own label shows an increased risk of respiratory issues, coma and death, if coupled with the depressants. Despite these risks, after Mike was recorded as receiving his largest dose of Brixadi at 2:20 P.M. – roughly 14 hours before he was found dead – no staff member checked on him, and “no vital signs, respiratory assessment, sedation assessment, pulse oximetry or clinical evaluation of any kind was performed” by ARC staff, the lawsuit alleges.

The mix of the medications coupled with Mike’s existing respiratory issues should have required increased and extensive monitoring, which the lawsuit alleges ARC was not equipped to do.

The lawsuit alleges that staff in charge lacked clinical qualifications and didn’t follow standard patient supervision and safety protocols, directly resulting in Mike’s death. For instance, staff at Riverplace were supposed to conduct hourly check-ins with all clients in their care, recording clients’ activity, health status, and the date, time and location of those check-ins, according to the lawsuit.

But no such check-in logs were recorded for Mike in the seven days leading up to his death. On July 13, a nurse noted in Mike’s file that he had fallen at noon that day, according to the lawsuit.

The last vital signs recorded in Mike’s medical file were logged three days before his death by a peer support specialist, the lawsuit says. Peer support specialists are certified to lead peer-to-peer recovery discussions, but they are not medically licensed. Relying on them to record vital signs is a violation of state and clinical rules.

“Defendants knew, or in the exercise of ordinary care should have known, that this combination of circumstances required heightened observation and monitoring of Mr. Rison during the hours following (the Brixadi) injection, and in particular during the overnight hours,” the lawsuit said.

Instead, rounding observations were conducted by personnel who were not licensed nurses, such as general ARC staff and peer support who were recently graduated clients. The Herald-Leader has previously reported that ARC staff without medical credentials were instructed to distribute medication and record clients’ vital signs.

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CABINET INVESTIGATION AND LAWSUIT ALLEGES LACK OF MEDICAL STAFF AND CARE

The Herald-Leader and ProPublica were the first to report in April that the Kentucky Cabinet of Health and Family Services investigated ARC facilities in the wake of Mike’s death and found there was overall no clinical staff during multiple shifts, and that medically licensed employees’ duties were delegated to unlicensed employees.

The lack of clinical staff was one of several “systemic deficiencies” the state found during its 2025 investigation of Riverplace in Pikeville, Yellow Banks in Owensboro, and Crown Recovery Center, a roughly 700-bed facility in Springfield. State investigators concluded that ARC operated with an “absence of qualified, licensed clinical personnel,” calling it a “sustained and systemic pattern.”

A separate whistleblower lawsuit filed by three former ARC employees in 2023 alleged similar labor practices, as well as widespread Medicaid fraud. ARC has billed and been paid hundreds of millions of dollars in Medicaid money since 2019. Former employees have told the Herald-Leader they were encouraged to falsify billing reports so the company could net more money from Medicaid. Insurance companies that manage how Medicaid money is spent also repeatedly flagged in 2024 and 2025 that the state-run insurance program was being abused by drug treatment providers like ARC.

The company has denied it has ever fraudulently billed Medicaid. ARC agreed to pay $16.2 million to the Department of Justice earlier this year to resolve allegations stemming from the whistleblower complaint.

The whistleblower suit also alleges staff who weren’t medically credentialed, some of whom were newly in recovery, were “asked to distribute medications on a regular basis and log them under the client’s chart as if administered by a qualified individual.” Later, “a properly licensed and/or trained medical staff would come in . . . and sign off as if he/she had actually administered the medication, as required by law.”

As part of their 2025 probe following Mike’s death, state investigators also found there was “unauthorized delegation of clinical functions to patients,” which included requiring clients to record their own vital signs that were then logged in their medical files. The Rison family’s lawsuit alleges staff without medical qualifications took Mike’s vital signs in the days leading up to his death.

ARC leaders were aware of their centers’ chronic staffing issues, according to internal emails obtained by the Herald-Leader and ProPublica. Employees shared “persistent concerns” with ARC supervisors and administrators that a shortage of staff was putting clients’ health and safety at risk.

“It is my concern that the term ‘sufficient staffing’ has been reduced to a technicality, rather than a standard tied to real client needs,” an employee who supervised staff across multiple ARC centers wrote in an email to three ARC leaders in August 2025, a month after Mike died.

“For us, ‘sufficient staff’ must mean more than meeting a minimum headcount. It means ensuring that enough direct care staff are present at all times to monitor clients and intervene in crises,” the employee wrote in an email obtained by the Herald-Leader. “At our current ratios, we cannot realistically or safely meet that standard.”

Riverplace operated at least 16 hours each day with no certified medical personnel on staff, the state’s report concluded. In total, there were 112 hours each week wherein no medical staff was on the property. Riverplace in particular operated without medically licensed staff so often it posed a “substantial regulatory violation and created a foreseeable risk of serious harm to patients experiencing withdrawal,” according to the findings.

As a result of the investigation, the Cabinet and ARC entered into an agreed order in which ARC voluntarily agreed to relinquish its license at the three facilities which halted the company’s ability to operate as a residential facility that managed withdrawal symptoms.

ARC, and the three facilities investigated, were allowed to remain open by the cabinet.

The Rison family hopes the lawsuit will bring accountability and help other people in treatment for their addiction.

“Treatment saves lives in Eastern Kentucky and throughout the commonwealth every day,” Hackworth, the family’s lawyer said. “People who seek it, and the families who urge them to go, have a right to expect they will be safe while they are there.