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AAC settles California lawsuit

October 25, 2016
by Julie Miller, Editor in Chief
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After more than a year, a lawsuit involving American Addiction Centers’ (AAC) parent company has ended in a settlement, according to the company’s website. The Nashville Business Journal also reports that investors regained confidence in AAC’s stock, and the share price rose about 4%.

Further, the Journal reports that analyst Paula Torch indicates that AAC stock will be more attractive after getting past this legal hurdle.

AAC has agreed to implement and maintain compliance, internal audit and quality review programs for its addiction treatment centers in California for the next three years. An independent party will monitor the programs. Additionally, AAC will pay $549,986 for costs related to the legal proceedings and $200,000 as a civil monetary penalty, according to the company.

Many believe the original charges concerning the death of a patient were an indication that the attorney general was prepared to scrutinize the addiction treatment industry in California that much more closely following a detailed state Senate report released in 2012. The report concluded that the state was not adequately monitoring treatment centers and sober living homes.

AAC will release its third quarter earnings on November 3.

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