By Kentucky Lantern Staff
Kentucky Lantern

Addiction Recovery Care, a for-profit provider of substance abuse treatment in Kentucky, says its purchase by a Florida company is no longer in the works.

A Dec. 31 news release from the Louisa-based company says, “Addiction Recovery Care, LLC and Ethema Health Corporation have decided not to move forward with the previously announced potential partnership. Addiction Recovery Care, LLC  looks forward to continuing to serve our clients and communities.”

.The potential sale was announced in October in a news release that said the two companies had “entered into a letter of intent” for Ethema to acquire the assets and operations of Addiction Recovery Care (ARC). It did not disclose the sale price. Ethema is based in Palm Beach, Florida.

.

Once the fastest-growing provider of addiction services in Kentucky, ARC has foundered over the past 16 months amid reports of an ongoing FBI investigation into possible health care fraud and closer scrutiny by insurers who process claims for patient care and had begun slashing reimbursement.

.

A spokesperson for the FBI in Louisville on Friday said the agency could not comment on the status of the investigation as it “is still ongoing.”.

Over the past year, ARC has closed multiple facilities and programs and laid off several hundred employees. At its peak in 2024, ARC had about 1,800 residential treatment beds, programs throughout Kentucky, and about 1,350 employees.